Have you ever wondered how vibes can shape the economy? Or how the economy differs from financial markets? Or even how meme stocks operate? In this episode, we dive into the intersection of economic theory, social media, and public sentiment with Kyla Scanlon, an insightful economic commentator known for her relatable approach to explaining complex economic concepts. Kyla is a prolific content creator and founder of the financial education company, Bread. She produces a weekly newsletter, informative YouTube videos, the Let's Appreciate Podcast, and (almost) daily short-form videos that break down complex economic concepts into engaging, bite-sized content. She's also the author of In This Economy?: How Money & Markets Really Work, an indispensable guide to the "mad math and terrible terminology" of economics. Join us as we explore her unique vibecession concept, discuss the impact of social media-driven market movements, examine the housing crisis through the lens of generational wealth transfer and zoning laws, and much more. As Kyla explains it, economics isn't just about numbers. It's about the stories we tell and how they influence the world around us. For a fun, fascinating, and highly accessible look at the state of the economy today, don't miss this conversation with one of the internet's favorite financial educators!

Key Points From This Episode:

(0:03:19) Kyla's definition of economics, who the main players are, and how it's understood.

(0:05:04) How "vibes" influence the economy and intersect with economic theory and reality.

(0:07:07) Money, its impact on the economy, and whether GDP reflects economic health.

(0:09:45) Ways that expectations about inflation affect vibes in the economy.

(0:10:50) Kyla's take on housing, what people get wrong about it, and renting versus owning.

(0:15:16) Surprisingly simple reasons for the housing crisis in the US and beyond.

(0:17:48) Key distinctions between financial markets, the economy, and the stock market.

(0:20:53) The difference between investing, speculating, and gambling.

(0:22:08) GameStop, meme stocks, and the power of social media.

(0:24:43) Reasons that "new era" thinking is dangerous and where crypto went wrong.

(0:29:49) How to know when we're in a recession and what a "vibecession" is.

(0:33:52) Why US national debt isn't always bad and why the Federal Reserve exists.

(0:39:43) Problems that can arise from strictly adhering to economic beliefs.

(0:42:53) Ways that the economy is connected to the mental health of individuals.

(0:45:10) The impact of social media and media business models on vibes.

(0:48:45) Kyla's biggest learnings from her work and how she defines success.

Links From Today's Episode:

Meet with PWL Capital — https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind
Rational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/
Mark McGrath on X — https://x.com/MarkMcGrathCFP

Kyla Scanlon — https://kylascanlon.com/

In This Economy?: How Money & Markets Really Work — https://www.penguinrandomhouse.com/books/737854/in-this-economy-by-kyla-scanlon/

Let's Appreciate Podcast — https://open.spotify.com/show/6ziXCBAojpLDKtexx8bxds

TLDR Podcast — https://wealthsimple-tldr-podcast.simplecast.com/

Kyla Scanlon Newsletter — https://kyla.substack.com/

Kyla Scanlon on LinkedIn — https://www.linkedin.com/in/kylascanlon/

Kyla Scanlon on YouTube — https://www.youtube.com/@KylaScanlon/

Kyla Scanlon on Instagram — https://www.instagram.com/kylascan/

Kyla Scanlon on TikTok — https://www.tiktok.com/@kylascan

Kyla Scanlon on X — https://x.com/kylascan

'The Vibecession: The Self-Fulfilling Prophecy' — https://kyla.substack.com/p/the-vibecession-the-self-fulfilling

Federal Reserve DFA (Distributional Financial Accounts) Chart — https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/

Federal Reserve SLOOS Report — https://www.federalreserve.gov/data/sloos.htm

Michael Mauboussin — https://www.michaelmauboussin.com/

FedNow — https://www.frbservices.org/financial-services/fednow

National Bureau of Economic Research — https://www.nber.org/

Justin Wolfers on X — https://x.com/JustinWolfers

'Why Gen Z is Rewriting the Rules of Work' — https://www.fastcompany.com/90911399/kyla-scanlon-on-why-gen-z-is-redefining-the-concept-of-job-satisfaction

'Loneliness as a "market opportunity"' — https://youtu.be/UL9QiHYtajw

Journal of Economic Teaching Symposium on Economics Teaching (JETSET) — https://journalofeconomicsteaching.org/symposium/

Kyla's Tweet about #JETSET24 — https://x.com/kylascan/status/1820242645672738938

Books From Today's Episode:

The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing — https://www.amazon.com/dp/1422184234 

Papers From Today's Episode: 

'Why Do We Think That Inflation Expectations Matter for Inflation? (And Should We?)' — https://www.federalreserve.gov/econres/feds/why-do-we-think-that-inflation-expectations-matter-for-Inflation-and-should-we.htm

'Negativity drives online news consumption' — https://www.researchgate.net/publication/369301406_Negativity_drives_online_news_consumption

Which account should you choose, a registered retirement savings plan (RRSP) or a Tax-free savings account (TFSA)? This is one of the most common decisions that Canadians must make when it comes to investing, but it will also elicit some of the most passionate responses. RRSPs especially get a lot of undue skepticism, with some even labelling it as a scam. Today we take a deep dive into both of these savings accounts, exploring the downsides and benefits of each, and how to decide which account is right for you based on your savings goals. With the help of Conquest Planning, a specialized, in-depth modelling tool, we look at a range of scenarios incorporating different variables, like income and family size, and break down our analysis regarding the RRSP vs. TFSA decision for each scenario. We discuss key factors to consider, including the basic personal amount tax credit, which allows RRSPs to act as a tax flow-through, and the guaranteed income supplement (GIS), which can impact retirement planning. Our conversation also examines how to approach family size and longevity, as RRSPs become more advantageous with longer lifespans. Join us today to learn about the benefits and flexibility of each of these accounts, the surprising ways RRSPs often outperform TFSAs, and find out which one is right for you!

Key Points From This Episode:

(0:00:20) An introduction to the RRSP vs. TFSA debate.

(0:08:11) How we used the Conquest Planning tool and the scenarios we analyzed.

(0:10:34) Taxation and contribution considerations and strategies for RRSPs and TFSAs.

(0:20:11) An analysis of scenario one; $60,000 income and no children.
(0:22:38) Basic personal amount tax credit; how it allows RRSPs to act as a tax flow-through.

(0:27:20) The Guaranteed Income Supplement (GIS) and its impact on RRSP vs. TFSA analysis in different scenarios.

(0:36:16) How GIS is tied to Old Age Security (OAS) payments.

(0:41:12) An analysis of scenario two; a couple with two children, and the impact of the Canada Child Benefit on RRSP vs. TFSA contributions.

(0:45:21) The impact of mortality and longevity on RRSP and TFSA in various scenarios.

(0:47:01) Main takeaways from today's scenarios and the advice our hosts would give to different clients regarding TFSAs and RRSPs.

(0:50:50) Why RRSPs are of greater benefit if you live longer compared to TFSAs.

(0:52:13) Our aftershow section: listener feedback, what Ben is working on regarding renting versus buying, the zombie apocalypse, and more.

Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind
Rational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/
Mark McGrath on X — https://x.com/MarkMcGrathCFP

Brady Plunkett on LinkedIn — https://www.linkedin.com/in/brady-plunkett-712489105/

Lukas Fleck on LinkedIn — https://www.linkedin.com/in/lukasfleck/

Flossing for your Finances, Personal Financial Strategies for Dentists — https://us06web.zoom.us/webinar/register/9017236574029/WN_7O_JdvejRhmh-_LleBNRmQ#/registration
Episode 317: Kevin Milligan — https://rationalreminder.ca/podcast/317

Papers From Today's Episode: 

'Tax Uncertainty and Retirement Savings Diversification' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2799288

There is a huge range of factors that can impact our investment decisions, whether we realize it or not, from our level of financial literacy to our political affiliations. This is borne out in research conducted by today's guest Professor Antoinette Schoar, the Stewart C. Myers-Horn Family Professor of Finance at MIT Sloan. Today, Antoinette joins us to share her insights and challenge conventional wisdom on various topics from target date funds to cryptocurrencies. Tuning in, you'll learn about the transformative impact of target date funds on investment behaviours and asset allocation, before delving into the subject of financial literacy and financial advisors. Antoinette also sheds light on the unique dynamics of crypto trading and breaks down why retail investors' strategies in crypto differ significantly from those in traditional markets. We also discuss the complexities of private equity and venture capital, focusing on why these asset classes might not be suitable for retail investors due to high barriers and risks. Our conversation also covers the critical role of regulation in maintaining market stability and protecting investors. Join us for a thought-provoking discussion that promises to deepen your understanding of financial markets and enhance your investment decisions!

Key Points From This Episode:

(0:00:18) An introduction to today's guest, Antoinette Schoar, and her extensive research.

(0:03:44) The rise of target date funds in the American retirement system: how it's affected asset allocation and trading behaviour of retail investors.

(0:09:39) The impact of target date funds: how they have affected mutual fund flows, arbitrage opportunities, market efficiency, the elasticity of aggregate demand, and trend-chasing anomalies.

(0:16:48) The influence of individual beliefs, like political affiliation, on financial decision-making and portfolio adjustments, and how to counteract it.

(0:21:54) Perceptions of risk in housing investments: how this affects the rent versus buy decision, what changes people's housing risk perceptions, and how to make better housing decisions.

(0:29:29) Findings from Antoinette's study on financial advisors and their effectiveness at undoing bias in their prospective clients.

(0:33:51) How investors' prior beliefs affect their receptiveness to receiving financial advice and why better financial literacy is essential.

(0:41:38) What consumers need to know about advisor compensation structures and what they should look for when seeking out financial advice.

(0:47:05) How Antoinette's students motivated her to research cryptocurrency and teach it.

(0:49:40) Antoinette's insights on the applications of cryptocurrency and blockchain, and some of the surprising positive outcomes from the rise in cryptocurrency.

(0:52:13) The trading behaviours of retail investors in cryptocurrencies compared to traditional asset classes.

(0:57:30) An analysis of the Terra Luna collapse explaining the systemic issues and resulting financial impact on smaller investors.

(01:02:14) The broader implications of cryptocurrency trading and the need for regulatory oversight to protect investors.

(01:06:05) An overview of the challenges and risks of investing in private equity and venture capital for retail investors.

(01:11:56) Antoinette's reflections on success, professional goals, and the broader impact of research on financial markets and investor behaviour.

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Antoinette Schoar — https://mitsloan.mit.edu/faculty/directory/antoinette-schoar

Monika Piazzesi — https://economics.stanford.edu/people/monika-piazzesi

Papers From Today's Episode: 

'Belief Disagreement and Portfolio Choice' — https://www.nber.org/papers/w25108

'Credit Supply and House Prices: Evidence from Mortgage Market Segmentation' — https://www.nber.org/papers/w17832

'Retail Investors' Contrarian Behavior Around News, Attention, and the Momentum Effect' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3544949
'Anatomy of a Run: The Terra Luna Crash' — https://www.nber.org/papers/w31160

Of course, you want to protect your family and your savings from unforeseen consequences, but is life insurance the best option? Can life insurance be an investment rather than a cost? In today's episode of the Rational Reminder Podcast, we take a look at everything life insurance and dig into some hard-hitting research on the subject. We break down the various insurance products available and unravel the nuances regarding returns, dividends, and the associated fees. We discuss why there is so much confusion regarding returns and associated risk, how your contribution can affect your returns, and why you may not get the payout you expected. We also delve into what makes each insurance product different from the next, whether predictions on insurance policy returns are possible, and how insurance compares to other asset classes. If you're looking for insight into the potential tax benefits of life insurance and a breakdown of the different scenarios where life insurance is needed, this is the episode for you!

Key Points From This Episode:

• The main topic of the episode: permanent life insurance. (0:04:29)
• Defining insurance and how it is typically structured. (0:04:44)
• 'Term life insurance' and how it works. (0:05:41)
• A brief outline of the differences between term insurance and permanent insurance. (0:07:37)
• Details about term life insurance and the benefits to the policyholder. (0:09:37)
• Another type of life insurance: universal life insurance. (0:11:05)
• How investments within a life insurance policy are designed. (0:13:20)
• An interesting insight Ben came across while researching insurance. (0:14:38)
• Non-participating whole life insurance and the associated cash value. (0:16:00)
• A breakdown of participating life insurance and what makes it different. (0:18:42)
• The basis for performance and premiums on participating insurance. (0:21:43)
• Whether or not it's possible to predict returns from insurance products. (0:25:25)
• Reasons for the obscurity surrounding insurance products and expected returns. (0:25:49)
• The policy illustration software that many insurance companies use. (0:29:35)
• Insight into post-tax returns of permanent insurance on death. (0:35:23)
• An overview of when you would need life insurance. (0:40:58)
• The long-term expected death benefits compared to other assets. (0:43:03)
• Insight into the commission incentive associated with insurance policies. (0:45:47)
• Highlights of a recent presentation that Ben gave at an IAFP conference. (0:46:53)
• Feedback received about the Jonathan Berk and Jules van Binsbergen episode. (0:49:01)
• A summary of recent news about rate changes and developments at Vanguard. (0:56:23)
• This week's review of The Art of Gathering, about meeting more effectively. (01:00:55)
• An honourable mention of another book, Your Investment Philosophy. (1:06:22)

Do you feel like you have a good grasp of financial markets? Think again! In this episode, we take a plunge into the world of financial markets with experts Jules van Binsbergen and Jonathan Berk. Jules is a Professor of Finance at the Wharton School of the University of Pennsylvania and Jonathan is a Professor of Finance at Stanford Graduate School of Business. They also host a popular podcast called Else Equal, which explores the science and strategy of making better financial decisions, and have written several academic papers that challenge the status quo. In our conversation, we discuss their research on the relationship between manager skill and fund performance, the best ways to measure performance, and reasons why benefits are in favour of the managers. We also explore the dogma surrounding mutual funds, the differences between active and passive management, and how to measure efficient capital markets. Listeners will also hear perspectives that challenge their understanding of capital markets and viewpoints that completely disagree with previous guests. Although we have covered this topic before in previous episodes, this conversation will fundamentally change the way you view financial markets and how to think about them.

