Money For the Rest of Us

Seven ways to increase the odds of living long into your retirement years (if you choose to retire).

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Show Notes

Podcast Stats: How many podcasts are there?—Listen Notes

Quality Over Quantity Is A Growth Strategy by Steven Goldstein—Amplifi Media

Slow Productivity by Cal Newport—Penguin Random House

Why our brains crave beauty, art and nature by Jemima Kelly—The Financial Times

Why southern Europeans will soon be the longest-lived people in the world—The Economist

What I’ve learnt from two decades eating in Paris by Simon Kuper—The Financial Times

Getting Good Sleep Could Add Years to Your Life—American College of Cardiology

Close friends can help you live longer but they can spread some bad habits too by Maggie Mertens—NPR

United we thrive: friendship and subsequent physical, behavioural and psychosocial health in older adults (an outcome-wide longitudinal approach) by E. S. Kim, W. J. Chopik, Y. Chen, R. Wilkinson and T. J. VanderWeele—Cambridge University Press

Why I’ve hung up my wellies and given up the country cottage by Tom Hodgkinson—The Financial Times

An Emersonian Guide to Taking Control of Your Life by Arthur C. Brooks—The Atlantic

Why you should never retire—The Economist

It’s not so ‘terribly strange to be 70’ by Anne Lamott—The Washington Post

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Millions of fintech app users have lost access to their cash. In this episode, we explain why this happened and show you how to protect yourself when placing cash with traditional banks, neobanks, and fintech platforms.

Topics covered include:

• The mass chaos in the fintech space spawned by the bankruptcy of Synapse Financial Technologies
• What are FBO accounts, and why they are so troublesome
• What is the difference between a traditional bank, a neo bank, and a non-bank
• What to look for and protect yourself when investing your cash savings

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Show Notes

CHAPTER 11 TRUSTEE’S INITIAL STATUS REPORT BY UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA SAN FERNANDO VALLEY DIVISION—CourtListener

Fintech platform Synapse raises $33M to build ‘the AWS of banking’ by TechCrunch—Synapse

X Post by Jason Mikula—X

"Full Reconciliation... May Not Be Possible," Synapse Trustee Says by Jason Mikula—Fintech Business Weekly

Mercury Seeking $30M From Synapse, Emergency Court Filing Reveals by Jason Mikula—Fintech Business Weekly

Infighting among fintech players has caused TabaPay to ‘pull out’ from buying bankrupt Synapse by Mary Ann Azevedo—TechCrunch

Fintech startup Copper forced to discontinue banking services amid Synapse fiasco by Taylor Soper—GeekWire

a16z-backed Tellus wants to offer consumers a much better savings rate. Here’s how. by Mary Ann Azevedo—TechCrunch

FDIC Demands Three Companies Cease Making False or Misleading Representations about Deposit Insurance—FDIC

Related Episodes

440: Beware of Platform Risk

424: Are More Bank Runs Coming? The Collapse of Silicon Valley Bank

412: Where to Invest Your Cash Savings for Higher Yields

304: A 15% Guaranteed Return? Lending on the Fringes of Finance

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How a few high-impact successes drive up overall average outcomes in investing, business, and creative projects. How to harness positive skewness using a barbell approach. Learn when to mitigate risks and when to embrace them.

Topics covered include:

• What is positive skewness and how does it manifest in investing, business and creative endeavors
• How power laws and the 80/20 rule work
• Why we shouldn't beat ourselves up if we aren't incredibly successful
• When should we reduce positive skewness and when should we embrace it

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Show Notes

Long-Term Shareholder Returns: Evidence from 64,000 Global Stocks by Hendrik Bessembinder, Te-Feng Chen, Goeun Choi, K.C. John Wei—SSRN

Long-Horizon Stock Returns Are Positively Skewed by Adam Farago and Erik Hjalmarsson—SSRN

Wealth Creation in the U.S. Public Stock Markets 1926 to 2019 by Hendrik Bessembinder—SSRN

The Coffee Can portfolio by Robert G. Kirby—csinvesting

Active vs Passive Investing U.S. Barometer Report—Morningstar

Table 7. Survival of private sector establishments by opening year—U.S. Bureau of Labor Statistics

How Many Podcasts Are There? (New 2024 Data) by Josh Howarth—Exploding Topics

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Why are homeowners seeing home insurance premiums increases of up to 70%, as David has? What can you do if your insurer drops you, you get a huge premium increase, or you can no longer afford coverage?

Topics covered include:

• What are the primary drivers of home insurance price increases
• Why these increases don't show up in the U.S. consumer price index
• How the reinsurance market works and why reinsurers are passing on 50% premium increases to property and casualty insurers.
• What percentage of home insurers self-insure
• What else can homeowners do

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Show Notes

Home Insurance Is Clobbering Consumers. Yet It’s Barely Counted in Inflation. by Jeanna Smialek—The New York Times

NIPA Handbook: Concepts and Methods of the U.S. National Income and Product Accounts: Chapter 5: Personal Consumption Expenditures—Bureau of Economic Analysis

The crippling home insurance crisis hitting America by Rana Forhoohar—The Financial Times

The Hidden Driver of Soaring Home Insurance Costs by Jean Eaglesham—The Wall Street Journal

When Disaster Strikes: Preparing for Climate Change by Seán Nolan and Krishna Srinivasan—IMF Blog

Home insurance was once a ‘must.’ Now more homeowners are going without. by Patrick Cooley—The Washington Post

Homeowners Perception of Weather Risks 2023 Q2 Consumer Survey—Insurance Information Institute

Insurance Companies Feeling the Pressure in Iowa and the Midwest by Jerry Theodorou—Insurance Journal

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Why stock, ETF, and bond trades are optimized to settle in less than a day, allowing investors quicker access to their cash and securities. What are the benefits and costs of optimization in the relentless drive for cheaper, faster, and more profitable.

• Why countries are moving to T+1 settlement from T+2 for security trades
• What will it take for secur
• How BlackRock and Franklin have launched Treasury funds that are tokenized and trade on the Etherium network
• How optimization works and what are the tradeoffs
• How we can use satisficing and rules of thumb in order to cope with the complexity of the world

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Show Notes

About the ‘T+1’ Rule Making US Stocks Settle in a Day by Lydia Beyoud and Greg Ritchie—Bloomberg

SEC Chair Gensler Statement on Upcoming Implementation of T+1 Settlement Cycle—SEC

What faster trading cycles will mean for US markets by Jennifer Hughes and Harriet Clarfelt—The Financial Times

Speedier Wall Street Trades Are Putting Global Finance On Edge by Greg Ritchie—Bloomberg

BlackRock closes in on crown of world’s largest bitcoin fund by Will Schmitt and Brooke Masters—The Financial Times

Optimal Illusions: The False Promise of Optimization by Coco Krumme

Financial Statement Analysis with Large Language Models by Alex G. Kim, Maximilian Muhn, and Valeri V. Nikolaev—The University of Chicago

Related Episodes

457: AI’s Fork in the Road: Societal Bliss or Existential Threat

329: Meme Stocks, GameStop, Short Squeezes, and Bubbles

228: How Tokenization Will Radically Change Investing

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In part three of our national debt masterclass, we share a simple debt dynamics formula we can monitor to help guide our investment choices.

Topics covered include:

• How much has the national debt grown over the past fifties years, and what are the underlying drivers
• How the budget deficit, interest rates, and economic growth determine the level and growth in the national debt
• Under what circumstances will the U.S. default on its debt
• How should we invest to protect ourselves from the uncertainties of the national debt situation

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Show Notes

Jerome Powell: Full 2024 60 Minutes interview transcript—CBS News

Yellen says she disagrees with Moody's outlook on US debt by Ann Saphir and David Lawder—Reuters

IMF Steps Up Its Warning to US Over Spending and Ballooning Debt by Christopher Condon—Bloomberg

WHEN DOES FEDERAL DEBT REACH UNSUSTAINABLE LEVELS?—Penn Wharton

The Long-Term Budget Outlook: 2024 to 2054—Congressional Budget Office

PUBLIC DEBT AND LOW INTEREST RATES by Olivier J. Blanchard—NBER

Bond vigilantes snooze as Treasury market shrugs off vast US borrowing by Kate Duguid—The Financial Times

Term Premium on a 10 Year Zero Coupon Bond—FRED

Instantaneous Forward Term Premium 10 Years Hence—FRED

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In part two of this national debt series, we explore how households and businesses, including commercial banks, can choose not to participate in what some call a national debt ponzi scheme. We also look at how central banks and federal governments monetize the national debt using quantitative easing.

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Show Notes

Credit and Liquidity Programs and the Balance Sheet: Federal Reserve liabilities—Board of Governors of the Federal Reserve System

As of and for the Years Ended December 31, 2019 and 2018 and Independent Auditors’ Report—The United States Federal Reserve System

Different types of central bank insolvency and the central role of seignorage by Ricardo Reis

How do central banks control inflation? A guide for the perplexed by Laura Castillo-Martinez and Ricardo Reis

Can the Central Bank Alleviate Fiscal Burdens? by Ricardo Reis

Ricardo Reis Tweets on Monetizing the National Debt

M2—Federal Reserve Economic Data

Assets: Total Assets: Total Assets: Wednesday Level—Federal Reserve Economic Data

Assets: Securities Held Outright: U.S. Treasury Securities: All: Wednesday Level—Federal Reserve Economic Data

Americans Reported Strong Personal Finances Late Last Year, Fed Finds by David Harrison—The Wall Street Journal

A Complete Guide to Understanding and Protecting Against Inflation—Money For the Rest of Us

A Complete Guide to Investing in TIPS and I Bonds—Money For the Rest of Us

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In part one of this three part series, we consider why a country that issues debt in its own currency can't default unless it chooses to. We also explore how central banks can control interest rates on the national debt. We also consider whether it is possible for government borrowing to crowd out the private sector.

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Show Notes

Money In The Modern Economy: An Introduction – Bank of England – Q1 2014

Money Creation In The Modern Economy – Bank of England – Q1 2014

Congressional Budget Office 2017 Long-term Budget Outlook

Going for Broke: Deficits, Debt, and the Entitlement Crisis – Michael D. Tanner

Bernanke’s Paradox: Can He Reconcile His Position on the Federal Budget with His Recent Charge to Prevent Deflation? – Pavlina R. Tcherneva – Levy Institute (includes quotes referenced in episode by Ben Bernanke and Michael Woodford

New Framework for Strengthening Monetary Easing: “Quantitative and Qualitative Monetary Easing with Yield Curve Control” – Bank of Japan

Japan’s Debt Burden Is Quietly Falling the Most in the World – Bloomberg

The Bone Clocks – David Mitchell

Venezuela Is Starving – Juan Forero – Wall Street Journal

Curse or Blessing? How Institutions Determine Success in Resource-Rich Economies – Cato Institute

Forget Taxes, Warren Buffett Says. The Real Problem Is Health Care. – New York Times

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Why global small-cap stocks have underperformed large-cap stocks and will the trend continue? The investment case for allocating to global small caps.

Topics covered include:

• How have small caps performed relative to large caps over the past two decades
• What factors contributed to the underperformance
• How quality is an important factor to consider when investing in small caps
• What are the earnings prospects for small-cap stocks
• Why small-cap stocks could deliver double-digit returns over the next decade

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Show Notes

US small-caps suffer worst run against larger stocks in over 20 years by George Steer—The Financial Times

Small stocks, big problems by Robin Wigglesworth—The Financial Times

The Death of Small Cap Equities? by Chris Satterthwaite—Verdad

The Quality of New Entrants by Chris Satterthwaite—Verdad

Related Episodes

466: Does Dividend Investing Still Work?

370: Should You Invest in Small-Cap and Mid-Cap Stocks?

253: Are IPOs the New Ponzi Scheme?

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It is not normal to want prices to rise and currencies to lose their purchasing power. We look at the advantages of stable currencies and prices.

Topics covered include:

• What's more normal, an inflationary or deflationary mindset?
• Why it is more normal for prices to fall due to productivity increases
• How central banks seek to overcome productivity-induced deflation by increasing the money supply
• How inflation and ongoing currency debasement encourage debt, the financialization of housing, and keep unprofitable companies in business
• How gold, Bitcoin, stocks, real estate, and other assets help us overcome currency debasement

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Show Notes

Is Japan finally becoming a "normal" economy?—The Financial Times

Broken Money by Lyn Alden

A Complete Guide to Understanding and Protecting Against Inflation—Money for the Rest of Us

Related Episodes

431: The Long-term Bullish Case for Gold

429: Which Inflation Protection Strategies Worked and Which Didn’t? 

389: Is Airbnb Intensifying the Housing Crisis?

253: Are IPOs the New Ponzi Scheme?

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Some analysts suggest that now is an incredibly attractive entry point to invest in emerging market bonds. We look at how to do this and whether you should.

Topics covered include:

• How emerging markets bonds have performed relative to U.S. bonds
• How frequently have emerging markets bonds defaulted
• What is the difference between local currency and U.S. dollar-denominated emerging markets bonds
• Why emerging markets nations are reforming
• What are the ways to invest in emerging markets bonds and what factors should you consider

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Show Notes

Emerging Local Debt: A Once-In-A-Generation Opportunity? by Victoria Courmes—GMO

EM Sovereign Defaults at Record Level, but Rating Outlooks More Balanced—Fitch Ratings

The big opportunity in emerging market debt by Victoria Courmes—The Financial Times

Default Risk Fades in Emerging Markets as Riskiest Bonds Soar by Zijia Song, Giovanna Bellotti Azevedo, and Srinivasan Sivabalan—Bloomberg

The weakest links in the global economy are on the mend by Ruchir Sharma—The Financial Times

How to invest in closed-end funds - Money for the Rest of Us

Investments Mentioned

iShares JP Morgan USD Emerging Markets Bond ETF (EMB)

iShares JP Morgan Emerging Markets Local Currency Bond ETF (LEMB)

DoubleLine Low Duration Emerging Markets Fixed Income Fund (DELNX)

DoubleLine Emerging Markets Fixed Income Fund (DLENX)

Virtus Stone Harbor Emerging Markets Income ETF (EDF)

DoubleLine Income Solutions Fund (DSL)

Morgan Stanley Emerging Markets Debt Fund (MSD)

Morgan Stanley Emerging Markets Domestic Debt Fund (MSD)

Related Episodes

411: Is Emerging and Frontier Markets Investing Still Worth It? – With Asha Mehta

How to Invest in Closed-End Funds

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In this conversation with financial advisor Josh Jalinski, David shares his views on constructing and benchmarking portfolios, factor investing including growth versus value, and managing regret. We explore a number of asset classes and strategies including dividend investing, leveraged loans, closed-end funds, equity REITs, and China. We also discuss how to manage retirement assets.

