John List is the recently appointed Chief Economist at Walmart, and is also a Professor of Economics at the University of Chicago, having worked as the Chief Economist at Uber and Lyft. He has published a huge array of important papers in the field of economics and is also the author of the recent book The Voltage Effect, which deals with the question of how to scale ideas successfully. We are very excited to bring you this episode, which is a particularly illuminating one, in which we draw on John's treasure trove of insight and experience, to answer a long list of questions related to personal finance decision-making. A large portion of our chat focuses on the central ideas of critical thinking and fieldwork, practices that our guest views as indispensable in making the world a better place. Along the way we get John's thoughts on retirement planning, public policy, charitable donations, and much more, so make sure to press play on this fantastic episode of the Rational Reminder Podcast.   Key Points From This Episode:   John explains the importance of fieldwork in the study of economics. [0:03:51] Examples of field experiments that overturned a supposed economic truth. [0:05:15] Finding ways to test theories that previously proved difficult. [0:08:30] The question of generalizing findings from an experiment to a wider rule. [0:13:30] Replication in academic studies; John unpacks its central importance. [0:20:46] Why positive results tend to garner a publication bias. [0:23:38] John's perspective on checking in on investment portfolios. [0:24:40] What the data shows us about investment behaviours of men and women. [0:28:38] Accounting for the drive to give to charity. [0:35:20] Advice for how to make the most of your donations. [0:39:42] John unpacks his findings on scaling, its importance, and what he calls 'the voltage effect'. [0:44:41] The impact of technological advancement on our ability to scale certain solutions. [0:48:27] How field experiments can influence the process of scaling big ideas. [0:54:47] Hindrances to healthy scaling; confirmation biases, and herding. [0:56:17] Impacts of loss aversion and marginal thinking when scaling ideas. [1:05:28] Reasons for the difficulty of tackling globally important issues; multidimensionality and politics. [1:15:10] Weighing the utility of incentives when trying to encourage retirement savings. [1:19:16] Thoughts on bringing more reliable science into the policy-making process. [1:21:26] How parents can approach the promotion of critical thinking in their children. [1:25:45] John's approach to the questions he pursues; how he evaluates potential ideas and questions. [1:31:10] A little bit about John's new post as Chief Economist at Walmart and what the job entails. [1:33:53] How John defines success at this point in his life and his focus on inputs. [1:33:53]

Fundamentals of the Blockchain with Daniel Mescheder   Episode 1: Show Notes   Welcome to the first episode of our limited series focusing on cryptocurrencies and everything you need to know about them. Our first guest is Daniel Mescheder, who joins us to appropriately break down some of the basic concepts and engineering of the blockchain, using his expertise as a software engineer as the lens for this discussion. We felt this chat was the best way to launch the series and prepare listeners for the following episodes on the subject, and you can expect to hear Daniel share very helpful insight and explanations of fundamental terms and concepts such as distributed systems, consensus, hashing, digital signatures, and more. We also have time for our guest to weigh in on the subjects of smart contracts and NFTs, both of which are regular points of intrigue for the uninitiated. Importantly, we do hear from Daniel about the limitations of the technology at present, and which types of technological problems that he believes the blockchain is well-suited to address. So for all this and more, and to start this journey with us into such an important and hot topic, make sure to listen in.   Key Points From This Episode:   The reasons for Daniel's interest and involvement with the blockchain and cryptocurrencies. [0:03:33] Daniel compares the hype around AI in the 1980s and the current atmosphere for crypto. [0:04:50] Getting to grips with Daniel's specific perspective on the blockchain and explaining distributed systems. [0:06:34] How the concept of consensus fits into the subject of distributed systems. [0:11:17] Looking at Byzantine consensus problems and how these occur on the blockchain. [0:13:51] Daniel gives an overview of the elements that make the blockchain functional; hashing and digital signatures. [0:19:17] How Satoshi Nakamoto introduced an economic incentive to comply with the protocol. [0:24:09] Differentiating between the public and permissioned blockchains, and databases. [0:27:33] How Bitcoin achieves consensus and some of the downsides of proof of work. [0:33:31] An assessment of the decentralized status of the Bitcoin and Ethereum blockchains. [0:41:16] The amount of control that is held by miners in relation to transactions. [0:45:27] Understanding interactions between the blockchain and other external systems. [0:49:16] Immutability and the blockchain; what the rules allow and the questions that still need to be answered. [0:52:47] Basic engineering downsides to the blockchain. [0:54:40] Vulnerabilities on the blockchain and how these have been exploited by hackers. [0:58:23] NFTs, DAOs, and smart contracts; weighing how neatly these fit into the current blockchain ecosystem. [0:59:27] The abundance of rhetoric surrounding discussion about the future and validity of the blockchain. [1:06:09] Which problems would be well-suited to a solution found within the blockchain? [1:08:10]  