Key Points From This Episode:

• What information fund performance contains about manager skill. (0:04:04)
• Reasons why manager skill and performance are unrelated. (0:04:59)
• We learn how manager skills should be measured. (0:06:57)
• How to choose the appropriate benchmark to measure value added. (0:09:26)
• Find out if you can use factor-mimicking portfolios to measure risk-adjusted returns. (0:12:05)
• Whether funds that directly target risk factors can be used as an investable benchmark. (0:16:35)
• What the skill of active managers are when skill is measured as value-added. (0:20:52)
• The proportion of value-added between security selection and market timing. (0:23:20)
• Discussion about how persistence manifests when it is measured by value-added. (0:25:43)
• Find out if investors should analyze mutual fund companies as opposed to managers. (0:32:36)
• Discover why research has focused on individual security pricing and not on evaluating manager skill. (0:34:25)
• We unpack the reasons why it's a zero net alpha as opposed to a negative net alpha in equilibrium. (0:38:19)
• We delve into why the research took so long to apply rational expectations to fund investors as with the stock market. (0:42:46)
• An explanation of how equilibrium zero net alpha fits into Bill Sharpe's arithmetic of active management. (0:48:16)
• Who benefits from the high amount of skill available within the sector. (0:51:11)
• Whether the increase in millionaires around the world drives inequality. (0:56:12)
• Hear if it is possible to identify skilled fund managers before the benefits of their skills are absorbed by fund size. (01:01:41)
• The implications on efficient market hypothesis for the stock market. (01:05:36)
• Advice for investors, considering that the benefits of skill are in favour of managers. (01:08:37)
• Details about their research on how multi-factor asset pricing models are not representative of risk. (01:12:45)
• We end the show by learning how our guests define success in their lives. (01:19:08)

Links From Today's Episode:

Jules van Binsbergen — https://sites.google.com/view/jules-van-binsbergen/

Jules van Binsbergen on LinkedIn — https://www.linkedin.com/in/jules-van-binsbergen-a7b21a2/

Jules van Binsbergen on Google Scholar — https://scholar.google.com/citations/

Wharton School of the University of Pennsylvania — https://www.wharton.upenn.edu/

Jonathan Berk — https://www.gsb.stanford.edu/faculty-research/faculty/jonathan-b-berk

Jonathan Berk on LinkedIn — https://www.linkedin.com/in/jonathan-berk-07874a3b/

Jonathan Berk on Google Scholar — https://scholar.google.com/citations/

Stanford Graduate School of Business — https://www.gsb.stanford.edu/

Else Equal: Making Better Decisions — https://www.gsb.stanford.edu/business-podcasts/all-else-equal-making-better-decisions

Passive in Name Only — https://heinonline.org/HOL/LandingPage/

The Emperor of All Maladies — https://www.amazon.com/Emperor-All-Maladies-Biography-Cancer/dp/1439170916

Unsettled — https://www.amazon.com/Unsettled-Climate-Science-Doesnt-Matters/dp/1950665798

'Episode 200 with Prof. Eugene Fama' — https://podcasts.google.com/feed/aHR0cHM6Ly9yYXRpb25hbHJlbWluZGVyLmxpYnN5bi5jb20vcnNz/episode/MzA2MjM2OTctOTc5Yy00MDU4LWE3YzMtYTdmMGU4NGQ0Y2Jj?sa=X&ved=0CAIQuIEEahgKEwjI27ng_rH6AhUAAAAAHQAAAAAQsQQ

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/?hl=en

Rational Reminder on YouTube — https://www.youtube.com/channel/
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on Twitter — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Critics of blockchain often say that it is nothing more than a database, but today's guest, Ari Juels, has a different opinion. His technical expertise (he is a Professor of Computer Science at Cornell Tech), combined with his ability to understand both sides of a divisive topic like this one, make for a very insightful conversation about Bitcoin, NFTs, and smart contracts. We talk about the reasons for the valid skepticism that surrounds blockchain technology, the various reasons that Ari believes that it is a powerful, useful tool, despite its downfalls, pyramid schemes, decentralized exchanges and more!

Key Points From This Episode:

• The significance of the Bitcoin innovation to Ari's field of study. (0:03:40)
• What piqued Ari's initial interest in digital currency. (0:04:46)
• Ari explains the difference between permission and permissionless blockchains. (0:06:27)
• Comparing a permission blockchain with a distributed-append-only database with authorized contributors. (0:08:34)
• A number of reasons why permissionless blockchains have been so widely embraced (despite Ari's initial prediction to the contrary). (0:12:24)
• Fraud in the cryptocurrency space; Ari shares his thoughts. (0:14:28)
• The benefits of the cultural phenomenon of NFTs. (0:19:25)
• Examples of NFT-related issues that still need to be addressed. (0:26:04)
• How smart contracts can be used by criminals to their advantage. (0:30:09)
• Why smart contracts are well suited for compliance. (0:32:02)
• An example of a smart contract pyramid scheme. (0:35:48)
• Some of the pros and cons of the inflexibility of smart contracts. (0:41:09)
• What flash loans are and what they can be used for. (0:46:11)
• Understanding the value of oracle systems. (0:50:04)
• How the Candid system that Ari's group developed helps to mitigate the problem of lost Bitcoin keys. (0:57:04)
• Ari explains the advantages and disadvantages of a decentralized exchange. (01:01:19)
• How the blockchain has improved code writing. (01:07:57)
• The importance of balancing privacy and accountability in DeFi systems. (01:09:38)
• Ari's thoughts about the future potential of blockchain technology. (01:14:03)
• The biggest concerns that Ari has about the blockchain space. (01:15:24)
• Why skepticism about blockchain technology is valid. (01:17:31)
• The facet of the blockchain space that Ari is most excited about. (01:19:51)

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.

Rational Reminder Website — https://rationalreminder.ca/ 

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Ari Juels on Twitter — https://twitter.com/AriJuels

Ari Juels — https://www.arijuels.com/

The Ring of Gyges: Using Smart Contracts for Crime — http://www.arijuels.com/wp-content/uploads/2013/09/Gyges.pdf

NFTs for Art and Collectables: Primer and Outlook — https://www.arijuels.com/wp-content/uploads/2022/04/NFTs__Primer_and_Outlook.pdf

'Huge mess of theft and fraud:' artists sound alarm as NFT crime proliferates — https://www.theguardian.com/global/2022/jan/29/huge-mess-of-theft-artists-sound-alarm-theft-nfts-proliferates

Incomplete Contracts and Control — https://www.nobelprize.org/uploads/2018/06/hart-lecture.pdf

Chainlink 2.0: Next Steps in the Evolution of Decentralized Oracle Networks — https://research.chain.link/whitepaper-v2.pdf?_ga=2.99068702.124468793.1661870135-1990502175.1661870135

Flash Boys 2.0: Frontrunning, Transaction Reordering, and Consensus Instability in Decentralized Exchanges — https://arxiv.org/pdf/1904.05234.pdf

Themis: Fast, Strong Order-Fairness in Byzantine Consensus — https://eprint.iacr.org/2021/1465.pdf

Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains — https://energycommerce.house.gov/sites/democrats.energycommerce.house.gov/files/documents/Witness%20Testimony_Juels_OI_2022.01.20.pdf

The Seven Grand Challenges — https://www.initc3.org/projects.html

The type of assets which usually come to mind when considering investments are stocks, bonds, or cash, but what are the alternatives? And what kind of returns do alternative asset classes offer? In today's episode, we delve into the returns which can be expected from alternative asset classes such as private equity, venture capital, angel investing, private credit, hedge funds, direct real estate, and cryptocurrencies. Hear an in-depth analysis based on empirical studies and the expertise of your hosts, Ben and Cameron, to discover whether there is any merit to alternative asset classes as investments. We unpack the extra layer of complexity associated with predicting returns on alternative assets, how to approach calculating returns, and why the associated fees are an essential consideration. We also hear details about an interesting conference Cameron recently attended and briefly recap cryptocurrencies as an investment. You'll also hear our conversation with our 22 in 22 reading challenge guest David Senra about his reading habits, the books that most inspire him, and his advice for people who want to read more.

Key Points From This Episode:

• Outline of today's main topic: expected returns for alternative asset classes. (0:01:51)
• Why predicting returns of alternative asset classes has an extra layer of complexity. (0:03:18)
• How to approach estimating the returns of private equity, specifically buyouts. (0:05:04)
• We unpack historical data regarding the returns of private equity. (0:07:35)
• Calculating the returns on venture capital and reasons to be cautious about it as an asset class. (0:16:35)
• The distribution of returns from venture capital based on the market numbers. (0:20:09)
• Learn what angel investing is and its associated returns. (0:20:54)
• What returns on angel investing are most dependent on and why. (0:22:21)
• The different types and the associated returns. (0:25:23)
• Hear about the fees associated with private credit. (0:27:42)
• We unravel the concept of hedge funds, the associated fees, and expected returns. (0:29:29)
• A limiting factor on hedge funds: capacity constraints. (0:33:38)
• The takeaway regarding private real estate investments. (0:36:25)
• How private real estate is valued as an asset class. (0:37:48)
• Cryptocurrencies and the returns to be expected. (0:39:34)
• We discuss some of the key takeaways from today's main topic. (0:43:30)
• We follow up on a previous topic we covered: financial literacy. (0:45:10)
• Find out about an interesting conference that Cameron recently attended. (0:48:46)
• Hear about the recent reviews we have received about the podcast. (0:57:58)
• We introduce our 22 and 22 reading challenge guest, David Senra. (01:00:15)
• Where David's passion for reading about founders originates from. (01:02:25)
• David shares details about his reading habits. (01:05:57)
• His approach to finding founders that he wants to read about. (01:08:49)
• David's approach to note taking while reading a book. (01:11:07)
• We learn about the stories that have impacted David the most. (01:13:53)
• He explains the benefits of reading a book for a second time. (01:17:11)
• Books about founders that he thinks everyone should read. (01:19:20)
• David's observation of the role of luck in a founder's success story. (01:23:19)
• Advice he has for people who want to read more. (01:29:33)

Links From Today's Episode:

AQR Capital Management — https://www.aqr.com/

BlackRock Asset Management — https://www.blackrock.com

Bank of America — https://www.bankofamerica.com/

'The risk and return of venture capital' — https://www.sciencedirect.com/science/article/pii/S0304405X04001564

'Performance of Private Credit Funds: A First Look' — https://jai.pm-research.com/content/21/2/31.short

'Do Hedge Funds Hedge?' — https://jpm.pm-research.com/content/28/1/6.short

'The Performance of Hedge Fund Performance Fees' — https://www.nber.org/papers/w27454

'Higher risk, lower returns: What hedge fund investors really earn' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X1100016X

'Another Look at Private Real Estate Returns by Strategy' — https://jpm.pm-research.com/content/45/7/95/tab-pdf-trialist

'The Characteristics and Portfolio Behavior of Bitcoin Investors: Evidence from Indirect Cryptocurrency Investments' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3501549

'Beliefs and the Disposition Effect' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3516567

'Once Bitten, Twice Shy: The Power of Personal Experiences in Risk Taking' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2506627

S&P Global FinLit Survey — https://gflec.org/initiatives/sp-global-finlit-survey/

Future Proof Conference — https://futureproof.advisorcircle.com/

Invest Like the Best Podcast — https://investlikethebest.libsyn.com/

David Senra on LinkedIn — https://www.linkedin.com/in/david-senra-278843236/

David Senra on Twitter — https://twitter.com/FoundersPodcast?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor

David Senra on Facebook — https://www.facebook.com/david.senra.1

The Founders Podcast — https://founders.simplecast.com/

A Triumph of Genius — https://www.amazon.com/Triumph-Genius-Edwin-Polaroid-Patent/dp/1627227695

Cable Cowboy — https://www.amazon.com/Cable-Cowboy-Malone-Modern-Business/

Titan — https://www.amazon.com/Rare-Chernow-Titan-Life-Rockefeller/

A Man for All Markets — https://www.amazon.com/Man-All-Markets-Street-Dealer/

Against the Odds — https://www.amazon.com/Against-Odds/

Estee: A Success Story — https://www.amazon.com/Estee-Success-Story-Lauder/

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/?hl=en

Rational Reminder on YouTube — https://www.youtube.com/channel/
Ben Felix — https://www.pwlcapital.com/author/benjamin-felix/

Ben on Twitter — https://twitter.com/benjaminwfelix

Ben on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on Twitter — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

In this episode, we speak to Chris DeRose, software developer and former co-host of the Bitcoin Uncensored podcast, about both the downsides and upsides of cryptocurrencies and the associated technologies. We took the time to dive deep into the subject with Chris and learned about some of the common misconceptions about blockchain technology, the value of cryptocurrencies to society, ways in which the crypto space has evolved, using economic theories to understand financial systems, the definition of money, what he thinks about the associated technologies, the role blockchain technology can have in society and why cryptocurrencies will not replace the dollar.

