We Study Billionaires - The Investor’s Podcast Network

TIP523: Financial Wisdom w/ Cullen Roche

33 snips

Feb 12, 2023

Cullen Roche, an investment expert and author of "Pragmatic Capitalism," joins the discussion to share his insights on financial independence and portfolio optimization. He breaks down the differences between CPI and PCE, debates the role of elected central bankers, and discusses the impacts of a decoupling world on inflation and the US dollar. Roche also addresses the concept of balance sheet recessions, questions the future performance of the 60/40 portfolio, and explores how new generations of investors approach risk and resilience.

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INSIGHT

PCE vs. CPI: A Deeper Dive

PCE, unlike CPI, updates its consumption basket monthly, accounting for substitution effects.
This makes PCE arguably a more accurate reflection of consumer spending habits.

ANECDOTE

The Banana Waffle

Cullen Roche shared how he substitutes bananas for eggs in his waffle recipe due to high egg prices.
This illustrates the substitution effect reflected in PCE.

INSIGHT

Central Bank Independence: A Trade-off

Central bank independence shields expert decision-making from political pressures, like demands for lower interest rates before elections.
However, this independence comes at the cost of reduced accountability and democratic control.

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