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Show Notes

Josh Jalinksi - Financial Quarterback

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Why most households are in better financial shape than prior to the pandemic, but remain frustrated at their lack of economic progress.

Topics covered include:

• How consumer sentiment surveys are designed and their current findings.
• Reasons behind consumer frustration with increasing prices amidst declining inflation rates.
• The magnitude of the inflation shock and its underlying causes.
• The concept of reference prices and their significant role in shaping consumer sentiment.
• Factors contributing to the high levels of economic uncertainty among households.
• Key elements required for enhancing consumer confidence in their economic future.
• The political repercussions stemming from widespread economic dissatisfaction.

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Show Notes

Surveys of Consumers—University of Michigan

Consumer sentiment climbs amid split views on business outlook—University of Michigan

The Purchasing Power of American Households—U.S. Department of the Treasury

Unemployment Rate—St. Louis Fed

We Still Don’t Believe How Much Things Cost by Rachel Wolfe and Rachel Louise Ensign—The Wall Street Journal

It’s Been 30 Years Since Food Ate Up This Much of Your Income by Jesse Newman and Heather Haddon—The Wall Street Journal

Consumers are increasingly pushing back against price increases — and winning by Christopher Rugaber—Yahoo! Finance

Kraft Heinz ups ad spend, changes leadership by Christopher Lombardo—Strategy

Many Americans Believe the Economy Is Rigged by Katherine J. Cramer and Johnathon D. Cohen—The New York Times

Covid-19 Coronavirus Pandemic—Worldometer

Related Episodes

380: How Stories Drive Our Happiness and Financial Success

294: How Stories Go Viral and Drive Economic Events

286: Coronavirus and the Financial Impact of Pandemics

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How to use covered call and buy-write strategies to generate income while understanding the risks and having realistic return expectations.

Topics covered include:

• How covered call strategies work
• How much can you earn investing in covered call strategies
• What are some numerical examples based on current option prices
• How covered call strategies can be used for both stock and bond ETFs
• What are some covered call ETF examples

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Investments Mentioned

JP Morgan Equity Premium Income ETF (JEPI)

JP Morgan Equity Premium Income Fund (JEPIX)

Global X NASDAQ 100 Covered Call ETF (QYLD)

Global X S&P 500® Covered Call ETF (XYLD)

iShares 20+ Year Trs Bd Buywrt Stgy ETF (TLTW)

WisdomTree PutWrite Strategy Fund (PUTW)

Related Episodes

467: Unraveling the Truth About ETFs: Benefits, Analysis, and the Indexing Bubble Myth

418: Bond Investing Masterclass

321: How to Analyze Complex Investments

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A primer on how the economic engine works through coordination between savers, investors, consumers, producers, governments and banks. How hoarding and unfair competition can lead to economic distortions.

Topics covered include:

• How spending and saving are connected including the paradox of thrift
• How borrowing money can lead to higher income and savings and potentially to bubbles
• How hoarding differs from investing and why too much hoarding can deprive businesses of capital
• How lightbulbs, grocery stores, and kitchen appliances could be examples of unfair competition and planned obsolescence.
• What role do we play as participants in this coordinated economic dance?

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Show Notes

Wait, Is Saving Good or Bad? The Paradox of Thrift—The Federal Reserve Bank of St. Louis

Rents: How Marketing Causes Inequality by Gerrit De Geest—Beccaria Books

FTC Challenges Kroger’s Acquisition of Albertsons—Federal Trade Commission

The Lifespan of Large Appliances Is Shrinking by Rachel Wolfe—The Wall Street Journal

Related Episodes

288: Will Early Retirements Crash the Economy?

222: Why We Overpay and How It Contributes To Income Inequality

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Berkshire Hathaway doesn't pay a dividend, its cash pile keeps growing, and Buffet says it's gotten too big to make acquisitions that can impact the company. Meanwhile, utility ETFs have a steady 3.5% dividend yield. Which will be the better-performing investment going forward?

Topics covered include:

• How has Berkshire Hathaway performed relative to the S&P 500 Index and other active managers
• Why Warren Buffett believes Berkshire's electric utility holdings were a mistake
• Why California has some of the highest utility rates in the U.S.
• Why Berkshire Hathaway will eventually need to pay a dividend even though it doesn't currently
• Going forward, will it be more profitable to invest in Berkshire Hathaway, a utility ETF, or an index fund

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Show Notes

Berkshire Hathaway 2023 Shareholder Letter

The Man Preparing for a Berkshire Hathaway Without Warren Buffett by Justin Baer—The Wall Street Journal

Warren Buffett admits Berkshire Hathaway’s days of ‘eye-popping’ gains are over by Eric Platt—The Financial Times

Active vs Passive Investment Management Barometer Report—Morningstar

Buffett sounds wildfire alarm as utilities industry enters new era by Eric Platt and Myles McCormick—The Financial Times

Paying for Electricity in California: How Residential Rate Design Impacts Equity and Electrification—Next10

Investments Mentioned

Berkshire Hathaway Inc Class B (BRK.B)

Vanguard Utilities ETF (VPU)

Related Episodes

466: Does Dividend Investing Still Work?

463 Plus: Model Portfolios, UK versus US Valuations, MCI Premium, and MFD Proxy Battle

444: Natural Disasters: Are They Truly Increasing? 

242: Should You Let Warren Buffett Manage Your Money?

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Japan's stock market recently exceeded the all-time high first set in December 1989. That's 34 years of zero price appreciation for the stock market. What drove this lackluster performance, will it continue, and what can we learn from it?

Topics covered include:

• How big was Japan's stock bubble, and how much did it contribute to the stock market's underperformance over the past three decades
• How do Japan's demographic trends impact its economic challenges, and what are the solutions
• Why Japan's houses are built to depreciate in value
• What lessons can we learn from Japan's extended bear market

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Show Notes

Japan’s Nikkei 225 index eclipses record high after 34 years by Leo Lewis—The Financial Times

Investors eye further gains after Nikkei breaks through 1989 high by Leo Lewis and Kana Inagaki—The Financial Times

Related Episodes

235: What If Home Prices Always Declined

178: Japan and the Impact of A Shrinking Population

73 Plus: Investing In Japan

38 Plus: Time Wealth and Japan

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How the ETF market is changing, why ETFs should be your preferred investment vehicle, and how to analyze ETFs to generate better investment performance.

Topics covered include:

• How large have fund flows been away from active mutual funds into ETFs
• How big are the largest ETF families and how has their market share grown
• Why the rise of active ETFs blurs the distinction between active and passive investing
• Why there doesn't appear to be an indexing price bubble, but the rise of passive investing has impacted volatility and decreased stock price informativeness
• A framework for how to analyze markets and select ETFs for your portfolio

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Show Notes

Global Fund Flows Dominated by Fixed-Income and ETFs—Morningstar

It’s Official: Passive Funds Overtake Active Funds by Adam Sabban—Morningstar

ETF Issuer League Tables—VettaFi

Global ETF Market Facts: three things to know from Q3 2023 by Samara Cohen—iShares

Rise of Passive Investing - Effects on Price Level, Market Volatility, and Price Informativeness by Pawel Bednarek—SSRN

Investments Mentioned

SPDR® S&P 500® ETF Trust (SPY)

JPMorgan Equity Premium Income ETF (JEPI)

Avantis US Small Cap Value ETF (AVUV)

Related Episodes

426: Which is Best – Active or Passive, ETFs or Funds?

321: How to Analyze Complex Investments

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Stocks that grow their dividends have outperformed non-dividend-paying stocks over the long-term, but not in the past 5, 10, and 20 years. Why are non-dividend paying stocks outperforming dividend growers, and will it continue?

Topics covered include:

• What message do companies say when they initiate, grow, or cut their dividend
• What is dividend smoothing
• How have dividend payers performed relative to non-dividend payers
• Why have non-dividend payers, which are primarily growth stocks, outperformed dividend payers
• How the payout ratio and return on equity impact dividend strategies
• What are reasons to include dividend strategies in your portfolio

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Show Notes

The dividend puzzle by Fischer Black—The Journal of Portfolio Management

Can Dividend Investing Rise From the Dead? by Jon Sindreu—The Wall Street Journal

Einhorn Says Markets ‘Fundamentally Broken’ By Passive, Quant Investing by Matthew Griffin—Bloomberg

Your Mutual Fund Stinks. Can This Wall Street Invention Change That? by Jason Zweig—The Wall Street Journal

Asset Camp

Investments Mentioned

WisdomTree U.S. SmallCap Quality Dividend Growth Fund (DGRS)

WisdomTree Emerging Markets High Dividend ETF (DEM)

Vanguard Dividend Appreciation ETF (VIG)

iShares Core S&P 500 ETF (IVV)

Related Episodes

429: Which Inflation Protection Strategies Worked and Which Didn’t? 

342: Is Another Great Inflation Coming?

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Humans are wired to feel regret. Here's how to learn from financial regret to become a better investor.

Topics covered include:

• What cognitive biases make feelings of financial regret unavoidable
• We analyze two regret case studies - one from David and one from a Plus member
• Why do we avoid big regrets but manage through small ones
• Five cognitive tricks to help manage financial regrets
• 
  

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Show Notes

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb—Penguin Random House

Related Content

448: Where Are Interest Rates Headed Next? Insights from the Jackson Hole Symposium

408: Is Success Due to Hard Work, Talent, or Luck?

What Is Risk vs Uncertainty?

53: Should You Invest In Bitcoin?

Investments Mentioned

Vanguard Long-Term Bond ETF (BLV)

Vanguard Extended Duration Trs ETF (EDV)

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Professional investors and other market participants are lousy at forecasting interest rates. Here are three more options to lock in higher yields today.

Topics covered include:

• The risk of buying long-term bonds and ETFs to benefit from falling yields
• How volatility drag has impacted a long-term bond ETF like TLT
• Why interest rates won't go up just because the government issues more bonds
• How CDs, fixed annuities, and zero-coupon bonds work
• We compare and contrast the seven fixed-income options reviewed in this two-part series

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Show Notes

Investors may be getting the Federal Reserve wrong, again—The Economist

Today's Best Multi-Year Guaranteed Annuities—Immediate Annuities

Zero-Coupon Treasuries Flew Off Shelves During October Yield Surge by Elizabeth Stanton—Bloomberg

Investments Mentioned

iShares 20+ Year Treasury Bond ETF (TLT)

Invesco BulletShares 2029 Corporate Bond ETF (BSCT)

Related Episodes

463: How to Lock in Higher Yields in Case Interest Rates Fall

418: Bond Investing Masterclass

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With cash yields expected to fall, here's how you can keep your portfolio income elevated by purchasing longer-term individual bonds and bullet ETFs

Topics covered include:

• How future short-term interest rates, inflation expectations, and term premiums impact long-term interest rates
• How each of those rate drivers contributed to the close to 1% drop in interest rates in the past three months
• How yield to maturity is our guide to locking in a fixed return using individual bonds or bullet ETFs
• How bullet ETFs work and what are some examples
• What are callable bonds and how to analyze them
• How to analyze municipal bonds
• Why we might want to lock in higher yields today

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Show Notes

Term Premium on a 10 Year Zero Coupon Bond—FRED Economic Data

Investments Mentioned

Vanguard Total Bond Market ETF (BND)

Invesco BulletShares 2030 Corporate Bond ETF (BCSU)

iShares iBonds Dec 2026 Term Trust ETF (IBTG)

Invesco BulletShares 2031 High Yield Corporate Bond ETF (BSJV)

Related Episodes

455: Easier Investing, Richer Life: TIPS Ladders to Annuities

453: The Price of Money – 700 Years of Falling, Can Interest Rates Keep Rising?

452: Beyond Stocks: The Allure and Strategy of Credit Investments

448: Where Are Interest Rates Headed Next? Insights from the Jackson Hole Symposium

418: Bond Investing Masterclass

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We explore reasons for buying Bitcoin using one of the new Bitcoin ETFs. We also consider the risks.

Topics covered include:

• Why the SEC finally decided to approve spot Bitcoin ETFs
• What are the fees and structure of these new Bitcoin ETFs
• How Bitcoin is similar and different from the fiat money system
• Where Bitcoin fits in an investment portfolio

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Show Notes

Statement on the Approval of Spot Bitcoin Exchange-Traded Products - SEC

Coinbase at the Center of Bitcoin ETF Draws Envy and Risks - Bloomberg

Federal Reserve Balance Sheet

Related Episodes

362: Should You Invest in a Bitcoin ETF?

355: Which Money Is Crazier: The U.S. Dollar or Bitcoin?

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The intricate dance between profession, risk, lifestyle, and luck in determining how net worth grows.

Topics covered include:

• The various factors that shape the growth of net worth, including professional choices, risk tolerance, and lifestyle decisions.
• David Stein's personal account of how these elements influenced the trajectory of his financial growth.
• Insights into the range of net worth increases observed in 2023, driven by the performance of financial markets.
• The importance of focusing on one's output quality and personal journey of wealth creation, rather than fixating on comparisons with others' net worth.

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Show Notes

Managing Oneself by Peter F. Drucker—Harvard Business Review

Soloing: Realizing Your Life's Ambition by Harriet Rubin—HarperCollins

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The pros and cons of investing your retirement assets 100% in equity, including half in international stocks. Why the 4% spending rule is too aggressive.

• Why historical asset class return studies that use only U.S. data are biased
• How researchers build a broader database to study retirement outcomes and spending rates
• How a 100% stock portfolio performed compared to balanced portfolios and target date funds
• Why investors should have half their assets in international stocks
• Why a 4% spending rule is too high, and what is the alternative

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Show Notes

Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice by Aizhan Anarkulova, Scott Cederburg, and Michael S. O'Doherty—SSRN

The Safe Withdrawal Rate: Evidence from a Broad Sample of Developed Markets by Aizhan Anarkulova, Scott Cederburg, Michael S. O'Doherty, and Richard W. Sias—SSRN

Related Episodes

421: Beware of Survivorship Bias When Investing

326: The New Math of Retirement Spending and Investing

254: Should You Be 100% Invested In Stocks?

250: Investing Rule One: Avoid Ruin

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We close out 2023 by answering your questions on active vs passive management, market timing, investing for status, what we learned from Charlie Munger, thoughts on a coming recession, worst investment mistakes, recent books that changed us, and more.  

