SEAN TEPPER | from Tykr

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My guest this week is Sean Tepper, founder and CEO of Tykr. We spoke about turning financial confusion into clarity. Sean’s 20 years in tech and 15 years investing shaped his journey. He built a service business in the 2000s, merged it in 2010, and learned service models lack big payouts. This pushed him to corporate roles at GE and Kohler while starting side hustles and investing.

Sean began investing in 2010 but felt lost picking stocks on E-Trade. By 2015, he studied Warren Buffett and Charlie Munger, diving into their math-driven approach. Inspired by Phil Town’s books, he created an Excel system rating stocks as green (on sale), gray (watch), or red (overpriced). This delivered 15-50% returns over four years. In 2019, he turned this into Tykr, a SaaS platform now serving 12,000 customers in 50 countries.

Tykr uses fundamental analysis, pulling data from public 10-Ks and 10-Qs. It evaluates eight metrics: revenue, net income, EPS, free cash flow, assets, liabilities, debts, and equity over 16 quarters. These roll into a traffic light rating, making stock valuation simple. Sean advises beginners to start with education for confidence. He suggests wealth-building mode (10-15 stocks, aiming for 15-25% returns) for those far from retirement and wealth-protection mode (index funds, ETFs, 8-10% returns) for those closer.

Sean warns against chasing stock tips without asking “why.” His “4M Confidence Booster” tool assesses math, meaning (business model), moat (competitive edge), and management, using AI to streamline research. The biggest mistake new investors make? Letting emotions drive decisions. Sean stresses discipline, citing Ronald Reed, a janitor who built an $8 million portfolio by investing consistently in 10-15 stocks.

Tykr’s stockpiling strategy is key: invest 50% monthly, save 50% for market dips. Sean’s 120% return in 2020’s COVID crash proves it works. Tykr’s three-step process—join, learn, invest—offers a 14-day free trial and daily tips like Duolingo’s micro-learning. It covers 60,000 global stocks, including Australian ones, with data updated daily for share prices and within days for earnings. Sean’s mission empowers investors with clarity and the confidence to invest in the stock market.

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TRANSCRIPT FOLLOWS AFTER THIS BRIEF MESSAGE

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EPISODE TRANSCRIPT

Phil Muscatello: Shares for Beginners. Phil Muscatello and FinPods are authorized reps of MoneySherpa. The information in this podcast is general in nature and doesn't take into account your personal situation.

Sean Tepper: We look past the numbers as well. We call this the 4M confidence booster. The 4M's of investing. You get the math part. That's the first M, which we do automatically. Then things get a little more complicated thereafter. You have the next M, that second M, which is the meaning. That's the business model. How many revenue streams does it have? How scalable are the revenue streams? Then you have the moat. That's how business compares to other businesses in the same sector and industry. And then the last M is the management. That's the track record of the CEO.

Phil Muscatello: G'.

Sean Tepper: Day.

Phil Muscatello: And welcome back to Shares for Beginners. I'm Phil Muscatello. What's the real difference between long game investing and the high stakes thrill of trading? And which one's actually right for you? If either, how can you dodge the number one mistake most people make that wipes out all their gains? Today we're unpacking all of that and more with a guy who's turned financial confusion into clarity for thousands.

Sean Tepper is the founder and CEO of Tykr

Joining me is Sean Tepper, founder and CEO of Tykr. Hello Sean.

Sean Tepper: Hey Phil. Good to be here. Thanks for the invite.

Phil Muscatello: So as the CEO of Tykr, obviously you've got some history. Tell us about your background and what led you up to this point in your life.

