Michael Apstein of Primary Growth Partners: Investing During The Pandemic; What Should I Do With My Money Considering All of the Volatility and Uncertainty Today

I don’t know that I’d try to significantly change anyone’s investment strategy in this climate. People feel uncertain enough, why bring more uncertainty? If they’ve been comfortable in index funds, why switch now? Even if corrections are ahead, steep corrections, and I think that’s quite possible, someone who is going to play the long game in index funds, retirement plans, or real estate should be fine.

I had the pleasure of interviewing Michael Apstein.

Michael is the Principal Founding Partner at Primary Growth Partners (PGP). As a CEO and strategic business operator he has a track record of success including building two “Top 1000 Brands” in the US, and multiple companies to mid-market revenue and exit. Recognized as a national branding and marketing expert, Michael has been profiled in the WSJ, Success, Money, and NBC’s Dateline. PGP fulfills mission critical roles for select legacy, early stage, and emerging cannabis companies as a hands-on stakeholder, mitigating risk through deep operating expertise. PGP works with investors seeking direct investment opportunities in PGP Clients.

Thank you for doing this with us Michael! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the cannabis investing industry?

I’ve always had a passion about helping people directly connect to and for their wellness needs — to eliminate the middle steps in that process. So, I’ve spent 30 years starting and building companies in health and wellness and adjacent segments to do that. Along the way, I’ve had the good fortune of building a couple of “Top 1000 Brands.” When California, my home state, began laying the foundation to move from medicinal marijuana to adult use legalization, it became very clear to me it was the next wave of direct health and wellness access, and that consumers would need brands to bring clarity in the marketplace.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

When I was a young man, I got seated next to a famous industrialist at a dinner. My head got too big because when the food server got my order wrong, I was unpleasant to them. Notice the way I phrase that, which shows I’m still so embarrassed about it. The industrialist proceeded to tell me the history of US Soviet relations, to which he’d had a front seat for 50 years, over the course of the dinner. Throughout this long conversation, there continued to be tension between the food server and me. Late in the story, the industrialist placed special emphasis on how the Soviets were surprised by the ongoing US military build up following WWII, and that eventually they believed they had no choice but to join that arms race, starting the Cold War. The dinner concluded, he got up, leaned over to me and very close to my ear said, “the moral of the story, son, is that if you treat someone like an asshole, eventually they become one.” It’s a line I’ve never forgotten — and a rule I’ve tried to apply in every relationship, especially in disagreements, business or otherwise.

Are you working on any exciting new projects now? How do you think that will help people?

We get excited about every new brand we’re involved with. There’s one coming to market next year that just completely epitomizes feelings about being part of the cannabis community. There’s another that’s the perfect example of a California lifestyle brand — the kind of brand California has been exporting across the country for generations in category after category. Thinking of those examples, we’re excited when we’re in the roots, when we’re deeply connected to something. And that comes across — the genuineness of a product, the enthusiasm of bringing it to people, and giving deep clarity to the products.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

It’s so hard to pick one person, because none of us do it alone. Who we are, and where we are, is so made up of those who’ve helped us along the way. My father taught me to listen, and hear between the words, my mother taught me patience, my late wife taught me to see the whole person. In business, my first mentor taught me more things than I can list. When I was really green, I called him after I’d had a particularly awkward business meeting. “How do you start a business meeting?” I asked him. He invited me to attend a meeting he was having that afternoon. When everyone was assembled, he said (looking at me), “we’re all here meeting to talk about…” and he concisely laid out what the parties were meeting about, and what they hoped to accomplish by meeting. It’s a lesson I still use today, and have taught countless others. It’s surprising how many people don’t know how to start a meeting well.

Let’s shift a bit to what is happening today in the broader world. Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious? Can you explain?

