Luke L. Wiley, CFP®, senior vice president of wealth management and senior portfolio manager at UBS Financial Services in Cincinnati, knew he wanted to leave a legacy behind for his four children. In addition, he wished to share within the investment community a rules-based mindset/strategy that could help improve investor outcomes. Combining these two desires, Wiley wrote The 52-Week Low Formula: A Contrarian Strategy that Lowers Risk, Beats the Market, and Overcomes Human Emotion.
“There’s a common misconception about my industry that we’re all the same. We all do the same things, we all give the same advice. That couldn’t be farther from the truth. This book helps explain to investors how we approach creating those outcomes, by inviting them into our detailed five-step process we have worked hard to create, test and improve over the years,” he says. We spoke with Wiley about the book, its success and writing more in the future.
How do you describe the book to a first-time reader?
It’s partially a reflection of how I think—I’m skeptical of conforming in all things, but especially conforming to investment trends—and it also examines the behavioral biases that influence the way we make decisions and a disciplined approach to overcoming those biases when it comes to making better investment choices.
This book is not about a quick-win or penny-stock myths; it’s a look into how the formula came to be and the logic behind it.
What’s an example that exemplifies the principles in the book?
Chapter 12 is titled, “The Importance of Embracing a Trailing 12-Month Return of -25 Percent.” The reason this chapter is my favorite is because I believe most investors do the exact opposite. Most investors will invest in a business whose trailing 12-month return is plus-25 percent because it feels good emotionally and because the majority of investors have a positive sentiment around the business. If the investor dictum is to buy low and sell high shouldn’t an investor look for businesses that are out of favor and have a negative sentiment around them?
What points do you hope readers take away?
I think the book is really going to open readers’ eyes to what I think is a better way of thinking. Some of the insights in the book can be applied to even non-investment decision-making. Instead of thinking all the ways to find out how to be a great father, ask yourself, “What are the five behaviors that, if performed, would not lead to a good outcome as a father?” Instead of asking, “What are the best ways to be a great investor?” ask, “What are the surest ways to destroy my wealth?” My hope is that the biggest take away from the book is that disciplined critical thinking will create better outcomes than emotional or responsive thinking.
What feedback have you received?
The experience has been quite amazing. Since the book’s release in April 2014 it has been a best-seller twice on Amazon within the wealth management section. In fact, my publisher shared with me that they are going to offer the book in the Japanese language due to the book’s interest in Japan.
Are you looking to write another book in the future? If so, what topic?
I have several ideas for my next book. One idea is a reference book for those individuals who want to overcome the self-defeating thoughts that can creep into all of our minds and limit our full potential. What I have realized in my life is that most of our own “proverbial walls of life” are elastic and can expand, or don’t exist at all.