Sean Tepper: Sure, you got it. It's like a two to three minute story here. It's somewhat entertaining, so bear with me. But my background is about 20 years in tech, 15 years invest and I it really started in the late 2000s. I was building my first business. It was just a service business building software and websites for small and mid sized businesses. And we went through a merger in 2010. Now I was not written a check like hey, here's a million dollars, you can ride off into the sunset. It was none of that. It was a situation where all debts and liabilities wiped clean. So it was a lot of hard work without a big payday. And that was a lesson learned that hey, a service business do it because you love it but an acquisition multiple really isn't there. So at that point or after those four years, I realized the business model I wanted to create because we served a lot of like restaurants and I think there is a car dealership in there, maybe an automotive repair shop, a m, few E commerce businesses, but kind of the top of the food chain as I'd phrase it would be a SaaS business, that software as a service, the reoccurring revenue model. I'm like, ooh, that's, that's what I want. However, I didn't have any good ideas that had lower competition. So I decided, path of least resistance, let's go work for corporate. And from there I went to work for ge, went on to Kohler, and worked with a few other businesses. But my plan was to work for corporate for two years. That turned into 12 years. And on that journey I invested in a few or started a few side hustles or businesses, and, uh, most of them failed. I also started investing between 2010 and 15, and in my situation was where most beginner investors start, which is you don't really know where to start. You join a broker like I joined E Trade here in the States. And then I didn't know what to do regarding picking stocks. How do I know if, like Apple or Microsoft or Tesla or Nvidia is actually good or bad? And it's kind of like investing blind now, over those first five years, I maybe kept up with the market, but I paused in 15. I'm like, I, I can't keep doing this. This is not sustainable. I have to figure out, how does Warren Buffett and the late Charlie Munger, how do they invest in the market? You and I both know, and most of your audience probably knows this too, is these are not gambling men. They don't use feelings or emotions to pick stocks. Which means they're probably starting with some sort of math, some logic, and decided, I'm going to figure that out. I've got a, uh, stronger math background. And I'm like, I can reverse engineer this. So I read as many books as I could and then went down the YouTube rab hole. And I found a guy by the name of Phil Town, and he wrote a few good books. And in those books, he provided some of the calculus. I moved that over to Excel, and then I'm like, you know what I need to do? I need to make a rating system that makes it super easy for me to know the difference between a good and bad stock. So I was thinking, all right, what's the easiest to understand rating system around the world? And I'm like, you know what? It's traffic light. Traffic light does a pretty darn good job. So I created a system where stocks roll up to either on Sal watch or overpriced. That's green, gray, or red. I then use this Excel sheet the next four years, making returns between 15 and 50%. And in 2019, things kind of came to a head where I started sharing this Excel sheet with a few other people and everybody's like, hey, you should turn this into a software to share with others. So it's like a nine year, we might as well round it up to ten year journey to think of a SaaS idea and decided, let's do this. Green light. Took a year to build the first version of Tykr

00:05:00

Sean Tepper: and we went live in 20. And then, yeah, fast forward to today. We have over 12,000 customers in about 50 countries.

Phil Muscatello: Okay, so it started out as a spreadsheet just to. Let's dig in a little bit to what it was like turning it from the spreadsheet into the business. And was there anything that you learned extra along the way while you were turning it into a SaaS model, for example, or is it just basically you've worked out the methodology and you've been able to pretty much transfer it into Tykr?

Sean Tepper: Yeah. Fortunately, using it those four years, it went through some iterations through those four years and calculations, for example, that like Warren or Charlie Munger would use or Phil Towne would use it. And a lot of it I agreed with, but some of it I'm like, you know, a little misleading, a little over engineered. And long story short, as you mentioned earlier, we are open source. So you can go to Tykr.com, there's an educational button. If you scroll down, there's calculations. And we do have patents on, um, some of these processes. But we wanted to get rid of the black box and just be like, all right, here's the math. So. So yeah, to answer your question, I really worked out the kinks in Excel those first four years and then converting it to code, that took a long time. It was a lot of, a lot of code writing to get it converted and then a lot of test engineering is one of the most non glamorous parts of building a tech company. But it was a lot of that. That's why it took a year to build to get the mvp, that minimum viable product launched.

What are some of the metrics that you use to value companies

Phil Muscatello: Okay, can we have a quick look at that manual stock analysis that you mentioned? What are some of the metrics that you use to value companies?

Sean Tepper: Yeah, so we look at. And again, all the credit I have to pass to Phil Towne, Warren Buffett and Charlie Munger. But I'll give you eight key lines we look at now. We don't do anything related to trading, so we don't care about charts. Even though there are Charts in Tykr. We don't use charts to calculate where businesses are going, which means we look at the fundamentals. So here we go.

Phil Muscatello: This is fundamental analysis 101 really, isn't it?

Sean Tepper: Yeah, fundamental analysis 101 is a good way to describe it. Yes. So we look at the income statement, cash flow statement and balance sheet. On the income statement we look at three lines, the revenue, the net income and the eps. And we want to see these numbers increasing quarter over quarter for four years. You get a higher score if you have more increase from quarter to quarter. Of course if you got a pullback, you're not going to get as high of a score. That score, overall financial strength rolls up to 100. We won't break that down here because that gets a little more complex. But the display to the customer is easy. So anyway, that income statement is three lines. Revenue, net income, eps, the cash flow statement. We look at free cash flow, same situation, 14 quarters. We want to see the increase quarter over quarter. And then the balance sheet we look at four, four lines. The assets, the liabilities, the debts and the equity. Now with assets and equity we want to see increasing and the liabilities and debts we want to see decreasing. But overall it's 16/4. Ideally of course, if it's a newer IPO stock and we can't get that much data, we can still calculate, but we need a minimum of two quarters. So that's kind of the range. Need a minimum of two, maximum 16. And that provides enough rigor to, to create the scoring system which rolls up to that traffic light rating system.