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Show Notes

How the World Really Works by Vaclav Smil—Viking

The Day the World Stops Shopping by J.B. Mackinnon—Harper Collins

Earth for All: A Survival Guide for Humanity by Sandrine Dixson-Declève, et al—Earth for All

Barbarian Days: A Surfing Life by William Finnegan—Penguin Random House

Tao te Ching: Power for the Peaceful by Lao Tzu (Author) and Marc Mullinax (Translator)—Fortress Press

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Do the impressive returns in public and private markets stem from strategic financial engineering or reflect actual economic growth?

• How corporate profit growth is linked to economic growth, even though corporate profits are more volatile
• How interest rates, tax rates, and stock buybacks influence corporate profits and stock returns
• Why there are fewer publicly traded stocks
• How the increase in leveraged buyouts has impacted the economy
• How private equity funds use financial engineering to boost returns

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Show Notes

US CEOs start to contemplate Trump, round 2 by Rana Foroohar—The Financial Times

End of an Era: The Coming Long-Run Slowdown in Corporate Profit Growth and Stock Returns by Michael Smolyansky—The Federal Reserve

10-Year Stock Market Returns—Crestmont Research

Stock Average—Crestmont Research

Stock EPS Reality—Crestmont Research

What Matters More for Emerging Markets Investors: Economic Growth or EPS Growth? by Jason Hsu Jay Ritter Phillip Wool Yanxiang Zhao—Portfolio Management Research

Nominal Gross Domestic Product for United States—FRED Economic Data

The Secretive Industry Devouring the U.S. Economy by Rogé Karma—The Atlantic

Key Drivers Behind Widespread Adoption Of NAV Financing by Matthew K Kerfoot—Proskauer

The Inevitable Rise of NAV Financing by Patricia Teixeira and Anastasia Kaup—Ropes & Gray

HAVE EXCHANGE-LISTED FIRMS BECOME LESS IMPORTANT FOR THE ECONOMY? by Frederik P. Schlingemann and René M. Stulz—NBER

LBOs Make (More) Companies Go Bankrupt, Research Shows by Alicia McElhaney—Institutional Investor

Leveraged buyouts and financial distress by Brian Ayash and Mahdi Rastad—ScienceDirect

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One year after the release of ChatGPT, we explore the positive and negative paths AI could take and what individuals can do to assist with a positive outcome.

Topics covered include:

• How David uses AI to increase his personal productivity
• The societal and economic impacts of AI, including its potential to enhance corporate profitability and individual productivity
• Changes at OpenAI's executive level are examined, highlighting a shift in the organization's direction and philosophy
• What is Effective Altruism and why is it so focused on the catastrophic risks of AI
• What are the phases that would lead to a singularity in which AI poses a threat to humanity
• Why AI is still in the early stages, and how should individuals, businesses and regulators treat it at this point

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Show Notes

Everyday Chaos: Technology, Complexity, and How We're Thriving in a New World of Possibility by David Weinberger—Harvard Business Publishing Education

The economic and market impact of artificial intelligence—Capital Economics

The Fight for the Soul of A.I. by David Brooks—The New York Times

How a Fervent Belief Split Silicon Valley—and Fueled the Blowup at OpenAI by Robert McMillan and Deepa Seetharaman—The Wall Street Journal

A.I. Belongs to the Capitalists Now by Kevin Roose—The New York Times

The ‘AI doomers’ have lost this battle by Benedict Evans—The Financial Times

Effective Altruism

80,000 Hours

What is the AI alignment problem and how can it be solved? by Edd Gent—NewScientist

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In this bonus episode, David visits with Bill Yount and Becky Heptig of the Catching Up to Fi podcast in a wide-ranging discussion on investing using a systematic checklist approach.

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Masterworks – invest in contemporary art

Masterworks Disclosure:

“net IRR” refers to the annualized internal rate of return net of all fees and costs, calculated from the offering closing date to the sale date. IRR may not be indicative of Masterworks paintings not yet sold, and past performance is not indicative of future results. See important Reg A disclosures: Masterworks.com/cd 

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Show Notes

Catching Up to FI

Money for the Rest of Us book

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What are the economic and cultural benefits of tourism. What are the downsides to too much tourism. How to find the right balance.

Topics covered include:

• How short-term rentals have changed tourism
• How cities grapple with too many short-term rentals
• What is the outlook for short-term rentals
• How much does tourism contribute to economic output
• How can tourism be harmful and helpful
• The example of Cuba

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Show Notes

International tourism revenue, percent of GDP - Country rankings—The Global Economy

U.S. Travel and Tourism Satellite Account for 2017–2021 by Sarah Osborne—Journal of US Bureau of Economic Analysis

2023 Short-Term Rental Mid-Year Outlook—AirDNA

Welcome to Hochatown, the Town Created by Airbnb by Julie Satow—The New York Times

Short-Term Rentals Attract Private Equity Seeking New Asset Class by Sean O'Neill—Skift

As Cuba’s economic crisis deepens, citizens scramble to migrate by any means by Dave Sherwood—The Irish Times

Cuba's worst economic crisis in decades forces people to get creative to survive by Eyder Peralta—NPR

Related Episodes

93: Capitalism, Complexity and Cuba

389: Is Airbnb Intensifying the Housing Crisis?

449: The House of Cards: Evaluating Economic and Financial Warning Signs

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What are the pros and cons of partially funding retirement expenses with an inflation-indexed bond ladder versus an immediate annuity? There is a big downside to TIPS ladders that many investors don't realize.

Topics covered include:

• Why the stock market is more risky than many people realize
• Is it too late to invest in TIPS as one advisor suggests
• How TIPS and TIPS ladders work
• How immediate annuities work
• The pros and cons of a TIPS ladder versus an immediate annuity

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Show Notes

Effortless: Make It Easier to Do What Matters Most by Greg McKeown

Essentialism: The Disciplined Pursuit of Less by Greg McKeown

Skin in the Game by Nassim Nicholas Taleb

Worry-Free Investing: A Safe Approach to Achieving Your Lifetime Financial Goals by Zvi Bodie and Michael J. Clowes

Safe Haven: Investing for Financial Storms by Mark Spitznagel

A Complete Guide to Investing in I Bonds and TIPS

TipsLadder

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We discuss ten rules of thumb for individual investors to consider when saving and investing for and in retirement.

1. Don't use institutional hand-me-downs
2. Stay close to home base
3. Beware of dragon risk
4. Mind your investment seasons
5. Catch the popping corn
6. Watch for market swarms
7. Track the economic winds
8. Follow the traffic lights
9. Diversify your baskets
10. Don't burn your ships

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Show Notes

How to Invest Money E-book

Related Content

Complete Guide to Mortgage REIT Investing - Money for the Rest of Us

Complete Guide to Equity REIT Investing - Money for the Rest of Us

Episode 451: How Much Should You Invest in Stocks

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Interest rates have been sliding for seven centuries. Dive into the historical forces driving this trend and examine whether the recent interest rate spike is just a blip on the radar.

Topics covered include:

• How the supply of savings and the demand to borrow impact interest rates
• Why have interest rates been falling for over 700 years, and what might have changed recently to propel rates higher
• How lower rates have helped households increase their net worth and reduce their financial vulnerability
• What are some lower-risk ways to take advantage of higher interest rates

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Show Notes

The Price of Money Is Going Up, and It’s Not Because of the Fed by Jamie Rush, Martin Ademmer, Maeva Cousin, Tom Orlik, and Rich Miller—Bloomberg

Secular stagnation is not over by Olivier Blanchard—Peterson Institute for International Economics

A big problem looming for bond markets by TOMASZ WIELADEK—The Financial Times

Eight centuries of global real interest rates - Paul Schmelzing - Bank of England

Changes in U.S. Family Finances from 2019 to 2022—The Federal Reserve

A Complete Guide to Investing in I Bonds and TIPS

Related Episodes

448: Where Are Interest Rates Headed Next? Insights from the Jackson Hole Symposium

450: How Higher Interest Rates Alter Our Financial Blueprint

452: Beyond Stocks: The Allure and Strategy of Credit Investments

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Why investing in non-investment grade bonds, leveraged loans, and preferred stocks is potentially more compelling than investing in common stocks at present.

Topics covered include:

• Why Howard Marks told institutional clients to sell stocks and buy high-yield bonds instead
• The contractual agreements comprising bonds, leveraged loans, and preferred stock give them an advantage relative to common stocks
• How preferred equity exhibits attributes of both bonds and common stocks
• What is the expected return and risks for high-yield bonds, leveraged loans, and preferred stock
• How do we invest in these three asset types

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Show Notes

Sea Change - Memo by Howard Marks

Further Thoughts on Sea Change - Memo by Howard Marks

Investments Mentioned

SPDR Bloomberg High Yield Bond ETF (JNK)

iShares iBoxx High Yield Corporate Bond ETF (HYG)

Invesco Senior Loan ETF (BKLN)

iShares Preferred Stock ETF (PFF)

Virtus Seix Senior Loan ETF (SEIX)

DoubleLine Flexible Income Fund (DFLEX)

BlackRock Debt Strategies Fund (DSU)

Barings Corporate Investors Fund (MCI)

Related Content

397: How to Invest Based on Cycles

451: How Much Should You Invest in Stocks? The Art of Position Sizing in a Volatile Market

423: A “Safe” 6% Yield: The Case for Investment Grade CLOs

How to Invest in Closed-End Funds

Money for the Rest of Us Closed-End Fund Course

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Our allocation to risky assets should vary based on the expected return, volatility, risk aversion, and how much we can earn risk-free. That means we should be taking less risk right now. Listen to learn why.

Topics covered include:

• Why there are so few billionaires
• Why the hedge fund Long Term Capital Management imploded
• Why how much to invest is more important than where to invest
• How the Merton share formula can assist with determining what percent of our wealth to invest in risky assets
• Why are expected outcomes so much greater than the median outcome and why it matters to our investing

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Masterworks Disclosure:

“net IRR” refers to the annualized internal rate of return net of all fees and costs, calculated from the offering closing date to the sale date. IRR may not be indicative of Masterworks paintings not yet sold, and past performance is not indicative of future results. See important Reg A disclosures: Masterworks.com/cd 

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Show Notes

How to avoid a common investment mistake - Buttonwood - The Economist

The Missing Billionaires: A Guide to Better Financial Decisions by Victor Haghani and James White

Money For the Rest of Us List of Most Influential Books

Charles Feeney, Who Made a Fortune and Then Gave It Away, Dies at 92 - New York Times

Elm Partners Coin Flip Exercise

Evaluating gambles using dynamics - O. Peters and M. Gell-Mann

Related Content

250: Investing Rule One - Avoid Ruin

Why You Should Rebalance Your Portfolio

196: How to Survive Financially

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We explore six impacts of higher interest rates on housing, capital projects, stock buybacks, excess returns for stocks, bonds, and other asset classes, and individual opportunity costs.

Topics covered include:

• Where current interest rates stand
• Central banker predictions for how long cash yields will stay this high
• Why housing is the least affordable since the early 1980s
• Why new apartment building construction has collapsed
• What has been the excess return for stocks, bonds, and other asset classes when interest rates are higher and lower
• Why there will be fewer stock buybacks and how that can impact earnings per share
• Which alternative investments do better when short-term interest rates are higher
• Why financial opportunity costs have increased and how that should impact our investment and other financial decisions.

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Show Notes

Summary of Economic Projections—The Federal Reserve

The Apartment Market Is Hitting a Construction Lull by Will Parker—The Wall Street Journal

30-Year Fixed Rate Mortgage Average in the United States—FRED Economic Data

Americans Are Still Spending Like There’s No Tomorrow by Rachel Wolfe—The Wall Street Journal

Honey, the Fed Shrunk the Equity Premium by Portfolio Solutions Group—AQR

Companies ease off on share buybacks as rising interest rates push up costs by Nicholas Megaw—The Financial Times

Related Episodes

384: Has a Commodities Bull Market Supercycle Started? If So, How Do You Invest in It?

435: Is It Better to Rent or Buy a House?

448: Where Are Interest Rates Headed Next? Insights from the Jackson Hole Symposium

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What are the economic and financial system early warning signs that we should heed rather than get caught up in fearmongering? When should we start to worry about ballooning budget deficits, the national debt, a currency collapse, or the stock market?

Topics covered include:

• Signals to monitor to see if things are falling apart
• How much government debt is too much and why interest rates are key
• Why central banks don't control the stock market
• Why the dollar remains dominant, and what has to change for it to plummet in value

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Show Notes

The Dawn of Everything: A New History of Humanity by David Graeber and David Wengrow—Macmillan

How Much Is Enough? Money and the Good Life by Robert Skidelsky and Edward Skidelsky—Penguin Random House

U.S. National Deficit—Treasury.gov

Budget and Economic Data—Congressional Budget Office

Japan's growing debt mountain: Crisis, what crisis? by Andrew Sharp—Nikkei Asia

The Dollar: The World’s Reserve Currency by Anshu Siripurapu and Noah Berman—Council on Foreign Relations

Currency Composition of Official Foreign Exchange Reserves—International Monetary Fund

Total credit to non-bank borrowers by currency of denomination: US dollar—BIS

Wonking Out: The Mysteries of the Almighty Dollar by Paul Krugman—The New York Times

Revisiting the international role of the US dollar by Bafundi Maronoti—BIS

Related Episodes

404: Why Is the U.S. Dollar So Strong? Will It Continue?

416: Your Nation’s National Debt: 5 Things You Need To Know

433: What Happens If The U.S. Defaults On Its Debt? Here’s Why It Won’t

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Why you might want to lock in higher yields now, given real interest rates are the highest they have been in 15 years.

Topics covered include:

• What was covered this year at the Federal Reserve Jackson Hole Symposium
• What are the primary policy actions central banks take, and how do they influence interest rates
• What is the neutral real rate of interest, and why is it important
• Why new ideas are central to an increasing standard of living
• What would drive interest rates higher or lower from current levels
• Why now is an attractive time to lock in longer-term yields

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Show Notes

Jackson Hole Economic Policy Symposium: Structural Shifts in the Global Economy—Federal Reserve Bank of Kansas City

Policymaking in an age of shifts and breaks by Christine Lagarde—European Central Bank

Inflation: Progress and the Path Ahead by Jerome H. Powell—The Federal Reserve Bank

Structural Shifts in the Global Economy: Structural Constraints on Growth by Chad Syverson—Federal Reserve Bank of Kansas City

The Outlook for Long-Term Economic Growth by Charles I. Jones—Federal Reserve Bank of Kansas City

Living with High Public Debt by Serkan Arslanalp and Barry Eichengreen—Federal Reserve Bank of Kansas City

Monetary Policy and Innovation by Yueran Ma and Kaspar Zimmermann—Federal Reserve Bank of Kansas City

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David shares how thieves recently tried to smash and grab his luggage from his car while he was still inside it. He then explores property crime trends, whether they are increasing or decreasing, and why.

