Orion's The Weighing Machine Larry Swedroe of Buckingham Strategic Wealth -Evidence-Based Investing and Sustainability
In today’s episode, Rusty talks with Larry Swedroe, the director of research for Buckingham Strategic Wealth.
Larry finished his MBA in Finance and Investment from NYU. Larry stays connected to the financial industry by spearheading research for Buckingham and the BAM Alliance, but he’s also a prolific writer who has authored or co-authored 16 books. His mission is to explain investing theories to investors in an accessible and straightforward way.
Larry talks with Rusty about evidence-based investing, the effects of sustainability on investing, and diversifying portfolios with risky assets.
"You should invest in as many unique sources of risk as you can identify that meet all of the criteria that I established—those five criteria of persistence, robustness, pervasiveness, implementability, and intuitive rationale. Everything we do is based upon not my opinion, but the evidence has to meet those criteria" ~ @LarrySwedroe
Main Takeaways
- Evidence-based investing is always the winning strategy. Focusing on the risk you can handle and ignoring stock picking and market timing can help you beat the market.
- Larry’sMy three rules of investing — are: give advice based on evidence, identify risk factors, and examine the robustness of the market.
- The five criteria for examining risk —are persistence, robustness, pervasiveness, implementability, and intuitive rationale.
- Sustainable companies get better ratings, which then eventually helps them increase their cash flows and drive their valuations up. Investors are now seeing this trend, too, and their actions as investors can impact how companies implement their objectives.
- Risky assets should have similar risk-adjusted returns. Portfolios must be diverse and should consider including alternative investments.
- Blockchain technology is truly innovating the finance world, but the key advice for investors is to assess and accept the changing regulations and the massive illiquidity it might face.
Links
- Larry Swedroe on Twitter
- Larry Swedroe on LinkedIn
- Garryowen (from the film They Died with Their Boots On featuring Errol Flynn)
- Buckingham Strategic Wealth
- Reducing the Risk of Black Swans by Larry Swedroe
- Warren Buffett Lost $132 Million On Financial Weapons Of Mass Destruction
- Wall Street Journal
- Continental Can Company
- Kimberly Clark
- Baruch Lev
- A note on the relationship between Fama-French risk factors and innovations of ICAPM state variables
- Morningstar
- Appirio
- Parametric Portfolio Association
- Levi Strauss
- Cliffwater
- Stoneridge
- Ray Dalio
- Harvard University
- Yale University
- SEC
- Bernard Baruch’s 10 Trading Rules
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2344-OAS-8/19/2021