Phil Muscatello: And these numbers, they're based on company reports which are published quarterly and anyone can access them. I mean you can go to the manual stock analysis page and then go to say Yahoo Finance. Get these figures and try start starting to work it out for yourself. That's possible, isn't it?

Sean Tepper: Correct. Yeah. You've got your 10K and 10Q, the 10Q being your quarterly reports and then the 10Ks being your annual reports. But you're right, it's, it's all public data. There's no secret here to the data. But yeah, we pull it all in a Tykr and then we run our calculations and then roll it up to uh, an easy to read system thereafter.

Where should a true beginner start in the stock market? Is it index funds

Phil Muscatello: So where should a true beginner start in the stock market? Is it index funds, individual picks or something else entirely?

Sean Tepper: I actually, I'll answer that in a different way. I would say start with education because if you can become educated, you can increase confidence in and this will Give really good feedback for a lot of your listeners. You know, making money, getting good returns, you know, beating your older brother in the stock market, jokingly saying that here, but those are all nice to haves. The thing that actually the majority of our customers care about is confidence. Like that moment people can do this on their own. That is literally the home run feeling. So we tell people, start with education. And then I'm going to take a minute here to kind of describe to you. You have really two paths thereafter. You have wealth building mode and wealth protection mode. Wealth building mode is when you are, you're still working and you have a

00:10:00

Sean Tepper: timeline to retire that is five years out or longer. And our onboarding teaches pretty much everything I'm going over here. But in that case, you want to be in about 10 to 15 stocks. If you're in wealth building mode, for example, Warren Buffett, he made his first million investing in about 10 businesses. Now when you are five years out, less to retirement, then you want to consider shifting to index funds, ETFs, and mutual funds, essentially bundles of stocks. In that case, and I'll give you the returns here. In that case, returns you can expect, as you know, are like around 8 to 10%. Whereas wealth building mode, no guarantees here, but you want to be aiming between 15 and 50%. In fact, most of our customers kind of fall between that 15 and 25% per year. That's where compound interest makes a significant difference. And I'll say one more thing here and then I'll stop. I see too many people in their 20s, 30s and 40s investing in these bundled products, putting all their money into 401ks or ETFs, index funds or mutual funds. And the problem is it's just too slow. It's the old way, 100 years ago of investing is just, it's not the same. And unfortunately, even advisors, they're teaching you how to vest, but they're not teaching you Warren Buffett style, which is 10 individual stocks, because that's where you get those big returns. So in other words, you can, you can reach a million. And I'll give you some fun numbers here. If you invest a hundred dollars a week, you start with 5,000 in your account. Invest a hundred dollars a week. How long do you think it'll take to reach a million dollars?

Phil Muscatello: I think it's what, 20, 25 years, something like that, Maybe even a bit longer.

Sean Tepper: At a 25% return, it's about 17 years. Now, if you invest in 401k ETF index fund and mutual fund. If you start with $5,000, invest $100 a week, it's not going to take you 17 years to build up an account or portfolio of a million. It's going to be closer to 35 years.

Phil Muscatello: It's double take control of your investments. Sharesite has you covered. It's Investopedia's number one track. DIY investors get four months free on an annual premium plan@sharesite.com sharesforbeginners.

You've mentioned in some of, when I've been doing some research, uh, you mentioned

You've mentioned in some of, when I've been doing some research, uh, you mentioned that people often get tips from their friends or family and you provide a couple of questions to ask when someone does provide that tip that will, you know, work out if they're on the level or not.

Sean Tepper: Yeah. So somebody tells you to buy a stock, the last thing you should do is buy that stock. The first thing you should do is ask why. That key question. Ask why. And in most cases, people can't give a logical explanation if XYC is a good investment. And that's why, I mean, if you're not using Tykr, we do teach people to do it manually by going to Yahoo Finance or Market Washington. You can simply eyeball the quarter over quarter. And I'll do that with people doing exercises like, okay, so you think XYZ stock. We did this with Figma recently and we use Figma Tykr. Great company. What, I invest in the stock, probably not. But we went to Yahoo Finance because it's not quite in Tykr yet. And we looked at the quarter over quarter because I think they released 2/4 and Yahoo wasn't quite in Tykr yet. But I'm like, check this out. We're seeing the EPS going down, the profits are going down, we're seeing other numbers going down. Does that give me the confidence to invest? The answer is absolutely not. But as soon as I showed people the manual way to do it, they're like, oh, that makes a lot of sense.

