What bearing do King Arthur, Merlin, Excalibur and the Knights of the Round Table have on investing? What information do you need to go into battle in the markets? What are your sources of investing data? How can you manage risk?

Guido Petrelli was just 16 years old when he opened his first trading account. He realised that before executing any trades, he had to develop a diversified and balanced investment strategy in order to succeed. Many spreadsheets later he started thinking about something easier and quicker that anyone could use. That was the time when Merlin Investor was born.

Merlin Investor is an easy-to-use online tool for INVESTMENT RISK MANAGEMENT aimed to LIMIT POTENTIAL CATASTROPHIC LOSSES and BUILD LONG TERM STABLE RESULTS. The Merlin Investor Community is for YOUNG RETAIL INVESTORS who want to be the one and only master of their own financial future thanks to STRATEGIC INVESTMENT PLANNING

TRANSCRIPT FOLLOWS AFTER THIS BRIEF MESSAGE

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EPISODE TRANSCRIPT

Chloe (1s):
Stocks for Beginners.

Guido (3s):
When you're making money, you think you can do much more money and so you move up the stop profit. When you're losing money, you think that the market will go back up and you will recuperate those money. So you increase the loss that you're willing to set. So the boundaries that you set, in my opinion, are very important. And then with those boundaries you need, you need to attach to those boundary a timeframe. So when I'm going to reach or when I'm willing to wait for reach in my ultimate goal.

Phil (32s):
Hi, I'm welcome back to Stocks for Beginners. I'm Phil Muscatello. How diversified and balanced is your investment strategy. What do you need to take into account when approaching the stock market Here today to explain his point of view is Guido Petrelli. Hello Guido.

Guido (46s):
Hey Phil.

Phil (47s):
Guido Petrelli is the founder and chief executive officer of Merlin Investor, a multi-asset educational strategizing and tracking tool for retail investors. After opening his first investment account at 16 years of age. I'll just say that again, 16 years of age. Yeah,

Guido (1m 4s):
It was pretty early.

Phil (1m 5s):
Guido identified the need for an easy to use tool that serves as an intelligent guide in structuring a diversified portfolio with the goal to balance investment risks and build long-term stable results. So I'm interested to hear about your background, Guido, but at 16 what were you thinking?

Guido (1m 23s):
Well, at that time actually I was going to university and I was studying business administration and finance. So let's say that I was into financial matters. My background after graduating from the university was basically in the manufacturing business, more specifically in the automotive sector as I've been serving for more than 13 years actually as an executive of a multinational company operating the manufacturing field. And through this experience, I've basically been focused on several aspects of the business and I've been opening up companies all over the world from west to east, even very, let's say exotic countries.

Guido (2m 4s):
So let's say the running companies is what I did for the last 15 years. And besides that, I've always been interested on in finance and in in investing. As you said, 16 was a pretty early age for someone starting to invest, especially at that time because people from my age were not investing at all. Or if they were, they were basically blindly relying on banks and advisors. So I didn't do so from the very beginning I started to open my trading account, picking stock investing and try to not all lose money first and then to make some profits.

Phil (2m 48s):
That's pretty mature for someone of 16 years of age. I mean even people who are much older just go in and start making mistakes. But you seem to be quite methodical about it.

Guido (3m 1s):
Probably because of my, my academic background from the very beginning I understood that the only key to success was to strategize and develop balance investment strategy before executing anything. Because what I see today, you know, if we look at the approach of investing, it change drastically in the last 10 to 20 years. I always like to, to give this analogy is like if before we were going around sitting in the passenger seat and then wOTH trading platform coming on board, we have been given a Ferrari to drive. So the question is, is a car enough to democratize access to mobility or investing?

Guido (3m 45s):
Well, in my opinion it's not because the execution is something that's supposed to come in the end of the investing process At the very beginning I believe that the right approach is to study, study, study, educate yourself, retrieve market information, and then basically get your own idea on what asset sector, whatever you think that may be growing and you would like to invest to. And then you develop a plan, you develop a plan with goal to diversify the is different risk that are associated with with investing. So basically going back to the analogy, it's like that you need to go to school and you need to get a driver less a driving license before you start to drive a car because otherwise your risk to hurt yourself, right?