We have a jam-packed episode for all of our listeners today, with two guests, a lot of news, and many great resource recommendations. We start off by rounding up some recent updates from the world of finance and the Rational Reminder community, and spend some time talking about Ben's recent paper, titled 'Finding and Funding Good Life'. We are then joined by Robb Engen, for his third appearance on the show, to talk about how he helps his clients move on from unhealthy advisory relationships. Robb shares some of the surprising, disturbing, and ridiculous rebuttals that he has come into contact with over the years, and we reflect on the recent Twitter storm that occurred as a result of Robb sharing some of these. After this great chat with Robb, we are very happy to welcome back author of How to Change, Katy Milkman, who was recently a guest on the show, to discuss her reading habits, tips for memory, and how she balances producing and consuming both podcasts and books. To take part in this bounty of great information and inspiring ideas from these two guests, please make sure to join us today.   Key Points From This Episode:   Reflecting on and investigating Ben's paper, 'Finding and Funding Good Life'. [0:10:59] How this podcast has increased our interest in learning about and sharing non-financial ideas. [0:15:30] The part that hindsight and regret play in our estimations of happiness. [0:20:08] Looking forward to our podcast miniseries in which we explore cryptocurrencies. [0:22:41] The basics of the blockchain and digital cash in light of new technology. [0:29:02] The context that sparked today's conversation with Robb. [0:35:49] Robb explains his typical client, their portfolio, and why they contact him. [0:38:30] How Robb approaches assessing a portfolio and communicating possible drawbacks. [0:40:43] Ways in which active managers are practicing bad investment habits themselves. [0:44:02] Tracking the progress from active to passive for those that Robb works with. [0:47:09] Advice from Robb for managing the end of a relationship with an active manager. [0:48:15] Robb shares some examples of how advisors have responded to 'break-up notices'. [0:52:07] A round of Talking Cents cards with Rob; addressing social issues in a new business, quitting a job, saving versus spending, and more. [1:02:26] Katy describes her reading habits and her use of audiobooks. [1:08:15] Tips and tricks from Katy for information retention and idea compilation. [1:09:20] Thoughts on the connected nature of the behavioural science community and the benefits that Katy sees in this. [1:13:39] Some of the classic behavioural science books that Katy recommends. [1:15:07] How Katy approaches podcasting, writing, and consuming the different mediums. [1:17:05] Advice from Katy for anyone wanting to increase the amount that they read. [1:21:00]