Phil Muscatello: There's a bit of a light bulb. And what's the second question?

Sean Tepper: The second question to ask is, gosh, I get a series of questions, but one question I would ask people is, what is a stock you were investing in and why? You know, and listen to what they have to say in that case. And sometimes you'll hear a fun story. You know, this is a business I use and this is something I like. You know, it. Warren Buffett teaches us to invest in what we know, which is great advice. But yeah, sometimes people are only doing that, like, hey, I, I like Shopping at, you know, remember you're in Australia, but like in the US it was JCPenney. And there are, there are other restaurants that are now defunct. They're pretty much out of business. Just because you're using it doesn't always mean it's a good investment.

Phil Muscatello: And on the flip side, of course, it's never worthwhile giving tips to anyone, is it? It's, it's not a very good idea. And it's a zero sum game really, isn't it?

Sean Tepper: It is. That's why at Tykr, this is really critical. We, we fall into what's called a publisher exclusion category. And I won't go into too much detail here, but we can give personalized financial advice and our competitors, same thing. If you want personalized financial advice, you go to an advisor. But we give people the tools. They can essentially they can come to their own conclusions, they can pick their own stocks. They have the power to do it on their own. It really rolls up to

00:15:00

Sean Tepper: confidence. But you're right, it's, you know, I can't go around and giving, you know, you should go buy XYZ stock. You see that with too many financial influencers on, um, you know, YouTube, Tikt, Reddit or whatever, and it's like it's all noise. Don't, don't bother with social media.

Phil Muscatello: Like you say, there's a lot of influencers, but there's a lot of systems out there that are being marketed, trading systems. And a lot of beginners get sucked into these things because they're promised, you know, great returns in a very short period of time. And they usually depend on charting and those kind of things. I mean, this is one of the reasons why I wanted to get you on the podcast because you're looking at fundamentals and you're not promising quick returns, you know, in short periods of time.

Be very leery of these businesses promising big returns in short periods

What are some of the things that listeners and viewers should be looking out for when they're presented with these kind of offers on the web and social media?

Sean Tepper: Yeah. So I'd say be very careful. I, I see this all the time about, you know, a new crypto coin or a, ah, precious metal holding company or a crypto exchange. There was FTX a few years ago. Be very leery of these businesses promising big returns in short periods. You know, you, you want to really understand that this is, this is integrity focused. It's, there's transparency. That's the key thing is I knew coming out of the gates, I'm like, all right, so this is before 2020. I have to do something different here. And I got to flip this on its head. All right. Calculations, open source, yet at the same time, we'll get our patents just in case. But that, like, if businesses are not giving you the formula, like, what's going on behind the scenes. Yeah. I would be very, very leery. They don't have to show you like CEO portfolios because of course the CEOs we follow, they're not going to show their portfolios. Like for example, Satya Nadella is a CEO. I like, is he showing his portfolio? No, I don't need to see it. But like when a business is picking stocks or analyzing stocks or, or let's say there's a crypto business that's doing the same, it's like, how are they doing? It's like, let's give me the reason. If it's really complex, but I can still read it and understand it, that's the moment I can say, yeah, I'm not gonna, I'm not gonna recreate the wheel. I'll just use the tool.

Tykr offers three stages of investing: Join, learn and invest

Phil Muscatello: Right, so tell us about the Tykr three stage process. Join, learn and invest.

Sean Tepper: Yeah, we try to keep it simple. Power three. So, um, we tell our customers, you can join for free. We are 14 day free trial. And then, um, similar to our competitors, I think we start at like depending on your country, the currency changes, similar to Netflix, but in the US it's like 15 bucks a month or $99 a year. So you want to join, you want to learn. And what we do there is when you join, you get a new investing tip every day, an email tip. Now in the bottom of those emails, especially the first few, there's a link that says you can go read them all in one go. Like if you just want to binge read them, we're not gonna hold you back. So you can read those tips. What is like 30 days of tips? We also have in the mobile app Duolingo inspired learning modules. Like, have you ever used Duolingo for language learning?

Phil Muscatello: I have, yes.

