Is Modern Portfolio Theory Broken? SynthEquity Revolutionizes Portfolios

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In this critical episode of Making Billions, host Ryan Miller and alternative asset manager Larry Kriesmer challenge the core tenets of Modern Portfolio Theory. Larry argues that traditional diversification is broken because supposedly uncorrelated assets become correlated during a market crisis (like 2000 or 2008), leaving investors exposed to unlimited loss.

This interview is essential for investors, fund managers, and financial advisors who must deal with clients in the "Zone of Freaking Out" (ZOFO) during a market decline. Larry explains how his risk off strategy and upfront disclosure keep clients calm, allowing their investments long enough time to perform and achieve long term average returns. The discussion also covers the future of SynthEquity (MRP 2.0) and the possibility of creating products that use leveraged options for even higher potential return against a small, defined drawdown.

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[THE GUEST]: Larry Kriesmer is the Chief Investment Strategist at Measured Risk Portfolios (MRP) and the founder of the SynthEquity (Synthetic Equity) investment strategy. With over 20 years of experience in finance and asset management, he is known for creating the SNTH ETF—an innovative alternative asset that uses a concent

Transcript

Larry Kriesmer  

We've decided that the best way to do this is to not own stocks, and we can do this synthetically and we've trademarked the term SynthEquity for synthetic equity. We can do this synthetic equity approach by buying options that can attempt to replicate the movement of a portfolio with only a fraction of the capital at risk. 

Ryan Miller  

My name is Ryan Miller, and for the past 15 years, have helped hundreds of people to raise millions of dollars for their funds and for their startups. If you're serious about raising money, launching your business or taking your life to the next level, this show will give you the answers so that you too can enjoy your pursuit of Making Billions. Let's get into it. 

Ryan Miller  

What if diversification is the very thing that crashes your portfolio in the next crisis, as a fund manager or an investor, discover the contrarian, synthetic equity strategy that captures S&P upside capped with a 15% risk, unlocking a new potential for compliance, scalable growth and market beating returns, all this and more coming right now. Here we go. 

Ryan Miller  

Larry, welcome to the show, man. 

Larry Kriesmer  

Thank you, Ryan, great to be a guest here. It's, I listened to a couple of episodes, and you've got a great thing going and sharing all these knowledge from various businesses and focus on finance, it's great, great to be here. 

Ryan Miller  

Yeah, it's great to have you, brother. Man, you've put something together so incredibly awesome, I cannot wait to get into this. So let's jump in, man, if stocks are optional, why does Wall Street worship them so much? 

Larry Kriesmer  

Right, so I think that the basic American economy, the US market, and I measure that by the S&P 500 is really the power engine of American commerce and particularly the S&P 500 is like this super engine. It's the All Stars, the top 500 largest companies and it says self healing, or self repairing index, because the constituents that were in it 20 years ago are not the same players today. Anybody that can't keep up with growth just gets pushed down off of the index, and the hot players that are making it, making a killing, grow up to the top. And that's why we have companies like Tesla, you know, up in there now, driving, driving it forward, you know. And every day, the CEOs of these big public companies wake up with the mission, literally from their boards and from their shareholders, to deliver value. And that is a relentless pursuit of dominating their areas and I think that's just a fantastic place to attach your wagon, let that horse run. 

Ryan Miller  

Yeah, I love it, S&P is a magical thing, and it's often a benchmark used around the world, but you see it a little bit different. And so my question is, when did you realize that modern portfolio theory was broken? 

Larry Kriesmer  

So for me, it was as a young advisor in the I have to go back now, 25 years, and we were working and building portfolios for clients using optimization software, diversifying among different asset classes, and that is kind of the the idea behind modern portfolio theory is trying to extract the best value for the least amount of volatility. And what we found as the tech bubble burst in the end of the 1990s and into the early 2000s is that the correlations that need to be different when you build a portfolio based on diversification, can become correlated, and they can actually all start to go down at the same time. And when we had a client call and say, geez, Larry, how much worse do you think this is going to get?Not being able to answer that question and not being able to put a number on it for the client is the cause and the root cause of anxiety and fear. And when that anxiety and fear creeps into the decision making process, nothing good happens. So what we found is that if you have a basket of diversified holdings, it doesn't matter if it's 17 positions or 1700 positions, if they start to go down in value and you can't put your finger on what the losses are going to be, then you have a problem. So we wanted to solve that.