Key Points From This Episode:

• The motivation behind Chris's decision to get involved with Bitcoin in 2010. (0:00:48)
• How the Bitcoin community has evolved since Chris got involved in 2010. (0:03:00)
• Some of the common misconceptions associated with blockchain technology. (0:06:03)
• Whether new technologies pushing back against regulations is common. (0:08:08)
• Ways in which Chris's perception of crypto has changed since he discovered it. (0:09:53)
• Chris explains what his definition of money is. (0:11:19)
• Find out what Bitcoin actually is, if it is not money. (0:14:39)
• Aspects of the current financial system that Bitcoin improves on. (0:16:42)
• A discussion around the recent controversy regarding Canadian trucker convoys. (0:17:54)
• Some of the problems anonymity associated with cryptocurrencies causes. (0:20:33)
• Why not being able to verify transactions is a problem for privacy coins. (0:21:18)
• A discussion about the US monetary system and the US dollar. (0:24:12)
• Chris discusses the reliance on economic theories to understand the economy. (0:30:59)
• What he thinks about crypto markets through the lens of market efficiency. (0:32:26)
• Whether crypto markets can be manipulated or not. (0:33:49)
• Why Chris thinks Bitcoin will not make traditional regulations around payments obsolete. (0:35:32)
• Another discussion regarding the economy through a theoretical lens. (0:39:15)
• Reasons why Chris thinks cryptocurrencies have value. (0:40:32)
• Chris explains what fungible value is. (0:45:49)
• Why Bitcoin is regarded as digital gold. (0:49:25)
• How possible it is for Bitcoin to replace the dollar. (0:50:46)
• Chris tells us if he thinks Bitcoin and Ethereum are (0:53:39)
• Why Chris thinks there is a mythical aspect to the economy. (1:00:49)
• We find out if Chris thinks blockchains are immutable. (1:02:29)
• Immutability: find out if this is a good aspect of cryptocurrencies. (1:03:37)
• An explanation of consensus and if proof of work alternatives offer solutions. (1:04:33)
• Reasons why he thinks Vitalik Buterin is a charlatan. (1:09:22)
• Chris tells us if Vitalik's claims are living-up to the expectations. (1:12:41)
• The role that blockchains can play regarding international money transfers. (1:15:22)
• Outline of how ransomware could be beneficial to society. (1:16:20)
• How possible is it to see nation-states existing only on the blockchain. (1:17:43)
• Learn what value private blockchains offer. (1:18:37)
• What are the most promising crypto products/technologies in Chris's opinion. (1:19:49)
• The technical aspects of NFTs are explained. (1:21:23)
• Find out what his opinion on DAOs is. (1:24:20)
• Examples of the best application of smart contracts that Chris has seen. (1:25:13)
• Whether cryptocurrencies and public blockchains are revolutionary technology. (1:27:38)
• What role cryptocurrencies can play in reducing wealth inequality. (1:28:35)

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.

Rational Reminder Website — https://rationalreminder.ca/ 

Shop Merch — https://shop.rationalreminder.ca/

Join the Community — https://community.rationalreminder.ca/

Follow us on Twitter — https://twitter.com/RationalRemind

Follow us on Instagram — @rationalreminder

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron on Twitter — https://twitter.com/CameronPassmore

Chris DeRose — http://www.chrisderose.com

The gender pay gap is still a persistent problem in today's society, reflecting the overall state of gender inequality. It is full of complexity and comprises different facets, making it hard to understand the overall situation. We have covered the topic before, but in this episode, we go into a whole new level of detail. To help us unpack the nuance of this essential topic is Colleen Ammerman, Director of the Gender Initiative at Harvard Business School. She is also the author of Glass Half-Broken, providing readers with hard evidence and detailed analysis of the different drivers of gender inequality in the workplace. We cover the basics of gender inequality, such as how it currently exists, how it manifests in the workplace, and the subtle and less obvious ways it occurs. We also find out whether men are generally aware of the problem, the obstacles that prevent men from taking action, and the power men have to initiate positive change within organizations. Colleen also untangles the intricacies of the topic, explaining why gender equality is still a pervasive problem, how gender inequality extends to promotions, how management explains away the issue, how gender equality is also beneficial for men, and the influence of perceived gender roles in career decisions. Tune in and learn about the intricacies of gender inequality, as well as the possible solutions, with Colleen Ammerman!

Key Points From This Episode:

• We start by finding out what the current situation is for women in the workplace. (0:03:22)
• How to quantify gender inequality symptoms in the workplace. (0:04:12)
• Whether there are similar effects of gender inequality for men of colour. (0:05:03)
• Why people might still deny that there is a problem concerning gender inequality. (0:05:35)
• An outline of the career obstacles that uniquely affect women. (0:07:18)
• Find out if men are aware that women have additional barriers to overcome. (0:12:03)
• Reasons why women may leave the workplace before retaining a leadership role. (0:14:05)
• Colleen explains how we know from the data that women have less interest in higher-paying technical jobs. (0:16:14)
• Learn if the adjusted gender pay gap data diminish the findings of using unadjusted gender pay gap data. (0:18:47)
• Ways in which the gender pay gap extends to promotions and compensation. (0:20:34)
• Colleen tells us why it is important for society to strive for more women in leadership positions. (0:21:26)
• The general response from men to workplace diversity initiatives. (0:22:07)
• What men should be doing in the workplace to help reduce inequalities that exist. (0:26:25)
• The ways corporate directors explain the underrepresentation of women and people of colour on boards. (0:29:15)
• Why we don't see more men taking action to combat gender inequality issues. (0:31:05)
• She explains what homophily is and its role in workplace diversity. (0:33:13)
• How the language in job descriptions determines who applies for the position. (0:37:04)
• Whether there is evidence to support the notion that women prefer a growth-mindset environment to a fixed-mindset environment. (0:40:00)
• What men, who are not in leadership positions, can do to overcome gender inequality problems in the workplace. (0:43:02)
• What companies need to be aware of regarding hybrid and remote-work models. (0:47:14)
• The steps men can take to overcome gender inequality outside of the workplace. (0:50:29)
• We learn what managers can do to attract more diverse candidates. (0:52:52)
• Whether there is data on the effect that gender has on hiring decisions. (0:54:22)
• How gender norms or biases affect employee evaluation. (0:56:01)
• Actions that women can take to advance their careers in an unequal environment. (0:59:53)
• Colleen explains the issues of negotiations for men and women. (01:04:03)
• The role parents can play to combat the issues of gender parity. (01:05:13)
• We end the episode by learning how Colleen defines success in her life. (01:06:03)

Glass Half-Broken: Shattering the Barriers That Still Hold Women Back at Work — https://amzn.to/3xbp2CG

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.

Rational Reminder Website — https://rationalreminder.ca/

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on Twitter — https://twitter.com/CameronPassmore

Colleen Ammerman on Twitter — https://twitter.com/colleenammerman

Colleen Ammerman on LinkedIn — https://www.linkedin.com/in/colleenammerman/

Today, we speak to Vili Lehdonvirta, Professor of Economics, Sociology, and Digital Social Research at the Oxford Internet Institute at the University of Oxford. Professor Lehdonvirta is a social scientist whose research focuses on ways digital technologies are reshaping the organization of economies, including their associated social effects. He is also the author of two books, Cloud Empires and Virtual Economies, which provide readers with an in-depth look into the power that crypto platforms hold and a well-rounded characterization of digital markets. In this episode, we talk about the ideological underpinnings of crypto and the role of governance in making cryptocurrencies possible. We discuss the role of states in scaling markets, how states and platform companies differ, the impacts of smart contracts on governance issues, and how control and power are centralized within crypto markets, as well as the social implications of blockchain technology. Listeners will also learn about past controversies within the crypto space, why people are still needed within crypto, and the blockchain paradox, plus more!

Key Points From This Episode:

• We start by learning about John Perry Barlow's vision for cyberspace. [0:05:06]
• Find out about the role that states play in markets. [0:07:03]
• How markets function at scale if the state is not involved. [0:07:55]
• Professor Lehdonvirta's view on whether governance may precede markets. [0:08:59]
• The role massive platform companies play in today's economy. [0:09:44]
• Ways in which states and platform companies differ. [0:10:42]
• Why he thinks public blockchain technology has garnered so much attention. [0:11:27]
• An explanation of the influence John Perry Barlow's vision had on cryptocurrencies. [0:13:04]
• Learn what a Kleroterion is and the role it played in Athenian democracy. [0:14:01]
• Professor Lehdonvirta shares what it means to 'trust in the code.' [0:17:05]
• An outline of the new properties smart contracts created. [0:18:59]
• Social and economic implications of unstoppable censorship-resistant contracts. [0:21:08]
• A brief rundown of how impactful smart contracts have been. [0:22:27]
• How the trustless and unstoppable claims of cryptocurrencies and DAOs were affected by the DAO story. [0:24:20]
• Whether the Bitcoin block-size conflict affected the perception of crypto as a trustless system. [0:28:17]
• We find out the current size of the Bitcoin development team. [0:31:05]
• Other examples of human discretion affecting the direction of Bitcoin. [0:31:46]
• Professor Lehdonvirta explains the strategies used to preserve trustlessness after the human interventions took place. [0:35:16]
• Details about an important strategy: the appeal to technical expertise. [0:38:53]
• Find out if the ability to fork blockchain networks restores trustless claims of crypto. [0:39:42]
• Whether users of a blockchain network, who are not miners, can influence crypto markets. [0:45:02]
• Professor Lehdonvirta's opinion on who has the most control over cryptocurrency networks. [0:49:35]
• Hear what aspect of Athenian democracy Nakamoto failed to replicate. [0:54:26]
• We learn what the blockchain paradox is (also known as the governance paradox). [0:56:50]
• Find out if Professor Lehdonvirta thinks technology changes the fundamental aspects which shape how societies are organized. [01:00:11]
• Find out if blockchain has eliminated the need for nation-states. [01:02:11]
• What cryptocurrencies have accomplished since their inception. [01:03:40]

What impact does financial literacy have on decision-making and financial outcomes? How is financial literacy tested? In this episode, we help listeners understand why financial literacy is vital in terms of financial well-being. Learn the definition of financial literacy, how financial literacy relates to economic outcomes, the differences between people who are financially literate and those that are not, and the contribution of financial knowledge to human capital. We discuss the topic through the perspective of several papers that will challenge how you think about financial literacy and the questions to ask yourself to test your financial understanding. Then, we talk about this week's book review regarding the effects of technology on communication and the various distractions associated with a traditional work environment. We also go through the various reviews received about the show and what we have planned for the Rational Reminder community.

Key Points From This Episode:

• Breakdown of changes made to the format of current and future episodes. [0:01:49]
• Introduction to today's topic: expected returns of financial literacy. [0:07:34]
• Learn the definition of financial literacy. [0:09:36]
• The predictive power of financial literacy concerning financial outcomes. [0:10:27]
• What financially literate people are better at and how it increases human capital. [0:11:34]
• The cost of financial ignorance to the individual. [0:13:06]
• Overview of an interesting paper concerning active investing. [0:14:43]
• A dangerous observation within the financial literacy research [0:16:34]
• Find out how financial literacy is measured. [0:20:10]
• Whether it is safer to put your money into one business or to invest. [0:21:23]
• An important aspect of financial literacy is discussed: inflation. [0:22:34]
• Why numeracy is also a fundamental aspect of financial literacy. [0:24:25]
• We go through the topic of compound interest in relation to financial literacy. [0:24:57]
• Hear what the global distribution of financial literacy is. [0:27:04]
• How to approach the financial literacy problem from a policy perspective. [0:27:59]
• We review the book, Reclaiming Conversation, and discuss communication problems technology causes. [0:35:08]
• Examples of the different distractions associated with office spaces. [0:41:55]
• Reasons why meetings should be thought out with clear objectives. [0:44:45]
• Ways in which your phone can distract you from deep work. [0:46:36]
• Steps that social media companies could take to reduce screen time. [0:51:12]
• We go through recent reviews and suggestions received about the show. [0:52:22]

Welcome to our limited edition crypto series. In this episode, we welcome back Professor John Cochrane, who was a guest on the Rational Reminder series, to talk everything money. Professor Cochrane has immense experience on the topic and is a Senior Fellow at the Hoover Institution at Stanford, as well as Stanford Institute for Economic Policy Research. He is also a Research Associate of the National Bureau of Economic Research, an adjunct scholar at the Cato Institute, and was a professor of finance at the University of Chicago Booth School of Business. He is also the author of several books and writes a popular blog called The Grumpy Economist. In this episode, we take a deep dive into the concept of money. We learn what numeraire is, how a numeraire is defined, and explore some of the intricacies of money. We also discuss and unpack the differences between fiscal theory and monetary theory, along with other ideas regarding the value of money. We then delve into how all this relates to cryptocurrencies, what future he sees for crypto, and much more. Tuning into this episode, listeners will challenge their thinking about the economy and how economic relations work.