Topic covers include:

• How thieves have stolen luggage from the same gas station multiple times per day
• What have property crime rates been in the U.S. over the past few decades and since the end of the pandemic
• What are reasons property crime rises and falls
• What is inventory shrink and how is it impacting retailers
• What can we do to reduce the risk of being a crime victim

Show Notes

Chevron Oakland Hegenberger Rd—Yelp

Myths and Realities: Understanding Recent Trends in Violent Crime by Ames Grawert and Noah Kim—Brennan Center for Justice

Reported property crime rate in the United States from 1990 to 2021—Statista

Pandemic, Social Unrest, and Crime in U.S. Cities: Year-End 2022 Update—Council on Criminal Justice

CATALYTIC CONVERTER THEFTS NATIONWIDE SURGE ACCORDING TO NEW REPORT—Cision PR Newswire

What the data says (and doesn’t say) about crime in the United States by John Gramlich—Pew Research Center

Oakland’s crime rates are surging. Here’s how they compare with S.F. and other Bay Area cities by Susie Neilson—San Francisco Chronicle

OAKLAND NAACP CALLS ON POLITICIANS TO CRACK DOWN ON CRIMINALS—California Policy Center

Money under the mattress: economic crisis and crime by Eleni Kyrkopoulou, Alexandros Louka, and Kristin Fabbe—SSRN

What Caused the Crime Decline? by Lauren-Brooke Eisen—Brennan Center for Justice

What’s Behind All This ‘Shrink’? by Jordyn Holman—The New York Times

Retail Theft Costs US Merchants Like Walmart and Target $100 Billion a Year—PYMNTS

Retailers battle nearly $100 billion in shrink by Jason Straczewski—National Retail Federation

2022 Retail Security Survey—National Retail Federation

US Retail Workers Are Fed Up and Quitting at Record Rates by Devin Leonard and Diana Bravo—Bloomberg

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How to balance saving, investing, and spending for a fulfilling life. Why you will probably reach your peak net worth sooner than you think and should start drawing down your nest egg earlier. Why we can't optimize for a fulfilling life but can still have one.

Topics covered include:

• How to estimate how much to spend from your retirement assets so you die with zero
• What is time bucketing and why it doesn't work for everyone
• How to balance the fear of making a change with the fear of missing out
• The difference between making deliberate choices and maximizing our experiences

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Show Notes

Die with Zero: Getting All You Can with Your Money and Your Life by Bill Perkins

The Pathless Path: Imaging a New Story for Work and Life by Paul Millerd

Four Thousand Weeks: Time Management for Mortals by Oliver Burkeman 

Anderson Cooper Is Still Learning to Live With Loss by David Marchese—The New York Times

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Three additional insights to help you confidently invest in fixed income. First, what are the different measures of bond yields, and which is best? Second, how to estimate the return for a bond ETF or fund and how long do you have to own it to achieve that annualized return? Finally, we explore a bond type that yields more than U.S. Treasuries, has never defaulted, and has the implicit guarantee of the U.S. government.

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• How badly has China's stock market performed except for one remarkable decade
• What are the economic and governance factors that contributed to the underperformance
• Why it's too soon to write off China despite the structural headwinds
• What are the factors that contribute to economic growth and a robust stock market, and which emerging market countries display those factors
• What are some ETFs to invest in countries with favorable economic tailwinds

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Show Notes

State-Owned Enterprises Going Public: The Case of China by Xiaozu Wang, et al.—SSRN

A Model of China's State Capitalism by Xi Li, et al.—SSRN

Has China given up on state-owned enterprise reform? by Nicholas Borst—The Interpreter

China Regulator’s New Slogan Fuels Buying Spree in State Firms by Bloomberg News—Bloomberg

Investors sour on Beijing’s bid to boost state-owned enterprises by Sun Yu—The Financial Times

China’s 40-Year Boom Is Over. What Comes Next? by Lingling Wei and Stella Yifan Xie—The Wall Street Journal

What just happened: Storm clouds loom for China’s economy by Sebastian Mallaby, et al.—The Washington Post

Imminent end of ‘demographic dividend’: Share of India’s working age population set to fall by 2036 by Tca Sharad Raghavan—The Print

What’s Holding Back India’s Economic Ambitions? by Shan Li and Vibhuti Agarwal—The Wall Street Journal

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From raging wildfires to devastating floods, how are these natural events reshaping our financial landscape? What if anything, should we be doing with our investments as a result?

Topics covered include:

• The devastating Maui wildfire: What are the factors that led to one of the deadliest wildfires in US history.
• Global wildfire trends: Are they really increasing? The data might surprise you.
• The role of insurance companies: Learn how the giants of the reinsurance world, like Swiss Re and Munich Re, are navigating the increasing number of natural disasters.
• The complex interplay of climate change, urban expansion, and human choices
• Why IPCC is not highly confident regarding some weather impacts of climate change due to the natural variability in weather patterns.
• What should individuals do when there is a lack of details regarding a long-term potential threat?

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Masterworks – invest in contemporary art

Masterworks Disclosure:

“net IRR” refers to the annualized internal rate of return net of all fees and costs, calculated from the offering closing date to the sale date. IRR may not be indicative of Masterworks paintings not yet sold, and past performance is not indicative of future results. See important Reg A disclosures: Masterworks.com/cd 

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Show Notes

Why the fires in Hawaii have been so bad—The Economist

CAMS: monitoring extreme wildfire emissions in 2022—Copernicus

A human-driven decline in global burned area by N. Andela et al.—Science

Seasonal Trend for Europe—Copernicus

Insurers rack up $50bn in losses from natural catastrophes this year by Ian Smith—The Financial Times

World insurance market developments in 5 charts—Swiss Re Institute

When Disaster Strikes: Preparing for Climate Change by Seán Nolan and Krishna Srinivasan—IMF

California insurance market rattled by withdrawal of major companies by Michael R. Blood—AP

Rising Temperatures Are Wreaking Havoc Year-Round by Zahra Hirji, Rachael Dottle, and Denise Lu—Bloomberg

Climate Change Information for Regional Impact and for Risk Assessment by Roshanka Ranasinghe, et al.—IPCC

The Science Before Science

CO2 emissions (metric tons per capita)—The World Bank

Related Episodes

340: Climate Change, ESG, and What Should Investors Do?

413: What if the World Stopped Shopping?

442: Crisis-Proof Investing: Strategies for a Shaky Future

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We share five things we have learned about stock index valuations, earnings, currency, and why value investing isn't dead.

Topics covered include:

• How index providers divide the stock universe into large and small, growth and value
• The difference between the price-to-earnings ratio and earnings yield and which is better
• How earnings volatility can impact annual earnings growth and what to use to estimate future earnings
• How value stocks often grow earnings faster than growth stocks
• How value has outperformed growth in the last three years

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Show Notes

Asset Camp

Money for the Rest of Us Plus

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102: What It Takes To Be A Value Investor

261: Is Value Investing Dead?

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Given climate change and other risks, how should you invest for the next forty years?

Topics covered include:

• What predictions from the last forty years came true and which didn't
• Why the next forty years will have a lot of similarities to the last forty years despite the promise of AI
• Why the scale and complexity of the world make big transitions away from oil, cement, and natural gas unlikely
• Why economic growth and consumption will likely continue leading to positive investment returns
• How should our portfolios and lifestyle be structured to build resilience

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Show Notes

The Third Wave by Alvin Toffler—Penguin Random House

Parcel shipping index 2022—Pitney Bowes

America Is Drowning in Packages by Amanda Mull—The Atlantic

How to Spend Way Less Time on Email Every Day by Matt Plummer—Harvard Business Review

World Population Prospects—United Nations Department of Economic and Social Affairs

Global Climate Change Vital Signs—NASA

Congestion Pricing Plan in New York City Clears Final Federal Hurdle by Ana Ley—The New York Times

New Jersey Sues Over Congestion Pricing in New York City by Ana Ley—The New York Times

How the World Really Works by Vaclav Smil—Penguin Random House

Does Sam Altman Know What He's Creating? by Ross Andersen—The Atlantic

The Economic Cost of Houston’s Heat: ‘I Don’t Want to Be Here Anymore’ by Rachel Wolfe and Amara Omeokwe—The Wall Street Journal

SEC Proposes Rules to Enhance and Standardize Climate-Related Disclosures for Investors—U.S. Securities and Exchange Commission

SEC’s Climate-Disclosure Rule Isn’t Here, but It May as Well Be, Many Businesses Say by Richard Vanderford—The Wall Street Journal

Market Myopia's Climate Bubble by Madison Condon—Boston University School of Law

What Really Happens to the Clothes You Donate by Oliver Franklin-Wallis—GQ

OpenAI's Sam Altman launches Worldcoin crypto project by Anna Tong—Reuters

Worldcoin’s premise is a disturbing one by Tabby Kinder—The Financial Times

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In 2005, Congress debated giving U.S. workers private savings accounts to invest their Social Security contributions in the stock and bond markets. Sixteen years later, we review how that would have worked out for workers.

Other topics discussed include:

• How the public and private sectors are both critical for a functioning social security systems
• Which countries pay the highest social security benefits
• How have other privatized social security plans worked out around the world
• How workers prefer defined contribution plans even though they are worse off than if defined benefit plans were still widely available
• How worried should we be about aging populations and rising dependency ratios
• Why Social Security won't go away

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Show Notes

Greenspan "There is nothing to prevent the government from creating as much money as it wants."—YouTube

Estimated Financial Effects of the "Social Security Personal Savings Guarantee and Prosperity Act of 2005" by Stephen C. Goss—Social Security Administration

Social Security Quick Calculator—Social Security Administration

The average 401(k) balance by age by Pau Deer—Empower

CBO’s 2022 Long-Term Projections for Social Security—Congressional Budget Office

Policy Basics: Top Ten Facts about Social Security—Center On Budget and Policy Priorities

Evaluation of Four Decades of Pension Privatization in Latin America, 1980-2020: Promises and Reality by Carmelo Mesa-Lago—SSRN

Population Age Structure and Secular Secular Stagnation: The Long Run Evidence by Joseph Kopecky—SSRN

Does Human Capital Compensate for Depopulation? by M. Siskova, Michael Kuhn, Klaus Prettner, Alexia Fürnkranz-Prskawetz—SSRN

How Much Do Public Employees Value Defined Benefit versus Defined Contribution Retirement Benefits? by Oliver Giesecke and Joshua D. Rauh—SSRN

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How to mitigate the risk of investing on crowdfunding platforms where there is little transparency on the underlying financial health of the platform company.

Topics covered include:

• What is the platform economy
• How blitzscaling and an over-reliance on venture capital funding led to Peer Street's bankruptcy
• What happens next for investors on Peer Street's platforms
• How individuals and businesses can mitigate the risk of investing or conducting business on platforms

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Show Notes

Amazon: Independent Sellers In The U.S. Sold More Than 4.1 Billion Products in 2022 by SGB Media—SGB Media

PeerStreet

LinkedIn Post by Brett Crosby—LinkedIn

Crowdfunding platform PeerStreet files for bankruptcy by Flávia Furlan Nunes—Housingwire

AI Was Q2’s Big Hope To Reverse The Global Venture Funding Slowdown. It Wasn’t Enough by Gené Teare—Crunchbase

VC finds its footing as headwinds weaken by James Thorn—PitchBook

PitchBook-NVCA Venture Monitor—PitchBook

Cases FAQ—Stretto

Real estate debt marketplace PeerStreet files for bankruptcy by Matt Carter—inman

BlockFi Bet Big on FTX and Alameda Even After Seeing Infamous Balance Sheet, Creditors Say by Jack Schickler—CoinDesk

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253: Are IPOs the New Ponzi Scheme?

301: Use Caution with Alternative Investments

393: What Happens If Your Brokerage Firm Goes Bankrupt

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AI models like ChatGPT could lead to massive productivity gains, accelerated economic growth, and higher stock returns. Here's how to invest in AI.

Topics covered include:

• How workers are already using AI models like ChatGPT to boost productivity
• Why ChatGPT is better at search than Google for certain queries
• How AI models will change the economic narrative
• What are ways to invest in AI, including specific ETFs

For more information on this episode click here.

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Masterworks – invest in contemporary art

Masterworks Disclosure:

“net IRR” refers to the annualized internal rate of return net of all fees and costs, calculated from the offering closing date to the sale date. IRR may not be indicative of Masterworks paintings not yet sold, and past performance is not indicative of future results. See important Reg A disclosures: Masterworks.com/cd 

Show Notes

Sarah Silverman Sues OpenAI and Meta Over Copyright Infringement by Zachary Small—The New York Times

ChatGPT saw its first-ever user decline in June by Igor Bonifacic—Engadget

A New Chat Bot Is a ‘Code Red’ for Google’s Search Business by Nico Grant and Cade Metz—The New York Times

How to get a handle on AI’s many implications for economies and markets by Neil Shearing—Capital Economics

Lessons From the Catastrophic Failure of the Metaverse by Kate Wagner—The Nation

To Drive AI, Chip Makers Stack ‘Chiplets’ Like Lego Blocks by Yang Jie—The Wall Street Journal

Investments Mentioned

iShares Semiconductor ETF (SOXX)

Roundhill Generative AI & Technology ETF (CHAT)

Robo Global® Artificial Intelligence ETF (THNQ)

iShares Robotics & Artificial Intelligence Multisector ETF (IRBO)

iShares Exponential Technologies ETF (XT)

Vanguard Total World Stock ETF (VT)

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184: Massive Job Losses Are Inevitable, But There Will Still Be Work

198: Capitalism Is Creation

256: Will Artificial Intelligence Change Investing?

417: Will Generative AI Replace Your Job?

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Camden and Bret sit down with Ramit Sethi, host of Netflix’s hit show, “How to Get Rich”, author of the New York Times bestseller, “I Will Teach You To Be Rich” and host of the popular “I Will Teach You To Be Rich” podcast. He is known for his unconventional insights on money psychology and his no-nonsense approach to designing and living a rich life. 