Sean Tepper: Okay.

Phil Muscatello: Although I'm not sure if I like the gamification of it too much. You know, I need a bit more grammatical information, but I'm sure it's a bit different with Tykr's model.

Sean Tepper: Yeah, ours is not as sexy as Duolingo, but there have been studies done that. And we have courses at Tykr, but long form courses online only have like a 30% or less completion rate. Whereas with these micro learning modules like Duolingo, it's like upwards of like 90% or higher. Like when people start it, they'll complete it, which is drive. It's a forcing function to driving results. And we're like. And I remember reading something like that along those lines and I'm like, wow, duolingo. I mean, they've got 600 million users, it's okay. So they're doing something right.

Phil Muscatello: It's an amazing company. I know, right?

Sean Tepper: So it's like we need to do that. And that, that has actually helped people go from, you know, zero to 60, if you will, in a short amount of time. They can go as we tell people. We don't promise it, but the goal is to go from beginner to confident investor in 14 days or less. And those modules have significantly helped. So it's kind of like the emails and the learning modules. Pretty similar content. They help people get to that confidence stage.

Phil Muscatello: So confidence is so important, first of all in feeling confident in what you're choosing to buy when you're approaching the stock market. But it's also confidence to believe in a company because you've got the numbers backing it because, you know, share price doesn't often correlate with, uh, the underlying numbers as well. And you've got to have some commitment to why you're still in a company. And you can go back and look at it as well.

Sean Tepper: Yeah.

Don't focus on share price, you want to focus on fair value

So one thing I have to say about share prices, and this is Warren Buffett has said something like this is he doesn't actually worry about share prices. You know, for example, you can

00:20:00

invest in a business, the stock market could close for the next 10 years. He doesn't care. What he does care about are the fundamentals. That's what we care about. Now there are people that Tykr that'll get a little, they'll get worked up with charts. They'll look at, well, the share price is here and it feels really high, feels overvalued. We do place and this is an element of our rating system. We tell people, don't focus on share price, you want to focus on fair value. What is a real value of the business? And we show the calculations on how you arrive there. But long story short, it's based on the EPS growth rate. So here's a good example. Let's say you see a share price at $500. Right off the bat, people are going to be like, oh wow, that's really expensive. I'm gonna be like, no, no, no, no, no, don't look at that. What's the fair value? But if you see the fair value is at A thousand dollars. There you go. You got a business right there that's 50% off the fair value. And that's. Warren Buffett is. He stated this is you want to buy $10 bills for five bucks.

Phil Muscatello: And we're all always influenced by narratives. We love the story of a company. It sounds so exciting. But you really do need to back it it up with solid research about whether it is providing value or just a great story. Because, you know, let's face it, CEOs, uh, are often great salespeople that are trying to sell the benefits of their company.

Sean Tepper: Yeah, this goes back to, you know, people, influencers out there trying to sell you to, you know, invest in their stock or their business or whatever thing they're hawking. But at Tykr, we've got a tool, and I think you'll appreciate this. We look past the numbers as well. We call this the Forum Confidence Booster. The forums of investing. You know, warm. Buffett kind of used a framework of this, but Phil Town coined the phrase forums. We put a patent on Forum Confidence Booster. But here are the forums. You get the math part. That's the first M, um, which we do automatically. Then things get a little more complicated thereafter. You have the next M, that second M, which is the meaning. That's the business model. How many revenue streams does it have? How scalable are the revenue streams? Then you have the moat. That's how a business compares to other businesses in the same sector and industry. And then the last M is the management. That's the track record of the CEO now doing homework in all four, especially those last three. It could take you hours, if not days of research. We use OpenAI. It's connected to Tykr, and we reduce it down to seconds. We actually created a scoring system where it's 0 to 100, and if you can get over 80, which is very hard to do, that is high confidence in the stock. So whenever you hear a CEO talking about their business or you see something on the news like, hey, this is a great opportunity. I part of the reason I created Tykrs, I needed to cut through the clutter because I'm a big podcast listener. I consume, consume, consume all the time. And I'd hear stock recommendations, and I needed a way to be like, all right, is that actually a good investment or not? Well, this forum tool is like looking at all the rating. It's another layer of confidence over everything to really be like, all right. It's not just the math checks out, but the entire business really checks out. So that way, again, I'll, all the time, especially new IPO stocks. You've got an excited CEO pitching, you know, get into my stock, and I'm like, yeah, let's, let's see about that.