Guido (4m 34s):
As far as the road is nice, there is nice weather, no bumps, no turns, everybody seems to be the best driver in the world, right? But then it's not what happened every time in the financial market. So you need to be able to anticipate and manage the bumps, the tars, the bed weather and so on. And how you do it well, you do it by diversifying your portfolio, by being aware of the risk that you take, the maximum exposure that you're willing to take either in terms of profit and in term of losses. So again, it's all the strategy that's supposed to come before execution. And another, let's say analogy coming to my mind is in the famous book, the The Art of War, where basically no, they say that tactics without strategy is nothing but the noise before defeat.

Guido (5m 24s):
And that's how I approach basically investing. So we hear a lot in the last years thanks to the trading platform that came into play, that they are democratizing access to investment strategies when to the investing in general. Well actually doubt that we can reach a full democratization in investing process if we just focus on the execution. Because if we just do that, it's like approach investing in terms of gambling, like going to the casino different is instead if you prepare yourself before and then the execution is actually the less strategic part and the basic activity of of investing.

Guido (6m 6s):
But everything that's supposed to come first has been, in my opinion, completely skipped from before to now. So we have been given the keys of very dangerous sport cars to let's say unskilled and uninformed young people. And that's a big risk. It's a big risk for them. It's a big risk for the society as a well. And so that's why I try to focus my my far with the me investor project.

Phil (6m 34s):
Well that that is a message that we try and get across on this podcast that just because you've got a a brokerage account open, it doesn't mean that you're going to instantly make money and that it's really something that's going to take a long time. I mean that's the reality of being in markets is that you do have to learn a lot work out strategies, work out how you are going to invest and basically like you say, diversify and have a long-term view. I was interested in your article for nasdaq.com three steps to take before you execute any trade. I'm interested to hear what your broad overview of how investors need to educate themselves.

Phil (7m 15s):
And you've got three steps in the post and step one is retrieve market data.

Guido (7m 21s):
Yeah, well the first step is definitely again retrieve market data study and do whatever it takes in order to get your own opinion. Because something else that I learn through my, let's say, investing experience is that in the end you are the only one that will pay for the investment that you do. No, because you may rely on somebody else thinking it's the best advisor, the best or whatever, but in the end you have just one certain that you're going to get to pay. Doesn't matter if we lose or make money for you, right? So you need to be as much inform as possible, but then it must be your final call of what asset, what sector, what you think can deliver the result for you.

Guido (8m 10s):
And actually when we started the Merlin Investor project, we, we were on a survey in the, in the US targeted to young and beginners retail investors. And I was personally shocked because I'm young man baby not that young to find out that more than 70% of the survey population was retrieving information and let's say getting to the decision about what asset to buy from social network, from finance influencer and so on, doesn't matter if it's YouTube, TikTok to Twitter and so on. But that's where the main source of information for the young generation of retail investors is coming from.

Guido (8m 53s):
And so again, the different, the sources are different or let's say less unusual, but it's important. That doesn't matter where you get information from, you get as much information as possible, you cross check and then you get to your own belief on what supposed to invest in.

Phil (9m 15s):
And then step two is to create a diversified investment strategy.

Guido (9m 20s):
Yeah, of course. That in my opinion is, is the key. And when you look at the diversification, you should look at diversification from different perspective, for example, from an asset allocation perspective, from an industry perspective, from geographical and geopolitical perspective. And unfortunately with what's going on right now in the world, it's, we all see that political factors strongly affect how the market behave and then the currency diversification and associated risks that you take. So there are so many that you need to balance when you develop your investment strategy because in the end, as you said before, sometime there is the belief that people become rich from night to day.

Guido (10m 9s):
It's not the case. I mean it's not the case. It takes time, it takes resilience. You need to plan long term. And in planning no long term it means that there will be some, let's call them battle battles that you will win and someday you will will lose. In the end is the trade off that needs to be positive. So it's the trade off of all the different risks that you associate to your investment strategy. There needs to be balanced so that in the end hopefully you will win more gain than those you lose. And so you will be successful.

Phil (10m 43s):
And then step three is to set a timeframe and a stop profit loss. Tell me about that.