Ryan Miller  

Brilliant, you and I, when we first met, I remember you telling me a story about when you're in insurance, and there was a practice that the asset managers would get the lion's share of revenue. And you know when markets start to become unglued, I remember this saying that you told me is, you said that was the moment you saw uncorrelated things start to become correlated. I wonder if you can unpack that, that moment where you really started to understand that has led to the theory that you're doing now, and the fund that you built. 

Larry Kriesmer  

Yeah, well, I just realized that if something is worth, let's say, you know, you buy a share of something, or an ATF or a mutual fund, then it's worth $64.10 and it's dropped by 10% to something in the $50 range, there's nothing stopping it from dropping another 10% and then another 10% and another 10% because there's no limit to the amount of loss that can happen. And the correlations we're looking for investments that, you know, I was taught an early on age, that you always want to have something going down in your portfolio, because if everything's going up at the same time, that means that means that you're almost assuring yourself that if there's a loss, everything's going to be going down at the same time. I found this not great, it's mathematically correct, but it's not great because you have to have something dragging down the performance of your portfolio in order to be successful, right? You're literally saying, I need losers in order to build a diversified portfolio. And then when you buy these things and you put them into your portfolio and mix them up when we get a crisis, then they all start losing at the same time. And this idea that you're going to diversify your way into a safer place, I just don't believe it. They neither do clients, frankly, when, when the proverbial crap hits the fan. 

Ryan Miller  

And it certainly did in 08 as I well know, as among many millions of people around the world as well. So you took a different strategy, right? So we're talking about the supposedly uncorrelated things start to become correlated, depending on what we'll say, a black swan event. And with that, it started to breathe life into a little bit different strategy, which is synthetic equity. So how maybe walk us through a little bit, how do you synthetically capture equity upside with options, because I know that's a big part of what you do in your fund. Maybe walk us through a little bit of that. 

Larry Kriesmer  

Yeah. So don't want to get too technical and get into Greeks and optionality and that kind of stuff, but the concept is very simple. I, what I've come to believe is that I can't limit the losses in stocks and still own stocks. So what we've done is we've decided that the best way to do this is to not own stocks, and we can do this synthetically and we've trademarked the term SynthEquity for synthetic equity. We can do this synthetic equity approach by buying options that can attempt to replicate the movement of a portfolio with only a fraction of the capital at risk. So rough numbers, about 15% of the portfolio is required to move the needle sufficiently so that the other part of the portfolio, which is held in, like, really the safest asset class we can find right now, which is US treasuries, short duration treasuries, and that's what gives us the floor, if we have roughly 85% in treasuries that don't respond much at all to market movement because of the short duration, and we have a tremendous amount of volatility in the 15%, I mean, like, really tremendous what we're doing differently, I think really, is that we're prepared to lose all of that 15% because we can't lose any more. I mean, the Treasury is assuming the treasuries don't have a catastrophic failure. But assuming that that's the case, then we're putting all of our risk into the 15% and when we do that, we're looking we're getting the benefits of what essentially is concentrated risk as opposed to diversified risk. 

Larry Kriesmer  

So concentrated risk is the type of risk that can really move the needle. And when we go to cocktail parties, nobody ever comes into a cocktail party and says, oh my God last year, I crushed it, my fully diversified portfolio. That just doesn't happen. What does happen is someone comes in and brags about the fact that they put half of their money into crypto, or they put half of their money into Nvidia, or, you know, all their money into pick, you know, pick the name that's hot today. That's where big, big dollars are made and I got news for you. Options can move even faster than either of those things I've just described. So a properly structured option contract can move at, you know, let's call it the speed of light, but effectively three times, five times, 10 times, 20 times the speed of the market, and it's just a question of probability, the bigger movement comes with lower probability. So what you're hiring us to do, as a professional manager that has trained in this now for over 20 years is to understand and weigh that probability against the speed that we need. So it's really a sizing thing, almost like a lever. The bigger the lever I have, the easier it is to lift a heavy object, on the shorter lever, more difficult, and that option piece is what makes it possible. 