What's the number one mistake that new investors make when investing

Phil Muscatello: So what's the number one mistake that you see new investors make and what is it? And how can we stop sabotaging our portfolios?

Sean Tepper: Now, the good news is, and all the listeners out there, you, you don't have to be an expert at math and you don't have to be the smartest person in the room, which I am certain, certainly not. What you do need to do is control your emotions. So what that means is when you buy a stock, doesn't mean you need to freak out the next day when it goes down. Because this happens all the time. And people are like, sean, it feels like whenever I buy a stock, that very next moment or the next day, it goes down. Do I, am I cursed? No, no, no. Nothing wrong with you. This is the next.

Phil Muscatello: It happens to all of us, doesn't it?

Sean Tepper: All the time, 100%. And I, as, as I phrase it, it's like you got to look at the stock market as waves in the ocean. They're going up and down at all times. But we have to think long term. Like when we buy a strong business, we got to keep investing because we want compound interest in our favor. For example, I'll give you the tactical advice here is we tell people, if you're in wealth building mode, it's 10 to 15 stocks is where you want to be and you want to try to invest between 15 and 30% of your monthly income. And if you can do that, compound interest will be your best friend, essentially. And I got a quick story here, and then I'll pause. There is a story out there by a guy by the name of Ronald Reed. He was a janitor making close to minimum wage, but he built up a portfolio of $8 million. Question is, how does somebody making minimum wage or close to build up a portfolio of that size? Well, the answer is investing in about 10 to 15 stocks. Now, he did this through the 70s, 80s and 90s. He was investing in like

00:25:00

Sean Tepper: GE, Dow Chemical, Walgreens, CVS, there are a few others. But of course, valuations with these companies have changed. But he had the discipline. This is the key thing. He had the discipline to never skip a month. He always put a little bit into the stock market as opposed to putting a little bit into a savings account. I see too many people becoming fearful, letting emotions take over, and they will skip months or they'll say, you know what, I'm just gonna wait. I'm gonna wait the next few months and see what happens. Can't do that. You can't do that. You gotta be like Ronald Reed and you gotta be fearless and keep investing because. And I'll leave. Leave your audience with one key tip here, which is really important, which is over the last hundred years, there have only been 17 bear markets or recessions with an average downturn of about 10 months. That tells us when the market goes down. It really doesn't go down for long. So stay fearless and keep investing month over month.

Phil Muscatello: Yep. The stock market's the only store where people run out of the door when prices go on sale.

Sean Tepper: Yes, yes, well phrased.

Phil Muscatello: Sorry, that wasn't mine. I've got someone else who said that. I won't take credit for that. Super. Is one of the most important investments you'll ever make. But how do you know if you're in the best fund for your situation? Head to lifesherper.com to find out more. Lifesherpa, uh, Australia's most affordable online financial advice.

Stockpiling is the number one most important strategy out of anything

So how does Tykr protect investors on the downside? Because not every recommendation is going to work, is it?

Sean Tepper: Yeah. So with Tykr, when times are good, Tykr's good. Like you're gonna make, not guaranteed, but most cases you're making those returns that are between 15 and 50%. Our defensive strategy is actually an offensive strategy. And this thank you to Phil Town for this. The number one most important strategy out of anything I talk about today. This is key. And this was my aha moment when I was reading his books, which is a strategy called stockpiling. And you really only need one or two good stockpiling opportunities in your life and it'll change your life financially. So here's how it works. You want to set aside capital. Like at Tykr, we actually teach people. You want to put money into your broker every month, but only invest 50%. So we'll use some nice round numbers. Let's say you send $1,000 to your broker per month. You want to DCA dollar cost average, 50% of that 500 bucks every month. And the other 50% you set aside, that is stockpiling. Because when the market goes down, which we know does not go down for long, you need to deploy that capital because that's when you make some big returns. So here's an example in my world, and then I'll give you a fun example of a blue collar worker and how it changed his life. So in my world, probably my best returns were 2020. The COVID dip. You probably remember that vividly. It was, it was February through March or April. The market went down about 30%. Why stockpiled? I'm like, all right, this is a great opportunity. I was setting aside capital I stockpiled in that year because all my stocks, those on sale stocks, took off. My returns that year were 120%. Am I going to make 120 every year here? Absolutely not. That'd be nice, but it doesn't work that way. You need the market to pull back. Here's an example of a buddy of mine and he, he was a plumber. Was a plumber is the key phrase here. In 2008, the market had huge downturn. It was like 38% down. The financial market crash. And there were the three automakers in the U.S. you got GM, you got Chrysler and Ford. Well, of the three, Ford decided to not take a bailout from the government because their, their balance sheet was strong enough. Now this guy had enough intuition and he, he was listening to Warren Buffett that, hey, you want to buy businesses with a strong balance sheet? So he put two and two together, took a hundred thousand dollars he had set aside, put it into Ford, that $100,000 turned into 2.5 million in about a year and a half. And he was done. Done. Is that event going to happen every year? Absolutely not. But you need to be ready. Have to strike while the iron's hot. I can't emphasize this because if you, if you see the market pull back and you don't have any capital set aside, that's a horrible place to be. You want money set aside because again, it can change your life. And I got other stories like his. That's just one good example where he was able to retire and his younger 30s because of that event.

