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LOS ANGELES BUSINESS JOURNAL

Vol. 40, No. 17 THE COMMUNITY OF BUSINESS™ Aptil 23 – 29, 2018 • $5.00

Soon-Shiong to
SAME RIBBON, NEW REP Keep Tronc Stake
All-women support group for MEDIA: Word comes with
final deal on Times pending
Music Center brings new vibe
By MATTHEW BLAKE Staff Reporter
to longstanding mission
Add this to Patrick Soon-
By DIANE HAITHMAN Staff Reporter Shiong’s increasingly full Page 3:
plate: Everything that will Tronc

I
t was the tumultuous year of 1968 when the Music Center come with keeping his 24 Shares Up
of Los Angeles County pioneer Dorothy Buffum Chandler percent stake in tronc Inc. on Softbank
rounded up her socially prominent friends to create the Blue after he closes a reported Report
Ribbon women’s volunteer support group, charged with finding $500 million deal to acquire
funds to aid downtown’s burgeoning performing arts complex on the Los Angeles Times and
Bunker Hill.
They became known as “The Amazing Blue Ribbon 400.” Please see MEDIA page 47
Each was asked to secure a $1,000 donation toward the creation
of a new performing arts center, which became a touchstone of
the city’s cultural life – often a factor when it comes to recruiting
top executive talent, and likely more so in the 1960s, when Los $130M in Wings on
Port Pilot Program
Angeles had yet to establish a significant reputation for the arts
beyond the movie business.
Chandler wielded her considerable power as the wife of then-
Los Angeles Times publisher Norman Chandler to make sure the
group’s members and their activities often dominated the daily’s
TRADE: Macquarie commits
society pages. The list of first-year members, written this way in to longer view
a history of the organization, included Mrs. Walter Annenberg
(Lee), Mrs. Howard F. Ahmanson (Caroline) and Hollywood By SHWANIKA NARAYAN Staff Reporter
notables including Mrs. Lew R. Wasserman (Edith) and Mrs.
Samuel Goldwyn (Frances). There’s $130 million in
Newspaper society pages are largely a thing of the past 50 funding committed to a public-
years on, and far more of L.A.’s women are busy with full-time private partnership to build a
careers. One prominent female philanthropist who asked not to be Blue Ribbon container staging facility at the
named called Blue Ribbon “brand challenged” by decades of being President Port of Los Angeles, a project
depicted in the press as a de facto lunch club for the social elite. Baldauf: that has yet to receive state
The looming portrait of a gowned “Buff” Chandler sporting Day job is regulatory approval and to go
associate
a queenly tiara in the Founders Room of the Dorothy Chandler through a pilot program to test Rosenthal
dean of
Pavilion does call to mind an era, and an attitude, long past in
alumni
today’s Los Angeles. Social circles and notions of diversity have relations Please see TRADE page 49
grown much broader since the 1960s, an era that saw the nation at UCLA
wracked by divisions over the Vietnam War and Los Angeles
Lobbyists, PR Shops
Anderson
School of
Please see PHILANTHROPY page 47 Management.

Up, Ad Agencies Dip

Market Volatility Shakes Confidence
ECONOMY: Worries increase
especially for older Angelenos
By HOWARD FINE Staff Reporter
L.A. County residents’ confidence in the
economy continued to slide in the first quarter,
led by a sharp drop among residents 55 and
older concerned that the recent stock market
L.A. County Consumer Confidence Index
COMMUNICATIONS: Strong
economy, tax revenue keys
That’s the overview from the quarterly
consumer sentiment survey of the L.A. market
150
By ELI HOROWITZ Staff Reporter
by the Lowe Institute of Political Economy 89.4
at Claremont McKenna College. The index 120 The past 12 months have been
for the local economy fell to 89.4 during the a mixed bag for Los Angeles
first quarter from 92.1 the previous period, and
IST County lobbying, advertising
THE pLages
90
from 106.6 a year ago. and public relations firms that
The latest reading of Angelenos’ confidence See , 20 generate revenue by pitching
levels in the national economy fell slightly 60 15, 18 crafted messages to government,
Q2
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2015 2016 2017 2018

volatility could harm their portfolios. Please see ECONOMY page 49 Source: Lowe Institute of Political Economy at Claremont McKenna College
Please see COMMUNICATIONS page 14
8

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 CUSTOM CONTENT
A P R I L 23 , 2018

WEALTH
MANAGEMENT
A Q&A with the Experts

SELWYN GERBER, CPA ANDY JAMES

Founding Member Co-founder & CEO
RVW Investing LLC BitTrust IRA

Financial Planning • Wealth Management

A
t the Los Angeles Business Journal, our ears are always to the
financial ground, and there are a number of questions that we’ve been
hearing repeatedly from readers navigating the wealth management
landscape. To take a closer look at the latest concerns and trends in
wealth management, we have turned to two leading experts, Selwyn
Gerber, CPA, Founding Member at RVW Investing LLC and Andy James,
Co-Founder and CEO of BitTrust IRA. They graciously weighed in for a
discussion and shared some insights on the state of wealth management
in 2018.