Guido (10m 50s):
It's related to, to the concept of emotional intelligence. Because we see, especially nowadays with the huge volatility we experience in the market, that there are some days that we look at our portfolio and we're smiling and some other days are we are crying, right? So that's unfortunately the case. So how you let's say try to mitigate the emotional risk that again we are human beings normal. Well, how to do it is that together with your strategy, you're supposed to set the maximum level of profit you are willing to accept before you close the position as well as the maximum loss you are accepted to take.

Guido (11m 33s):
And that loss supposed to be in a limit which will not affect your own and your family life. So that's why it's important to set the boundaries either on the positive and negative side so that you always keep track of your performance within these boundaries. Doesn't matter what happened as far as you're saying the boundaries and you make them command your actions, then you are a, let's say a safeguard, but it's not easy. I know when you're making money you think you can do much more money and so you move up the stop profit when you're losing money, you think that the market will go back up and you will recuperate those money.

Guido (12m 14s):
So you increase the loss that you're willing to set. So the boundaries that you set, in my opinion are very important. And then with those boundaries you need, you need to attach to those boundary a timeframe. So when I'm going to reach or when I'm willing to wait for reach in my ultimate goal. And so when you, you attach to your diversify and balance strategy, the stop and profit limits, and then a timeframe, you basically complete your plan and you are ready to execute.

Phil (12m 47s):
And these three steps do take time to learn, don't that it's not something that you're gonna learn overnight, is it?

Guido (12m 53s):
No, absolutely. It takes time and like everything in life we learn by the experience that we have either good or bad. So it takes time. And also I think it should be proportional the amount of money that you invest, the amount of risk that you take because then true times you will be able to, to fine tune your approach to investing and to your strategy actually is a suggestion that I really hope that somebody told to my young myself. Because unfortunately I, to be honest, I learned from my experience from my mistakes. So this is, this is the the case, but it's, it's really critical that your approach investing in this way.

Guido (13m 37s):
And also let me stress that what we are talking about here, it's not, let's say that we just discover the fire or the odd weather, our concept that are very well known to the professional in the field. The problem is that before the trading platform, the car was given to drive only to those professionals that were applying such logic. But now that we gave the the steer also to a young investor, it's fundamental that they also educate themselves on the investment approach that the expert have if they want to become an expert as well and be successful in the market.

Phil (14m 23s):
I guest that I spoke to a long time ago, I said a few words which I've is really stuck with me and that's match your risk to your experience, which seems to encapsulate this idea. And another guest also pointed out that now with fractional share trading that you can start with maybe a couple of hundred dollars in the, in the market and just use that as a learning experience. I mean you can create a diversified portfolio and only be risking a very small amount of money while you learn

Guido (14m 52s):
Absolutely agree with you. And that what is supposed to happen. And actually there has been a democratization in this sense also with the, for example, the fractional stock that you mentioned. But at the same time also let's say very risking weapons have been given to the beginner to let's say the less expert people because for example, the leverage, no, the leverage, it's something that today having some experience in the market, I still don't use. And let me say I will not use because for my, let's say approach to investing, I cannot afford to lose something I don't have, right? Because it will be a opposite to what we said before.

Guido (15m 34s):
So there are some sort of technicality and instruments that must be very, very careful consider by the young retail investors because it's difficult to manage. And sometime they don't understand the risk associated with that. And then only the day you realize that you have the bank having a margin call basically say, okay, you need to gimme back this money that you don't have. Then unfortunately very bad thing up. And, and we, we read in the news, especially in us in the past where unfortunately young people find themself in a very difficult position and it's some sort of action that unfortunately are very terrible because of this situation.

Guido (16m 17s):
So again, definitely it is good, there are opportunity that helps to take a step by step approach and to democratize our to investing, but we need to pay attention to what opportunity, what tool we take because some of those are also very risk and goes to the opposite of what we have been just saying.

Phil (16m 37s):
So Merlin, Merlin investments, are you a fan of King Arthur in the Knights of the Round table?

Guido (16m 43s):
Yeah,

Phil (16m 44s):
Actually there seem to be a few references there in the pricing structures and so forth. Yeah,

Guido (16m 49s):
Exactly. Well yeah, personally I I like, I like the story and I always like the figure of Merlin the wizard as trustful companion of the King Arthur. So not somebody that advising or making decision for King ARTHUR, but somebody sharing his opinion that King Arthur. Could digest and then going into the, the battlefield with the best strategy, I think it was going to be successful. And so here I I saw the analogy with our product because we're not a bank, we're not an advisor, we're not a custodian, we're nothing of those. We're just a tool that empower people to make their own analysis and their own choice.