Key Points From This Episode:

• Professor John Cochrane explains to us the short version of fiscal theory. [0:04:35]
• Find out the definition of numeraire and how it is determined within an economy. [0:05:21]
• Learn whether government backing is required to define a numeraire. [0:07:05]
• What Professor John Cochrane thinks is the primary function of money. [0:08:55]
• Whether money needs to be a medium of exchange that stores value. [0:09:45]
• He explains why money is valuable according to fiscal theory. [0:11:22]
• The role of taxes in adding to the value of money according to fiscal theory. [0:12:59]
• How fiscal theory's explanation for why money is valuable differs from the monetarist explanation. [0:13:33]
• Find out whether the term 'fiat' is still a good adjective to describe money in a fiscal world. [0:17:24]
• We learn if 'fiat' is an appropriate term to describe money according to the monetarist view. [0:19:10]
• What the government debt valuation equations suggest about the stability of the price level. [0:20:21]
• An outline of what happens when discount rates become volatile. [0:23:29]
• Ways in which sticky prices affect the stability of the price level. [0:27:24]
• Whether the supply of money is still a useful perspective today. [0:31:01]
• Why monetarism theory has gained so much traction. [0:33:51]
• He unpacks the purpose of monetarism theory. [0:35:21]
• How fiscal and monetary actions set expected and unexpected inflation regarding fiscal theory. [0:37:10]
• The level of fiscal and monetary coordination required for price stability. [0:39:58]
• Whether the level of coordination needed is realistic considering the independence of the central bank. [0:42:10]
• Ways in which monetary policy debt sales and fiscal policy debt sales differ. [0:45:02]
• What effect the size of the central bank's balance sheet has on the price level. [0:49:52]
• Repercussions of inside money issued by private banks on the price level. [0:53:06]
• Statistical tests available that can be used to prove fiscal theory. [0:58:55]
• Find out why COVID-related effects on the economy lead to inflation. [1:04:17]
• Breakdown of the fiscal explanation for the US inflation of the 1970s. [1:11:24]
• Reasons why inflation targets have been successful in some countries and not in others. [1:16:14]
• A discussion about whether we have always lived in a fiscal-based economy. [1:19:24]
• Whether citizens should behave differently living in a fiscal world. [1:27:51]
• How the value of the dollar will be affected if more people buy cryptocurrencies. [1:28:49]
• Professor John Cochrane shares if he thinks anonymous digital cash is a good thing. [1:30:51]
• We discuss what the future has in store with regard to fiscal theory. [1:39:31]

The indexing revolution is something that underpins all of our work here at the Rational Reminder and is a subject we reference in different ways in almost all of our episodes. Today we have a special exploration of this history, as we welcome Gus Sauter, the former long-time CIO of Vanguard, to talk about his incredible history at the firm, the role he played in the rise of the company, and its huge role in reforming the investing landscape. We also hear from our guest about his experience of working on numerous investing committees since he retired about a decade ago. One of the most notable things about this conversation is Gus' ability to weigh both sides of the arguments about active management, and he does a great job of balancing what he sees as the potential positives of this way of doing things. This is all strengthen by the way he presents these ideas as a powerful mix of stories, evidence, and the research he himself has conducted. To all our listeners, be sure to listen right to the end of the episode, as after the official conversation ends, Gus shared a few more thoughts on Jack Bogle and ETFs as a bonus.

Key Points From This Episode:

(0:03:49) Looking back at the part that indexing played at Vanguard when Gus started at the company.

(0:04:20) The rise of indexing in the subsequent years and the pivotal moments in this process.

(0:06:28) Initial ways that indexing was denigrated by Vanguard's competition.

(0:08:36) How the narrative changed around indexing when its utility became undeniable.

(0:09:10) The role of the University of Chicago in the growth of indexing early on.

(0:11:11) Changes in the active management space over the last few decades.

(0:12:04) Considering the role of an active manager in today's climate.

(0:14:43) Gus' opinion on balancing the strengths of indexing and active management.

(0:20:48) Differences between traditional active management and factor investing, and Gus' preferences.

(0:29:09) A look at Vanguard's recent forays into factor-based funds.

(0:31:00) Recounting Jack Bogle's thoughts on active management at different points.

(0:32:27) Evaluating active managers; weighing the processes and their maintenance.

(0:35:09) Vanguard's relative low fees and how this impacted their success.

(0:36:35) How Vanguard went about selecting investment managers.

(0:38:44) Gus talks about the structure of Vanguard; what it meant to be a truly mutual company.

(0:41:19) Thoughts on home country bias and global diversification in light of countries like Canada.

(0:45:07) Approaches to private equity; Gus' recommendations for the average investor.

(0:48:30) Access to private markets and the prohibitive effect of high fees.

(0:51:25) Accounting for the recent large flows towards private equity and the current institutional philosophy around it.

(0:54:10) Gus talks about the important questions he asks when joining a new investment committee.

(0:56:30) Comments on hedge funds and liquid assets, and their decreased returns.

(0:59:50) The psychological benefits of holding a single fund.

(1:02:44) Gus comments on how direct indexing might figure into the future.

(1:09:20) The education of investors; Gus talks about where he believes Vanguard's biggest success lies.

(1:11:48) Reflection on the impact of introducing the implementation of ETFs at Vanguard.

(1:12:56) Areas that still excite Gus about investing; the good and bad sides of increased opportunity.

(1:14:48) Gus' definition of success and his gratitude for finding a home at Vanguard.

(1:17:07) Bonus content: Gus talks about Jack Bogle's relationships with ETFs.

When robo-advisors first came onto the scene, they were pitched as an easy way to access index funds. These digital platforms provide algorithm-driven financial planning and investment services, with little to no human supervision, and typically use passive investment strategies. But while this technology has revolutionized access, not all robo-advisors are created equal. In today's episode, Mark, Ben, and Cameron sit down to discuss the role of robo-advisors as passive investors, and the performance disparity in robo-advisor returns, as they investigate different robo-advisors, from Wealthsimple to Wealthfront. Next, in this week's version of 'Would you rather?', we have robo-advisors pairing off against active bank mutual funds, with each of our hosts debating the pros and cons of these two approaches. For our aftershow section, we discuss listener feedback, interesting community discussions, Ben's addiction to Excel, and much more. Tune in for a deep dive into robo-advisors and how to navigate this technology!

Key Points From This Episode:

(0:04:20) The history of robo-advisors and how they are used today.

(0:08:30) Why there is such a marked dispersion among robo-advisor portfolios; an overview of Wealthsimple's portfolios and the changes they've made over time.

(0:16:00) Wealthsimple's investment returns, fees, and an attribution analysis.

(0:24:19) Why Wealthfront pulled value out of their factor-tilted portfolios in 2022.

(0:26:13) PWL's investment approach and why no strategy is truly passive.

(0:30:43) What the average investor needs to understand when using a robo-advisor.

(0:32:02) Wealthsimple's value proposition and why people are drawn to it.

(0:33:33) Our 'Would You Rather?' Question: Would you rather put all your money with a robo-advisor or in a big bank actively managed mutual fund?

(0:40:30) The growth of passive investing vs active management in the financial industry.

(0:44:12) AI's impact on financial planning and an update on new calculators we've released.

(0:52:38) Aftershow section: listener feedback, community discussions, leasing versus buying vehicles, Ben's addiction to modelling, and more.

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/
Mark McGrath on X — https://x.com/MarkMcGrathCFP
Wealthsimple — https://www.wealthsimple.com/en-ca

Wealthfront — https://invest.wealthfront.com/

Rational Reminder Episode 308: Dan Bortolotti —
Episode 299: The Most Important Lessons in Investing — https://rationalreminder.ca/podcast/299

The Money Scope Podcast — https://moneyscope.ca/
Episode 251: Covered Calls — https://rationalreminder.ca/podcast/251

Ashleigh Madison: Sex, Lies & Scandal — https://www.netflix.com/za/title/81602884

— 

Papers From Today's Episode: 

'Are Banks Better Money Doctors?' — https://www.researchgate.net/publication/377037694_Are_banks_better_money_doctors_An_analysis_of_mutual_fund_flows_of_bank_and_non-bank_funds_using_Canadian_data

We start the show with a brief highlight of recent episodes, upcoming guests, and feedback we have received about the show. We then review the book Running Remote, which provides evidence for the benefits of working remotely and asynchronous management. We also outline the three essential principles of an asynchronous mindset. We discuss the positives and benefits of remote work, why hybrid work is a flawed approach, and how to recreate face-to-face meetings in a remote world. We also give listeners a breakdown of an interesting journal article about inferring stock duration and equity trades, including key takeaways from the papers. We then welcome our special guest, Harley Finkelstein, to talk about the role that reading plays in his life. Harley is a lawyer, entrepreneur, and the President of Shopify and uses what he reads to push him further in his professional life. In our conversation, we learn the role reading has played in Shopify's culture, what his favourite books are, and inner details about his reading habit. Tune in for another jam-packed episode!

Key Points From This Episode:

• We start the show with a recap of previous episodes and upcoming guests. [0:00:00]
• A brief highlight of some of the reviews we have received about the show. [0:03:41]
• An update on the Rational Reminder 22 and 22 reading challenge. [0:06:35]
• This week's review of the book, Running Remote. [0:09:24]
• The three fundamental principles of the asynchronous mindset. [0:16:58]
• Hear what the seven deadly sins are regarding remote team transitions. [0:24:35]
• Cameron shares a compelling paragraph from the book, Running Remote. [0:28:04]
• Learn a mind-blowing statistic Cameron read in a Bloomberg article. [0:32:31]
• Ben breaks down a journal article about inferring stock duration. [0:33:47]
• Another interesting paper regarding the retail price of equity trades. [0:44:10]
• Introduction to our guest Harley Finkelstein to talk about our 22 and 22 challenge. [0:47:20]
• Harley shares details about his reading habit. [0:47:50]
• How he incorporates what he has learned from reading into his professional life. [0:49:57]
• Ways in which Harley finds interesting books to read. [0:51:58]
• The role reading has played in Shopify's culture and work ethic. [0:53:57]
• What books have had the biggest impact on him. [0:58:12]
• Find out whether his daughters have embraced his love for books. [1:02:29]
• Advice that Harley has for people who want to read more. [1:04:32]

What is the real value of cryptocurrencies? Can crypto technology be applied to traditional financial markets? In this episode, we welcome David Gerard, a technologist and author of the books Libra Shrugged and Attack of the 50 Foot Blockchain.  He uses his skills as a journalist to investigate the uses and hype around cryptocurrencies and is an outspoken skeptic of the technology. Although not originally from the technology sector, he has become an authority on the topic and has briefed the UK House of Commons Science and Technology Committee on the technology. He also runs a blog covering important aspects of the cryptocurrency space. In today's conversation, we learn some harsh realities about the benefits of cryptocurrencies and why they will not last in the long term. We learn what the real value of crypto-markets is, why he considers it to be a Ponzi scheme, what needs to change about cryptocurrencies, whether there are any benefits to the technology and the role of financial journalism in the crypto space. Listen as we unravel the political ideology which underpins crypto and whether it can be separated from the technology. We also discuss the outcome of El Salvador's bitcoin experiment and why it did not work. We also learn the reasons behind the recent crash in some crypto markets and find out which book David thinks everyone should read.

Key Points From This Episode:

• We start the show by finding out the real dollar value of crypto markets. [0:03:45]
• The role financial journalism played in getting crypto to where it is today. [0:06:02]
• Reasons why he does not trust the value of cryptocurrencies. [0:11:04]
• Why he thinks cryptocurrency journalism is not credible. [0:12:00]
• He explains Bitcoin's underlying political ideology and the associated problems. [0:13:25]
• The classic debate of who should have control over financial markets. [0:16:41]
• Whether it is possible to remove the political ideology from crypto-technology. [0:17:34]
• What the most important aspect of cryptocurrency technology is. [0:18:24]
• The reasoning behind the argument, 'You just don't understand the technology.' [0:21:52]
• How to make cryptocurrency work in traditional financial markets. [0:23:50]
• Why the recent crash in the cryptocurrency markets occurred. [0:28:03]
• Find out if cryptocurrencies can be beneficial for the 'bankless'. [0:30:25]
• We discuss the outcome of El Salvador's bitcoin experiment. [0:32:20]
• He outlines why Salvadorans did not like the proposed bitcoin market. [0:38:11]
• Learn what the UK House of Commons Science and Technology Committee wanted to understand about cryptocurrency. [0:41:23]
• How his views on cryptocurrency were received by the commission. [0:43:46]
• An example of a crypto-based business that was operating illegally. [0:45:01]
• Whether NFTs will allow artists and musicians to keep more financial gains from their work. [0:46:13]
• We discuss whether crypto-based technologies will improve over time. [0:47:57]
• Examples of good uses for crypto and blockchain technology. [0:49:22]
• What would need to happen for David to change his opinion on crypto. [0:52:25]

Identity helps shape our perception and thinking about the world around us. What is identity? How does it influence our perspective? These are some of the questions we answer in this episode of the Rational Reminder Podcast. In this episode, we talk with Jay Van Bavel, an Associate Professor of Psychology and Neuroscience at the University of New York, an affiliate at the Stern School of Business in Management and Organizations, and Director of the Social Identity and Morality Lab. He is also co-author of the book The Power of Us, which provides readers with cutting-edge research in psychology and neuroscience to explain how identity really works and how we can harness it for the better. His research focuses on how group identities, moral values, and political beliefs shape the mind, brain, and behaviour. He has published over 100 academic publications on the topic and has won various awards for his research achievements. In our conversation, we unpack the complexity of identity and its influence on our perspective and decision-making abilities. We cover aspects such as the differences between self-identity and group identity, how to be aware of your biases, the role that leaders play in influencing identity, and how identity plays out in social relationships. We also talk about how group identity interacts with democracy and the role of social media in shaping our identity, as well as learn some practical advice to help broaden your perspective.