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40 LOS ANGELES BUSINESS JOURNAL – CUSTOM CONTENT
WEALTH MANAGEMENT
‘We’re lucky to live in a time where
individual investors have a great deal
of opportunity and the costs to invest their
capital are very low. This means they can
take control of their own financial destiny.’
ANDY JAMES
◆ Describe the current investment environment and
what you consider to be the best investment approach,
in general terms?
GERBER: We adhere to evidence-based investment principles
regardless of the environment, because RVW portfolio
design is more science and less art than most. The research
of Nobel Laureates Prof. Eugene Fama and Prof. Harry
Markowitz; academics like Prof. Jeremy Siegel; and storied
investors like Buffett and Munger inform our approach -
and we implement resilient portfolios tailored to the long
term needs of each client for growth, safety income and tax
minimization. The data indicate that over 80% of managers
who engage in stock picking and market timing (“active
management”) have underperformed their benchmark
indexes over any 10 years - and that over the long term
stellar rewards awaited those who owned quality stocks
and endured the volatility. Our typical portfolios comprise
a group of broadly diversified, low cost enhanced-index
based funds with an overweighting towards factors that
have historically delivered higher expected returns. Bonds
mute volatility and provide interest income. A selection
of superior dividend paying equities delivers growing tax-
minimized income.
JAMES: This economy has been bolstered by record monetary
stimulus and it’s important to recognize exactly where we
are in the cycle. We encourage our clients to be deliberate
in managing risk by using asset allocation. A lot of the
traditional asset classes are at historically high levels and
they’re all fairly correlated. This makes diversifying more of a
challenge. Alternative investments like cryptocurrency have
proven to be an attractive option for those looking for an
asset that has no linear relationship with the major indices.
For investors with a high-risk tolerance, the ROI has just
been off the charts.
◆ What are the major changes for the business of wealth
management in the last five years and what key strategy
changes do you anticipate in the next five?
JAMES: We’re lucky to live in a time where individual
investors have a great deal of opportunity and the costs
to invest their capital are very low. This means they can
take control of their own financial destiny rather than
relying strictly on advisors who may be more interested
in gathering assets than establishing the best investment
strategy. However, the invention and adoption of an
entirely new asset class has been the most important and
disruptive force in the financial world over the past half
decade. Cryptocurrency is a real game changer. Alternative
investments like Bitcoin will continue to be a growing
avenue for investors looking for atypical diversification and
the potential for better than average ROI.
◆ What is “atypical diversification?”
JAMES: “Atypical Diversification” is the new normal in 2018.
It’s a concept that every investor should get comfortable
with. This is a very different landscape as compared to
past decades. We often say: you can’t rely on your parents’
investment strategy. Atypical diversification is a natural
reaction to an erratic market. For many of our clients,
cryptocurrency investments (like Bitcoin, Ethereum
and Ripple) have proven to be a potent x-factor in their
portfolio. The cost to invest is very low, but the returns can
be impressive.
◆ What is your general market outlook for the remainder
of 2018?
JAMES: Interest rates have almost certainly bottomed. We
don’t foresee a sharp rise in rates this year. Equity markets
are fully valued and have weathered geopolitical headlines
thus far, but it feels like there is increased risk to the
downside. We’ve clearly turned a page and are entering
into a more volatile future. It’s going to become more
challenging to find steady growth. We can’t necessarily
expect the same generous risk returns we’ve had in the past.
In cryptocurrency, we’re seeing continued interest from
investors and wider adoption globally. We expect significant
further returns.
◆ Given your firm’s outlook and forecast for the year: what
is the next advice for longer-term portfolio asset allocation?
GERBER: Asset allocation for our clients is similar each year
independent of what “experts” forecast, especially since they
have such an abysmal record of being right - and is responsive
to the specific situation of the client rather than to the
outlook de jour. If one had invested $10,000 in the S&P 500
in 1997 that would have grown to around $50,000 by the end