Ryan Miller  

Okay, still, from the options, and also the treasuries, is that, like, a six month is that a 10 year is a I'm being ridiculous. I know 10 years not a thing, but how far out do we, do we go where that makes sense? 

Larry Kriesmer  

Let's start with the treasuries, because that's the part where we really put our all of our safety is in that and so we want to be on the short end of that curve, very short. So we we build a very straightforward 90 day ladder, which means that we have four, just four bonds in the portfolio, and they mature every 90 days. So we have basically roughly a quarter of the portfolio coming due, and it just gets redeployed out to the next one year tranche. So that's kind of the what would be, I think, widely considered a very safe investment vehicle. It's not really meant to do anything, frankly, except not lose money. Then we're not really asking it for a heavy lift, we're just having they're asking it to not go down in value the balance with the options. We'll typically put out to about a one year duration, I say about because, you know, sometimes we don't have strikes in the right place, and we'll just we purchase option contracts that are adjusted and structured to attempt to be able to keep up with the S&P 500. So we're looking to capture that rate of return, if we can, when the market rises, and keep a defined down stroke in place because of the Treasury, the heavy Treasury allocation. 

Larry Kriesmer  

The next thing that we do that's unique to our firm, and that is that we don't do this on like a one year basis, where we just buy the option contracts and don't ever look at them again until we see what happens a year later. We buy the option contracts and then actively manage that that piece. So if the market does move up like it has in the last couple 10 days, we will be actively selling that option contract at a gain, taking a portion of those gains and buying more treasuries. So we raise the safety balance, and then we deploy the remaining capital out into a new option tranche. And what that really does, also uniquely, very different than, say, a traditional holding in VOO or an SPY or the big, you know, investable index, ETFs, is that after a period of time, our clients will have. Is more in the treasury component of our fund than they gave us to invest at the outset, meaning that their capacity to go backwards is mitigated if you put a million dollars into a tradable ETF exchange that tracks the S&P 500, and you're successful, and it doubles. Let's say, in five years you're literally just one bad you know, 50% decline away from giving it all back. You don't get to keep any of it because it's all still at risk. And with our structure, each incremental step up becomes a new floor against which you have a very difficult time piercing. 

Ryan Miller  

Brilliant. And how durable is that floor in, say, an 08, or 2020, style crisis? 

Larry Kriesmer  

Well, it's going to be what the wiggle is on the and I say wiggle because there's going to be probably some vol in the treasury space. It's not entirely immune. But what we have to realize is that the like, a quarter, literally, of the portfolio is coming due, and within, let's say, 90 days at the longest, and then the next quarter is going to be another amount. So if there's a markdown to the Treasury component, it's likely to be modest, it's not necessarily going to be zero, but it's likely to be modest. And we shouldn't have to sell those treasuries until they mature and I'm actually not even selling them. We just wait till they mature, so we don't even suffer a real loss. We just might be a small markdown. 

Ryan Miller  

Great. And so those short duration bonds with that latter strategy that really sounds like it's holding up well. So you know, if the market goes pretty wild like that, you have that nice, healthy floor to protect the downside risk, I think is part of is a big part of that. 

Larry Kriesmer  

That's the meat & potatoes, right? So people that are familiar with option strategies may think we're writing covered calls or we're buying protective puts, we're not doing any of that. What we're doing is we're taking the long synthetic approach by actually buying calls and attempting to replicate through some what's referred to as delta, adjusting the notional risk so that we can have the small part of the portfolio move at a rate of speed that is large enough to compensate the entire portfolio for a comparable return in the market. 

Ryan Miller  

Awesome man, great to know. So my next question, talk about how SynthEquity may underperform outright equity. 

