Perry Shak, On Investments, Managing Expectations and Giving Back

08/14/19  |  Zara Koh  |  341 views

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The first time I met Perry was with Leah Lipkowitz, the first official GOSS cover girl. Perry, an avid supporter of women in business, was also a big philanthropist. We connected instantly over those two points. A CFA charterholder working under the wealth management arm of RBC Dominion Securities for the last four years, Perry’s trajectory in a “safe” financial environment was different than the average. It involved more grit, patience and risk. Yet just like investing in the stock market, high risk tends to lead to high reward.

We met at his office in the golden square mile of Montreal, tucked in between the CIBC Tower and Rene Levesques. I was greeted by his associate and right hand accomplice Raluca, who is Romanian just like my mother. The first thing I noticed in his office was the vast collection of books that ranged from children’s, to self-help non-fiction to classics. He loves sharing with his audience the knowledge he has absorbed. A giver by nature, in all its triumph. That’s Perry Shak.


Tell me about your journey that led you to the finance world.

I was 19 years old, when I thought I was going to go into Psychology, I was brought up by a single mom so my EQ was tapped into more than most. My best friend at the time who was very much a business man in a teenager’s body, was an influence.  I completed my pre-requisites in mathematics, and graduated with honors from the BCOM program at John Molson School of Business (JMSB).  I soon realized the world finance is built on my two primary interests, Finance and Psychology.


Can you elaborate?

If you look at the stock markets for example, what is that exactly? It’s billions of people like you and me who are trying to make decisions with very imperfect information. So you know terms “fear and greed”? When people are scared, they sell out of fear that things will get worse, and when they’re feeling confident and greedy they rush to buy. While driven by emotion, their expectations are based on what they believe will happen in six months (or more) from now. The market is not (so much) how much profit a company is making today, but how confident we are in the profit they’ll make in the future. There are many important factors, and these factors are always changing. So while Trump is bashing China, slowly decisions are being made based on emotions and interpretations of how that may impact trade between those two countries. There are many areas where psychology intersects in decision making including the psychology of the global market, of the client, of our industry / firm, of my peers and how they are reacting.

There’s a blossoming field called “behavioral finance”. Daniel Kahneman, one of the founding fathers of behavioral finance wrote in his book “Thinking, Fast and Slow” about some key concepts, some  that helped earn him a Nobel Prize.  There’s the concept of loss aversion, where people will make decisions that will not make sense based on expectations because they are driven (primarily) by not wanting to lose. They would rather avoid the pain of not losing, and therefore take less risk.

You often see this dynamic in relationships too.


What is the trajectory that brought you into stocks?

I finished my degree in finance I worked for two years at an independent firm where I was on 100% commission, foot in the door. I cold called someone who worked at a bank and he said “you’re really good, I can’t invest in this with you but you’re really good on the phone. Call me next year.”  I followed up and called him a year later. He was no longer with the bank but by following through them I got my foot in the door a large financial institution. Just goes to show the importance of following up! I joked.

From then on I was in the banking system, I started off in a branch, as Financial Planner while I was working on my CFA. While I didn’t know exactly what I wanted to do - I knew I wanted to manage money and interact with people. How exactly I wasn’t sure, one thing led to another I got promoted to a higher division managing the wealth of High Net Worth families. Making decisions on a day to day for their investments and making sure anything that had to do with financial planning, they were getting the advice they needed with the team I provided. I worked in that division for around ten years.


 What have you learned about money management and individuals?

People have an interesting relationship when it comes to money. Money is somewhat abstract and since Money and Finance aren’t concepts that have traditionally been taught in schools, people often lack of knowledge in those areas. A big part of what we do is educating and setting expectations - we are preparing them for their financial future. That adage of an ounce of prevention is worth a pound of cure – it’s part of my job to make sure people are not taking on more risk than they can accept because sometimes people think they can tolerate more risk and they really can’t. Everything is based on trust, and that’s the key part of what I do - trust is even more valuable today than ever - it takes a lifetime to build it and one moment to destroy it. With social media and the internet, a person’s reputation can severely impaired or destroyed even faster than ever before. My favorite quote is from a line in the movie Scarface “all I have in this world is my balls and my word and I don’t break them for nobody”.


You were in that division for almost 10 years. What made you decide to take that leap of faith?

I wasn’t happy with the culture and I left in 2015, I felt like I didn’t fit in that box. My wife was a hugely supportive and she said “I back you 100%”, I was leaving with nothing. I didn’t have anything. Ultimately the relationships that I had built over the years wanted to follow me here. Since then I’ve grown through referrals and other ways.


Difference between you and other wealth managers?

 I’ll work with my team to do whatever is in our power to add value, from sharing our professional network, to ensuring we have the ability to provide timely advice for instance with financial planning, or tax saving opportunity.  We strive to always staying on top - in terms of expertise, as the goal is to add value to our clients’ situation. When they need help they can go to me (or my team) and we’ll do the best we can to get the answers. I want to surround myself with smart people with integrity - and focus a lot of my time and energy on philanthropy - there’s meaning in that.


Explain to me how stocks work in terms of returns on initial investment?

When you’re investing you have an ownership in a company, you are acquiring shares (or stock) and become a partner in the profits. With stocks, the return is variable and not guaranteed. When you have a guaranteed return you’re a lender, you’re lending money to the bank they’re making money on your money. Or you’re lending the government money and you’re getting a bond.

How do you make money in investing in a company? Either the company pays dividends, or as the companies’ grow, the stock goes up in value. Investors keep their shares and when they need money, we sell some. We’re always rebalancing and making changes. A few years ago we were more invested in Canada now we are invested mostly outside Canada. We invest largely in US, European and global companies in the infrastructure space. It’s extremely difficult to time the market. You’re always competing with imperfect information so in the short run it’s very difficult. In the long run, stocks should earn 6-10% range on the average.


When you were 25 what advice would you give yourself?

I would remind myself that it’s challenging to be 25 but it’s also challenging for everybody else - what’s going to differentiate me is going to be the grit, and keeping at it, networking and becoming the best I can be and invariably, it will lead to good things. Like climbing a tall mountain it’s highly distracting to keep looking up, but if you focus on the next few feet, break it down, and what will be will be. We’re often our worst enemies from that perspective.

I would definitely say that make parallels between relationships and investing in the stock market. The most important decision that I made was to marry my wife (2004). Another huge decision was to go and rebuild my Wealth Management business is 2015. It was the scariest thing I’ve ever done, the most stressful, with a one year old at home, three kids, no safety net. However, the status quo was scarier than the unknown.

  “It’s like a metaphor for stocks” I joked.

But it is. People look at GIC, savings deposits, that’s safe. That’s the scariest thing in the planet because if you’re making 1% or 2%, which means after tax you’re making at best 1% and the cost of living is going up by more than that. If you project that forward I can assure you that it’s terrible for your financial picture over the long-term. I would rather invest in the stock of good companies knowing that with time, I’m going to get more income, dividends and growth than I would ever get from the guaranteed bank account or deposit.


What inspires you?

What inspires me is my grandparents and how fortunate I am by virtue of living in this great country. Even though my grandmother was raised in Canada, she lived through the Great Depression. I sometimes get a man cold, and (we) complain, but really we’re so lucky and have all these opportunities. I’m inspired by people who like my grandfather, came to Canada with absolutely nothing and yet, was able to achieve.  I believe that people like my grandparents who have suffered and pushed through their struggles, are often intrinsically the happiest. I’m inspired to give back as much as I am because I feel like along the way I’ve gotten a lot. I plan to emphasis more on philanthropy and giving back.


Cover Photo Credit - Avril Franco Photography

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