Key Points From This Episode:

• We start the show by learning the basics of group identity. [0:03:29]
• How group identity differs from self-identity. [0:04:04]
• He explains how impactful group identity is to individual identity. [0:05:06]
• Whether there is good data on how many groups people typically identify with. [0:06:08]
• How aware people are of the groups they identify with. [0:07:27]
• Ways in which group identity affects decision-making. [0:08:12]
• The effect group identity has on setting and achieving goals. [0:09:35]
• General ways group identity affects social relationships. [0:15:21]
• A deeper explanation about groups, memberships, and physical presence. [0:17:28]
• Differences between introverts and extroverts. [0:19:18]
• How group identity affects our thinking and perspective. [0:20:43]
• Associate Professor Van Bavel explains how to foster social cohesion, using America as an example. [0:25:41]
• Find out if people have a default identity that determines their perspective. [0:28:41]
• What people can do to be aware of which identity is affecting their thinking. [0:30:10]
• Find out if group identity affects how people learn new information. [0:31:58]
• Whether people can change or broaden their identity to improve decision-making. [0:34:18]
• Practical advice to help broaden someone's perspective. [0:37:25]
• The challenges of changing your group identity entirely. [0:39:34]
• Steps that one can take to view the world more objectively. [0:42:04]
• A rundown of how leaders influence the thinking and decision-making of individuals. [0:45:47]
• An outline of what qualities to look out for in groups. [0:48:49]
• The influence of social media on which groups people identify with. [0:52:21]
• We learn if following people on social media with opposing views helps break down group barriers. [0:55:57]
• An explanation of how group identities interact with democracy. [0:58:48]
• The differences between current political divisions and past political divisions. [1:03:59]
• How well studies on the topic can be replicated. [1:05:43]
• We end the show by learning how Associate Professor Van Bavel defines success. [1:09:18]

In this episode, we speak to Quinn DuPont, a self-described technology historian and researcher of everything crypto. He is fascinated by what humans do and how technology affects what humans do. Quinn focuses his research on the history, meaning, use, and socio-technical development of cryptography. He has published many academic papers on the subject, including the book Cryptocurrencies and Blockchains, and is currently an adjunct professor at the UBC School of Information. He approaches investigating the world of crypto as a scientist making him neither a skeptic nor a proponent of the technology, offering listeners an objective perspective. In this episode, we unpack the basics of crypto and take a deep dive into the theoretical and technological concepts. We learn about the ideological foundations of crypto, how crypto technology will impact governance, what the definition of money is, the potential of the technology to society, and the social components associated with cryptocurrencies. We also find out the real value of crypto and learn about the ethical challenges Quinn faces as a researcher in the space.

Key Points From This Episode:

• [0:05:16] The ideological worldview that resulted in cryptocurrencies. 
• [0:10:51] Quinn explains his standard criticism of the critics. 
• [0:13:43] Why the ideological origins of crypto are irrelevant today. 
• [0:15:50] The nuance surrounding the immutability of crypto technology is discussed. 
• [0:17:04] What the benefits of the cryptosystem are for governance. 
• [0:19:48] How well he thinks crypto fits within a democratic society. 
• [0:25:41] Reasons why political ideology needs to be taken into account. 
• [0:28:19] Quinn tells us his definition of money. 
• [0:31:18] What impact decentralized censorship-resistant monies have on society. 
• [0:38:52] How valuable a cryptocurrency in the real world is. 
• [0:40:48] Why paying your taxes gives money value. 
• [0:44:25] Whether Quinn considers Bitcoin to be money. 
• [0:46:09] He walks us through the benefits of DeFi to societies. 
• [0:49:30] We learn what the downsides of DeFi to societies are. 
• [0:50:22] Learn if blockchain solves any of the problems that exist in traditional finance. 
• [0:57:57] The advantages of bitcoin-based technology for business logistics. 
• [01:03:00] Why some blockchain business technology is marketing hype. 
• [01:04:32] How a DAO is different from a traditional corporation. 
• [01:10:24] Find out what would happen if we turned our podcast into a DAO. 
• [01:15:35] Whether smart contracts replicate the role of traditional contractual relations. 
• [01:19:51] Quinn outlines the ethical challenges to researching cryptocurrencies and blockchain. 
• [01:27:32] Hear what he thinks the greatest disappointments and successes of crypto are. 
• [01:31:32] We end the show by finding out if Quinn considers crypto and blockchain to be a technological revolution. 

In today's episode, we beg the question: is factor investing worth it? Factor-tilted portfolios tend to perform independently of the market and today, we break down a few of the characteristics associated with higher expected returns, as well as the challenges of factor investing. We give a brief history of pricing models and walk step-by-step through a hypothetical factor investment; taking the Fama and French five-factor model into account. Additionally, we discuss liability duration and bond returns and speculate whether pooling finances results in greater relationship satisfaction. Tune in to hear our take on everything from book clubs and the impact of inflation on consumption liability assumptions to our final verdict on whether factor investing is, in fact, worth your while.

Key Points From This Episode:

• The latest phenomenon of people paying to go on popular podcasts. [0:01:58]
• Interesting feedback we've received for our Crypto series. [0:03:49]
• Why not to make an investment decision based on one person's opinion. [0:04:53]
• The evaluation skills our Crypto series equips listeners with. [0:06:05]
• Upcoming guests on the Rational Reminder Podcast! [0:07:31]
• Some interesting LinkedIn connections we've made in the past few weeks. [0:16:06]
• Recommended book for kids: Way of the Warrior Kid 3. [0:18:11]
• Recommended book for adults: The Psychology of Money. [0:21:08]
• The model of our firm's book club and our experience of it so far. [0:22:02]
• Does pooling finances result in greater relationship satisfaction? [0:24:35]
• Liability duration and bond returns according to the current change in bond yields. [0:26:22]
• How inflation impacts consumption liability assumptions. [0:29:11]
• The positive effect the changes in the bond market have had on pension funds, relative to their liabilities. [0:30:20]
• The main topic of the day: is factor investing worth it? [0:32:30]
• The long-term volatility for factor-tilted portfolios. [0:33:56]
• What factor investing is and the added risk it entails. [0:34:51]
• A brief history of pricing models. [0:35:53]
• A few characteristics associated with higher expected returns. [0:39:25]
• The challenges of factor investing. [0:39:47]
• How to determine the mix of factors that captures all relevant state variable sensitivities. [0:42:56]
• The significance of size premium. [0:46:07]
• Speculating whether factors deliver premiums. [0:47:57]
• The steps involved in a hypothetical factor investment. [0:48:57]
• A few important facts about factors. [0:53:23]
• The benefits of having more independent risk premiums in a portfolio. [0:54:56]
• Our verdict as to whether or not factor investing is worth it. [0:57:02]
• Why it's important to take tracking error into account. [0:57:38]
• The tendency of factor-tilted portfolios to perform differently from the market. [0:57:48]

There is a lot of hype surrounding cryptocurrencies and DeFi technology, with excitement around the potential innovations they offer financial systems. Often lacking in the discussion is an objective and critically informed viewpoint, leading to confusion and misunderstanding. In today's conversation, we get the balanced perspective that we need with Professor Hilary Allen, who has a wealth of experience in banking, law, financial regulation, corporate finance, and business administration. She is a law professor at the American University of Washington College of Law and her research focuses on the impact of new financial technologies on the stability of the current finance system. She has written many academic papers on the subject, including the book Driverless Finance, which provides readers with a balanced perspective on the opportunities and threats of fintech innovations. In our candid and fascinating conversation with Professor Allen, we learn about the threats and opportunities DeFi technologies pose to the financial system. We hear what shadow banking is, the similarities that decentralized finance has with shadow banking, the risks of cryptocurrencies, if innovation in finance is always positive, why regulation is essential, whether DeFi is actually decentralized, the basics of stablecoins, how you can help affect change in the financial system, if you should invest in cryptocurrencies, and much more. Tune in to get the clarity you need about the world of crypto with expert Professor Hilary Allen!

Key Points From This Episode:

• We start the show by learning what shadow banking is and how it is associated with the financial crisis in 2008. [0:04:05]
• Professor Allen explains what DeFi is and gives us some examples. [0:07:16]
• Learn about some of the innovations that DeFi technology proposes. [0:09:21]
• Similarities between shadow banking activities and DeFi technology. [0:11:06]
• Other risks that Professor Allen sees with the DeFi system. [0:12:12]
• What effect replacing intermediaries with algorithms have on financial systems. [0:16:03]
• The effect complexity has on a financial system. [0:17:19]
• She explains what financial stability is and the objective of financial regulation. [0:19:27]
• How the financial stability of the existing system compares to the DeFi system. [0:21:01]
• Whether stability of the existing financial system is exposed to problems within DeFi. [0:22:14]
• Which DeFi innovations pose the biggest risk to the current financial system. [0:23:23]
• Find out if stablecoins could affect monetary policy. [0:25:23]
• The regulatory lessons from the 2008 financial crisis that are relevant to DeFi. [0:26:28]
• Outline of the problems that the existing financial system has. [0:30:44]
• How successful DeFi has been at being decentralized. [0:33:14]
• If Professor Allen has any concerns that regulation might stifle innovation in DeFi. [0:36:06]
• Find out if financial innovation is always a good thing. [0:37:41]
• What the best possible regulatory outcomes are regarding crypto and DeFi. [0:39:30]
• Whether it is too late to regulate cryptocurrencies. [0:42:48]
• Why Professor Allen thinks some politicians are pushing crypto-friendly agendas. [0:43:52]
• How people can affect change in the right direction regarding the financial system. [0:46:08]

If you're ready for a serious education on market elasticity, demand system pricing, and stock market flows, you've come to the right place (disclaimer: don't expect light entertainment). Today's guest is Ralph Koijen, AQR Capital Management Professor of Finance and Fama Faculty Fellow at the University of Chicago, Booth School of Business. Tune in for a fascinating conversation about some of the most fundamental characteristics of our economy. To say we learned a lot from this conversation is an understatement, and we're sure you'll walk away with just as many lightbulb moments and impactful lessons as we did.

Key Points From This Episode:

• Ralph provides an in-depth explanation of demand system pricing. [0:02:48]
• An example of how valuations can be affected while the connection between fundamentals and valuations remain relatively unaffected. [0:08:18]
• How Ralph's model for demand system asset pricing differs from other models. [0:41:26]
• The two components that investor demand is made up of. [0:14:54]
• Exploring the concept of latent demand and how to estimate it. [0:17:57]
• How the price impact from institutions and elasticity of markets has changed over time. [0:20:34]
• Understanding the surprising impact of households on stock market volatility in 2008. [0:20:34]
• How latent demand can be used to predict differences in expected returns. [0:25:46]
• Examples of factors that drive latent demand. [0:30:42]
• The most impactful group of investors (and why this is the case). [0:33:17]
• An overview of what would likely happen if the most influential investors switched to market cap indexing. [0:35:22]
• How huge firms influence the setting of prices. [0:36:25]
• Ralph shares his thoughts on the idea that index funds are distorting market prices as they continue to grow in magnitude. [0:35:22]
• What demand system pricing tells us about the effect of socially responsible investing on prices. [0:43:01]
• How US asset prices would be affected if foreign demand for US assets decreases. [0:35:22]
• Inelastic versus elastic markets. [0:47:23]
• Why prices are so much more volatile than fundamentals. [0:51:11]
• Comparing micro-elasticity and macro-elasticity. [0:52:18]
• Ways to estimate micro-elasticity and macro-elasticity, and the limitations of these approaches. [0:54:00]
• Ralph's estimate of what the macro-elasticity is. [01:01:00]
• Risk factors that impact elasticity. [01:02:07]
• An example which shows how flows work. [01:03:32]
• Factors that impact how long the price impact of flows lasts. [01:05:24]
• Dividend irrelevance in inelastic markets. [01:10:30]
• The role of the increasing market share of cap weighted indices on market elasticity. [01:12:28]
• How investors should behave when markets are inelastic. [01:15:11]
• Ralph's definition of success. [01:18:47]

For this week's episode, we are revisiting a portion of our conversation with the legendary Professor Campbell R. Harvey and and his more optimistic viewpoint on the crypto space.  Campbell is the Professor of International Business at Duke University and is also a Research Associate at the National Bureau of Economic Research. In 2016 he served as the President of the American Finance Association, and from 2006 to 2012 he occupied the incredibly demanding role of Editor for the Journal of Finance. We hear about Campbell's latest book DeFi and the Future of Finance along with his most recent research. Discover how Campbell first became interested in the topic several years ago and decided to put together a course for his students. We also delve into the rise of decentralized finance (DeFi) and how we can expect it to shape global finance, trading, and the future of the internet. 