Larry Kriesmer  

Yeah, there's actually sort of three environments that we operate in, we have a declining market that is modest. So let's say we have a market that's, you know, sort of steadily grinding down, but only a small amount, maybe two to 3% over six months. That's really not good for our strategy and the reason it's not good for the strategy is that our options are predominantly made up of time value, or basically the gunpowder on a fuse. We buy an option contract that has a finite amount of life in it. Ours is typically about one year when we purchase them and if things don't happen positively, and the market doesn't rise, then that time value just is on a relentless decay. It's almost like literally watching the fuse goes, you know, get to boom, done. So that's that's a market it can also can happen if the market's only appreciating a little bit, like if you only go up 1% but it goes up eight basis points a week over the course of five or six weeks, you know, that's also going to, you know, likely result in time value decay during that time period, we can underperform, and that's happily not very often. It's not never, but it's not very often. What typically happens is the market runs in very, very rapid spurts, both up and down. And I think I also learned a long time ago that the market takes the stairwell up and the elevator shaft down, so it tends to take a long time to grow a portfolio, and then just moments to have it reset itself back to a lower price. In a really big sell off, then we earn back that, that earlier deficit, because if the market's down 20 or 30% we just based on what we talked about, what we talked about earlier, we likely can't go down that far, just because we have this floor of treasuries to support us. And by the same token, there's a feature in options that when the market's really on a tear, the participation rate, the amount of money you actually earn from the options we own, starts to accelerate on how much we're actually earning. So instead of something that sort of loses gas as the market rises, these option contracts that we purchase actually accelerate, and they start to deliver higher rates of return than the market itself. So that's our cue to sell, so we can substantially outperform, and we have in the past when the market is running hot. So those two opportunities allow us to get money in the bank to offset the time periods when we will underperform, when there may be some low vol, or periods of time when there's not enough movement in the portfolio to or in the markets to drive the portfolio.

Ryan Miller  

Okay, brilliant and when it comes to, let's say, one of the some of the fragility that exists in all funds in the market, like slippage, volatility, crush liquidity, where do you see some, some of that fragility may show up. 

Larry Kriesmer  

You know, that is actually an area where I'm not very concerned. And the reason I'm not very concerned is that the two markets we're trading, and we literally only have two places we're shopping, and that's the US Treasury, a short duration, that's got to be the largest market in the planet, you know, for like, both liquidity and stability. And then the second piece we're trading in is on options and derivatives on the S&P 500, also the biggest global market per inequities. So those two things we tested before we launched our exchange traded fund with a single billion dollar transaction to see if we could move a billion dollars without much slippage and it worked out to about four basis points that that's a very adjustable type of exchange, or slippage, for being able to bring that much risk control to that much capital in one transaction. 

Ryan Miller  

Brilliant, you don't really have any liquidity issues. Again, you said, in a rare sense, you may have a little bit of that, theta issue, the time decay. 

Larry Kriesmer  

I wouldn't say it's rare. I mean the time decay, theta is happening every day, there is a, there is a, basically a headwind that we're pushing against. The question is, is there enough energy in the market movement to offset it? And these, this slippage can be daily, it could be weekly, it could be monthly. So we're happy. We just we're a little bit over six months from our ETF launch. We, I think I mentioned to you this morning, we crossed over $100 million of assets raised from just a very small seed deposit initially so we're stoked with that. And also, through the end of the last quarter, in September, we've outperformed our benchmark, the S&P none of our fee as advertised, it's been a great run. We're up over 20% the market's been stellar as well, and that's the kind of environment that we do well in. So that's how it works, but no, theta is the enemy. That is absolutely what we're up against.

Ryan Miller  

For sure, 100% and that's why we talk about it. We're having a real discussion about that and thank you for being there. Now, you know we've been talking about strategy up to this point, and how you build it and stack, and that is great. But there's also clients that you that will say, hire you, but not maybe that's not the best term, but clients that invest, I know you spend a lot of time in that, and so working with clients is a big part of what all asset managers have to deal with, not just you., I deal with it too. So how do you keep clients calm when maybe things in their mind, maybe the market, the sky is fall, or whatever it is that they're freaking out about. How do you keep them calm with some of these options that they might be fluctuating, what do you do there? 

