Today's Animal Spirits talker book is brought to you by Fabric, go to FabricRisk.com to learn more about their system that helps advisors manage risk and client portfolios.

Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching.

Michael Batnik and Ben Carlson work for RIT Holt's Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of RIT Holt's Wealth Management.

This podcast is for informational purposes only and should not be relied upon for investment decisions.

Clients of RIT Holt's Wealth Management may maintain positions in the securities discussed in this podcast.

Welcome to Animal Spirits with Michael and Ben.

Michael, I think it was back in early to mid-2000s, reading a Ryan Holiday book, I think it was called OpSchool as the Way, was really my first introduction to the whole idea of performing a pre-mortem.

You heard the post-mortem where you look after the fact and say well isn't wrong.

Pre-mortem is, let's go ahead of time and figure out what could go wrong in advance before we even start.

That way you don't have to go back after the fact and be totally surprised.

I loved this idea in terms of portfolios and thinking through because we've mentioned before like things that never happen seem to happen all the time in financial markets.

Because we really don't have that long to go with it.

I think that's something that advisors could probably help with clients more than they think is preparing people for a wide range of outcomes and drilling it in their head over and over again.

And I think that's something you can do qualitatively and quantitatively these days.

The platform that we're speaking with today is something called Fabric Risk and we've had Rick on in the past to talk about the platform.

And I would encourage anyone who's interested to go directly to the site and do a demo because it's one thing to talk about risk even though it's something that's quantifiable.

It's a little bit squishy when you're talking about it but seeing this come to light was really eye-opening for Ben and I.

So like for example one of the things that this platform does and it does a lot of things is it shows you sort of like a tolerance band of where the portfolios are in terms of where you want them to be and rebalancing.

And I've never seen anything that at a glance like color codes itself effectively for the advisor whether portfolio manager or the trader.

Basically any advisor is going to have dozens to hundreds to thousands of client accounts and being able to see it all in one place to understand whether that client is within the range of potential risks or outside of it is great because that's not only warrants a conversation that can warrant some sort of change in the portfolio.

So we get into that more with Rick bookstabers Rick's got a crazy background in risk management for a bunch of different hedge funds and foundations and in talents and institutions.

So here's our conversation with Rick bookstabers from fabric risk.

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