Guido (17m 34s):
So I saw this analogy between me and King Arthur that I like and then I brought it into the project name, but also on the subscription packages that you had mentioned where you have seen some sort of linear growth starting from the Camelot the first step into the strategy, then moving to the Lancelot package where you take your own seat at round table, then move into Excalibur when you actually have educated yourself to a certain level where you are able to handle a very powerful weapon like the, the Excaliburs world up to the last stage of the king art package where basically you reach some sort of advanced level and now you are able to go into the battlefield and lead your troops toward success.

Phil (18m 24s):
I love that analogy for, for investing. So it sounds like to me that you've encapsulated what we've been speaking about in the first part of the interview into tools for investors. Is this what the Merlin platform is all about? Yeah,

Guido (18m 38s):
Well basically with the, with the Melin platform, we try to cover all the investment cycle except and execution, the trading, we are not the trading platform. So basically as we said before, the first step supposed to be study the market and retrieve information and we developing the, in our product, what we call the inspiration section, where basically we consolidate different sort of, sort of information, different sources of information. And I mentioned before now that more than the 70% rely on social network and it's not just a matter of advisor or news.

Guido (19m 22s):
So we consolidated everything inside the inspiration section. It means that if you follow an influencer in YouTube or Twitter or Reddit you will be able to navigate those social network inside our platform. And if you are also, let's say more traditional, you will also have access to news from different medias, Dow Jones and so on. You would've access to economic calendar. So basically doesn't matter what sort of information you base your decision on what source of information inspires you, you find everything consolidated inside the Merlin inspiration section and you're able to navigate them in a very easy and customer friendly way.

Phil (20m 11s):
And in terms of tools for valuing stocks, are they available in the platform as well?

Guido (20m 15s):
Sure, that goes with a more traditional approach to investing. But of course we also have financial metrics, technical indicators and graphs or all, let's say the more complicated things that you're able to analyze from a technical perspective. Yes, definitely. They are also inside and assessment.

Phil (20m 36s):
So, so a beginner approaching Merlin for the first time, what are the kind of tools that they're, they're given and how would they use those?

Guido (20m 43s):
Well basically again, the the four subscription packages that we mentioned before has been developed in line with the concept of taking the side of every kind of investor and go together with their own land learning curve. So more you, you move on through the different packages more. You have access to let's say more complicated feature or complicated in the sense that features that are usually assessed by more experienced investor. So there is this

Phil (21m 18s):
Something, something that you'd need expertise in?

Guido (21m 20s):
Exactly, exactly.

Phil (21m 21s):
To begin to understand. Yeah,

Guido (21m 23s):
So, so that's why if you are a, let's say if you are a beginner investor, you start with the basic feature that we allow you to analyze your overall portfolio and the diversification in risk in terms of asset allocation, risk sector risk and so on. Then you move up up to the point of some feature that will help you to analyze futures or bonds for example. So it's really, it's really the process and how we structure the platform is with what we call the widget library. We develop in ours more than 30 widgets and many more will coming soon.

Guido (22m 6s):
And this widget are available in a library. And so the investor can cherry pick which one widget, which one feature it's more in aligned with this investment approach and then customize his own workspace with the widgets that he feels more familiar to. So this is the approach that we talk with, with the, is to go along with each one learning group.

Phil (22m 30s):
And what assets does Merlin cover?

Guido (22m 32s):
Well, I believe the right answer is everything because you will be able to build your strategy using stock, crypto, NFT, options, bonds, index, commodity and so on. But why I say everything is because we also added what we call the manual function, meaning that you can add whatever kind of asset you put in your strategy. Also, now we mention stock crypto as the assets to invest on, but sometime we forget that real estate is also an asset for investment. Well, we are associated with Zillow so that if you are invest in real estate, you are able to automatically pull out in Merlin the evaluation of your properties in US or let's say you invest in s or watches or limited edition sport, choose well manually.

Guido (23m 34s):
You can add everything and track them inside the platform. In this way you would be able to have access to your overall wealth. And what's your overall wealth? Well, basically it's your overall investment investing strategy because even if you are 100% cash, still being 100% cash is strategy, right? So that's the point that we try to cover with me.