of last year. However, those who missed the 10 best trading
days during that time would have earned only half as much.
Market timing generally produces sub-optimal returns. We are
long term mega-bulls and have 100 years of history to back
up our position. The key is to have the emotional fortitude
and the financial diversification to be able to endure the
severe bear markets that take place from time to time, with
equanimity. They are simply part of market and economic
cycles - and each bear market eventually turned out in time
to be a compressed spring that pushed the markets up to ever-
greater heights. The problem is that normal market volatility
never feels normal when you’re in it. I arrived in the USA
from South Africa in 1977 when the Dow was around 850
and it is now well over 24,000 excluding dividends that would
have been paid out over that time. It has grown over 34-fold
with dividends reinvested. The fact that there were a dozen
major market collapses over that period is now irrelevant to
those who were invested over that time. Each RVW Wealth
Advisor is also a CPA and Personal Financial Planner. We
have a ruthless focus on the bottom line and on income tax
minimization, because it’s not what you earn but what you
keep that counts.
◆ What can advisors do to keep news-driven distractions
out the clients’ heads to keep them focused on their long
APRIL 23, 2018
‘Portfolio design is not a one-size-fits-all
exercise and you should expect your
advisor to design an investment program
responsive to your own situation,
needs and risk-tolerance.’
SELWYN GERBER
term plan and goals to grow wealth and prevent them from
exiting out and entering into the market at the wrong time?
JAMES: Cryptocurrency tends to generate its share of
headlines. The bottom-line is this: keep your clients
informed. Investors need a clear road map for their financial
future. The focus should be on establishing goals based on
their risk tolerance and their requirements. Rather than
respond to the market, we respond to the needs of the
individual investor. This means that we answer every email,
every phone call. It can be time consuming, but that’s our
responsibility. We share every piece of market data that we
receive. When our clients are informed they’re far less likely
to react to sensationalist headlines.
GERBER: Each client’s ship is guided by the stars and not
the prevailing winds. We regard the news largely as noise,
and generally ignore it. Media messages negatively affect
investors’ performance by reporting with dramatic headlines
which tend to cause them to panic and sell. For example,
many investors exited the markets after BusinessWeek’s
famous “Death of Equities” issue in 1979, which was just
before a multi-decade bull market, and there was a similar
stampede out in 2008. Those who reacted to the headlines
paid dearly. We are counter-cyclical educators - in bearish
markets we let our clients know that all bear markets end
eventually and that history is solidly on the side of the bulls.
In frothy markets we invoke the immortal words of Buffett
that “trees don’t grow to the sky” and that in time reversion
to the mean will cast a spell of bearish reality. Suppressing
one’s instincts and ignoring the pundits are key attributes of
the savvy equity investor.
◆ In today’s economic environment, which industries and
markets show opportunity? Any emerging industries of
interest we should be keeping an eye on?
JAMES: This answer may be a bit obvious coming from us,
but with the disruptive technology that is Blockchain we
see opportunity being created at an ever increasing rate for
investors. We think we’re only in the second inning of a nine
inning game in terms of the evolution of digital currency. We
started with just Bitcoin and now we have many many others.
We continue to see astounding growth. A lot is going to
happen over the next three to five years. You definitely have
not missed the boat.
◆ What are best strategies to help build and protect wealth
in this global economy?
JAMES: Diversification. Think longer term – not in months
but over multiple years. Think globally – It’s key not to have
a US only investment portfolio. One of the great attributes
of cryptocurrency is the enthusiasm and interest and support
we have seen from all over the globe. Think about where
the greatest value is being added and invest your capital
alongside this value creation. Blockchain and cryptocurrency
are creating a more advanced financial landscape that was not
even conceived only a few short years ago.
42
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 CRYPTO-CURIOUS?
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42 LOS ANGELES BUSINESS JOURNAL – CUSTOM CONTENT APRIL 23, 2018

