The Long View Barry Ritholtz: ‘How Not to Invest’
Barry Ritholtz, co-founder and chief investment officer of Ritholtz Wealth Management, shares profound insights on the art of investing. He emphasizes the unpredictable nature of markets and the vital need for cautious strategies. Ritholtz also discusses the illusions of forecasting and the importance of admitting ignorance in finance. He critiques emotional investing, advocating for well-being over status in financial decisions. With a mix of humor and wisdom, he reveals how learning from mistakes is key to navigating market cycles.
01:05:57
Media Diet
- Limit media consumption's influence on investment decisions.
- Read financial news after work, not before.
Conceptual Frameworks
- Conceptual frameworks and syllogisms are key for understanding markets.
- Apply past patterns and probabilities to future predictions.
Prolific Writing
- Barry Ritholtz maintains a prolific writing schedule alongside managing a wealth management firm.
- He writes for two hours every morning, a habit developed over 30 years ago.
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Intro
00:00 • 5min
The Writer's Journey and Financial Insights
04:43 • 14min
The Illusion of Predictability
18:13 • 7min
The Power of Admitting Ignorance and Understanding Numbers
25:39 • 6min
Understanding Secular Market Cycles and Their Impact
31:30 • 2min
Navigating Market Cycles and Emotional Investing
33:58 • 30min
Wrap-Up and Call to Action
01:03:45 • 4min
Principles
Ray Dalio
In 'Principles: Life and Work', Ray Dalio shares the principles he has developed over his career that have helped him achieve success. The book is divided into three sections: the first section explains how Dalio's principles were formed from his personal and professional experiences; the second section outlines life principles, such as embracing reality, being radically open-minded, and understanding the importance of pain and reflection in personal growth; and the third section focuses on work principles, including the use of radical truth and radical transparency to transform an organization. Dalio advocates for systematizing decision-making into algorithms, learning from failures, and building a culture where it is okay to make mistakes but unacceptable not to learn from them.
Misbehaving
The Making of Behavioral Economics
Richard H. Thaler
In 'Misbehaving: The Making of Behavioral Economics,' Richard H. Thaler recounts his journey in challenging traditional economic theories that assume humans are rational actors. The book chronicles the evolution of behavioral economics, a field that integrates psychology and economics to understand how people actually make decisions. Thaler discusses various behavioral concepts such as endowment effects, mental accounting, and self-control issues, using anecdotes and empirical studies to illustrate these points. The book also delves into Thaler's personal struggles and successes in establishing behavioral economics as a recognized field, including his work with institutions like the British tax collection agency and his battles with traditional economic thinking[2][4][5].
Poor Charlie's Almanack
The Essential Wit and Wisdom of Charles T. Munger
Charles T. Munger
Peter D. Kaufman
Originally published in 2005, Poor Charlie's Almanack is a collection of eleven talks delivered by Charles T. Munger between 1986 and 2007. Edited by Peter D. Kaufman, this book draws on Munger's extensive knowledge across various fields to provide a framework for rational and rigorous approaches to life, learning, and decision-making. It is renowned for its sharp wit and rhetorical flair, making it an essential read for investors, entrepreneurs, and anyone seeking to enhance their wisdom and critical thinking skills.
What is Life? And Other Big Questions
What is Life? And Other Big Questions
Ken Feinberg
Four Thousand Weeks: Time Management for Mortals
Oliver Burkeman
In 'Four Thousand Weeks: Time Management for Mortals', Oliver Burkeman challenges conventional time management strategies by emphasizing the finite nature of human life. The book argues that the average human lifespan of about 4,000 weeks is too short to accomplish everything, and thus, it is crucial to focus on what truly matters. Burkeman draws on insights from ancient and contemporary philosophers, psychologists, and spiritual teachers to advocate for a more balanced and meaningful approach to life, encouraging readers to embrace the limits of time and prioritize activities that bring intrinsic joy and fulfillment. The book critiques the modern obsession with productivity and efficiency, suggesting that true fulfillment comes from accepting the constraints of time and living in the present[1][2][4].
Expert Political Judgment
How Good Is It? How Can We Know?
Philip E. Tetlock
In this book, Philip E. Tetlock evaluates the predictive abilities of experts by analyzing 27,451 verifiable predictions made by 284 world-renowned experts over more than 20 years. He finds that expert predictions are often no better than random guesses and identifies two types of thinkers: 'hedgehogs,' who are confident in their single, overarching idea, and 'foxes,' who are more eclectic and adaptable. Tetlock argues that foxes are generally more accurate in their predictions due to their ability to consider multiple perspectives and adapt to new information. The book also explores how the media often favors hedgehogs for their confident and decisive statements, despite their lower accuracy.
Winning the loser's game
Timeless Strategies for Successful Investing
Charles D. Ellis
In 'Winning the Loser's Game,' Charles D. Ellis explains that investing has become a 'loser's game' where the outcome is determined by the mistakes of the loser, rather than the skills of the winner. Ellis advocates for a focus on developing and adhering to wise and appropriate investment policies, emphasizing the importance of understanding client needs, avoiding high fees, and investing for the long term. The book includes updated chapters on bond investing, investor behavior, and the impact of technology on investment decisions, while reinforcing core principles of successful investing such as indexing and reducing costs.
Bailout nation
How Greed and Easy Money Corrupted Wall Street and Shook the World Economy, with New Post-Crisis Update
Barry Ritholtz
How Not to Invest
The ideas, numbers, and behavior that destroy wealth—and how to avoid them
Barry Ritholtz
Today on the podcast, we’re welcoming Barry Ritholtz. He’s co-founder, chairman, and chief investment officer of Ritholtz Wealth Management, a firm that was launched in 2013. He’s the creator and host of Masters in Business, one of the earliest finance-related podcasts. He also regularly posts on The Big Picture, where he’s been covering everything investing related since 2003. He is the author of Bailout Nation, and his latest book, How Not to Invest: The Ideas, Numbers, and Behaviors That Destroy Wealth—and How to Avoid Them, has just been published.
Background and Books
How Not to Invest: The ideas, numbers, and behavior that destroy wealth—and how to avoid them
Podcasts and More
“Masters in Business - Ray Dalio Full Show,” Masters in Business podcast, Nov. 30, 2018
“An Interview With Ken Feinberg: Masters in Business,” Masters in Business podcast, Oct. 9, 2015
“MiB: Charley Ellis on Rethinking Investing,” Masters in Business podcast, Feb. 21, 2025
“Why Fear Is an Investor’s Worst Enemy” by Samantha Lamas from the 2017 Morningstar ETF Conference, Morningstar.com, Sept. 12, 2017
“Rabbithole: What Do People Get Wrong About Money?” The Big Picture, March 10, 2025
“It’s Been 40 Years Since Our Cover Story Declared ‘The Death of Equities,’ ” by Peter Coy, Bloomberg, Aug. 13, 2019
Readings
Winning the Loser’s Game: Timeless Strategies for Successful Investing, Eighth Edition, by Charles D. Ellis
Expert Political Judgment: How Good Is It? How Can We Know?, by Philip E. Tetlock
Four Thousand Weeks: Time Management for Mortals, by Oliver Burkeman
Principles, by Ray Dalio