Phil (23m 56s):
So even any kind of alternative asset can be plugged into it, huh? Yep,

Guido (23m 60s):
That's

Phil (24m 0s):
Correct. And how does the Merlin inspiration section work?

Guido (24m 4s):
Well, the, the me inspiration works like I was describing before with this inspiration sector section where you can pull together different sorts of information and ri your, your market data and knowledge. And then after that you move to the strategy section, which is the core of the platform. The strategy section basically is where you will be able to create your own investment strategy by easily cherry picking the different assets that you want to put inside and you can create your infinite set of investment strategy. You can analyze them one by one or you can compare them one with another.

Guido (24m 48s):
You can back test those strategies just to say, let's assume I did this strategy one year ago. What, what will be the result today? You can do that as well. And then the last step after creation comparison and tracking of investment strategy is also what we call the align function. Why we develop this? Because so far we talk about I start from a white paper paper and I build my first strategy and then I follow that. But what about I already have a strategy A and then I want to pass to a strategy B. What are the to-do list in term of execution in terms of trade that I need to perform?

Guido (25m 31s):
Well, you will just select, I want to go from strategy A or B to strategy C and D and automatically just with the click of a button, the Merlin magic will give you the to-do list of action that you need to do in order to align your current portfolio to the new strategy. Then you just go in your trading platform. Doesn't matter if it is a crypto stock trading platform, you, you do the execution, the alignment, let's say execution trade. And then because you connected your trading platform to Merlin , when you will enter Merlin, you will automatically see your new portfolio imported.

Phil (26m 6s):
So is this a desktop platform or is it available on mobile as well?

Guido (26m 11s):
Well, eh, we develop both. We develop both, we are going to start with the Desktop platform. Then the app will follow very soon, let's say no more than two weeks after the desktop launch. So it will be available in both because there is people that like to spend more time inside the big screen in front of their computer, but also looking at the young population that we, that we approach, they do everything with a, with a phone today. So even looking at graph or something that in a small screen could seem very complex already from for me, well it's not the case for the majority of young investor and that's why from the very beginning we decided to start right away by developing both desktop and and apps that will be available either for Apple and Android Mobile.

Phil (27m 4s):
So you've just launched Merlin, you must be very excited about this and tell us about the launch procedure, how that, how that went.

Guido (27m 12s):
Well, yes, I'm definitely very excited. The launch was just last week and it took about one year or really hard work on developing the platform because one year ago it's when the idea was originated and after one year to see ourself already in the market, it's, it's very exciting for me and so far, but either before the launch and also after the launch, we have seen a lot of interest from the public and they really hope that our numbers will contribute to grow as they did in the past month when we were just testing the market.

Phil (27m 53s):
How can listeners find out more information about Melin?

Guido (27m 56s):
Well, they can visit merlininvestor.com where they can find all the information about the product about the Merlin community because with Merlin we are not just launching a product, but we are also launching a community of young passionate retail investor who want to be the one and only master of their own financial future. So the website is for sure that the first place to go. Again, product community. We also have a blog section where we post our own article about the investing world and then of course they can also get a very deep understanding also of the four different subscription packages that we offer.

Phil (28m 45s):
Guido Petrelli, thank you very much for joining me on the podcast.

Guido (28m 48s):
Thank you. Thank you. Feel I really much appreciate it. And thank you for having me.

Phil (28m 52s):
If you found this podcast helpful, please tell a friend, especially it's someone who needs to start thinking about investing for their future. You'll be helping them and helping me to keep this show on the road.

Chloe (29m 2s):
Stocks for Beginners is for information and educational purposes only. It isn't financial advice and you shouldn't buy or sell any investments based on what you've heard here. Any opinion or commentary is the view of the speaker only not Stocks for beginners. This podcast doesn't replace professional advice regarding your personal financial needs, circumstances, or current situation.

Phil (29m 21s):
And thank you for listening to my podcast.

Stocks for Beginners is for information and educational purposes only. It isn’t financial advice, and you shouldn’t buy or sell any investments based on what you’ve heard here. Any opinion or commentary is the view of the speaker only not Stocks for Beginners. This podcast doesn’t replace professional advice regarding your personal financial needs, circumstances or current situation.