Larry Kriesmer  

Yeah, I think the strategy is built to do this, it's purpose built for that exact outcome, and it's, it's why we have it. We have a relatively new guy with our company, he came from South Africa, and he's, you know, more than an intern, but he was here initially, and he is just blown away by the fact that we do have something like, you know, 500 families that we manage money for, in addition to managing money for external advisors and relationships there. And when we had, like, the April swoon here when the tariff announcements came out and all broke loose and the market sold off like 13 or 14% a couple of two trading days. He said he just is blown away, because we don't get any phone calls, we literally don't have anybody freaking out and that is the goal. And the reason it's so clear now with the book of business that we have is that all the clients know that the options are being crushed. They absolutely, yes, definitely get decimated, like they may lose 50% of their value, but they're becoming a less and less piece of the portfolio, and it's a defined amount of risk that we can all look at. And you can open up your statement or go online and see, okay, we got this much left in the fight. You contrast that with a portfolio that is just dropping like a brick, and doesn't have that type of, you know, stop. Then that's where, like, oh my god, you know, what am I up against here? He still is blown away that the phones don't ring because he just, he shares, anecdotally, that when there was any kind of market turbulence back in South Africa, they would just the phone be ringing off the hook, where clients come in and glue it and freaking out. And I think that's an experience that many advisors still have, and we have a solution that can really help prevent that and do it in a way that simultaneously, potentially can help increase the allocation to risk, instead of backing away from that S&P 500, that gorgeous engine that is going to do well for us, if we can just own it long enough, it allows clients to maybe increase the allocation to that space and enjoy more of the return over time.

Ryan Miller  

I love it, and it's bittersweet, too. So when things go sideways, you're gonna get calls, okay, if the if things go sideways, it's also a blessing that they do call you. Maybe they're upset or confused or whatever it is, and you're saying, I actually don't get those calls. And would you say that's a big part of just how you prep and how you train clients when they first join either. 

Larry Kriesmer  

Absolutely.

Ryan Miller  

They either jump into your ETF or something on the side, but when they first do it, I think a lot of what you're saying is, we don't get calls. I'm guessing that it's because of the you front load a lot of the disclosures, and you help them really understand what they're getting involved in before they get involved. As I say, whatever you decide to do, just make sure you do it with your eyes wide open. Is that a little bit of your strategy as well with clients and deal with that?

Larry Kriesmer  

100% because I much prefer that a new client goes to the experience of having a rising market and sees how quickly the portfolio can grow along with the index right and we can point out, okay, it's all happening over here because of the option going up in value. While I'm having that great conversation, than a good outcome conversation with an early adopting client. I am adamant about having the reality check that says, Now this could have gone the other direction. We could have been having a conversation where these options have lost half their value, or 75% of their value. And I want you to understand that that conversation is coming at some point. It's not that we are not going to lose it just going to be a question of when. And when we do, I don't want you to lose your courage and tell me, you know, freak out and say, we're not going to sell the treasuries and buy more options. That's a waste of money, I'm going to fight you on that, because it's the strategy that will help us make it through this process while simultaneously defining how much drawdown risk we're taking. So the real the real job on the front is, is to make sure that the client can, in fact, lose the amount of money we're talking about losing. So in the ETF, it's a one risk sleeve, we only have the budget is 15% in the privately managed accounts. That is the majority of our firm's assets that we can do on a customs on a custom basis. So if Ryan, if you're a baller and you want, you know, 22% of your portfolio at risk, we can do that for you. You know, if you want to bring your mother's account to us, and she's, you know, got a little more timid, we can do a 6% allocation for her. So it's very customizable down to the client, and that makes it very, very, you know, bespoke, so that we can likely not have a freak out conversation during a market decline. 

Ryan Miller  

You know, one of our earlier guests, she's, she was on TED Talk and communications and leadership and all that. She calls it the zone of freaking out, the ZOFO. So sometimes leaders can get there, clients can get there. And so letting  cooler heads prevail through actual facts, logic, mining, of the strategy, the disclosures, those are important, right? And that's why we have the rules, and that's why the US capital markets are some of the strongest in the world. Is because they require a lot of upfront, I would say. So you're the licensed guy, so you definitely would know. So it's one thing to build a strategy, but it's another thing to scale it to 100 mil and beyond and I'd love to talk a little bit about how you scale this for advisors without blowing up compliance.

