Combine a physics Ph.D., a former astronaut boss, a stint running an airline business, and gigs on MSNBC and The New York Times, and what do you get?
A financial advisor with a solid track record of predicting stock market moods.
Laurence Balter, the advisor in question, admits that he's had quite the diverse career path that finally led to Oracle, his international, 120-plus client financial advisory firm that's headquartered on Fox Island.
“I'm definitely not changing car oil every day,” he says.
Post graduation from the University of California San Diego while working for Southwest Airlines, and a stint as a research assistant for NASA astronaut Dr. Sally Ride, Balter moved on to a job for the CFO of Hawaiian Airlines. By age 21, he had his own private air charter company, which eventually included 14 aircraft and employed 40 pilots. A decade later, though, he sold that when he realized that he wanted to ease into the financial industry — the outcome of which became Oracle.
“I started the company that's pretty much the business that I have today,” he says, “which is helping high net-worth individuals navigate through the complexities of the markets.”
That business, it seems, has been the genius of them all. Balter's financial track record swiftly rocketed him into the mainstream media, with regular gigs as a financial consultant on MSNBC, Bloomberg, The New York Times and other venues.
“That's really blossomed,” he admits. “It's really elevated the level of the practice higher than I ever imagined. And it's definitely opened some doors.”
Today his clientele are a blend of international wealth-holders and clusters of upper income-earners in major U.S. cities like Boston and New York, as well as “many who are right down the road” on Fox Island, he says. The story of how Balter came to found his home-based business there alone is testament to his razor-sharp financial timing: across a global map, he was looking for “a place on the mainland that was near the ocean, had clean air, in a place that was resident and business tax-friendly, and was no more than a 15-minute drive from the airport,” so he could fly his own plane whenever he liked. Then the housing bubble burst, the stock market plunged, and he bought his home-cum-office the day the Dow dropped 700 points.
That his advisory firm has been so successful, he says, is due to a formula of behavioral analysis mixed with a relatively new field called “emergence theory.” In other words, how patterns in the natural world relate to behavior patterns of human investment trends.
“There are people who are out there studying everything from ant colonies to flocks of geese to human cities to see how that relates to how people invest in the stock market,” he says. “That common behavior can be somewhat predictable, so we're finding an understanding of what drives it.”
What motivates people in any investment are two things, Balter notes: fear of being left behind, and fear of losing it all. Fear is twice the motivation of greed, he adds. And there are three types of investors: those who jump in right away, those who wade in after they feel it's safe, and those who scramble to splash in at the end.
“If you look at all of the participants in the markets, it's kind of like an ant colony,” he says. “Everyone gets excited. People think that their neighbors are doing well, and they should be, too. It's crowd theory.”
Thus far, his hunch has worked, according to his company's history. In 2006, he told his clients to get out of spec real estate because there were some cracks in the armor. He predicted the Apple stock high, telling investors to get out. The next problem area he foresees is gold.
Overall, he observes, “There's definitely a shifting of the asset class as people go to the 'investment du jour.' It's an ebb and flow. But patterns in nature can come into play, and if you look for those things, you can find better spots to buy and sell.”
In the end, his advice mirrors Warren Buffett's famed quote: Be greedy when people are fearful, and fearful when people are greedy.
“Then you'll buy big houses at the bottom of the market, and make big-dollar investments that ride to the top of it,” he says.