To carry on the trend of amazing guests on the show, today we welcome Antti Ilmanen. Antti is the co-head of the Portfolio Solutions Group at AQR, and the author of a couple of really impactful books that we highly recommend. His most recent is Investing Amid Low Expected Returns, and in today's chat, we get to hear all about the ideas contained in its pages, and the most important moments in his career that have shaped his philosophy. Antti received his PhD in Finance from the University of Chicago and has had a long career of working with high profile names that you might recognize from past episodes of this podcast. Our guest talks about the need for cultivating your patience in relation to your investment portfolio and shares many other great pieces of practical advice that you can implement today. We delve into some bad investment habits that Antti noted in his book and also touch on the usefulness of bonds, illiquid assets, trend following, and much more. Be sure to tune in today to hear all that this great mind has to offer.   Key Points From This Episode:   The power and limitations of using historical data for calculating expected returns. [0:04:17] Balancing historical data with market-implied expected returns. [0:07:47] Antti comments on shifting into higher expected return equity markets. [0:11:37] The role of bonds in revenue generation and why to not give up on them completely. [0:13:00] Locating the roots of the positive premium that Antti associates with bonds. [0:16:35] The effect of illiquid assets on expected returns. [0:19:44] Why recent historical returns in real estate are not indicative of future expected returns. [0:23:40] The response from institutional investors to lower expected returns. [0:26:09] Situating value's current dip in a broader historical picture. [0:29:57] Some comments on the recent performance of rates, growth, and value. [0:33:39] Today's expected value returns in comparison with other points in history. [0:37:19] Antti unpacks the idea of trend following and its performance during the most recent crash. [0:39:53] Defining the defensive style premium and its relation to quality. [0:41:26] Antti differentiates carry and value strategies from each other. [0:45:55] An explanation of the importance of being 'long-short' to capturing the premium. [0:51:24] Locating the difference between alternative risk premia and alpha. [0:55:31] Practical tips for investors to wait out periods of poor performance. [0:57:45] The need for investors to be more fee-conscious in today's, low-return world. [1:01:35] Antti shares about what he calls the investor's 'premier bad habit'. [1:02:33] The impact of Ken French on Antti's career and philosophy. [1:05:29] How Antti defines success at this point in his life and the priority he gives to balance. [1:07:33]

Today, on the Rational Reminder Podcast, we are tackling a few interesting topics that tie into recent and forthcoming conversations with our amazing guests. In this 'us only' episode, we are focusing on thematic ETFs and the truth about dividend investing. After a quick look at The Quick Fix by Jesse Singal, some reflections on the past six months at ARK Invest, and the lessons we can still learn from the dot-com crash, we get into the meat of today's episode by way of Ben's recent experiences on a discussion panel about the utility of thematic investing. From there, we transition into the 'relevance of dividend irrelevance' and share some of the most illuminating and pertinent findings. In the end, our argument is simply that dividends are not the way to go and are an inefficient policy on many fronts. This has not deterred many investors, however, and we get to grips with the kinds of behaviours associated with dividends before espousing what this can mean for you and your objectives. To catch all of this and links to some of the best research available, be sure to listen in with us today.   Key Points From This Episode:   Today's book review of The Quick Fix by Jesse Singal and its critique of popular psychology. [0:12:30] Inflows at ARK Invest; the startling commitment that we are currently seeing. [0:21:48] Reflections and information that we dug up on the dot-com crash in the '90s. [0:22:30] Notes on thematic ETFs garnered from the recent panel Ben was on. [0:25:09] Disentangling the relevance of dividend irrelevance. [0:35:45] The performance of a dividend portfolio and a better idea of expected returns. [0:40:28] Empirical findings about dividend investors and their actions in relation to yields, diversification, and more. [0:42:01] The tax inefficiency of dividends and what this means for capital gains. [0:49:01] Underlining the importance of dividend investor's consumption and its sensitivity to dividends. [0:51:31] How the problem with dividends is compounded outside of the US. [0:57:11]  