Ramit’s financial philosophy is centered around several key principles, including the importance of automating your finances, using money psychology to prioritize your “money dials,” and focusing on $30,000 questions instead of $3 ones.

Topics covered include:

• What it means to live outside the spreadsheet and have a rich life
• The importance of learning how to spend, not just save and invest
• Approaching investing when you don’t come from an investment background and what to do if you are feeling behind

For more information on this episode click here.

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Masterworks – invest in contemporary art

Masterworks Disclosure:

“net IRR” refers to the annualized internal rate of return net of all fees and costs, calculated from the offering closing date to the sale date. IRR may not be indicative of Masterworks paintings not yet sold, and past performance is not indicative of future results. See important Reg A disclosures: Masterworks.com/cd 

Show Notes

I Will Teach You to Be Rich

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278: You Have Permission to Spend

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How to create and sustain a life of freedom and happiness you don't want to retire from.

Topics covered include:

• What are the physical and mental aspects of living like you are already retired
• What is the good life, and what are the basic goods that contribute to it
• How we handle time is the key to the good life and living like we are already retired

For more information on this episode click here.

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Show Notes

Politics by Aristotle

How Much is Enough? Money and the Good Life by Robert Skidelsky and Edward Skidelsky—Penguin Random House

Cormac McCarthy Had a Remarkable Literary Career. It Could Never Happen Now. by Dan Sinykin—The New York Times

Soloing: Realizing Your Life's Ambition by Harriet Rubin—HarperCollins

Saving Time: Discovering a Life Beyond the Clock by Jenny Odell—Penguin Random House

An Early Resurrection: Life in Christ Before You Die by Adam S. Miller—Deseret Book

Four Thousand Weeks: Time Management for Mortals by Oliver Burkeman—Macmillan Publishers

Time Surfing

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117: The Retirement Journey

371: Find Your Retirement Investing and Living Style

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We review the performance and investment prospects for carbon, SPACs, silver, convertible bonds, and frontier markets.

Topics covered:

• What has been the performance of these five asset types since they were discussed on the podcast two to three years ago
• What are the underlying performance drivers and expected returns going forward
• Which asset types are most and least attractive

For more information on this episode click here.

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Masterworks – invest in contemporary art

Masterworks Disclosure:

“net IRR” refers to the annualized internal rate of return net of all fees and costs, calculated from the offering closing date to the sale date. IRR may not be indicative of Masterworks paintings not yet sold, and past performance is not indicative of future results. See important Reg A disclosures: Masterworks.com/cd 

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Show Notes

Initial Public Offerings: Updated Statistics by Jay R. Ritter—Warrington College of Business, University of Florida

Two SPAC ETFs Close in One Month, Suggesting End to Wall Street Boom by Emily Graffeo—Bloomberg

Investments Mentioned

Vanguard Total World Stock Market ETF (VT)

SPAC and New Issue ETF (SPCX)

iShares Convertible Bond ETF (ICVT)

iShares Silver Trust (SLV)

ProShares Ultra Silver (AGQ)

iShares Fronter and Select EM ETF (FM)

Kraneshares Global Carbon ETF (KRBN)

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330: Is Silver the Next GameStop? How to Invest in Silver

A Complete Guide To Investing In Convertible Bonds

The Opportunity and Risk of Frontier Markets

What You Need to Know About Carbon Investing and its Effect on Climate Change

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How to decide whether to rent a house or apartment or purchase a home or condo. What has been the financial return from owning a house?

Topics covered include:

• How much have home prices increased in major cities since 1980
• What drove the greater than 50% jump in home prices in some U.S. cities since 2020
• Why there aren't more new starter homes
• What will it take for the housing shortage to abate so houses can be more affordable
• Why now could be a more advantageous time to rent versus buy
• What academics estimate the long-term return is for owning a house, and why the calculations are incomplete
• How to determine what your total cost of ownership is for buying a house in order to compare it to renting

For more information on this episode click here.

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Show Notes

The housing theory of everything by John Myers & Ben Southwood & Sam Bowman—Works in Progress

Irish property: the boom that shows no signs of slowing by Jude Webber—The Financial Times

Whatever Happened to the Starter Home? by Emily Badger—The New York Times

The Housing Revolution Is Coming by M. Nolan Gray—The Atlantic

In Today’s Housing Market, It’s Timing Over Location by Joe Pinsker—The Wall Street Journal

The Rate of Return on Real Estate: Long-Run Micro-Level Evidence by David Chambers, Christophe Spaenjers, and Eva Steiner—Oxford Academic

The Rate of Return on Everything, 1870–2015 by Òscar Jordà, Katharina Knoll, Dmitry Kuvshinov, Moritz Schularick, and Alan M. Taylor—National Bureau of Economic Research

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Why equity real estate investment trusts should be part of your investment portfolio despite the office sector's struggles.

Topics covered include:

• Why some office REITs are down 30% in 2023, and owners are walking away from buildings
• How commercial mortgages differ from residential mortgages
• The broad sector diversification found within equity REIT ETFs
• What have equity REITs performed long-term and what drove those returns
• What is a reasonable return expectation for equity REITs
• Why equity REIT prices adjust more quickly than private real estate values
• Why you should be wary of private REITs

For more information on this episode click here.

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Show Notes

Slow Return to Work Pummels Office Stocks by Peter Grant—The Wall Street Journal

REITs Likely to Attract Growing Interest from Private Real Estate Funds by Sarah Borchersen-Keto—Nareit

Related Content

414: Use Caution with Private REITs like Blackstone’s BREIT

A Complete Guide to Equity REIT Investing

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What are the grave consequences if the U.S. debt ceiling isn't increased and the government defaults? What would the Federal Reserve and the Executive Branch do to prevent default if Congress doesn't act?

Topics covered include:

• What are the potential impacts of a U.S. default on the stock and bond markets, and the overall economy
• What causes the U.S. to have a perennial debt ceiling crisis
• Why it is uncertain when the U.S. government would run out of money to meet its obligations
• What the Biden Administration could do to prevent a default
• What the Federal Reserve could do to prevent a default
• Given the ongoing crisis, should you shift assets from stocks to cash?

For more information on this episode click here.

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Masterworks – invest in contemporary art

Masterworks Disclosure:

“net IRR” refers to the annualized internal rate of return net of all fees and costs, calculated from the offering closing date to the sale date. IRR may not be indicative of Masterworks paintings not yet sold, and past performance is not indicative of future results. See important Reg A disclosures: Masterworks.com/cd 

Masterworks’ offerings are filed with the SEC, view all past and current offerings here.

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Show Notes

The Debt Limit Since 2011—Congressional Research Service

7 doomsday scenarios if the U.S. crashes through the debt ceiling by Jeff Stein—The Washington Post

A debt ceiling default would send the U.S. housing market back into a deep freeze by Jeff Tucker—Zillow

Why is federal spending so hard to cut? — Recurring debt ceiling fights will only be solved by budget reform by Linda Bilmes—Brookings

Debt Limit Default Is Default, Even Under a “Prioritization” Scheme by Richard Kogan—Center on Budget and Policy Priorities

Why I Changed My Mind on the Debt Limit by Laurence H. Tribe—The New York Times

The Trillion-Dollar Coin Might Be the Least Bad Option by Annie Lowrey—The Atlantic

If U.S. again risks default, Fed has 'loathsome' playbook by Ann Saphir—Reuters

Related Episodes

169: The Debt Ceiling—What Happens If the U.S. Defaults

416: Your Nation’s National Debt: 5 Things You Need To Know

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Does there need to be a loser for every winner when it comes to investing and economic growth?

Topics covered include:

• What are zero-sum games
• How trading can be a zero-sum game
• Why active management and seeking excess returns through security selections or country weights are zero-sum games
• Why the U.S. stock market has outperformed the rest of the world
• Why economic growth overall is not a zero-sum game, but some aspects of the economy are zero-sum games

For more information on this episode click here.

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Show Notes

With the Odds on Their Side, They Still Couldn’t Beat the Market by Jeff Sommer—The New York Times

International Diversification—Still Not Crazy after All These Years by Cliff Asness, Antti Ilmanen, and Daniel Villalon—AQR

The (Time-Varying) Importance of Disaster Risk by Ivo Welch—The Financial Analysts' Journal

The Economics of Biodiversity: The Dasgupta Review by Dasgupta P.—GOV.UK

Why the economy is not a zero-sum game: a simple explanation by Nathan Mech—Acton Institute

Defending the Free Market: The Moral Case for a Free Economy by Robert Sirico

Rents: How Marketing Causes Inequality by Gerrit De Geest

The Threat of Rent Extraction in a Resource-constrained Future by Stratford B.—White Rose Research Online

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426: Which is Best – Active or Passive, ETFs or Funds?

430: How Should Personal and National Wealth Be Measured?

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Why you should allocate a small percentage of your assets to gold.

Topics covered include:

• What is money, and how does gold fit with that definition
• Why central banks bought more gold last year than at any time since 1967
• Which central banks own the most gold and which are increasing their gold holdings
• How fast is the gold supply growing compared to the U.S. dollar money supply
• How financialization, greater leverage, and contagion risk should motivate us to consider gold

For more information on this episode click here.

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Show Notes

Central banks load up on gold in response to rising geopolitical tensions by Daria Mosolova—The Financial Times

Above-ground stocks—Gold Hub

Central bank holdings—Gold Hub

Does the Federal Reserve own or hold gold?—The Federal Reserve

Trey Reik—LinkedIn

M2 and Components—FRED

Gold Charts R Us

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37: Gold – Without the Hype and Politics

53: Should You Invest In Bitcoin?

59: Is Gold Money?

263: Should You Invest In Gold?

344: Why Should You Care About Shadow Banking?

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How we measure wealth, riches, abundance, and well-being is more important today than ever.

Topics covered include:

• How late 18th century philosophers Adam Smith and the Earl of Lauderdale defined wealth and the role of capital. Why they worried about income inequality and excess profits
• What led to the dramatic increase in life expectancy and wealth in the 20th and 21st centuries
• How a long life expectancy and well-being can be attained at much lower levels of wealth
• Why John Maynard Keynes was right about the expansion of the economy but wrong about how many hours we would work
• How the U.S. expanded its wealth relative to the rest of world, and at what cost
• Why natural capital should be included in measuring wealth

For more information on this episode click here.

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Show Notes

An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith—Early Modern Texts

About Adam Smith—Adam Smith Institute

An Inquiry Into the Nature and Origin of Public Wealth and Into the Means and Causes of Its Increase by The Earl of Lauderdale—McMaster University

Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail by Ray Dalio—Simon & Schuster

The Economics of Biodiversity: The Dasgupta Review—GOV.UK

Less Is More: How Degrowth Will Save the World by Jason Hickel—Penguin Random House

Economic Possibilities for Our Grandchildren by John Maynard Keynes—Yale

America’s economic outperformance is a marvel to behold—The Economist

How Much is Enough? Money and the Good Life by Robert Skidelsky and Edward Skidelsky—Penguin Random House 

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142: Why Are Some Nations Wealthier Than Others?

282: Is GDP the Best Measure of Happiness and Well-Being?

300: Ray Dalio and the Changing World Order

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With a total U.S. inflation rate of 14% in the past two years, we review how various inflation hedges performed over the past twenty-four months.

Topics covered include:

• What were investors' and the Federal Reserve's inflation expectations two years ago
• What led to the big inflation increase
• Why was the Federal Reserve forced to raise its policy rate by almost 5% in a year
• How successful were inflation-index bonds, stocks, commodities, and real estate in beating inflation over the past two years
• How did two active ETFs that set out to protect against inflation perform
• What is the current outlook for inflation, and what should investors do

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Show Notes

CPI Inflation Calculator—U.S. Bureau of Labor Statistics

Inflation Beneficiaries ETF—Horizon Kinetics

Quadratic Capital Management

Investments Mentioned

iShares TIPS Bond ETF (TIP)

Vanguard Short-term Inflation Protection Securities ETF (VTIP)

Invesco DB Commodity Index Tracking Fund (DBC)

Vanguard Total World Stock ETF (VT)

Vanguard Total Stock Market ETF (VTI)

WisdomTree U.S. High Dividend Fund (DHS)

WisdomTree Global High Dividend Fund (DEW)

Horizon Kinetics Inflation Beneficiaries ETF (INFL)

Schwab U.S. REIT ETF (SCHH)

Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL)

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336: Own What Is Real

342: Is Another Great Inflation Coming?

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How accelerating bank deposit withdrawals could harm the economy, including real estate prices. How dollars slosh around the financial system but always seem to end up at the Federal Reserve.

Topics covered include:

• How many deposits have left banks since the Silicon Valley Bank collapse
• How much have banks borrowed from the Federal Reserve to meet deposit withdrawals
• Why exiting deposits are harming bank profits and causing them to make fewer loans
• How the credit crunch could hurt commercial real estate values
• How money market mutual funds differ from banks
• How today's banking crisis is similar to the 1980s savings and loans crisis
• What should investors do to protect their wealth

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Show Notes

Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks—The Federal Reserve

Assets and Liabilities of Commercial Banks in the United States—The Federal Reserve

All U.S. Banks Net Interest Margin—BankRegData

Current Treasuries and Swap Rates—Chatham Financial

Options trading surges as investors brace themselves for US regional bank volatility by Stephen Gandel and Nicholas Megaw and Colby Smith—The Financial Times

Bank Turmoil Squeezes Borrowers, Raising Fears of a Slowdown by Jeanna Smialek—The New York Times

Banks' Demand for Reserves in the Face of Liquidity Regulations by Jane Ihrig—Federal Reserve Bank of St. Louis

Money Market Funds: Investment Holdings Detail—The Federal Reserve

Deposit Outflows Shine Light on Fed Program That Pays Money-Market Funds by Eric Wallerstein and Nick Timiraos—The Wall Street Journal

ICI Research Perspective: Trends in the Expenses and Fees of Funds, 2022—Investment Company Institute

FAQs: Reverse Repurchase Agreement Operations—Federal Reserve Bank of New York

US Resolution Trust Corporation by Aidan Lawson and Lily Engbith—SSRN

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270: Repo Rates Soared—Here’s Why It Matters

333: How The Covid Shock Nearly Destroyed The Financial System

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What has been the impact on trade and the trade deficit since the U.S. implemented tariffs on steel, aluminum, and goods made in China?

