William L. Gaul

William L. Gaul, CFA®, CTFA

Wealth Manager

Mr. Gaul graduated from the University of Missouri in 1990 with dual degrees in Journalism and Economics. He has 20 years experience in the financial services industry assisting clients in the areas of investment management, retirement planning and financial planning.

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May 11, 2012 | Posted by Gaul William at 3:58 pm

Why The Avengers Make Lousy Investment Advisors



Have you seen The Avengers?  The summer’s first blockbuster film is off to a fast start at the box office.

Me?  I took a pass.

Science fiction just isn’t my thing, though I appreciate the creativity and as a father of four I am likely to end up going at some point.

I don’t know the plot of The Avengers but appreciate the “‘good versus evil” message, particularly as it applies to the investment field.

Would the Avengers make good investment advisors?  My gut says no, though they would probably be ideal relationship managers.

Think of the possibilities:

Imagine walking into a crowded restaurant on a Saturday night without a reservation next to Captain America.  Corner table? No problem.

Subway rides and street corners would feel safer next to The Iron Man though he would probably cost you a lot of money on the golf course.

And at ballgames you would move quickly through turnstiles and concession lines behind the Incredible Hulk.

But as investment advisors?  Not so much.

For one thing, as professionals our job is to patiently set a clear direction instead of fight off an external evil force.  Superheroes are not patient.

I think back to my first meeting with a prospective client many years ago, an advertising executive referred to me by an accountant.   I knew going in there was a big learning curve and that the prospect had accumulated wealth through automatic deposits rather than a disciplined strategy, a practice the CPA called “pay and pray.”

In our initial meeting the executive handed me his most recent quarterly statement.  As I reviewed the holdings he pointed to one fund which had underperformed the market.  When I pointed out that it was a growth fund, he looked at me, incredulously, and shot back, “Well, it’s not growing!”

This was before I could point out that value funds were in favor, not that it mattered in the moment.

Managing investment portfolios requires patience, a trait not common with superheroes.   Patient investing often means being fashionably late to the party (a market surge) and leaving before the punch bowl disappears.

As John Meynard Keynes said, “The market can stay irrational longer than the investor can stay solvent.”

We aren’t superheroes, dressed in capes toting a crystal ball.

There are no superheroes, except in comic books and at the movies.

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April 4, 2012 | Posted by Gaul William at 3:09 pm

Catching Up With The Beardstown Ladies, Or Why I Can’t Hammer A Nail

I thought about the Beardstown Ladies on the way to work the other day (between wondering where winter went and why my Final Four picks never work out).

Remember the Beardstown Ladies Investment Club?

The 16 original Beardstown Ladies (from tiny, rural Beardstown, IL) formed their club in 1983 after being told by the men in their lives “not to worry your pretty little heads” about finance and investing.  They put together $25 to $100 a piece and bought stocks like Walmart (because the lot was always crowded) and Medtronic (after a member was fitted for a pacemaker).

Their simple approach caught on in an era where fund managers like Fidelity Magellan’s Peter Lynch famously owned Dunkin Donuts “becasue the coffee is always good and the store is always crowded.”

After a number of national television appearances and best selling books an article appeared in 1995 questioning the club’s investment performance. Turns out after an audit that their results, though solid, was not as stellar as they claimed.

So they faded, quickly, from the public eye.  If the Beardstown Ladies were a stock chart, it would end up in the “sell” pile. They rose and fell in the public eye faster than a cheap carnival ride.

The Beardstown Ladies Investment Club continues on, however, with many of the original members who were in it for camadarie, not fame.

We all have a comfort zone; the tendency to fall back on what is known and reliable.

For example, I am the son of an architect but picked up none of his “architect genes.” My father, the engineer, can fix anything. Me? I am clueless to the point where my kids regularly snatch the toolbox from my hands, pour cold water over my head and call Grandad as a matter of public safety.

When it comes to home repair, car repair or any type of repair, I am most proficient at writing a check and happy to remain a pedestrian in the field.

It is just as important to know who I am as who I am not.  The same can be said for clients.