Phil Muscatello: And that's the beauty of dollar cost averaging, isn't it? Is that if you're putting your money in regularly, week in, month in, however, um, your cadence is that you're going to be getting those times when the market is down as well and buying companies when they're on sale.

Sean Tepper: You're right. Because if that's part of that 50, 50 strategy is 50% DCA, 50% stockpile. You're right. When it's going down, you're

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Sean Tepper: still buying more. So it's almost like a one, two punch. You're buying more dca. But, oh, I've got chunk of change here. Dry powder set aside. Let's deploy that into A few really strong stocks and that's, that's when those big returns are, are manifested.

Having high assets and growing equity is so, so critical

Phil Muscatello: Can we look at the importance of the balance sheet? Dig a little bit deeper into that. Why is the balance sheet so important?

Sean Tepper: Yeah, having high assets or growing assets and growing equity is so, so critical. Lower debts. You see too many businesses out there, and this is very common especially in the startup world is they're way over leveraged, they're, they're taking out debts, they've pretty much, you know, all the equity in their business, they've given up. There are CEOs I've, I've seen and I'm not going to say any names, but they've diluted their shares in the business to less than 1%. You know, just way, way over allocated in the wrong spots. But yeah, the balance sheet is, it is critical. It's almost like the, it's the foundation of a house essentially. You want to make sure that is strong, it can stand up on its own. That's, I mean Warren Buffett has taught this for years. You get a business with a strong balance sheet, if it doesn't have a strong cash flow statement, a strong income statement, it can still sustain. But if you don't have a strong balance sheet, it can almost, it can cripple the entire company.

Phil Muscatello: So what's the kind of metric that you use to look at the balance sheet?

Sean Tepper: Well, I actually don't look at any specific. We've got uh, like metrics, like any ratios. I straight up because of the Tykr rating system, I look at that score and I like to see stocks that have a 50 or higher because that's looking at the income statement, cash flow statement and balance sheet. Because me, I be honest with you, I don't just look at the balance sheet, I want all three because it provides more rigor, gives me more confidence in the business. But if I wanted to look at a ratio, you know, there's debt to equity ratio. I don't have a what, what is good number example but I know every once in a while I get customers that ask hey, do you have that in Tykr? And we've got like, I think like a good 15 different ratios like return on invested capital, return on assets, return on equity, debt to equity ratio, current ratio, quick ratio. We got a few others, but those are a few examples.

Phil Muscatello: Yeah, it's great because that's the kind of jargon that makes most people beginners eyes glaze over. So it's good to even me who.

Sean Tepper: Created Tykr, I don't even use those ratios. It's like the super. It's the investing nerds that are using four other platforms and then making a decision like teach their own. But it's like they look at this platform, that ratio, then this platform, that ratio. It's like over analysis to the nth degree. And you're right. Like most people eyes are going to glaze over. Like when I got a request today. This is funny. He's like, it was some ratio that I've never heard. I have to go back and listen to episode never heard. And. And he's like, could you add that to Tykr? And I'm like, sure. Like, is it going to make you any more money? I didn't say that to him, but like, yeah, we'll put it on the list. Maybe we'll add it.

Phil Muscatello: Yeah.

When building a business, one of the most important things is listening to customers

You seem to have quite a personal relationship with a lot of your customers. What are some of the stories that you hear as they come and start the ticket process?