Topics covered include:

• Has the shipping backlog been reduced at U.S. ports
• What are the dangers of running too high of a trade deficit
• How large is the U.S. trade deficit
• What has been the impact of U.S. tariffs on trade, domestic production, and prices
• How Chinese direct-to-consumer retail companies Shein and Temu are driving prices of goods ever lower
• Why consumers should demand greater visibility on how products they purchase are made

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Show Notes

The ‘ship backup has ended’ at Los Angeles, Long Beach ports by Alejandra Salgado—Supply Chain Dive

America’s Trade Deficit Surged in 2022, Nearing $1 Trillion by Ana Swanson—The New York Times

Industry study tracks China tariffs’ added costs to importers and consumers by Ben Unglesbee—Supply Chain Dive

Costs of Trade Wars: The Distributional Consequences of US Section 301 Tariffs Against China by Kara M. Reynolds—SSRN

Certain Effects of Section 232 and 301 Tariffs Reduced Imports and Increased Prices and Production in Many U.S. Industries by USITC—United States International Trade Commission

Economic Impact of Section 232 and 301 Tariffs on U.S. Industries by USITC—United States International Trade Commission

The other Chinese apps taking the US and UK by storm by Chelsea Bailey—BBC

Secretive Shein Founders Build $40 Billion Fortune in Rapid Fashion by Venus Feng and Pei Yi Mak—Bloomberg

Shein sets ambitious revenue target ahead of IPO by Rachel Douglass—Fashion United

Shein copycats chase its explosive growth by Eleanor Olcott, Qianer Liu, and Gloria Li—The Financial Times

Temu’s Big Haul by Ella Apostoaie—The Wire China

The High Price of Fast Fashion by Dana Thomas—The Wall Street Journal

Stealing More than Just Designs: Utilizing Environmental Law as a Remedy to Design Piracy by Fast Fashion Brands by Spencer Kluth—SSRN

Shein’s Cotton Tied to Chinese Region Accused of Forced Labor by Sheridan Prasso—Bloomberg

Worn: A People's History of Clothing by Sofi Thanhauser—Penguin Random House

More than ever, our clothes are made of plastic. Just washing them can pollute the oceans. by Brian Resnick—Vox

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212: Trade Wars Increase Prices and Poverty

413: What if the World Stopped Shopping?

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David has a fascinating discussion with Kristof Gleich about active management, indexing, and how ETFs and mutual funds really work.

Topics covered include:

• Should individual investors even try to select active mutual funds
• Is there an indexing bubble
• Why are there so many new ETFs
• Should we be worried about an ETF flash crash
• What do ETF market makers and authorized participants do
• Do SEC yields for international equity mutual funds and ETFs reflect the impact of dividend withholding taxes

As the president and CIO of Harbor Capital Advisors, Inc. Kristof Gleich oversees all Investment, Distribution & Marketing and Executive Office functions at Harbor. He provides insight while helping lead Harbor’s strategic growth plan.

Previously, Kristof was a managing director and global head of manager selection at JP Morgan Chase & Co. He has a degree in Physics from University of Bristol. 

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321: How to Analyze Complex Investments

311: Did ETFs Pass the 2020 Market Collapse Stress Test?

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"If something is profitable, it will be done," says Martin Wolf of the Financial Times. We explore how profits will drive the energy transition and how and where water from the Colorado River is used.

Topics covered include:

• How profits have led to higher energy market share for natural gas and renewal energy
• What is hindering a faster transition to renewables
• What is contributing to a water shortage in the southwestern U.S,. and how will it be resolved
• Why big infrastructure projects often aren't the best solution to solve a problem
• Why some regulation is helpful

For more information on this episode click here.

Show Notes

The market can deliver the green transition by Martin Wolf—The Financial Times

Where the Water Goes: Life and Death Along the Colorado River by David Owen—Penguin Random House

Economics may take us to net zero all on its own by John Burn-Murdoch—The Financial Times

The Gregor Letter by Gregor Macdonald—Substack

The Inflation Reduction Act: Here's what's in it—McKinsey & Company

Management of the Colorado River: Water Allocations, Drought, and the Federal Role by Charles V. Stern and Pervaze A. Sheikh—Congressional Research Service

The Supreme Court wrestles with questions over the Navajo Nation's water rights by Becky Sullivan—NPR

As the Colorado River Shrinks, Washington Prepares to Spread the Pain by Christopher Flavelle—The New York Times

Can Western States Agree on the Future of the Colorado River? by Matt Vasilogambros—Pew

A matter of priorities by DeEtte Person—Know Your Water News

Average monthly water prices in the United States as of July 2022, by selected state—Statista

Election to Designate AMA for the Douglas Basin—Arizona Department of Water Resources

Arizona Is in a Race to the Bottom of Its Water Wells, With Saudi Arabia’s Help by Natalie Koch—The New York Times

Arizona gets serious about piping water from Mexico in nonbinding desalination resolution by Brandon Loomis—AZ Central

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399: Unintended Consequences Impact Everything

345: Investing in Water

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What caused Silicon Valley Bank to collapse in only 44 hours, and how likely will the contagion spread, leading to other bank failures?

Topics covered include:

• How losses on bonds blew up SVB's balance sheet
• How is Silicon Valley Bank similar and different than other regional banks
• What the FDIC and Federal Reserve are trying do to restore confidence and stop bank runs
• How a weakening of the Frank-Dodd bank regulation act set the stage for SVB's failure
• Why bailing out uninsured depositors is controversial
• Three scenarios of what might happen next
• Actions we can take to protect ourselves when private money fails

For more information on this episode click here.

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Show Notes

Silicon Valley Bank launches $2.25bn share sale to shore up capital base by Joshua Franklin and Antoine Gara—The Financial Times

US Bank Capital Regulation: History and Changes Since the Financial Crisis by John Walter—Economic Quarterly

SVB's 44-Hour Collapse Was Rooted in Treasury Bets During the Pandemic by Brian Chappatta—Bloomberg

Remarks by FDIC Chairman Martin Gruenberg at the Institute of International Bankers—FDIC

How Silicon Valley Turned on Silicon Valley Bank by Ben Foldy, Rachel Louise Ensign, and Justin Baer—The Wall Street Journal

SEC Filings Details—Silicon Valley Bank

FDIC Creates a Deposit Insurance National Bank of Santa Clara to Protect Insured Depositors of Silicon Valley Bank, Santa Clara, California—FDIC

Uninsured Silicon Valley Bank depositors seek fire sale of assets by Joshua Franklin, Sujeet Indap, Colby Smith, and George Hammond—The Financial Times

Join Statement by Treasury, Federal Reserve, and FDIC—Federal Reserve

FDIC Acts to Protect All Depositors of the former Silicon Bank, Santa Clara, California—FDIC

US regulators are setting a dangerous precedent on SVB by Sheila Bair—The Financial Times

Back-to-Back Bank Collapses Came After Deregulatory Push by David Enrich—The New York Times

Will another bank fall? by Robert Armstrong—The Financial Times

Shares in US regional banks close sharply lower over fears of deposit flight by Jennifer Hughes, James Fontanella-Khan, Ortenca Aliaj, and Brooke Masters—The Financial Times

Charles Schwab shares drop 12% even as the firm defends financial position by Yun Li—CNBC

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305: Are Banks Safe?

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How leveraged loans and CLOs work and how to invest in them. What are the risks and opportunities with the new CLO ETFs.

Topics covered include:

• What are the characteristics of leveraged loans and how David has invested in them in the past, both professionally and personally.
• Why LIBOR reference rate for leveraged loans is being phased out
• What is the current investing climate for leveraged loans
• How collateralized loan obligation work
• Why insurance companies are fighting over CLOs
• What are the different ways to invest in CLOs

For more information on this episode click here.

Show Notes

Companies, Lenders Clash Over Loan Spreads in Switch from Libor by Mark Maurer—The Wall Street Journal

Libor: The Spider Network—The Wall Street Journal

Collateralized Loan Obligations (CLOs) Primer by Jennifer Johnson—NAIC and The Center for Insurance Policy Research

Investing In The Middle: Tapping Into Opportunities in Middle Market Lending—AllianceBernstein

Top 10 US CLO Managers: CLO AUM (30 Nov 2022)—CLO Research

Default, Transition, and Recovery: 2021 Annual Global Leveraged Loan CLO Default And Rating Transition Study—S&P Global Ratings

U.S. BSL CLO And Leveraged Finance Quarterly: Is Winter Coming? by Stephen Anderberg, Daniel Hu, Et al.—S&P Global Ratings

Risk Assessment of Structured Securities - CLOs by Eric Kolchinsky, Charles A. Therriault, Marc Perlman—National Association of Insurance Commissioners (NAIC)

Monthly US CLO Index - December 2022—Fitch Ratings

Private equity-backed insurers under US scrutiny over risky loans by Antoine Gara and Sujeet Indap—The Financial Times

Private Equity Taps Insurers' Cash to Speed Up Growth by Matt Wirz and Leslie Scism—The Wall Street Journal

Investments Mentioned​

Virtus Seix Floating Rate Income Fund (SAMBX)

Virtus Seix Senior Loan ETF (SEIX)​

Invesco Senior Loan ETF (BKLN)​

DoubleLine Flexible Income Fund (DFLEX)​

BlackRock Debt Strategies Fund (DSU)

BlackRock AAA CLO ETF (CLOA)

iShares Treasury Floating Rate Bond ETF (TFLO)​​

Janus AAA CLO ETF (JAAA)

Janus B-BBB CLO ETF (JBB)​

VanEck CLO ETF (CLOI)

Eaglepoint Credit Company (ECC)

Oxford Lane Capital Corp (OXLC)

Related Episodes

305: Are Banks Safe?

206: Be Bear Aware of Bank Loans

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Do activist hedge funds including Carl Icahn's add value? Should you invest in Icahn Enterprises L.P., a conglomerate with a 15% dividend yield and a stake in Carl Icahn's hedge fund?

Topics covered include:

• How Icahn Enterprises' (IEP) investment performance compares to Berkshire Hathaway
• How to analyze individual stocks and why it is challenging
• What are activist hedge funds and do they make a positive performance difference
• What are the risks and opportunities of investing in IEP

For more information on this episode click here.

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Show Notes

Icahn Enterprises L.P.

The Activism of Carl Icahn and Bill Ackman by Jason D. Schloetzer and Richard Lee—SSRN

The Long-Term Effects of Hedge Fund Activism by Lucian A. Bebchuk, Alon Brav, Wei Jiang—SSRN

Did They Live Happily Ever After? The Fate of Restructured Firms After Hedge Fund Activism by Jongha Lim and Wonik Choi—SSRN

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242: Should You Let Warren Buffett Manage Your Money?

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Why long-term U.S. stock market outperformance could be because it has avoided major catastrophes. Does an over-reliance on historical U.S. stock returns when modeling retirement outcomes lead to spending rates that are too high?

Topics covered include:

• Why you might consider earthquake insurance
• What is survivorship bias and what are some examples
• Why the U.S. is an outlier when it comes to stock market performance
• Why the 4% retirement spending rule might be too high
• If the 4% spending rule is too high, what can retirees do instead to have enough for retirement
• Why the size and scale of the U.S. economy provide some resistance to catastrophes

For more information on this episode click here.

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Show Notes

Homefacts

Survivorship Bias—Matt Rickard

Is The United States A Lucky Survivor: A Hierarchical Bayesian Approach by Jules H. van Binsbergen, Et al.—SSRN

The Financial History of Emerging Markets: New Indices by Bryan Taylor—SSRN

The (Time-Varying) Importance of Disaster Risk by Ivo Welch—Financial Analyst Journal

The Safe Withdrawal Rate: Evidence from a Broad Sample of Developed Markets by Aizhan Anarkulova, Et al.—SSRN

The 2.7% Rule for Retirement Spending by Ben Felix—YouTube

Trends in Retirement and Retirement Income Choices by Tiaa Participants: 2000–2018 by Jeffrey R. Brown, Et al.—SSRN

Related Episodes

250: Investing Rule One: Avoid Ruin

326: The New Math of Retirement Spending and Investing

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What are the pros and cons of a simple stock and bond portfolio consisting of two funds or ETFs? Given U.S. stocks have significantly outperformed the rest of the world over the past decade, is there even a role for non-U.S. stocks in your investment portfolio?

Topics covered include:

• How have 60/40 and similar portfolios performed over the long-term
• What are the advantages and disadvantages of a 60/40 portfolio
• What is the expected return of a 60/40 portfolio and what should be included?
• What has contributed to U.S. stocks outperforming non-U.S. stocks over the past decade
• Why have emerging markets stocks done so poorly
• What has to happen for U.S. stocks to continue to outperform non-U.S. stocks

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Show Notes

BlackRock vs. Goldman in the Fight Over 60/40 by James Mackintosh—The Wall Street Journal

Battered 60-40 portfolios face another challenging year by Adrienne Klasa—Financial Times

The case for the 60/40 portfolio in equities and bonds by Erin Browne—Financial Times

Investors wonder if the 60/40 portfolio has a future by Michael Mackenzie—Financial Times

Has the tried and tested 60/40 strategy soured? by Maya Bhandari—Financial Times

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We consider four case studies in which individuals struggle to decide what to do with their investment portfolios.

Topics include:

• Why it's so difficult to reenter the stock market after sitting on the sidelines and what to do instead
• What are the risks of having a too aggressive portfolio allocation in retirement and what to do instead
• What to do when an investment strategy has worked really well but you feel it is time to make a change
• How to decide on an appropriate portfolio mix after a significant financial change

You can learn more about Money for the Rest of Us Plus here.

For more information on this episode click here.

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401: Why Diversifying Your Portfolio Feels Awful

Show Notes

Case studies were pulled from the following Plus episodes:

287 Plus: Coronavirus Update, Mid Month Investment Conditions and Overcoming the Fear of Investing

306 Plus: Member Profile, Bond Investing, and Emerging Technology

310 Plus: Mid Month Update and a Member Wants to Reallocate from Growth Stocks

331 Plus: Member Profile, Tail Risk Protection, Rental Real Estate as Bond Substitute, and YYY ETF

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What you need to know to confidently invest in bonds.

Topics covered include:

• Key components of bond investing include face value, coupon rates, yield-to-maturity, duration, and convexity
• How to decide between owning longer-term or short-term bonds
• How to decide whether to own individual bonds or bond funds and ETFs
• When to use active bond management versus bond indexing
• How bullet bond ETFs work and when to use them
• How to know when to invest in municipal bonds and corporate bonds
• When should you own foreign bonds
• Should you own bonds in taxable or tax-deferred accounts
• A bond case study based on current interest rates

For more information on this episode click here.

