Andrew Stotz
IMPACT INVESTING

Andrew Stotz

#153

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CEO, A. Stotz Investment Research

Andrew Stotz – The power of constancy

“When you think about CEO, think growth. When you think about the chairman think risks”

ABOUT

Andrew is the CEO of A. Stotz Investment Research, which helps clients create, grow, measure, and protect value, and the co-founder of CoffeeWORKS – Thailand’s leading B2B specialty coffee roaster. He served two terms as President of CFA Society Thailand and during his investment banking career and was voted the #1 financial analyst in Thailand.

Andrew is also the Worst Podcast host of My Worst Investment Ever podcast, the #1 risk-management podcast that helps future generations reduce their investment risks by learning through the stories of others.

In addition to his three decades in the financial industry and teaching finance, Andrew has written four books and six online courses. Among them, ValuationMasterClass.com – the world’s #1 practical valuation online course.

REQUEST INTRODUCTION Arrow

THE FULL INTERVIEW

Andrew Stotz

The full #OPNAskAnAngel talk

Jeffery: Welcome to Impact Investing brought to you by SupportersFund.com from the sunny real estate capital of the world Toronto, Canada. I’m your host Jeffery JP Potvin let’s please welcome from sunny Bangkok Thailand Andrew stotz from stocks investment research and academy as our investor for today. Welcome Andrew it’s a real pleasure having you join us.

Andrew: JP Thank you very much. And I grew up in Cleveland, Ohio. It definitely wasn’t a sunny capital in Cleveland, Ohio, but maybe Toronto gets a little more sun than Cleveland, but definitely not more sun than Bangkok.

Jeffery: Well, that is true. That is true. I’m going to say that today was actually a really nice sunny day in Toronto. And I think I’m going to start using nice little lines in front of everything just to emphasize wherever I am in the world. But. So today’s my first throwing that out there. So I’m going to try and put a little bit more emphasis on where everybody is these days because it’s such a remote world. Right. But we’re excited to have you join us today. Really excited because, man, do you have such a great background across all platforms from starting companies, investing in companies all the way to the world markets. And today we’re going to get to dive into that and the way we like to start our show, Andrew, is we want to dive right into it. So if you can share a little bit of your background all the way from your school days, all the way through to what you’re doing today. And then one thing about you that we wouldn’t know.