WEALTH MANAGEMENT

◆ How do investors manage the complexities of the current
investment market?
GERBER: Investing should not be complex in any market
environment. Complexities in investing are often associated
with excessive fees, hidden charges and deceptive sales
practices. We favor a simpler approach to investing where
each client knows what they own and why, in a liquid, low
cost and transparent manner. The advent of ETFs (Exchange
Traded Funds) enables investors to access broad groupings
of investments with common characteristics under a single
umbrella at low cost. Companies that no longer meet the
selection criteria of the fund are automatically dropped - and
new ones are added as they begin to fit the rules of admission.
We regard this approach as a Darwinian best-of-breed
selection process. Combining a grouping of funds is much
like creating a financial orchestra where each fund functions
as an instrument, bringing a different attribute to the overall
harmony of the portfolio.
◆ What keeps your clients up at night in 2018?
GERBER: Financial peace of mind is our #1 promise. Being
invested in a diversified group of successful enterprises
selected in an objective manner and laddered secure bonds
where appropriate, our clients have absolutely nothing to
worry about at night, and they know it. They understand
that the portfolio has been properly designed to withstand
volatility, and over time to meet their expectations. In
addition, our educational process ensures that our clients
understand what they own and the expected volatility of
each element within their portfolio. If they’re not sleeping
peacefully we have failed in our primary task.
JAMES: For some clients they simply fear missing out on the
next big opportunity. For other clients it’s more complicated.
Many have come to us because they’re looking down the
road and realizing that they don’t have enough savings to
live the life they want in retirement, and this can be panic-
inducing. The window of opportunity is closing rapidly and
they see no way to fill the gap in time. In both cases, our
clients want to make sure they are not missing out on the
greatest opportunities for investment returns. They’re forward
thinkers. They’re not thinking month to month. They’re
thinking long term. And they see cryptocurrency and the
blockchain as incredibly disruptive technology with the
potential for huge upside.
◆ What should clients be asking their advisors in 2018?
GERBER: The first key question is to understand if there
are any conflicts of interest in the recommendation of
investments. The distinction between suitability and fiduciary
standards is a good starting point. Fiduciaries are obligated
to place the interests of each client ahead of their own
and will bring objectivity and genuine care to the wealth
management process. Most traditional stockbrokers adhere
to the less rigorous suitability standard. Understand what
the total fees and charges - direct and indirect - amount to
for each investment, and what incentives if any are provided
to the salesman for each sale. Many classes of mutual funds
charge higher fees in order to compensate the advisor more
generously. Investors should understand if the portfolio is
well diversified across geography, sectors, and stocks to avoid
concentration risk - and how similarly designed portfolios
have previously performed in times of market stress. Always
inquire about the educational qualifications of your advisor
and check public records for violations. Request periodic
reporting that is clear and readily understandable.
◆ What are some mistakes individuals make when working
with their wealth management advisors?
GERBER: Blindly trusting the advisor without understanding
the investment philosophy or the process is a key mistake.
Complexity is often a way to hide costs and fees - and to
mislead. In addition, the investment process should ensure
that there are absolutely no conflicts of interest between the
advisor and the investor. “Flavor of the month” is for ice cream
not for portfolios and we ignore the latest trends or fads in
investing like hedge funds, alternatives and venture capital.
Concentration risk in a specific region, sector, or stock can lead
to permanent loss of capital, and diversification is the only free
lunch for investors because it transforms risk into volatility.
Portfolio design is not a one-size-fits-all exercise and you
should expect your advisor to design an investment program
responsive to your own situation, needs and risk-tolerance.
◆ What is the best formula for creating a successful and
valuable relationship between you and your client?
JAMES: Education + Transparency = Trust. Our primary
objective is to educate investors on cryptocurrency and
blockchain technology. We exist as a resource to help
people and welcome the opportunity to talk whether the
conversations result in you becoming a client today, tomorrow
or never. It’s such a new phenomenon that many otherwise
savvy investors are just not informed enough to fully recognize
the opportunity. Secondly, navigating the crypto markets can
be as complicated as the technology itself. We make sure our
clients understand exactly how our signature process works
and the fees associated with it. By doing these first two things
correctly we are then able to build long lasting, successful
relationships built on a solid foundation.

Our Sole Focus is Your

“ The market, like the Lord, helps those Long-Term Economic Well-Being.
who help themselves... RVW manages wealth for individuals, families, retirement
plans and foundations. We have the experience and
But, unlike the lord, the market does not resources to design and implement a sophisticated wealth
forgive those who know not what they do. ” strategy that aligns with your unique financial, tax, estate-
planning and philanthropic goals.
~ Warren Buffett
The Three RVW Core Values
We are fee-only managers whose sole financial goal is to help
Introducing Our Expanded Team you reach yours in a planned and systemic manner. We are
compensated solely through your (fully disclosed) fees, taking
no undisclosed commissions or other third part incentives. Our
interests are fully aligned with yours.
We are fiduciaries and always act solely in your best interests,
which we place ahead of our own. All of our wealth advisors are
also CPAs and trained financial planners.
We are absolutely objective and bottom-line oriented. Each
RVW Portfolio is tailored to respond to the needs of the investor for
income, growth, tax minimization and safety.

Financial Planning • Wealth Management

Established 2006 | Clients in 43 states and 6 countries
CALL: 310.945.4000 | VISIT: www.RVWWealth.com

Back: (L to R) Kelly Richardson, Simon Liu, Elizabeth Turner and Stephen Seo Call us now for a complimentary evaluation and proposal.
Front: Mary Ann Moe, Donavan Schafer, Selwyn Gerber, Jonathan Gerber, & Loren Gesas

IMPORTANT: Past performance is not indicative of likely future returns. Always read actual offering documents carefully before investing. Investments not guaranteed and may lose value. This information should not be relied on. It is generic, may not be applicable to you and accuracy is not assured.

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