Welcome to another episode of the Rational Reminder Podcast! We start by reviewing The Fearless Organization, and learn some important concepts such as psychological safety in the workplace, allowing people to voice their concerns, and the value of continuously learning. We also discuss a paper on index investing followed by a quick discussion on gender equality in finance.  We then take a deep dive into today's main topic, 'Stocks for the Long Run…?', by unpacking research to see if stocks are still a valuable long-term investment. Finally, we end the show with a conversation about our 22 and 22 book challenge with Mark Sutcliffe, and find out about his reading habits and the books that have had the biggest impact on him.

Key Points From This Episode:

• An update about the podcast and feedback received about the crypto series. [0:03:55]
• A rundown of the guests we have planned for future episodes. [0:07:43]
• Outline of the 'mixed-bag' reviews received about the show. [0:08:28]
• News and updates regarding the Rational Reminder reading challenge. [0:13:07]
• This week's book review of The Fearless Organization by Amy C. Edmondson. [0:14:45]
• We talk about an interesting paper 'On Index Investing' [0:24:42]
• Follow-up on and discussion concerning gender equality in finance from previous episodes. [0:28:34]
• We dig into today's main topic, 'Stocks for the Long Run.' [0:33:38]
• Issues surrounding using Stocks for the Long Run data to draw insights. [0:35:22]
• What has been achieved to solve issues regarding a lack of data on stock returns. [0:41:45]
• An important insight from research on the value of stocks and bonds in the long term. [0:47:17]
• A breakdown of some interesting findings from the paper, 'Global factor premiums'. [0:48:00]
• Overview of the research discussed and whether stocks are still valuable long-term investments. [0:53:54]
• The Rational Reminder 22 and 22 book challenge conversation with Mark Sutcliffe. [0:55:09]
• What Mark has discovered about the world of social media while working remotely. [0:56:58]
• Mark shares details about his reading habit and his favourite books growing up. [0:57:53]
• Whether he has a favourite genre of book. [01:00:11]
• How Mark sources books to read and how he captures interesting information. [01:00:44]
• The books that Mark commonly recommends to family and friends. [01:03:05]
• Find out if Mark thinks being an author changes how you read books. [01:05:12]
• Advice that he has for people who want to read more. [01:06:33]

When it comes to DIY investing, there's always a temptation to make things more complicated than they need to be. But, in reality, embracing simplicity is one of the best ways to ensure good investment outcomes. Today's episode features an exceptional conversation with our long-time friend and colleague, Dan Bortolotti, who has worked alongside us as an Portfolio Manager at PWL Capital for over ten years. Some of our Canadian listeners might recognize Dan as the man behind the Canadian Couch Potato blog (one of the most popular resources for Canadian investors) and the voice behind the Canadian Couch Potato podcast. Dan is a consummate communicator, both on paper and in person; beyond his extensive blogging, he has also written a number of books, both fiction and non-fiction, the most recent of which includes Reboot Your Portfolio: 9 Steps to Successful Investing with ETFs. Dan has played a pivotal role in making PWL Capital what it is today, and in this episode, we learn about his surprising journey to becoming an advisor, before hearing his wide-ranging insights on DIY investing. Dan breaks down key components for investors, from how to approach your asset allocation and picking index funds to navigating fees, taxes, and performance. We also discuss how the investing landscape has changed since Dan started writing and essential lessons he has learned over the years. To hear all about investing from the Canadian Couch Potato himself, be sure to tune in for this expansive conversation!

Key Points From This Episode:

(0:03:52) The origin story of the Canadian Couch Potato blog, by Dan Bortolotti.

(0:08:17) How the availability of index funds in Canada has changed since Dan started writing about them in 2010, and his role in the index fund revolution.

(0:10:01) Why Canadians have been slower to adopt index funds than Americans.

(0:12:09) How the model portfolios on his site have changed over time.

(0:14:20) Why simplicity is so important to a good investment outcome.

(0:16:38) The biggest obstacle Dan has observed when it comes to successful investing.

(0:19:40) Advice on how to approach decisions around stocks, bonds, and asset allocation.

(0:24:34) How to select the ideal ETF or index fund to express your asset allocation.

(0:27:22) Some of the ways that Dan's views have changed since starting the Couch Potato portfolio, and the evolution of his blog.

(0:31:46) Why you should be clear on your financial goals before investing and the importance of saving rate relative to fees and performance.

(0:37:32) Understanding the value of financial advice if we consider investing to be effectively solved by low-cost ETF mutual funds.

(0:40:23) Why it's so important to close the gap between providing a financial plan and implementing it.

(0:43:25) What surprised Dan about his clients during his transition from blogger to advisor, and what he has learned about earning his clients's trust.

(0:48:22) Dan's thoughts on how people should make the decision between DIY investing or hiring an advisor, and what people should look for in a financial advisor.

(0:55:46) The story of how Dan connected with PWL Capital and the key ways he has helped shape the company.

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Dan Bortolotti — https://www.pwlcapital.com/profile/dan-bortolotti/

Dan Bortolotti on LinkedIn — https://www.linkedin.com/in/dan-bortolotti-8a482310/

Canadian Couch Potato Blog — https://canadiancouchpotato.com/

Canadian Couch Potato Podcast — https://canadiancouchpotato.com/podcast/

Larry Swedroe on LinkedIn — https://www.linkedin.com/in/larry-swedroe-18778267/

Larry Swedroe books on Amazon — https://www.amazon.com/Larry-E-Swedroe-Books/s?k=Larry+E.+Swedroe&rh=n%3A283155

Books From Today's Episode:

Reboot Your Portfolio: 9 Steps to Successful Investing with ETFs — https://www.amazon.ca/Reboot-Your-Portfolio-Successful-Investing/dp/1988344328

Wild Blue — https://www.amazon.com/Wild-Blue-Natural-History-Largest-ebook/dp/B005BP0E3W

Welcome back to another comprehensive and informative episode in this limited series of the Rational Reminder Podcast, a weekly reality check about the world of cryptocurrencies. We are lucky to have another respected figure in the crypto world on our show, technology veteran Tim O'Reilly. Tim is a well-known educator and publisher in the crypto community and the Founder, CEO, and Chairman of O'Reilly Media. He has been involved in the technology industry since the inception and rise of Silicon Valley and, with over 35 years of industry experience, he is known for popularizing the terms 'open-source software' and 'Web 2.0' and is a respected commentator on the space. In today's show, we do a lot of looking backwards with Tim and draw insight from his vast experience in the industry to discuss what the future of cryptocurrencies holds. We also talk about what separates companies that survive from those that do not, problems in society that blockchain technology can be used for, and changes that have taken place in the technology industry during Tim's career, as well as what the definition of true innovation is, and much more.

Key Points From This Episode:

• What Tim's definition of a technology unicorn is. [0:03:07]
• The problems that Web3 could solve and what makes a product innovative. [0:04:39]
• Differences between companies that survived the .com bust and those that did not. [0:11:05]
• Whether Tim thinks there are promising projects in the crypto or Web3 space. [0:18:36]
• How society would change if Web3 became the new normal. [0:22:19]
• Examples of the applications blockchain technology could have for record-keeping. [0:24:36]
• Tim shares his thought son whether or not we need blockchain technology for aspects where the state is involved. [0:27:24]
• Ways in which the evolution of crypto has changed Tim's mental map of the future. [0:31:37]
• The role public blockchains could play in breaking the recentralization trend in decentralized technologies. [0:35:02]
• Tim tells us if he thinks centralization is a bad thing. [0:37:15]
• Past mistakes and innovation within the tech industry. [0:41:39]
• Tim's opinion on the support of Web3 from venture capitalists. [0:44:02]
• Whether or not building technology outside of the government's reach is the right way to improve society. [0:46:46]
• Advice Tim has for those who are looking to get rich from cryptocurrencies. [0:50:35]

If you have any interest in private equity or have thought about it as an asset class, then this episode is for you! What is private equity? This might seem a simple question but the answer is more complex than you think. Private equity is a nuanced subject that requires a deep understanding to make successful investments. To help unpack this non-trivial subject is expert Ludovic Phalippou, a Professor of Financial Economics at the University of Oxford Saïd Business School. Although he studied economics in general, his research mainly focuses on unravelling the complexities of private equity. He has written many papers on the topic, including a book called Private Equity Laid Bare. He has a Masters in Economics and a Masters in Mathematical Finance from the University of Southern California and a Ph.D. in Finance from INSEAD, making him well versed in the subject. Besides his impressive qualifications and experience, his insight and ability to speak to the data make him stand out from other experts. In our conversation, we get into the basics of private equity and what makes it attractive to investors. During our conversation we discuss the challenges for measuring performance, how to best measure the performance of private equity funds, the different facets associated with private equity, how to tell if certain private equities are a good investment, and the differences between private and public equity. We also hear how it is applied as he walks us through some real-world scenarios and gives us some insider knowledge on the best private equity options. As you will hear from our conversation, there is no easy answer!

Key Points From This Episode:

• We learn what asset classes are included in the broad term of private equity. [0:03:39]
• The end-to-end process for investing in a typical private equity fund. [0:06:49]
• The challenges with measuring the performance of private equity managers. [0:09:48]
• How investments that have not yet been sold are treated when a manager is reporting on their performance. [0:12:48]
• Professor Phalippou explains how well the IRR captures the economic results delivered by a fund. [0:14:04]
• Whether there are alternative approaches to evaluating performance. [0:17:52]
• A discussion about the typical characteristics of a buyout fund. [0:19:35]
• The best approach for evaluating your private equity. [0:21:24]
• Find out if a public equity benchmark has to be adjusted for leverage, regarding buyouts. [0:24:26]
• We learn about the fees that private equity limited partners typically pay. [0:26:34]
• Outline of the less obvious fees that limited partners might be paying. [0:28:11]
• Whether an investor paying carry is a sign that the investment has done well. [0:31:07]
• Comparison of private equity performance relative to public equities. [0:32:31]
• What number Professor Phalippou would assign on an expected return to private equity, as an asset class. [0:38:46]
• How successful investing in private equity has been for institutional investors. [0:39:32]
• The performance of Blackstone and KKR is discussed relative to an average private equity fund. [0:42:11]
• We get details about the Yale situation and how it manifested. [0:44:24]
• Reasons why private equity is regarded as the best performing asset class for institutions. [0:45:32]
• Professor Phalippou tells us if he thinks private equity offers diversification benefits to a public equity portfolio. [0:46:01]
• He discusses a recent case study regarding Hilton. [0:47:11]
• Why he thinks sophisticated investors are allocating funds to private equity. [0:48:14]
• Professor Phalippou shares how to be successful when investing in private equity. [0:50:00]
• Whether the returns of private equity can be replicated in public equity. [0:53:09]
• How Professor Phalippou defines success. [0:55:18]
• We end the show by finding out if the value premium is risk-based or behaviour-based. [0:55:35]

Dr. Nicholas Weaver's well-known lectures on cryptocurrencies explain why he believes it needs to be "burned with fire." Today, we speak to Dr. Weaver, an expert in computer science and a long-time observer of the cryptocurrency space. He holds a BA in Astrophysics and Computer Science and a Ph.D. in Computer Science from UC Berkeley, where he was also a lecturer until recently. His primary research focus has been network security, among other topics. His interest and search for comedy "godl" have also resulted in published papers on cryptocurrency. In our conversation, Dr. Weaver untangles the complexities of the perceptions of cryptocurrencies with the actual technology. We talk about decentralization, if cryptocurrencies are achieving it, and the underlying concept of blockchain technology, as well as whether or not blockchains are secure and what the potential benefits of cryptocurrencies are to developing countries. We then go into detail about why Dr. Weaver thinks the crypto space is not beneficial, why prestigious academic institutions are teaching about it, and why he thinks it will never work in the log-run. Please tune in for a truly eye-opening, no-holds-barred episode as we learn the harsh truth about cryptocurrencies with expert, Dr. Nicholas Weaver!