We are so happy to bring you all our 200th episode, and who better to have on the podcast on this auspicious occasion than the legendary, Professor Gene Fama? This is one of the most jam-packed episodes we have ever recorded, with Gene providing concise and thought-provoking answers to our many, many questions. After delving into the foundations of Gene's work and philosophy, covering market efficiency, and its competing theories, Gene entertains our queries about a wide range of ideas and models, and generously shares the decades worth of wisdom that he is so widely known for. We also find time to talk about retirement plans, inflation, cryptocurrencies, and the influence of machine learning. Towards the end of our conversation, our guest touches on some more personal ideas about productivity, his career, his partnership with Ken French, and what success means to him at this point. For a landmark episode, with a true hero of the evidence-based approach to investing, make sure not to miss this.   Key Points From This Episode:   The basics of market efficiency and its main implications for investors. [0:04:49] Limitations of the efficient markets model for explaining specific cases. [0:08:02] Gene's perspective on the inelastic markets hypothesis and his interest in it for the future. [0:09:36] The anomalies that brought down the capital asset pricing model. [0:10:26] Unpacking the three-factor and five-factor asset pricing models that Fama and French created. [0:11:43] Thoughts on the Q-factor model, factor premiums, and data dredging. [0:15:43] Gene's reflections on building data sets dating back to the 1920s. [0:17:13] The best way to estimate expected returns and expected factor premiums according to Gene. [0:19:52] Structuring portfolios and how different investors should approach this. [0:24:10] Considering international diversification for investors in Canada. [0:29:05] Further thoughts on asset pricing models. [0:32:47] The assets that are hedged against expected and unexpected inflation. [0:33:31] Gene illuminates the role of the Fed in relation to inflation. [0:36:43] Advice for typical retirees from Gene. [0:38:22] The challenges that Gene has experienced translating theory into practice. [0:40:16] Lesson from Gene's work with Dimension Fund Advisors. [0:43:47] Gene's reflections on his impact and having his theories implemented in practice. [0:45:32] Weighing the value and impact of behavioral finance. [0:47:53] Technology and active managers; is it any different for those aiming to achieve alpha in the current context? [0:50:46] Gene weighs in on cryptocurrencies and how his perspective might have shifted. [0:53:08] A look at the people who have had the biggest influence on Gene's career. [1:03:05] Thoughts on productivity and making the most of periods of clear thinking. [1:03:39] Our guest's personal definition of a successful life. [1:06:17]

As we near the 200th episode of our little podcast, we wanted to have a chat with our friend Aydin Mirzaee about one of our favourite topics: books. Before welcoming Aydin into the conversation we round up some important news, go deeper than ever into the fascinating subject of bonds, and share some thoughts on Setting the Table. As the host of the Supermanagers Podcast and the CEO of Fellow, Aydin has an unusual and stimulating perspective on many of our usual interests, and we get to hear from him about the development of his own reading habit, what he most enjoys reading, what would make him recommend a book to someone else, and few pieces of advice for strengthening your reading practices. Aydin also talks about why advice can be dangerous, increasing your ability to retain information, and he is generous enough to do a round of Talking Sense cards with us to finish off the episode. To hear it all, make sure to join us.   Key Points From This Episode:   Today's book review, looking at Setting the Table by Danny Meyers. [0:08:47] Christopher Bloomstran's thought-provoking critique of Ark Invest. [0:18:06] A follow-up on our ongoing discussion about bonds and look at their recovery time. [0:20:04] Comparing real returns across the different decades. [0:27:30] Research into a more complete view of the historical returns of stocks versus bonds. [0:39:31] How correlations come into the conversation about stocks and bonds. [0:42:54] Aydin describes his reading habits; audiobooks on a commute, hacks, and more. The different purposes of books and how Aydin uses business content to generate ideas. [0:49:40] Books as leverage and some thoughts from Aydin on his favourite genres. [0:52:27] Where Aydin sources his books and what it takes for him to decide to recommend books to others. [0:56:12] The role that podcasts play in Aydin's reading habits. [0:58:30] Aydin's advice for how to read more and his approach to encouraging his children. [0:59:12] Considering different ways to increase information retention. [1:02:11] A round of Talking Cents cards with Aydin! [1:03:34]

Gerard O'Reilly, Co-CEO and CIO of Dimensional Fund Advisors, talks about the firm's research-based culture and rules-based approach to investing. He discusses risk assessment, factor tilted portfolios, operating profitability, and the value of combining multiple metrics. He also highlights the benefits of including small-cap stocks in portfolios and the changes in Dimensional portfolios over the past decade. Gerard's scientific learnings inform his unique portfolio adjustments and Dimensional's integrated approach.