Larry Kriesmer  

Launching the ETF was really the key to making this a scalable venture. We've been working with external advisors. First, I should back up and just say we made the decision to actively start to solicit and court other advisors, because if I'm going to be clear here, what we're trying to build is an opportunity for people to invest in the capital markets without taking the brunt of the capital pain when things go wrong. That's an experience that my father had, which was terrible on him. He worked for a big oil company for a long his whole career. He retired young, like in his 50s, and then took a instead of taking the pension, he took a lump sum, invested with an advisor up in Northern California, and within a very short period of time, that thing unwound into a Ponzi scheme, and his losses were tremendous, right? So I watched my dad basically change over the course of about 18 months, from a gregarious, successful, you know, pleasing man, to just a shell of a person. That when I get serious about it, I'll say that my dad didn't die until about 10 years ago, when he was 85 but he actually passed away in his 50s, and that is devastating, it really is. And for some people, you know, it's a total loss of a portfolio or something, but for other people, they can have the same type of emotional pain and shell shocking from just having a 10 or 20% loss that's out of control. They lose their ability, or they lose their perceived ability to make valid decisions on what to do with money, and that's what I'm trying to solve. So as far as scalability, it's a long, long answer to scalability. I want to impact more families, I want to improve more outcomes for people, and I know that the way to do that is to allow them a process where they can increase the allocation to equities and survive it, really be able to stay with it. That's really the goal we have as advisors, is to keep the investments in place so they have long enough time to actually perform and deliver the services to the client. 

Larry Kriesmer  

So scalability, we were grinding it out honestly in the SMA space, because the amount of paperwork and the regulatory requirements to onboard a client through the through a relationship with another advisor, is daunting. Thank God for DocuSign, because if it wasn't for that, we'd be personally responsible for devastating the forest, the amount of paper that was required to onboard somebody was ridiculous. So with, at least, with the advent of DocuSign, the 33 signatures and all the forms required as at least, you know, somewhat palatable, but it's still a big lift. The ETF is so simple, it is literally just a ticker symbol, S, N, T, H, and it's available on most platforms. And you can just in a brokerage account, right click, enter the number of shares and hit buy, and now you own it. So, I mean, it's just unbelievably scalable from that perspective. And then from a, you know, let's call MRP 2.0 the strategy of SynthEquity can be applied to different underlying securities. So we are incubating right now a version that we are looking to potentially use for the QQ, and then we might have a type of a fund that would be geared a little differently. So right now, we can build a ratio for the S&P and takes about 15% in options. We may consider launching one that maybe attempts to do 150% of the movement of the S&P for only a slightly higher increase to the options that we could actually juice up the return, potentially in exchange for a higher drawdown rate. So there are more products in the pipeline that are likely going to be launched in the near future. 

Ryan Miller  

Brilliant. I love that. So that's how you scale is to say, when you started, you tell me if I got this right. So when you start SMA, more that bespoke model, that's where you started, and it worked well. But, scaling, right? So we say grinding is additive. Systems are multiplying, and so when you have a system that allows you to scale, now, you can start to get a new form of growth, which allows you to get further faster. Didn't you say you got to, like, 100 million in six months, or something like that with your ETF? 

Larry Kriesmer  

You know, we launched in March, and we crossed over $100 million today, as we're recording this like the recording this literally today, and that's just a little over six months. 

Ryan Miller  

And just over six months good for you, man, that that's one heck of a way to raise some capital. I love it. That's I'm a big fan. So since the S&P is mean reverting, are you guys concerned at all with underperforming once the S&P goes below the 8% average? 

Larry Kriesmer  

I'm not if you look at the long term average of the S&P 500, you know, what's again, you have to know when you're starting and when you're ending to get an exact number. So for compliance purposes, we're just going to use a rough, you know, kind of not a wives tale, but the 8-10% is what people would consider like off the top of their head, and kind of the return you're looking to get over time. If you measure one period, it could be negative 6% if you measure a different measure a different period, it could be 22% so it's very time sensitive to when you start and end you're measuring. But if we use a rough idea of 8-10% annual long term average, it rarely arrives between 8-10% the way the market delivers that 8-10% return is years that are 20%, 24% minus 16% minus 34%. Keep in mind the 8-10% average includes the big drawdowns like the tech bubble that lasted almost more than two years and drew down 49%. 08, which was a 53% drop from peak to trough and then just recently, the covid drawdown was almost 34% and that was just over the course of like 19 trading days, that 8-10% return includes those drawdowns, right? So imagine the kind of success you can have if we can eliminate and engineer out those big drawdowns and still participate in the big run ups. And then we have to digest that occasionally, when the market's not very strong or has a modest loss or a modest gain, we're going to deliver some losses potentially in there we still expect to be able to deliver that 8-10% return. 