Key Points From This Episode:

• What public blockchain technology can achieve that was not previously possible. [0:02:51]
• How well the original concept, introduced by Satoshi Nakamoto, is living up to its theoretical promise. [0:04:06]
• Weaver explains and outlines the general appeal of decentralization. [0:04:57]
• He elaborates on his perspective on trusted and honest authorities. [0:09:39]
• An explanation of how Lightning Network attempts to solve throughput limitation. [0:10:36]
• We find out if major blockchains like Bitcoin and Ethereum are decentralized. [0:13:08]
• Differences between how nodes and miners influence the network. [0:16:23]
• How secure public blockchains really are. [0:17:45]
• Whether a facility for censorship-resistant transactions, like Bitcoin, is a good thing for society. [0:20:30]
• Potential benefits of cryptocurrencies for people in countries with limited access to banking and a good legal system. [0:24:35]
• Steps governments can take to regulate and control cryptocurrencies. [0:26:47]
• Weaver's opinion on why the regulation of cryptocurrencies has been so slow. [0:29:17]
• Outline of how Dr. Weaver sees cryptocurrencies developing in future. [0:31:38]
• How to incentivize miners not to attack the system to retain the value of Bitcoin. [0:38:24]
• Weaver on how stablecoins fit into the crypto ecosystem and if they're decentralized. [0:39:18]
• A rundown of the new properties the blockchain data structure provides. [0:45:59]
• Find out if Walmart using a private blockchain is just marketing hype. [0:51:20]
• Why the popularity of cryptocurrencies amongst venture capitalists is rising. [0:53:12]
• Why prominent schools like MIT and Cornell are emphasizing blockchain programs. [0:55:23]
• Weaver explains what the smartest way to invest is, in his opinion. [0:58:34]
• Who the technologists in the crypto-space are that he respects professionally. [0:59:51]
• He tells us whether he has heard any compelling arguments for cryptocurrencies. [1:00:31]
• A discussion about Dunning-Kruger economics in relation to cryptocurrencies. [1:04:38]
• What the general opinion of other technologists is on crypto and blockchain. [1:06:23]
• We end the show with a final takeaway from Dr. Weaver. [1:07:31]

Welcome to another episode of the Rational Reminder Podcast! In today's jam-packed episode, we start by going through the feedback received on our limited crypto series and outline upcoming guests. We also give a breakdown of Cal Newport's book, Deep Work, and the importance and long-term benefits of engaging in deep work. We then follow-up on our recent episode with Rebecca Walker by discussing gender equality in financial planning. Lastly, tune in to also have a rundown of the housing market and its investment potential, price risks associated with home ownership, the effects homeowner's occupation has on their household investment and more!

Key Points From This Episode:

• We go through feedback received on the limited edition crypto series. [0:01:40]
• An outline of the upcoming guests we are going to have on the show. [0:05:51]
• This week's book review, Deep Work written by Cal Newport. [0:09:01]
• Some of the common workplace problems highlighted in the book. [0:14:30]
• How work can be more enjoyable than free time and reasons why. [0:15:56]
• Ways to overcome common workplace problems and engage with 'deep work.' [0:16:47]
• The long-term benefits of engaging with deep work and why it is needed. [0:20:21]
• A follow-up on our recent episode with Rebecca Walker and the feedback received. [0:20:49]
• Discussion about the data that is related to Rebecca's points from the episode. [0:22:10]
• We unravel the nuance concerning the gender pay gap and financial planning. [0:26:10]
• An important takeaway concerning our discussion on the gender pay gap. [0:33:19]
• Rundown of the housing market and its investment potential. [0:33:58]
• Find out how an owned home can act like an investment. [0:37:42]
• Learn more about 'Portfolio Theory' concerning property investment. [0:40:50]
• An interesting aspect regarding peoples' occupation and property investments. [0:46:18]
• How people reduce the risk associated with property investments. [0:47:45]

Welcome back to another episode of our limited addition Crypto Series on the Rational Reminder Podcast, a weekly reality check about sensible investing and financial decision-making. Are cryptocurrencies and the associated technologies beneficial? Could they change the world for the better? There is a lot of controversy surrounding the use and application of cryptocurrencies and the associated technologies. Some say the innovation is ultimately useless while others think it is the answer to society's problems. To help us unpack this complicated and hot-button topic is Bruce Schneier, an internationally-renowned security technologist, author, and educator. The focus of his work is the intersection of security, technology and people. Bruce also has an immense passion for educating people about cryptocurrencies. Examples of his well-known books include Liars and Outliers and Data and Goliath, which provide much-needed insight to readers about DeFi technologies and big monopolies. He also lectures in public policy at the Harvard Kennedy School and is a fellow at the Berkman Klein Center for Internet and Society. In our conversation, we discuss the debate surrounding cryptocurrencies such as privacy concerns of digital cash, what makes Bitcoin different from earlier digital currencies, aspects of public blockchain technology, the misapplications of crypto technology, the different forms and approaches to cryptocurrencies, and whether DeFi technologies can be beneficial to society, and what the biggest concerns are regarding cryptocurrencies. Join us today as we take a detailed look into the value and drawbacks of crypto and DeFi technology with Bruce Schneier!

Key Points From This Episode:

• What the objective was of early digital cash projects, like DigiCash. [0:03:27]
• The privacy concerns associated with digital cash. [0:04:45]
• Whether financial surveillance should be a concern for people. [0:05:45]
• Differences between Bitcoin and earlier forms of digital cash. [0:08:35]
• How good technology is at solving economic and political problems. [0:09:30]
• Details about the pieces that come together to make public blockchains work. [0:10:29]
• Why Bruce considers proof of work to be an idiotic way to form consensus. [0:13:43]
• Whether alternatives to proof of work resolve wasteful energy practices. [0:16:01]
• The new properties that public blockchains offer. [0:17:04]
• We find out if public blockchains do what their proponents say they do. [0:17:37]
• The claims that crypto proponents make regarding blockchain are discussed. [0:19:29]
• We discuss the misapplications of crypto and DeFi technologies. [0:20:23]
• Outline of the systems of trust that humans use to incentivize good behaviour. [0:23:26]
• Whether cryptocurrency technologies will become secure and trusted. [0:27:49]
• Reasons for the perspective 'code is law' from crypto technologists. [0:30:02]
• Whether 'one CPU, one vote' is how blockchains are working in practice. [0:31:35]
• We discuss other ideas and emerging technologies in the crypto space. [0:33:24]
• If government intervention is needed for crypto technologies and currencies. [0:36:21]
• How cryptocurrencies can be included in the mainstream financial system. [0:39:06]
• Bruce shares his opinion on the future of NFTs for artists to be able to capitalize on their creativity. [0:40:08]
• What the potential impacts of crypto technologies on younger generations are. [0:43:48]
• How blockchain erodes moral and reputational incentives to act responsibly. [0:45:26]
• Ways in which cryptocurrencies can help people who are 'bankless' and avoid high bank fees. [0:46:13]
• Break down of a real-world scenario where blockchain is being used in an alternative way. [0:49:00]
• Bruce tells us whether Bitcoin is suitable as a global currency. [0:50:55]
• The message that Bruce hopes his students will take away after his class. [0:51:59]
• If the government is beginning to take regulation of cryptocurrencies seriously. [0:52:43]
• What aspects, if any, excites Bruce about cryptocurrencies. [0:53:04]
• What Bruce's biggest concerns about cryptocurrencies are. [00:53:43]

There's no doubt about it; money is a taboo topic in our society. But not talking about money only serves to uphold inequalities and injustices. Rebecca Walker is an advocate for transparency and, during this episode of the Rational Reminder Podcast, she shares the importance of exploring the factors that have influenced our relationship with money so that we can begin to understand how we can use money as a tool to effect the kind of changes we want to see in the world. This is the intention behind her latest collection, Women Talk Money. No matter your gender, race, or financial standing, this episode will provide you with a new perspective on how to approach money. Rebecca is a well-known speaker, author, consultant and was named by Time Magazine as one of the most influential leaders of her generation. Tune in today.

Key Points From This Episode:

• What money represents and why it is so important that we understand it better. [0:02:21]
• The intention behind Rebecca's latest collection, Women Talk Money. [0:03:05]
• A brief overview of some of the stories Rebecca shares in her book about our relationship with money and how it impacts our lives and society as a whole. [0:05:13]
• How race, class, and gender impact how knowledge about money is transferred. [0:08:50]
• Problems that arise when we aren't transparent about our finances. [0:11:22]
• How the way we approach money ties into many broader societal issues. [0:15:45]
• Examples of how not talking about money renders people powerless. [0:17:45]
• Rebecca explains how she has taught her son about money from a young age. [0:20:58]
• Rebecca's approach to talking to other people about money. [0:22:30]
• Issues that may stem from an obsession with money. [0:24:32]
• How Rebecca defines "enough." [0:27:09]
• The role that men can play in empowering women in relation to money. [0:29:24]
• Advice for women who are struggling to form a healthy relationship with money. [0:33:33]
• How Rebecca defines success in her own life. [0:36:04]

Welcome back to another limited series of Rational Reminder Podcast, focused on learning about cryptocurrencies. Our journey about cryptocurrencies has led us to speak to various experts on the subject, all of whom see some benefits to cryptocurrencies and the underlying blockchain technology. However, what does a skeptic think about cryptocurrencies and the benefits to the current financial system? In today's episode, we speak to Stephen Diehl, a software engineer who works with financial technology within the finance sector and is an outspoken cryptocurrency skeptic. His engineering background, coupled with his experience working with financial technology, provides a unique perspective on the future of cryptocurrencies. We move through the episode learning about public blockchain technology, different consensus mechanisms, what potential problems blockchain technology can solve, whether crypto can improve the current financial system, if Bitcoin really is decentralized, what drives crypto prices, reasons why crypto will not work, what makes it similar to gambling, and more. Tune in today to hear a unique opposing view of cryptocurrencies and DeFi technology with expert and skeptic, Stephen Diehl!

Key Points From This Episode:

• A brief breakdown of public blockchain technology. [0:03:28]
• The current problems that public blockchain technology is trying to solve. [0:04:16]
• Proof of work consensus and how it tries to eliminate the need for a trusted third party. [0:05:44]
• Some of the downsides associated with the proof of work concept. [0:07:41]
• How other consensus mechanisms have improved the proof of work concept. [0:09:21]
• What the costs associated with proof of stake relative to proof of work are. [0:11:09]
• Problems that both consensus methods have regarding recentralization. [0:12:07]
• What other problems blockchain technologies can be used to solve. [0:12:50]
• The problems in the financial technological system that public blockchains solve. [0:14:29]
• Why finality of payments associated with cryptocurrencies is not a good thing. [0:15:42]
• What limitations can blockchain technology remove regarding international money transfers. [0:17:06]
• How to prevent double-spending under the current financial system. [0:20:34]
• What Stephen thinks drives the value of cryptocurrencies. [0:21:15]
• Whether Bitcoin is decentralized in Stephen's opinion. [0:23:19]
• Reasons why concentrated mining power does not cultivate decentralization. [0:24:46]
• How permissioned blockchains can improve on the pitfalls of public blockchains. [0:25:40]
• A discussion about the potential benefits of private blockchains. [0:27:15]
• We learn what a smart contract is. [0:29:49]
• Outline of other useful applications for smart contracts. [0:31:25]
• Examples of illicit activities associated with cryptocurrencies. [0:32:08]
• Code is law: deferring to code for implementing law. [0:33:17]
• What Stephen thinks is the value of the underlying blockchain technology. [0:34:32]
• Stephen explains what Web3 is and if it improves the financial system [0:37:05]
• We find out if there is anything about crypto technologies that excite him. [0:41:06]
• The most compelling argument for crypto that Stephen has heard. [0:43:08]
• He explains what he means by suffering stemming from cryptocurrencies. [0:44:40]
• Stephen shares his experiences as an outspoken crypto skeptic. [0:45:26]
• How he began working with researchers from the London School of Economics. [0:47:03]
• Discussion about the narrative of cryptocurrencies and why Stephen is outspoken on the subject. [0:50:33]

In today's episode, we share some updates from our Financial Goals Survey, respond to a listener who says we are wrong about dividends, and talk about Scout Mindset by Julia Galef. We then respond to a listener question about whether our comments in Episode 205 on private equity extend to private real estate. In our main topic, we unravel what money is by looking back at its origin story and the two competing theories about what it is. We discuss the ideological underpinnings of money and how these ideologies can make choosing a definition of money highly political. We end the episode talking to Dan Solin about his reading habits. Dan Solin joined us almost four years ago for an episode on evidence-based investing. Tuning in, you'll hear how Dan finds the books he reads, what his favourite types of books are, and whether he recommends books to people, plus he shares why he believes reading is so essential, and much more. Don't miss out on another well-rounded and informative episode of the Rational Reminder Podcast.