Andrew: Yeah, well, thanks for that. And the one thing that probably nobody, very few people know is I served time in jail and that was when I was 14. So luckily it was at a young age, so it wasn’t on my permanent record. I was charged with encourage ability by my parents for my behavior, and I had a drug addiction and alcohol addiction problem and my parents were pretty tough and they said, throw the book at him. And that’s part of the lessons that I learned in my life. And then I went into, you know, my story is incomplete without understanding my background, which is that I went into three different drug rehabs when I was young and got into a 12 step program that helped me from that day till today. So I’ve never had a legal drink in my life and I’ve been clean and sober for 41 years. So that is, you know, and thanks to my parents for for pushing me hard at those in those early days. So and I try to provide inspiration for people who are facing addiction and other problems and challenges like that, that there is a way out. You know, if anybody’s ever listening to the things that I say at times, I always tell them, just go online and type in 12 step programs and there’s something out there that can help. When with the 12 step program. So that’s kind of the foundation. So when I left my parents house at 18, I just started to fly. I was ready to fly and I flew to California from Ohio and I struggled to try to get my education. I ended up, you know, getting an education as an analyst in finance or as a as a as a a student in finance. And in fact, Jeffrey, I just had a I call into my client a classroom in Long Beach State where I graduated from. And it was my professor who taught me in my undergrad in 1988, and it was his last year for teaching. And so I spoke to his class, which was, you know, really exciting. But when I graduated from finance, I ended up working at Pepsi. So I worked for three years in Los Angeles in manufacturing. And I think that was something that I wasn’t really like big on Wall Street or I didn’t really know much about. I just thought finance was interesting. But I went to work in operations at Pepsi, and I think it was a great move. And I always tell young people, when you get out of university, try to get a job in something that’s different from what you study. The reason why is because first it’s going to widen your horizons, number one. But if you figure out that I don’t like operations, you could always go back to the finance or accounting that you studied. But going from the finance or accounting that you studied to a new area is a lot harder. And so that’s some advice that I give. But I, I took a trip to take it to Thailand and in Asia when I graduate university and I found Thailand was very fascinating. I had a Cambodian girlfriend at the time I was in university in Long Beach, is famous for having a large population of Cambodian. We had about 10% of the population of Cambodians in of the population of Long Beach were Cambodians. So Thailand made sense and in 1992, I quit my job at Pepsi. I sold everything I own. I closed my bank accounts. I got rid of everything. I packed up some boxes. I got on a plane and I moved to Thailand and I started teaching finance for one year. And then I realized that I wasn’t going to make any money doing that. And the politics in a Thai university are even more complex for me than the politics in a Western university. And I just thought this is a field of battle that I’m never going to win on. So I stayed teaching all my life. So I’ve been teaching since since I came to Thailand. But I got a job as an analyst and I worked for ten years as a bank analyst, basically. And then I became a head of research and then I ran teams of analysts. So I lived through the boom times in 19, you know, when I started as an analyst in 1993, I lived from 93 until 1997 when we had the Asian financial crisis. So I was living in the boom times when banks were growing their balance sheets by 20%. And then I went through the bust time and during the bust time, basically I had to, you know, learn as an analyst to how to recapitalize banks and all of that. So up until 2023, I really learned a lot about that. And so I had a career as an analyst and then as a head of research, which I did all of that for about 20 years until I set up my own firm, starts investment research and he starts academy. Now, in 1993, about my best friend Dale came to see me in Thailand. He was studying in Japan and he’s fluent in Japanese. And he said, Coffee in Thailand is terrible. And so he said, Why don’t we start a coffee business? And so he came back and in 1995 he set up coffee works our coffee business, and we started to grow. But, you know, it was it was pretty tiny, I would say, in our first year was in 1997, we probably had $100,000 in revenue or whatever. We had a factory. And the key thing is that in the 1997 crisis, everything kind of fell apart. The economy in 1998 and Thailand contracted by 11%. It was brutal. And for the coffee business, it was basically a death blow. And for my job as an analyst, I lost it in in April of 1998. And we moved into the factory to try to figure out how to regroup and make our coffee business survive. And there’s just one little defining story that I tell is that in August of 1998, it seemed like all had been lost. We had invested our money. I had still had, you know, in savings and stuff. But, you know, it was we weren’t getting our business wasn’t running the way we wanted to. We didn’t have the money to try to expand. Plus there weren’t people buying coffee at the time. It was just a crisis. And so we were living in the factory since April of 1998, and I got a phone call in August of 1998 from my sister who said her cancer returned. And when I hung up that phone, Dale and I just sat there and cried in this, you know, rainy Sunday in the middle of, you know, a jungle outside on the outskirts of Bangkok. You know, in 1998, two American guys, you know, what are we going to do? I had to get on a plane, go back and see my sister. that startup is kind of a trap. Sometimes you get in a situation where you can’t go forward because we didn’t have the funding to hire the sales team. Plus there really wasn’t that much sales in a down economy. But you also can’t go backwards because if we wanted to exit and sell our business, we were going to get $0.10 on the dollar for what we invested. So sometimes you just sitting there trying to not get knocked out. And that is exactly what happened to us in the year of 1998. And maybe I’ll I’ll stop there because I’ve said a lot of stuff, but there’s more to the story. But that gives you a picture of my number one. I’ve done five different startups over my career, but that’s the one that I would say is the most interesting story in that way.

Jeffery: Well, that’s that’s great. I’m going to go back to kind