Sean Tepper: Thank you for asking that question. And this I'll give a little snippet that's really important, is when building a business, one of the most important things you can do, if not the most important, is listen to your customer, understand all the details, all the pain points. What are they looking for? One of my favorite books is Mom Test. I'll get back to your question here in a second, but I got to say, this mom test or the. I think it's the Mom Test. It's a great book on asking the right questions. And a good example of this is don't ask your customers about your own platform. Ask them about what platforms do you use? What are your favorite features on those platforms? What do you pay for? How much are you paying? So it takes you and your business out of the equation. But through the years, I probably talked to, you know, not on zoom calls only, but it's. It's like a combination of email and zoom calls. Probably over a thousand people. And in the things I've learned through the years, it's a lot of common threads of like, how do I get started? When do I buy? When do I sell? How do I increase confidence? And those are some of the key questions that are repeated over and over. There's numerous others, but that's kind of like the frequently asked questions. And so a lot of what we do focuses on on answering those questions as quickly as possible. Here's where you start. Here's when you buy, here's when you sell, here's how you reduce risk. Here's how you increase confidence. And then along the way, of course, I built, thank God for this. But I've, because of Tykr, I've. I've made friends with people all over the world, get to learn about their hobbies and their culture and their favorite foods and their favorite movies, their wife. It's, it's just, it's been really a joy on that side because it is, it has been a relationship building tool, not

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Sean Tepper: just a, uh, way to build wealth, if you were to say it that way. But, but yeah, good question. That it's been more than just business. It's been building some really good friendships.

Sean: Tykr covers stocks around the world. We have two data providers

Phil Muscatello: Now, I just wanted to talk about my own experience because I installed the Tykr app the other day and it seems to cover, well, a lot of the stocks here in my country in Australia. Funnily enough, the first one that came up was BBC. And this is the day after our, uh, grand final, football grand final, which is a little bit like your Super Bowl. And suddenly this company was up 40%, the company that owned this team that won the grand final. And I thought that was quite amusing. So Tykr covers stocks around the world. Is that the case?

Sean Tepper: It does, yeah. We have two data providers right now that give us about 60,000 stocks around the globe and there's about 75,000 and around the world. So we're about 80% of the way there. We're hoping to close that gap within the next few months. But yeah, you're right, we do have a lot of stocks from Australia.

Phil Muscatello: And another one that I noticed is a company called Iren I R E N, which is listed on the nasdaq, but which is really an Australian company. And funnily enough, it's now worth more than the whole of the Australian Stock exchange.

Sean Tepper: Yeah, you're right. There's a ton of businesses we've got in Tykr and in. And we'll get people. I gotta provide a quick tip here. You know, there are people we'll get from countries that are not as large as Australia or the US and they'll be like, hey, Sean, I want to invest in the apple of my country. How do I find that? And my response is, you can invest in stocks in your country, but if they are only serving your country, do keep in mind there's a revenue ceiling which means there's going to be a profit growth ceiling. So I tell people you want to try to invest in companies that are global. And yes, there are going to be a lot of them based in the States. And I know some people are Like, I don't want to invest in U.S. stocks. Well, think global because if you can scale the revenue beyond the walls of your country, invisible walls here, you and you have good leadership. They can optimize the profits and that's where you build those consistent returns. So in my case, I'll just be transparent. I do Invest, I got 20 years in tech. I do invest in a lot of tech companies that have a global footprint. Nvidia being one of those, Microsoft being one of those, Apple being one of those. They have massive global footprint and if they're well run, they can optimize those profits.

Phil Muscatello: So with the data provider, how quickly is the data ingested into the system and then expressed through the numbers and the algorithm?

Sean Tepper: Yep. So the share price is important. We get that every day because that allows us to track where things are at in correlation to the fair value. But yeah, share prices once a day. And then the earnings reports, those quarterly earnings reports, in those annual earnings reports, it's usually one day after the event or two days, sometimes three days. But it's again, the two data providers, and I will say one is a little quicker than the other, but it's within a short, short enough duration that you can make a pretty, pretty quick decision in the market.

Sean Tepper: How can listeners and viewers find out more about Tykr

Phil Muscatello: Okay, so how can listeners and viewers find out more about Tykr?

Sean Tepper: Yeah, I try to keep it simple. Just go to tyker.com, that's t y k r.com and in one more location. If you're interested in getting, uh, to know me, you can go to LinkedIn. Sean Tepper. Sean is about the Sean Connery way.

Phil Muscatello: And I'm going to be setting up a landing page on the website, which is Shares for Beginners, uh, where you can find out more and link through to the special offers from Sean and Tika. Sean Tepper, thank you very much for joining me today.

Sean Tepper: Thank you very much. I appreciate it.

Phil Muscatello: Thanks for listening to Shares for Beginners. You can find more at sharesforbeginners.com if you enjoy listening, please take a moment to rate or review in your podcast player or tell a friend who might want to learn more about investing for their future.

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