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Show Notes

A Complete Guide to Investing in I Bonds and TIPS—Money for the Rest of Us

Investments Mentioned

iShares 20+ Year Treasury Bond ETF (TLT)

Vanguard Short-Term Treasury ETF (VGSH)

iShares® iBonds® Dec 2025 Term Treasury ETF (IBTF)

iShares® iBonds® Dec 2025 Term Corporate ETF (IBDQ)

Vanguard Total Bond Market Index Fund ETF (BND)

Doubleline Total Return Bond Fund (DBLTX)

Related Episodes

337: Why in the World Would You Own Bonds?

378 Plus: A Frustrating Time To Invest and Did Bulletshares Underperform?

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How sophisticated AI apps from OpenAI and other companies create articles, art, and other works that have never existed. How generative AI will impact business owners, employees, students, and financial markets.

Topics include:

• How AI is creating personal finance articles and other creative works
• ChatGPT's attempt at writing a script for the Money For the Rest of Us podcast
• How ChatGPT and other large language models work
• What are the risks and flaws of generative AI
• How can we adapt and take advantage of generative AI

For more information on this episode click here.

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Show Notes

We Are Here To Create: A Conversation with Kai-Fu Lee—Edge

CNET Is Quietly Publishing Entire Articles Generated by AI by Frank Landymore—Futurism

CNET Money—CNET

Should You Break a CD Early for a Better Rate by AI engine and edited by Jaclyn DeJohn—CNET

NerdWallet, Inc. Q3 2022 Earnings Call—NerdWallet

OpenAI

The Backstory of ChatGPT Creator OpenAI by Berber Jin and Miles Kruppa—The Wall Street Journal

GPT-3.5 + ChatGPT: An illustrated overview by Alan D. Thompson—Life Architect

AI-generate answers temporarily banned on coding Q&A site Stack Overflow by James Vincent—The Verge

Alarmed by A.I. Chatbots, Universities Start Revamping How They Teach by Kalley Huang—The New York Times

A Coming-Out Part for Generative A.I., Silicon Valley's New Craze by Kevin Roose—The New York Times

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We analyze the worrisome national debt situation in the U.S., UK, and Japan and consider what will determine the likelihood of default

Topics covered include:

• How big is the national debt in the U.S., UK, and Japan
• Why Japan and UK interest rates have increased
• When do federal government debts jump the most
• What two numbers are key to whether a level of national debt is sustainable
• What are five ways indebted countries have reduced the relative size of their debt
• Why quantitative easing is not a solution to a national debt crisis

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Show Notes

Debt to the Penny—U.S. Treasury Fiscal Data

Federal Debt and the Debt Limit in 2022—Congressional Research Service

Can the Central Bank Alleviate Fiscal Burdens? by Ricardo Reis—London School of Economics and Political Science

UK government debt and deficit: June 2022—Office for National Statistics

Japan's Experience with Yield Curve Control by Matthew Higgins and Thomas Klitgaard—Liberty Street Economics

What is the national debt?—U.S. Treasury Fiscal Data

Major Foreign Holder of Treasury Securities—Treasury International Capital System, U.S. Treasury

The Liquidation of Government Debt by Carmen M. Reinhart and M. Belen Sbrancia—International Monetary Fund

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295: Federal Reserve Insolvency and Monetizing the National Debt

338: The National Debt, Inflation, and the U.S. Dollar—What Could Go Wrong?

360: Will the U.S. Default? Debt Ceilings, Government Shutdowns, and the National Debt

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We kick off 2023 by answering your questions on making portfolio changes, risk tolerance, the strong dollar, inflation and retirement, influential books, and other topics.

For more information on this episode click here.

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How public equity REITs differ from private REITs. Why investors are selling out of private REITs and why private REIT sponsors like Blackstone and Starwood are limiting investors' ability to do so.

Topics covered include:

• What are public and private real estate investment trusts
• Why has Blackstone's BREIT been such a success
• Why investors are trying to exit private REITs
• Why commercial property values are falling
• Is now a good time to invest in public and private REITs?

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Show Notes

How the gates closed on Blackstone’s runaway real estate vehicle by Antoine Gara, Sujeet Indap, and Kaye Wiggins—Financial Times

Investors Yank Money From Commercial-Property Funds, Pressuring Real-Estate Values by Konrad Putzier and Peter Grant—The Wall Street Journal

How the gates closed on Blackstone’s runaway real estate vehicle by Antoine Gara, Sujeet Indap, and Kaye Wiggins—Financial Times

Investors Yank Money From Commercial-Property Funds, Pressuring Real-Estate Values by Konrad Putzier and Peter Grant—The Wall Street Journal

Property Insights: Roller Coaster by Michael Knott—Green Street

Rising Interest Rates Threaten to Expose Office Buildings’ Inflated Values by Konrad Putzier—The Wall Street Journal

Why Blackstone’s $69 Billion Property Fund Is Signaling Pain Ahead for Real Estate Industry by John Gittelsohn and Patrick Clark—Bloomberg

Blackstone’s $70 Billion Real Estate Fund for Retail Investors Is Losing Steam by Dawn Lim and John Gittelsohn—Bloomberg

Related Episodes

183: How To Invest In Commercial Real Estate

230: Use Caution With Real Estate Crowdfunding

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How to solve the conundrum that consumption reductions lead to economic disasters while benefiting the environment.

Topics covered include:

• Why consumption, fossil fuel usage, and carbon emissions keep growing
• How fossil fuel consumption goes well beyond heating and transportation uses but is tied to agriculture, steel, and cement production
• The four times global consumption fell and the dire economic consequences that resulted
• How the world is consuming twice as many resources as the planet can sustain
• How the economy could still grow while reducing the environmental impact

For more information on this episode click here.

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Show Notes

How the World Really Works: The Science Behind How We Got Here and Where We’re Going by Vaclav Smil

The Day the World Stops Shopping: How Ending Consumerism Saves the Environment and Ourselves by J.B. Mackinnon

Global Footprint Network

Related Episodes

262: Better Not Bigger, Circular Not Linear – How the Global Economy Is Changing

282: Is GDP the Best Measure of Happiness and Well-Being?

340: Climate Change, ESG, and What Should Investors Do?

395: How Population Trends Will Impact Growth, Inflation, Investing, and Well Being

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What are the best options for safely investing cash.

Topics covered include:

• High-yield savings accounts
• Certificates of Deposits
• Government Bonds
• Money Market Mutual Funds
• When should you invest in long-term bonds
• Why some savings apps try to look like banks but they are not
• What happens when central banks lose money
• Where not to deposit cash for safety

For more information on this episode click here.

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Show Notes

a16z-backed Tellus wants to offer consumers a much better savings rate. Here’s how. by Mary Ann Azevedo—TechCrunch

Factors Affecting Reserve Balances—U.S. Federal Reserve

Liabilities and Capital: Liabilities: Earnings Remittances Due to the U.S. Treasury: Wednesday Level—FRED

What if the Federal Reserve books losses because of its quantitative easing? by William B. English and Donald Kohn—Brookings

U.S. Banks Lost a Record $370 Billion in Deposits Last Quarter by David Benoit—The Wall Street Journal

Crypto Lender BlockFi Follows FTX Into Bankruptcy by Alexander Gladstone—The Wall Street Journal

Related Episodes

304: A 15% Guaranteed Return? Lending on the Fringes of Finance

392: What Is Money and How to Use It

410: Is Cryptocurrency Dead?

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Camden and David converse with Asha Mehta, Managing Partner & CIO at Global Delta Capital about the bullish case for emerging and frontier market stocks as well as the risks.

Topics covered include:

• How to go about investing in emerging markets
• Should you invest in China
• Where are the most promising emerging and frontier markets
• Why aggregate emerging markets earnings have been lackluster
• How to balance quantitative analysis with subjective reasoning

For more information on this episode click here.

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Show Notes

Power of Capital by Asha Mehta

Global Delta Capital

Related Episodes

249: Should You Invest in India?

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How the bankruptcy of FTX, the world's third-largest crypto exchange, undermines trust in cryptocurrency and decentralized finance, making it even more difficult for crypto to ever be taken seriously as a monetary alternative.

Topics covered include:

• How FTX squandered its customers' deposits
• How FTX is another example of a private money bank run
• How traditional securities lending works and why it is very low risk compared to the highly speculative nature of cryptocurrency lending platforms
• How FTX's demise is impacting numerous entities including Voyager, BlockFi, Bitcoin miners, venture capitalists, and many others
• How should individual investors store cryptocurrency, and does it even make sense to continue to own it

For more information on this episode click here.

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Show Notes

Don't Miss Out on Crypto: Larry David FTX Commercial

The spectacular implosion of crypto’s biggest star, explained by Emily Stewart—Vox

Divisions in Sam Bankman-Fried’s Crypto Empire Blur on His Trading Titan Alameda’s Balance Sheet by Ian Allison—CoinDesk

FTX held less than $1bn in liquid assets against $9bn in liabilities by Antoine Gara, Kadhim Shubber, and Joshua Oliver—Financial Times

FTX balance sheet, revealed by FT Alphaville—Financial Times

FTX Tapped Into Customer Accounts to Fund Risky Bets, Setting Up Its Downfall by Vicky Ge Huang, Alexander Osipovich, and Patricia Kowsmann—The Wall Street Journal

After FTX: Rebuilding Trust in Crypto’s Founding Mission by Noelle Acheson—CoinDesk

How Sam Bankman-Fried’s Crypto Empire Collapsed by David Yaffe-Bellany—The New York Times

Exclusive: At least $1 billion of client funds missing at failed crypto firm FTX by Angus Berwick—Reuters

Investors Who Put $2 Billion Into FTX Face Scrutiny, Too by Erin Griffith and David Yaffe-Bellany—The New York Times

FTX signs deal with option to buy BlockFi for up to $240 mln by Niket Nishant and Aditya Soni—Reuters

Voyager Digital and Voyager Official Committee of Unsecured Creditors Provide Update on Reorganization Plan—Cision

Crypto lender BlockFi says it has significant exposure to FTX by Manya Saini and Shailesh Kuber—Reuters

Coinbase Quarterly Earnings

Related Episodes

393: What Happens If Your Brokerage Firm Goes Bankrupt

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How the International Monetary Fund, the world's economic firefighter, works for global monetary cooperation and prosperity while using its own made-up currency, the SDR.

Topics covered include:

• What was the Bretton Woods monetary system that led to the formation of the IMF and the World Bank
• How the World Bank and IMF differ
• What does the IMF do
• How the IMF creates its own money out of thin air
• Why does Argentina, the IMF's largest borrower, keep defaulting on its debt obligation including those to the IMF
• Why the IMFs negotiating tactics are controversial

For more information on this episode click here.

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Show Notes

Creation of the Bretton Woods System, July 1944—Federal Reserve History

The World Bank

International Monetary Fund

Sterling devalued and the IMF loan—Cabinet Papers, The National Archive

Total IMF Credit Outstanding, Movement From November 01, 2022 to November 07, 2022—IMF

Why you can’t technically default on the IMF by Izabella Kaminska—Financial Times

Implications of the IMF's SDR Allocation for Australia and the Global Economy by Ben Hollebon and Kate Hickie—Reserve Bank of Australia

The IMF cannot solve Argentina’s dysfunction—The Economist

IMF Executive Board Completes Second Review of the Extended Arrangement Under the Extended Fund Facility for Argentina—IMF

The IMF: The World’s Controversial Financial Firefighter—by Jonathan Masters, Andrew Chatzky, and Anshu Siripurapu—Council on Foreign Relations

Related Episodes

233: Is An Emerging Markets Crisis Imminent?

322: Why Currency Exchange Rates Matter?

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How to survive in a world where luck and randomness play a pivotal role.

Topics covered include:

• What are power laws
• What are the narrative fallacy and hindsight bias
• What are examples of domains where randomness has contributed to success
• What are ways to distinguish investing skill from luck
• How sixth-century philosopher Boethius had an accurate view of chance
• What are ways we can benefit from good luck while protecting ourselves from bad luck

For more information on this episode click here.

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Show Notes

Redacted messages to and from Elon Musk—Delaware’s Court of Chancery

Elon Musk’s Texts Shatter the Myth of the Tech Genius by Charlie Warzel—The Atlantic

Talent Versus Luck: The Role of Randomness In Success and Failure by Alessandro Pluchino, Alessio Emanuele Biondo, and Andrea Rapisarda

Susan Alexandra

Welcome to Susan Alexandra’s Dream World by Sophia Herring—Clever, Architectural Digest

The Fashion Set Can’t Get Enough of Susan Alexandra’s Colorful, Kitschy Designs by Noah Lehava—Coveteur

Quantifying the evolution of individual scientific impact by Roberta Sinatra et al.

What's in a Surname? The Effects of Surname Initials on Academic Success by Liran Einav and Leeat Yariv

Middle names make you look smarter—University of Southhampton

Admission to Selective Schools, Alphabetically by Štěpán Jurajda and Daniel Münich

It Pays to Be Herr Kaiser: Germans With Noble-Sounding Surnames More Often Work as Managers Than as Employees by Raphael Silberzahn and Eric Luis Uhlmann

The relative-age effect and career success: Evidence from corporate CEOs by Qianqian Du, Huasheng Gao, Maurice D. Levi

The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb

Were Those Great Returns the Result of Skill — or Just Luck? by Julie Segal—Institutional Investor

Related Episodes

323: The Economy Is Not A Machine

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How to use laddered inflation-indexed bonds (i.e., TIPS), CDs, fixed annuities, and fixed index annuities to meet retirement living expenses while worrying less about running out of money.

Topics covered include:

• How individuals can use liability-driven investment strategies
• Why now is the best opportunity to buy Treasury Inflation Protection Securities in 15 years
• How to use bond ladders
• How deferred fixed and deferred variable annuities work
• How to analyze fixed index annuities

For more information on this episode click here.