Today’s investor has infinitely more at their fingertips than the pre-internet Beardstown Ladies ever did, and knowledge is power.  But there is something to be said for independent, objective advice from an advisor who is not emotionally attached to individual holdings.

My best clients through the years, and the best people to work with, have a bit of the Beardstown Ladies in them.  They enjoy picking stocks and talking about them.

They also realize that trying to manage an entire investment portfolio is akin to shingling a house alone or replacing a transmission in the driveway, whether in Beardstown, Chicago or points between.

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March 7, 2012 | Posted by Gaul William at 2:45 pm

In Investing, And Baseball, It’s All About The Relatives

As winter turns to spring over the next several weeks sports fans will focus on college basketball’s “March Madness”  and the beginning of a new baseball season.

Training camps are open in sunny locales as players roll around in the grass and prepare for the annual grind of 162 games through October.

It’s a long season, but there’s nothing quite like opening day, when the renewal of spring is matched by the hope of every fan that their team, maybe,  can win the World Series.  

For baseball junkies like me, thoughts turn to great players and teams, each with a piece of history.   Teams like the mighty Yankees, players like Albert Pujols, Willie Mays and Jackie Robinson.  And Larry Doby.

“Larry who?” you might ask.

Most people are familiar with Jackie Robinson, the Brooklyn Dodger great who’s number 42 was retired several years ago by all professional baseball teams, both major and minor league.  Robinson broke baseball’s color barrier in 1947 as the major league’s first black player.

Larry Doby was the second black player in the majors after Jackie Robinson and the first in the American League.  Coincidentally, he was also the second black manager (after Frank Robinson) of a forgettable White Sox team in the late 70’s.

Larry Doby signed and played for the Cleveland Indians eleven weeks after Jackie Robinson broke in with the Dodgers. He led the Indians to their last world championship in 1948, played in nine all-star games and, like Robinson, is a member of the Baseball Hall of Fame. 

Was life in “the show” any easier for Doby than Robinson? Hardly.  But few fans outside of Cleveland remember Larry Doby.

I’m not a fan of “firsts;” first black player, first woman director, etc.  In Journalism school I had an editor who hated “first” stories because they neglected everyone who came before them, paving the way.   

In the investment management world its not about “firsts” as much as relative performance, a concept which, in my experience, is often difficult to convey to clients. 

The idea that as an advisor I am “jumping on the table” with excitement over a negative 10% return, when the market is down 15%, rings hollow with people who are focused on the negative outcome instead of the incremental return. 

Relative performance, or benchmarking, can be a tough sell.  In the simplest terms, it’s analogous to two men being chased by a bear.   “I don’t need to outrun the bear,” says the man in the lead, “I just need to outrun you.”

You have probably seen a version of the chart below, a stack ranking of yearly returns by asset class: 


SAM Table


The colorful scheme would make nice artwork in any living room.    For investors the idea is simple: Rankings change dramatically from year to year, and being “first” is not as important as being diversified and consistent in your approach. 

Steady and consistent.  “Larry Doby” returns. 

Larry Doby was, relatively, pretty darn good. 

Which perhaps, historically, is of little consolation to Larry Doby.  But not to investors. 

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February 8, 2012 | Posted by Gaul William at 2:57 pm

Putting The “Fun” in Dysfunction

I walked into my office on a Monday morning many years ago  to a blinking red light. 

After getting my coffee, I picked up the phone to retrieve a voice mail message, stamped at 5:27 the same morning.

“Bill, this is (I will call her Jane).  My mother died at 5:10 this morning.  I will be coming in at 9 o’clock to see you.  Where’s my money?”

Mom had been in a nursing home for several years before passing away peacefully at age 94.

At first, I was struck not by Jane’s eagerness to get to my office (we had been dealing with her for years) as much as the realization that mine was the first call after learning that her mother died, before any of her siblings or family.  

Jane arrived fifteen minutes early, waiting while my colleagues and I gathered in the conference room.  I escorted her in, then had the distinct pleasure of informing her that her mother saw her  for exactly who she was:  An angry, vengeful, vindictive woman.   And just as she thought (and lamented to us at every turn through the years), Jane was not included in her mother’s estate. 

