Tech vs. Value, and Private Equity vs. Public Equity (EP.205)

Welcome to another episode of the Rational Reminder Podcast. In today’s jam-packed episode, hear updates regarding our goals survey, the schedule for upcoming guests on the show, the latest news and highlights from the financial world, and some of the feedback we have received about the show. We also highlight interesting articles and papers regarding tech valuations, expected stock returns, the performance of venture capital funds, and a book recommendation that will help you understand the finance game. Tune in to learn about the results of the recent social survey in Canada, the basics of private equity funds, the challenges of calculating the Internal Rate of Returns for investors, some of the misconceptions surrounding private equity, and much more! Don’t miss out on this informative and well-rounded episode of the Rational Reminder Podcast with your two favourite Canadians!

Key Points From This Episode:

• We start the show with an exciting announcement for our listeners. [0:02:07]
• An update regarding the Goals Survey Project and what needs to be done. [0:03:30]
• A rundown of the upcoming guests for the show. [0:04:44]
• Outline of the reviews and criticisms received about the show. [0:05:55]
• A breakdown of the book for today’s review, Finite and Infinite Games. [0:10:07]
• Background about the author of the book, James P. Carse. [0:10:57]
• The main point of the book: the differences between finite and infinite games. [0:11:16]
• An interesting quote from the book regarding culture. [0:14:42]
• Highlights of the recent news and updates in the financial world. [0:17:02]
• Insights from an interesting article about tech valuations by Cliff Asness. [0:19:47]
• Another interesting paper by David Blitz about expected stock returns. [0:23:09]
• A discussion regarding the recent social survey implemented in Canada. [0:26:07]
• We discuss the basics of private equity as an investment strategy. [0:30:06]
• Why the math used is problematic for calculating the Internal Rate of Return. [0:32:35]
• The results of a paper which investigated the performance of venture capital funds. [0:39:01]
• More insights from follow-up papers about private equity. [0:42:24]
• Examples of the type of risk exposures that private equity provides. [0:49:36]
• The impacts associated with the preference for illiquid assets. [0:52:00]
• Some of the misconceptions surrounding diversity in private equity funds. [0:52:44]
• What are the best metrics to use to measure returns on private equity. [0:56:00]