Show Notes

Worry-Free Investing by Zvi Bodie and Michael J. Clowes

Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, Quoted on an Investment Basis, Inflation-Indexed—FRED

Market Yield on U.S. Treasury Securities at 5-Year Constant Maturity, Quoted on an Investment Basis, Inflation-Indexed—FRED

New 5-year TIPS auctions with a real yield of 1.732%, highest in 15 years—TIPSwatch

Complete List of Multi-Year Guaranteed Annuities (MYGAs), October 26, 2022—ImmediateAnnuities.com

Safety-First Retirement Planning: An Integrated Approach for a Worry-Free Retirement by Wade Pfau

A Complete Guide to Investing in TIPS and I Bonds—Money for the Rest of Us

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279: Why All Retirees Should Consider an Income Annuity

326: The New Math of Retirement Spending and Investing

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In Episode 406, David and Camden visit with Annie Duke about how to better manage our investment portfolios including when and what to sell. We also discuss a number of behavioral finance topics such as mental accounting, sunk costs, and goal myopia.

Annie Duke is an author, speaker, and consultant in the decision-making space, as well as Special Partner focused on Decision Science at First Round Capital Partners, a seed stage venture fund. Annie’s latest book, Quit: The Power of Knowing When to Walk Away, was released on October 4, 2022. Her previous book, Thinking in Bets, is a national bestseller, and is highly influential on the investing philosophy of Money for the Rest of Us. 

As a former professional poker player, she has won more than $4 million in tournament poker, won a World Series of Poker Bracelet and is the only woman to have won the World Series of Poker Tournament of Champions and the NBC National Poker Heads-Up Championship. She retired from the game in 2012. 

Prior to becoming a professional poker player, Annie was awarded a National Science Foundation Fellowship to study Cognitive Psychology at the University of Pennsylvania.

These days, Annie loves to dive deep into decision-making under uncertainty. As can be seen from her new book, her latest obsession is the topic of quitting.

For more information on this episode click here.

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Show Notes

Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts by Annie Duke

Quit: The Power of Knowing When to Walk Away by Annie Duke

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What is volatility and what causes it to rise and fall? How volatility itself contributes to more volatility such as in the example of the chaotic UK government bond market where long-term yields have increased by 4% in 2022.

Topics covered include:

• How the role of volatility has changed in financial markets
• What caused UK interest rates to spike and long-term bond investors to lose 50%
• What is liability-driven investment
• What drives increases in volatility and volatility spikes and spillovers are more frequent
• How to earn income from shorting volatility and what are the risks
• What we can learn when financial securities blow up

For more information on this episode click here.

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Show Notes

The volatility virus strikes again by Eric Lonergan—Financial Times

How ‘Liability-Driven’ Pension Funds Triggered UK Bond Panic by Loukia Gyftopoulou and Greg Ritchie—Bloomberg

UK government debt and deficit: December 202—UK Office for National Statistics

Markets are more fragile than investors think by Robin Wigglesworth—Financial Times

Volatility and the Alchemy of Risk: Reflexivity in the Shadows of Black Monday 1987—Artemis Capital Management

What Caused the Volatility “Volmageddon” on 5-Feb-2018 by Vance Harwood—Six Figure Investing

Gamma Explained—Merrill

Delta Explained—Merrill

Inside Volatility Trading: Is VIX Backwardation Necessarily a Sign of a Future Down Market? by Scott Bauer

Investments Mentioned

WisdomTree CBOE S&P500 PutWrite Strategy ETF (PUTW)

Simplify Volatility Premium ETF (SVOL)

Related Episodes

159: What You Need To Know About Volatility

283: Why You Should Care About Carry Trades

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What has caused the U.S. dollar's currency exchange rate to be the strongest in twenty years? How a strong dollar leads to slower global economic growth and falling asset prices.

Topics covered include:

• Why a strong dollar is a no-win situation for the rest of the world
• Why have inflation and interest rates increased
• Why recession risks are rising as central banks combat inflation
• Why asset prices fall when interest rates rise
• What would cause the U.S. dollar to weaken from these levels
• How to protect against currency fluctuations

For more information on this episode click here.

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Show Notes

Wall St blames missteps at FedEx as parcel service fails to delivery Steff Chávez and Andrew Edgecliffe-Johnson—Financial Times

The Global Dollar Cycle by Maurice Obstfeld and Haonan Zhou, BPEA Conference Drafts, September 8–9, 2022—Brookings Papers on Economic Activity

Monetary policy challenges posed by global liquidity by Hyun Song Shin—BIS

Dollar beta and stock returns by Valentina Bruno, Ilhyock Shim and Hyun Song Shin—BIS

Wonking Out: The Mysteries of the Almighty Dollar by Paul Krugman—The New York Times

Rents Drop for First Time in Two Years After Climbing to Records by Will Parker—The Wall Street Journal

Stop looking for a bogeyman to explain sterling’s collapse by Kate Martin—Financial Times

British Pound / US Dollar Historical Reference Rates from Bank of England for 1975 to 2022—Pound Sterling Live

Related Episodes

215: Is A Dollar Collapse Coming?

338: The National Debt, Inflation, and the U.S. Dollar—What Could Go Wrong?

364: Should You Hedge Your International Stock Exposure Against Currency Fluctuations?

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How risk perceptions and actions have changed over several years of the pandemic. How the pandemic's impacts continue to affect politics, the economy, financial markets, how we invest, and our personal lives.

Topics covered include:

• Is the pandemic really over?
• What percentage of people continue to isolate at home
• How behaviors such as eating out and visiting friends have changed throughout the pandemic.
• How work has changed with the pandemic
• Has pandemic stimulus changed beliefs about the sustainability of the national debt leading to structural inflation
• How productivity improvements could improve the national debt burden
• What investment lessons has David learned from the pandemic

For more information on this episode click here.

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Show Notes

Biden’s claim that ‘pandemic is over’ complicates efforts to secure funding by Dan Diamond—The Washington Post

COVID-19 Dashboard—The Center for Systems Science and Engineering at Johns Hopkins University

Axios/Ipsos COVID-19 Poll – Wave 70, September 9–12, 2022

Study: 163 Million People Dine Out at Least Once a Week—QSR Magazine

U.S. Return-to-Office Rates Hit Pandemic High as More Employers Get Tougher By Peter Grant—The Wall Street Journal

Reassessing Constraints on the Economy and Policy; Panel Topic: An End to Pre-Pandemic Trends or Just a Temporary Interruption? by Valerie A. Ramey

Inflation as a Fiscal Limit by Francesco Bianchi and Leonardo Melosi

Related Episodes

333: How The Covid Shock Nearly Destroyed The Financial System

400: What If High Inflation Doesn’t End?

Investments Mentioned

Simplify Interest Rate Hedge ETF (PFIX)

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What are the drivers that lead to higher student loan balances? Why a one-time student loan forgiveness program doesn't solve the problem of increasing student debt. What are some more viable longer-term solutions.

Topics covered include:

• How big is the Biden Administration student debt forgiveness plan
• How big has the student debt burden grown
• Why are borrowings for students increasing
• Why Baby Boomers spent so much less on college
• How are student loans accounted for by the U.S. federal government
• What is the impact on the deficit and potentially inflation of forgiving billions of dollars of student debt

For more information on this episode click here.

Show Notes

Student Debt And The Federal Budget | How Student Loans Impact The U.S. Fiscal Outlook, November 2021—Bipartisan Policy Center

What the Student-Loan Debate Overlooks by Ronald Brownstein—The Atlantic

See the Average College Tuition in 2022-2023 by Emma Kerr and Sarah Wood—U.S. News & World Report

Biden’s Student-Debt Plan Could Chip Away at the Racial Wealth Gap by Sheelah Kolhatkar—The New Yorker

If your federal student loan payments are high compared to your income, you may want to repay your loans under an income-driven repayment plan—Federal Student Aid

What Does Student Debt Cancellation Mean for Federal Finances?—Committee for a Responsible Federal Budget

Government payments by program—Economic Research Service, U.S. Department of Agriculture

Projected Lifetime Earnings by Major by Douglas A. Webber, December 1st, 2019

Related Episodes

245: Is College Worth It?

307: Income Share Agreements—Good for Students or Investors?

327: Is Student Loan Forgiveness A Good Idea?

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Warren Buffet said, "Diversification makes very little sense for anyone that knows what they’re doing." He also said, "Diversification is a protection against ignorance..." Most of us need that protection against ignorance, yet diversification often makes us feel bad when some of our holdings don't do as well as others. We make the case why we should diversify anyway.

Topics covered:

• Warren Buffet says it's crazy to own more than 30 stocks, but Berkshire Hathaway owns 48 stocks
• What does it mean to analyze a business
• How have U.S. stocks performed relative to non-U.S. stocks long-term
• What has driven the outperformance of U.S. stocks and what has to happen for it to continue
• What are examples of diversification plays just in case the U.S. falters

For more information on this episode click here.

Show Notes

Warren Buffett and Diversification—GrahamValue.com

The Complete Berkshire Hathaway Portfolio by John Divine U.S. News

The Business Cycle Is Different Than The Economic Cycle - Crestmont Research

EU Natural Gas—Trading Economics

Related Episodes

254: Should You Be 100% Invested In Stocks?

275: Are You Over Diversified?

364: Should You Hedge Your International Stock Exposure Against Currency Fluctuations?

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How economic wars, pandemics, and worker shortages could lead to years of high structural inflation. What needs to happen to avoid this dire inflation scenario.

Topics covered include:

• What are the three inflation lessons Federal Reserve Chair Jerome Powell shared
• What is inflation anchoring
• What caused the current period of high inflation
• How China and Russia contributed to low inflation and why those trends have reversed
• How behavior changes and productivity improvements can contribute to lower inflation
• How to invest for an extended period of high inflation

For more information on this episode click here.

Thanks to Policygenius for sponsoring the episode.

Show Notes

Monetary Policy and Price Stability, August 26, 2022, byChair Jerome H. Powell—Board of Governors of the Federal Reserve System

Fed's Kashkari: 'happy' with market reaction to Powell speech by Ann Saphir and Matthew Lewis—Reuters

War and Interest Rates by Zoltan Pozsar—Credit Suisse

2nd Quarter Market Commentary, July 2022—Horizon Kinetics

BP Energy Outlook 2022

Investments Mentioned

Invesco DB Commodity Tracking ETF (DBC)

Horizons Kinetics Inflation Beneficiary ETF (INFL)

Related Episodes

342: Is Another Great Inflation Coming?

384: Has a Commodities Bull Market Supercycle Started? If So, How Do You Invest in It?

395: How Population Trends Will Impact Growth, Inflation, Investing, and Well Being

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We explore examples of positive and negative unintended consequences, what causes them, and how to navigate a world where unanticipated things happen all of the time.

Topics covered include:

• What leads to unintended consequences
• What are some unintended consequences of QE and stimulus, price controls, tax incentives, gun legislation, and marijuana legalization
• How positive unintended consequences and order can arise from the bottom up
• How recent climate legislation could lead to unintended consequences
• Why customers don't always know what they want

For more information on this episode click here.

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Show Notes

Large rent increases squeeze metro Phoenix tenants by Associated Press—The Journal Record

Unintended Consequences by Karras Lambert and Christopher J. Coyne

The Seen, the Unseen, and the Unrealized: How Regulations Affect Our Everyday Lives by Per L. Bylund

Norway reconsiders electric car privileges by Chris Randall—electrive.com

More Guns, More Unintended Consequences: The Effects of Right-to-Carry on Criminal Behavior and Policing in Us Cities by John J. Donohue, Samuel Cai, Matthew Bondy, and Philip J. Cook

Marijuana Legalization and Fertility by Sarah Papich

Japan’s latest alcohol advice: please drink more by Leo Lewis and Kana Inagaki—Financial Times

The Poverty of Historicism by Karl Popper

How the New Climate Bill Would Reduce Emissions by Nadja Popovich and Brad Plumer—The New York Times

Democrats Designed the Climate Law to Be a Game Changer. Here’s How. by Lisa Friedman—The New York Times

Economists’ Statement on Carbon Dividends; The Largest Public Statement of Economists in History—Climate Leadership Council

Why We Don't Have a Carbon Tax by Paul Krugman—The New York Times

Lean Startup and the Business Model: Experimentation Revisited by Teppo Felin, Alfonso Gambardella, Scott Stern, and Todd Zenger

Related Episodes

158: How To Invest Like A Cockroach

236: How Investors Cope With Radical Uncertainty

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We analyze two listeners' portfolios. One who is close to retirement and considering hiring an outside money manager. The second is 45 and just sold a business and is trying to decide whether to fire Schwab's robo-advisor service and manage his portfolio on his own.

Topics covered include:

• What elements are part of a financial plan
• What to consider when researching an investment advisor
• What is a core-satellite investment approach
• Why Schwab was fined $180 million for misleading its clients about the cash balance in its Intelligent Portfolios service
• How to decide if an investment advisor is a good fit
• Why no portfolio can be on autopilot, but they can be as simple as two ETFs

For more information on this episode click here.

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Show Notes

Schwab Subsidiaries Misled Robo-Adviser Clients about Absence of Hidden Fees—SEC

Cease-And-Desist Order Against Charles Schwab & Co, June 13, 2022—SEC

Related Episodes

92: What Robo-Advisors Recommend

248: How to Avoid Investment Fraud

303: How To Do Financial Planning

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This episode edits and remasters two earlier episodes on investing based on cycles to focus on timeless investing principles.

Topics covered include:

• What are different types of cycles
• Why do cycles have subjective start and end dates.
• Why do coincidences happen so often.
• How to position investment portfolios based on cycles.
• How luck and skill play a role in investing.
• Why it is better to invest based on calibrating risk rather than prediction.

For more information on this episode click here.

Show Notes

Weiss Research

Weiss Research SEC Action

Foundation For The Study of Cycles

Fluke: The Math and Myth of Coincidence by Joseph Mazur

A Spectral Analysis of World GDP Dynamics – Andrey V. Korotayev and Sergey V. Tsirel

Howard Marks – Yet Gain?

Mastering The Market Cycle by Howard Marks

Related Episodes

173: Should You Invest Based On Cycles

224: Mastering the Market Cycle – Howard Marks

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Why it is challenging to distinguish a legitimate multi-level marketing company from a pyramid scheme as hedge fund billionaire Bill Ackman found out in his losing campaign against Herbalife. How Forsage has taken pyramid and Ponzi schemes to a whole new level, and why the regulators can't shut it down.

Topics covered include:

• What are multi-level marketing companies and how most MLM distributors are unsuccessful
• What is the difference between a pyramid scheme and a Ponzi scheme and what are some examples
• How hedge fund Pershing Square Capital Management took on Herbalife and despite FTC and SEC actions, Herbalife continues to thrive.
• Why Forsage, a pyramid and Ponzi scheme on the blockchain, continues, despite SEC regulatory actions
• Why Bitcoin isn't a Ponzi scheme

For more information on this episode click here.

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