And no, we did not say those exact words to her.  We were professional and fulfilled our fiduciary duty, though believe me I wanted to dance a jig on the table after she left for the final time.

I think she snatched a few pens and mints on the way out. 

Jane had two sisters, each of whom inherited some money.  They were both nice people and expected nothing given Mom’s advanced age. 

Money doesn’t change people, it just exposes them. 

This is the time of year advisors get out the crystal ball and try to predict which way the markets will go. 

But it’s also an important time to review, with your loved ones,  your estate and financial plans.  For me it’s personal.

In the past six months we have dealt with the death of both of my in-laws, one from cancer, the other from a stroke while suffering from dementia.    

They were successful doctors who lived a comfortable lifestyle and did basic planning.   Very basic, meaning my wife and her sister were left in many instances to make decisions based on what they thought their parents wanted. 

I am often approached by prospective clients whose “investment problem” is first and foremost a planning problem requiring us to take a step back.  In this sense quality financial advisors are like doctors, unable to make a full diagnosis without first examining the patient. 

Investing without an effective estate and financial plan is akin to hunting while blindfolded.  You might hit a few birds, but in our business what you get is never as important as what you get to keep.   Taxes matter, planning matters. 

At TCI we talk about clients being able to make “one call” to a trusted advisor who has all of your information safely in one place.   Every family should have a quality legal advisor, a quality tax advisor and a quality financial advisor, ideally in touch with and on the same page with each other. 

Talk to your loved ones, but go beyond “where the documents are.”  Let them know your intentions about everything from end of life wishes to where your passwords and keys are kept.  

I had a client years ago who was terminally ill with cancer.  She was a traveler, often alone,  and did so even as her one year life expectancy stretched past five years. 

I remember her telling me about a trip to Israel during a period of intense conflict despite travel warnings.   As she put it, “Who cares about a bomb when you only have six months to live?”

She lasted over six years, and the service, which she planned months in advance, was a fitting tribute.

Do your loved ones a favor with one final gift, the gift of familiarity, which will empower them. 

And consider naming a corporate fiduciary to independently and objectively handle your affairs.   We all have families, and what are families for if not to put the “fun” in dysfunction? 

There are plenty of “Janes” in the world.  

And plenty of people who, in the midst of a crisis, are exposed as one.    

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January 26, 2012 | Posted by Gaul William at 3:49 pm

Trading Shuffleboard For The Big Board

I came across a neat interview on CNN the other day which you can view here.

Irving Kahn, who began investing in 1928, is still at it, 84 years later, at the age of 106.

My initial thoughts after viewing were:  1) If I am still going in to work 50 years from now my wife will kill me and; 2) Good for him.

His longevity is remarkable.

The Founder and Chairman of Kahn Brothers for over 30 years, Mr. Kahn describes himself as a value investor, holding 20 or so stocks for clients over the (in his case really)long haul.   In his office a Bloomberg terminal gathers dust.   He owns a cell phone, “So I don’t forget my number.” I am sure he has outlived most of his clients, and many of their children.   Two of his own children who worked for him are retired.

One of Mr. Kahn’s sons says what Dad values most is “an office, a job and responsibilities.”

I found that compelling.  It’s clear that much of Mr. Kahn’s identity is tied to his career, but it is his deal now.  As a middle aged father I look forward to the day that work is purely on my terms and that I go in because I want to, not because I have to.

I am also struck by what the video doesn’t explicitly show.  For example, besides the clients he has helped reach their dreams, I can’t imagine how many people he has mentored in the business.

We all want to have a voice and a life with meaning, both personally and professionally.   I love my career for two reasons: 1) No two days are ever the same, with each day an opportunity to learn and meet new people; 2) Everything that goes on in our world relates in some way to the financial markets, from the toys my children use to the cars my neighbors buy.

Everyone has a story.  Our business is about collecting stories in the hopes of being able to connect with clients and say, “I have been there, here’s how I can help.”

Guys like Irving Kahn have two lifetimes of stories.  I would love to hear more.

And hopefully I am around to tell more.

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