I think we have to listen. Research shows when we try to make someone who is feeling sad or lonely feel better, they feel unheard and unacknowledged, and then often feel worse and more isolated. We really just need to listen to them, and acknowledge how they’re feeling. Then they don’t feel quite so alone. On a broader world basis I think we need to understand this is temporary. It may be a bit long of a temporary, and may bring certain lasting changes, but ultimately temporary. Warren Buffet gave a great talk where he went back and made coronavirus comparisons for the U.S. to the periods of 1776–89, slavery, the Civil War, the Great Depression, WWII, and the ’08 Great Recession. It was good to hear it put in that context, because it both acknowledged what a significant historical event this is, and also that we have survived, even flourished, after worse.

Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long-term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing $500 every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?

I don’t know that I’d try to significantly change anyone’s investment strategy in this climate. People feel uncertain enough, why bring more uncertainty? If they’ve been comfortable in index funds, why switch now? Even if corrections are ahead, steep corrections, and I think that’s quite possible, someone who is going to play the long game in index funds, retirement plans, or real estate should be fine. Diversification is always a good idea, but I think you have to stick with the economic vehicles you believe in.

Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?

It’s not always easy to predict recoveries. For example, from your question, pent up demand might drive travel and hospitality in ways we can’t see today while we’re still masked and mostly at home. It’s always smart to look at companies that make or deliver products and services people are clearly going to need and want, solutions to real problems, both during and following the pandemic. When I started into the cannabis sector, I couldn’t have predicted the pandemic, nor that cannabis would be largely deemed an essential business. Now analysis is underway which suggests it may also be a fairly recession proof sector of the economy. It’s made me think a lot about what’s essential, and what’s recession proof or resistant.

Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?

I think I’ll double down on what I just said. I like sectors deemed essential; I like sectors that look recession resistant.

Are there alternative investments that you think more people should look more deeply at?

Obviously, I like cannabis a lot. It’s such a young industry it’s still taking one step back for every two steps forward, and there are serious issues requiring resolution, not to mention it’s still federally illegal! But it’s conservatively growing by $8–10B a year domestically with a hostile federal environment, a challenging regulatory environment where legal, and an ongoing unregulated market (not included in that growth number). That impresses me.

If a person in their thirties and forties came to you today and said that they have $10,000 that they want to put away today for a long-term investment what would you advise them to do with it?

No brainer — the stock market has outperformed every other investment vehicle over the long term. Do a lot of research, pick a strategy, and stick with it.

Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?

First, it’s important to know yourself, and your partner. It’s easy to ask the question “what is your risk tolerance?” but the answer is more complex — it may vary between two people; it may vary within circumstances and sectors. It’s important to have your investment strategy be aligned with who you are. Second, really understand debt and leverage, and again your comfort level with it. Third, insurance is almost always cheap — buy plenty. Fourth, think long term — where you want to be in 20 years is much more important than where you want to be in 5 years. Finally, have fun — you’re going to make mistakes, you’re going to have losses, don’t take them too hard, they are investments in your education.

And remember to have some balance and treat yourself and your loved ones along the way. Yesterday I went for a long walk with a couple of my kids and my daughter was talking about a trip we took to Europe when she was 11. I remember it being very expensive — I have a big family, and it was long trip — several weeks in Provence, plus a week in Paris. She’s been back to France a couple of times since as an adult, but she said, “I’ll never forget that trip.” That’s an excellent return on investment!

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

I’ve had different life lesson quotes for different periods of my life. I’ve long loved the Theodore Roosevelt “daring greatly” quote and specifically the “again and again” line because it’s about perseverance, resilience, believing in yourself. Roosevelt was seemingly referring to big heroics, but it’s so important to acknowledge small heroism — good parents, teachers, and mentors, those whose light hands on a shoulder help guide good directions. I learned resilience from my parents, and as a lifelong entrepreneur, it’s been of immeasurable value.

The other one I have to mention, because it’s traveled with me since childhood is from Winnie the Pooh, “it’s a grand thing to be an afternoon.” It always reminds of both the finite and infinite nature of life, to enjoy the long stretch, to notice, be present, and that we invented hammocks for a reason.

You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)

It’s going to sound trite, but it really would be kindness and gratitude, which are wonderful complements to each other — the acts of consciously giving and receiving.