Larry Kriesmer  

Now the frequency of distribution in the S&P, this hasn't changed much, whether you measure over 30 years or 50 years or 60 years, but the highest frequency, the most common rate of return, is like above 20% that is nuts, but that's where it is. That's where the biggest that's where the most hits are, and the next is between five and 15% so most of the time, literally about 55% of the time, you're going to get returns that are going to be perfectly suited for this strategy. And then you have another 10% or 20% depending on the measuring period, where you've got losses that exceed 15% and we should do well in those environments, because we won't go down that hard, or we shouldn't go down that hard. So I'm not concerned, I can't know when the market's going up and I don't know when the market's going down. So I know the market goes up more than it goes down, and I just position the portfolio and the strategy by its structure, is designed to participate if the market rises and limit the damage if it goes down and I think that's the best we can do. 

Ryan Miller  

My final question for you before we wrap things up, what does the future hold for SynthEquity 2.0 where do you go from here? 

Larry Kriesmer  

Well, we are in a process as a small fund that we have to grow up and get out of adolescence, and that happens, really, you can't he can't increase the time. But for most firms, most big firms, we don't even get to qualify for due diligence review until you're over $100 million and over one year of investment trading time. So I can't make the time go faster, but I've already hit the dollar benchmark. So for us, when, when that happens, when we roll into March of next year, we'll have a year under our belt, and then we can start knocking on doors that open up an opportunity for much bigger scale that's going to allow us to potentially get into the large brokerage firms and become part of advisor models. And again, it's almost like when you hear about a company being added to the S&P 500, it's almost instantly accretive to the share value, because all of the investment vehicles that are statutorily, you know, looking at the S&P 500 as their as their benchmark, have to buy this stock. We are, we're not quite that, you know, popular yet. But what will happen is that we'll get those doors open for us when we meet, when we check off these boxes, and that's coming. And then when that happens, and we expect to really be able to scale significantly. 

Ryan Miller  

Brilliant. So before we wrap things up. Is there any anything at all? You'd like to say closing remarks, where people can go to get more information, anything at all. 

Larry Kriesmer  

So the website, measuredriskportfolios.com is a place where we post all of our information, how to reach us. There's a section at the top right, you can click that says, chat with an expert, and that would take you to a page that you can choose whether or not you're a retail investor or you're a professional who would like to consider looking at us and working with us, and that whichever one you click will take you to an appointment structure where you can click and set an appointment with us. And what I'd like to offer basically, is this, if you have an investment portfolio, we have the tools to be able to review it and build for you a report that shows. Type of risk you're taking historically for the return you're earning historically. And we can do that by taking what you own and seeing what those portfolio positions have gone up and down, what type of volatility they experience, and what type of earnings you've achieved as a result. And it's been my experience that we can do one of two things. We can either match the rate of risk you're taking and improve your potential rate of return, or we can keep your return the same and reduce your risk. And each client may have a different opinion about what's more important to them. So typically, we find the younger clients would like to have greater return for the risk they're currently taking, and maybe the older clients, who have already gotten to be successful and have an amount of capital they're comfortable with, would much, much prefer to have the same return but lower risk. So that's what I like to offer out there. 

Ryan Miller  

I love that. So just to summarize everything Larry and I spoke about when investing in building your thesis, try building a risk off strategy as you do your research. Second thing is ensure you possess the discipline, stick with the strategy or the person who created the strategy, to avoid the zone of freaking out. And finally, always do your research and talk to financial and legal advisors. You do these things, and you too will be well on your way in your pursuit of Making Billions.

Ryan Miller 

Wow, what a show, I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guests even better. And make sure to come back for our next episode, where we dive even deeper into the people, the process and the perspectives of both investors and founders. Until then, my friends, stay hungry, focus on your goals and keep grinding towards your dream of Making Billions.