Many people have been contemplating the death of bonds, which is why for the main topic of today’s episode we’re going to be talking about their immortality. After a vicarious trip to The Masters, an overview of The Art of Insubordination, and an explanation of why we’re concerned about the changes that WealthSimple has made to their business model, we get into the world of bonds. Bond returns have not been good this year, and bond index funds are down all round, but that doesn’t mean that bonds are necessarily the riskier choice of investment in the long term, or that you should be feeling disheartened about them. Tune into our conversation today to hear why!   Key Points From This Episode:   The incredible experience of attending The Masters, and how you can win a ticket. [0:02:21] Three business-focused TV series that we highly recommend. [0:02:27] Upcoming guests, and some very positive listener reviews. [0:03:34] An overview of The Art of Insubordination. [0:09:16] Why change is challenging for most people, and the value of creating environments that encourage dissent. [0:11:12] How dissenters can make their actions more impactful, and what leaders can do to encourage dissent. [0:13:16] Key takeaways from The Art of Insubordination. [0:16:39] Why we are disappointed with the changes that Wealthsimple has made to their business. [0:18:47] Nuances that Wealthsimple has left out of their venture capital analysis. [0:23:51] Today’s main topic: the immortality of bonds. [0:33:38] Statistics which highlight the fact that bond returns have not been good this year. [0:33:51] Why volatility is not the only risk that matters. [0:35:06] How Ken French defines risk. [0:37:51] Some of the pros and cons of bonds and stocks. [0:38:56] Calculations which show that stocks are not necessarily less volatile than bonds in the long run. [0:40:48] The five components of long-run predictive variance. [0:43:23] An explanation of a model we created for the dispersion of outcomes. [0:45:10] Why now is the time to get excited about bonds. [0:49:27] Today’s first misconception: high growth sectors/regions/companies are good investments. [0:53:52] Today’s second misconception: you can lose all of your money in stocks. [0:55:57]

Welcome back to the show all about sensible investing in Canada! Today we have yet another masterclass with a wonderful guest, Sebastien Betermier. Sebastian is an Associate Professor of Finance at Desautels Faculty of Management at McGill University, where he teaches investment management, applied investments, and pension funds retirement systems. We have a deep, thoughtful, and precise conversation with him about his recent research and papers, much of which stands in contrast to our usual fare on the show. In our chat, we dive into the nuts and bolts of asset allocation, hedging risk, and his research into what demographics can teach us about investment behaviours and returns. We also hear from our guest about interesting topics of expected persistence and tilting towards value stocks, before shifting the conversation towards homeownership and property investment. Sebastien provides some sound advice around when it might be a good idea to purchase property over other asset classes, and we evaluate this position from a number of different investing perspectives. Lastly, we spend some time looking at pension plans, and what we can learn from those available in Canada right now.   Key Points From This Episode:   Sebastien explains the theoretical relationship between labor income and financial asset allocation. [0:04:30] Findings on hedging labour income risks and the paper that Sebastien published on the subject. [0:06:47] The relationships between risk and age, gender, wealth, and heterogeneity across households. [0:10:05] Unpacking Sebastien's investigation into value and growth investors. [0:12:07] The effect that the characteristics of labor income have on the rate of progression on the value ladder. [0:18:43] What we can learn about expected persistence in the value premium. [0:22:39] Weighing the possibility of predictive demographics for future value premiums. [0:24:29] Advice for young investors looking to tilt towards value stocks. [0:27:50] Explaining differing returns according to the characteristics of people. [0:29:41] Sebastien explains the factors of markets, wealth, and age, in the pricing model. [0:31:24] Understanding how investors tilt to age and wealth factors, and what these portfolios look like. [0:38:19] The impact of age and wealth factors on wealth inequality, and how younger investors can combat this. [0:42:19] Possible rationales for homeownership and the storage of wealth in housing. [0:44:26] The household characteristics that are predictive of larger allocations to housing. [0:48:49] Economic importance of risk-free benefits of homeownership. [0:52:15] The decade-long rule of thumb for purchasing property; Sebastien weighs in. [0:55:31] Why asset-only performance is not the only correct way to measure the success of the Canadian pension fund model. [0:58:50] Differentiating asset-only performance and liability-hedging performance measurement. [1:02:29] A list and explanation of the assets that Canadian pension funds use for hedging real liabilities. [1:04:03] Lessons from the Canadian Pension Plan for individual investors and firms. [1:12:54] Sebastien's personal definition of success: making the most of opportunities and a balanced life. [1:16:07]