Key Points From This Episode:

• An update on the progress of our Financial Goals Survey. [0:03:32]
• Your monthly update on the reading challenge and how to get involved. [0:04:52]
• An update from our limited crypto series and some of the feedback we've received. [0:08:00]
• This week's book review: The Scout Mindset. [0:16:29]
• Simple set of tools to help you assess biases when receiving new information. [0:19:18]
• Following up on private investments concerning real estate. [0:24:32]
• Onto the main topic of the show with Dan Solin: money and what it is. [0:29:09]
• Where the perception and definition of money originated from. [0:31:00]
• Unpacking an alternative definition of money by Adam Smith. [0:37:32]
• The quantity theory of money and its application in the economy. [0:40:14]
• An interesting political aspect to forming John Locke's theory of money. [0:46:49]
• Outlining of the history of opposing views on the theory of money. [0:47:25]
• A break down of the findings of an anthropological review investigating money. [0:49:47]
• How money is neither commodity nor quantity but rather a measure of credit. [0:51:32]
• The state theory of money and how it is different from other theories. [0:53:39]
• What sets the price level of money based on credit theory. [0:55:06]
• A discussion around money based on the several theories of what it is. [0:57:22]
• Why fiat money is not a derogatory term for currencies. [0:59:30]
• Some of the nuances regarding the definitions of money in a modern context. [1:00:07]
• Dan shares his reading habits as an author. [1:01:05]
• Whether Dan reads hard copies, audiobooks, or Kindle. [1:01:32]
• The difference between reading and streaming in Dan's opinion. [1:02:08]
• Insight into some of Dan's favourite types of book. [1:03:11]
• How he finds new books to read and what inspires his reading interests. [1:05:40]
• Ways in which Dan organizes what he reads and learns. [1:08:47]
• Whether or not he recommends books to other people. [1:09:33]
• Reasons why Dan believes it is important to read books similar to his latest book. [1:12:21]
• Dan's advice for people that want to read more. [1:14:10]

Welcome to another special episode of Rational Reminder Podcast, a show to help us learn about cryptocurrencies and their role in our current and future financial systems. In today's show, we speak to Tobin Hanspal, an Assistant Professor of Finance at the Vienna University of Economics and Business who has written several papers focused on household finances. Tobin's research area offers insights into the behaviours of retail investors in the crypto space and how this may affect household finances. In this episode, we take a deep dive into some of the papers that Tobin has authored and how his findings relate to the behaviours and biases of crypto adopters. We discuss the investment behaviours of early crypto adopters, the role of EFTs in reducing risk, the different types of investor groups, how past experience negatively affects investor confidence, how behaviours change after an initial crypto investment, the disposition effect, how cryptocurrencies are an extension of existing behaviours, and much more! Be sure not to miss out on this informative episode with expert, Tobin Hanspal!

Key Points From This Episode:

• How Tobin investigated the investment behaviour of early crypto adopters. [0:04:24]
• Whether indirect crypto investments are a good proxy for crypto investors. [0:08:10]
• Why it is important to consider the different types of investor groups. [0:10:23]
• The differences between individual characteristics of crypto adopters and non-adopters. [0:10:55]
• Comparison of eventual crypto adopters and non-adopters [0:12:37]
• What kind of sector ETFs do crypto adopters choose to invest in. [0:13:48]
• Differences between the crypto and non-crypto investors, in terms of typical investor behaviour biases. [0:15:01]
• How cryptocurrencies are an extension of traditional high-risk investing. [0:16:39]
• Whether the behaviour of investors changes after their first crypto investment. [0:17:37]
• The differences in behaviour between early and late adopters. [0:19:15]
• What insights Tobin has regarding the geographical location of crypto adopters. [0:20:36]
• What percentage of their portfolios' do adopters allocate to crypto. [0:21:11]
• Find out if crypto investors buy lower-risk assets to make up for cryptocurrencies. [0:21:36]
• What differences exist between crypto and non-crypto investors regarding efficiency. [0:22:51]
• Description of the typical crypto investor characterized in their study. [0:23:39]
• Tobin explains the disposition effect and how belief systems play a role. [0:25:56]
• How risk appetite is related to the disposition effect. [0:28:05]
• People's beliefs: are expected returns affected by past experience in expected realized returns. [0:29:20]
• Whether positive or negative realized past return experiences have the same effect on beliefs. [0:31:19]
• How peoples' beliefs affect investing in riskier assets. [0:32:07]
• Changes in behaviour on a household level from past negative investment experiences. [0:33:23]
• The role experiences of peers and/or relatives have on investment belief. [0:38:16]
• Reasons for people reducing risk in their portfolios. [0:38:50]
• Tobin shares if he thinks cryptocurrencies will have similar effects on peoples' behaviours. [0:39:42]
• How applicable the findings are from Tobin's study to other parts of the world. [0:41:54]
• What the ideal theoretical response is to losing money on an investment. [0:42:47]
• Important takeaways that Tobin has for crypto investors. [0:43:23]

Welcome back to another exciting and informative episode of the Rational Reminder Podcast, a show all about finances and how to get the most of your money responsibly. To make the right decisions regarding your investments, besides the knowledge and understanding of financial systems, you also need to understand the psychology behind your decisions. To help us unpack this complicated and interesting subject is Professor Vanessa Bohns, a Social Psychologist and Professor of Organizational Behaviour at Cornell University. Professor Bohns has a Ph.D. in Psychology from Columbia and is the author of You Have More Influence Than You Think: How We Underestimate Our Power of Persuasion, and Why It Matters. The topic of the book is exactly what today's show is about, as we delve into the intricacies of human behaviour and decision-making. In today's episode, we learn about the influence that people have on one another, how people perceive one another, the human behaviours that scammers take advantage of, why people worry about saying the wrong thing, what the default behaviour of people is, why people struggle to say no to a request, and so much more! Don't miss out on this fascinating episode with special guest and expert, Professor Vanessa Bohns!

Key Points From This Episode:

• How much impact and influence people have on one another. [0:03:09]
• What people tend to notice about other people. [0:04:50]
• Why people don't realize what other people are paying attention to. [0:08:58]
• How being in the presence of other people affects experiences. [0:10:31]
• Whether communicating with someone about a shared experience amplifies it. [0:12:41]
• Reasons why some people are underconfident in their social lives. [0:13:20]
• Problems that stem from underconfidence. [0:15:52]
• The consequences of underestimating how much people like us. [0:18:02]
• Why people worry about saying the wrong thing. [0:20:53]
• Whether it is default to believe or disbelieve when assessing information. [0:22:55]
• The impact of people interacting with people anonymously. [0:26:01]
• How the default to believe people impacts receiving advice from experts. [0:27:22]
• The authority on a subject can switch between domains of expertise. [0:31:19]
• Ways in which scammers take advantage of behavioural biases. [0:32:22]
• Problems caused by people being dishonest or spreading false information. [0:34:47]
• Approaches to ensure that you are not spreading misinformation unintentionally. [0:36:04]
• Why asking for what you want is so effective. [0:38:21]
• Whether asking for what you want becomes easier over time. [0:40:33]
• The effect that money has when asking for something. [0:42:24]
• Differences in response to small or large requests. [0:43:48]
• How responses differ between direct and indirect requests. [0:45:23]
• What effect asking in person as opposed to over email or text have on responses. [0:47:20]
• Reasons behind the hesitancy for people to ask for what they want. [0:49:04]
• Why people find it difficult to reject a request from someone. [0:50:36]
• Whether saying no in person is the same as saying no over email. [0:52:12]
• Feeling guilty and whether you should feel bad asking for things. [0:53:52]
• How people generally respond to unethical requests. [0:56:21]
• Find out if people with authority realize how much influence they have. [0:59:01]
• Approaches to help people be more aware of their influence. [1:00:58]
• A rundown of the impacts of not being aware of other people has. [1:05:12]
• We end the show with Professor Bohns sharing her definition of success. [1:07:41]

Are you confident about the amount of life insurance coverage you have? Are you maximizing your tax savings with the principal residence exemption? In this episode, we delve into life insurance and optimizing capital gains to answer these essential questions. In our conversation, we unpack the nuanced topic of life insurance, what people get wrong about it, and how to effectively calculate your life insurance policy needs. Using his own experience as the lens for the conversation, Mark shares how he calculated his life insurance and incorporated costs such as funeral cover, emergency funds, short-term expenses, and income replacement. Learn about using the safe withdrawal rate shortcut, free resources for calculating life insurance costs, and the best financial tools for getting the most out of your policy. He also delves into capital gains and how to use a lesser-known exemption to reduce the amount owed significantly. Mark walks listeners through how the principal residence exemption works and how it impacted the sale of his rental properties. Then, jumping to a brand new segment on the Rational Reminder Podcast, Ben introduces his financial decision-making iteration of the game of 'Would you rather'. Finally, we share listener reviews and feedback on previous episodes and debate whether to lease or buy a car in our after-show segment. Tune in now!

Key Points From This Episode:

(0:03:13) Mark explains how he and his wife calculated their life insurance needs.

(0:06:55) Learn how to plan for income replacement and why it is so complicated.

(0:12:10) Ben's perspective on Mark's approach to calculating his life insurance coverage.

(0:13:54) Find out why there are differences between Ben and Mark's calculations.

(0:18:17) How Mark factored in retirement costs into his life insurance calculations.

(0:22:30) Free resources and tips to accurately calculate your life insurance needs.

(0:27:04) Why Mark considers whole life insurance as a separate asset class.

(0:31:25) The principal residence exemption and how Mark applied it to his situation.

(0:39:19) How we would choose to invest $1 billion in today's market.

(0:42:26) Would You Rather segment: only life insurance versus only disability insurance.

(0:45:02) The exciting development of a tool for realizing capital gains in a corporation.

(0:51:06) Trends in the awareness of corporate notional accounts and tax planning intricacies.

(0:54:12) Listener reviews, episode feedback, and leasing a car instead of buying.

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/
Mark McGrath on X — https://x.com/MarkMcGrathCFP

'How Much Life Insurance Do You Need?' — https://www.linkedin.com/pulse/how-much-life-insurance-do-you-need-mark-mcgrath-cfp-cim-clu--tjwwe/

InsureRight — https://www.insureright.ca/

Episode 65: Dr. Wendall Mascarenhas — https://rationalreminder.ca/podcast/65

Dimensional Fund Advisors — https://www.dimensional.com/

Money Scope Podcast — https://moneyscope.ca/

Braden Financial Services — https://www.bradenfinancialservices.com/

Hendry Warren on LinkedIn — https://www.linkedin.com/company/hendry-warren-llp/

Brady Plunkett on LinkedIn — https://www.linkedin.com/in/brady-plunkett-712489105/

Capital Gains Calculator for Non-Corporations — https://research-tools.pwlcapital.com/research/realize-gain

Episode 305 - Is Private Credit Special? — https://rationalreminder.libsyn.com/episode-305-is-private-credit-special

Welcome back to another episode of our series focusing on cryptocurrencies. In this episode, we dive into conceptual complexities surrounding cryptocurrencies and how this might affect the financial system in future. To help us unravel this nuanced subject is Professor Eswar Prasad, a senior professor of trade policy and Professor of Economics at Cornell University, and a senior fellow at Brookings Institution. He is also a research associate at the National Bureau of Economic Research and was a former head of the IMF China Division. Besides his wealth of experience regarding traditional economies, he is also an authority on cryptocurrencies, which he explains in detail in his book The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance. In today's conversation, we discuss broad conceptual ideas surrounding money and finance, such as the basic functions of money, the difference between outside and inside money, the limitations on creating wealth, how cryptocurrencies work, how cryptocurrencies may disrupt financial systems, why cryptocurrencies need trust to work, the future of cryptocurrencies, and much more. Tune in today to get insider information on cryptocurrencies with our special guest, Professor Eswar Prasad.

Key Points From This Episode:

• A brief outline of Professor Eswar Prasad's professional background. [0:01:14]
• Professor Prasad explains what the basic functions of money are. [0:01:59]
• We learn if money is a commodity or a social contract. [0:02:33]
• The problems associated with fiat currencies. [0:03:00]
• What the concepts of inside and outside money are. [0:04:12]
• Factors that constrain the creation of outside money. [0:05:34]
• Whether mechanically constrained money is good for economies. [0:07:07]
• Learn whether commercial banks need deposits to make loans. [0:08:46]
• What the definition of fungibility is. [0:10:24]
• How and why reserves are usually maintained by a central bank. [0:11:19]
• What the differences are between physical cash and electronic money. [0:12:25]
• The anonymity associated with each of the payment methods available. [0:13:28]
• What the main functions of the financial system are. [0:15:14]
• Find out what the definition of shadow banking is. [0:17:01]
• How trust in the financial system is facilitated. [0:18:29]
• We find out if modern financial systems can be disintermediated by technology. [0:20:33]
• The potential effects that intermediaries can have on economies. [0:22:59]
• What Satoshi Nakamoto's 2008 innovation was. [0:25:51]
• The resilience of the underlying system for Bitcoin is explained. [0:28:12]
• Learn about the three elements that make Bitcoin decentralized. [0:30:12]
• How the decentralization of Bitcoin can be overcome. [0:31:39]
• Learn about the value of blockchain and emerging validation technology. [0:34:07]
• The key reasons why cryptocurrencies have value. [0:36:14]
• Ways in which a decentralized system would be beneficial. [0:38:32]
• Outline of the downsides to decentralized finance. [0:41:01]
• Why trust is also essential to the long-term viability of cryptocurrencies. [0:43:03]
• What role unofficial digital currencies will play regarding monetary policy. [0:44:05]
• The influence that Satoshi's innovation had on the development of a central bank digital currency. [0:45:49]

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]

Understanding the complexity surrounding cryptocurrencies is essential in making the correct decisions regarding investing in DeFi technology. To help us understand the basics, we talked to Dr. Igor Makarov who is an expert on cryptocurrency and Bitcoin, particularly Bitcoin and the associated mining processes. He is based at the London School of Economics, where he serves as an Associate Professor of Finance. Dr. Makarov is also the author of several papers focusing on DeFi and crypto markets in general and has provided new insights surrounding governance and mining processes. In today's show, we learn about the basics of cryptocurrencies, mining and the future of DeFi. In particular, we talk about the role of intermediaries, what drives the prices of Bitcoin, how concentrated mining processes are, the role DeFi in increasing governance, the upsides and downsides of cryptocurrencies, and much more. Tune in to make sure you don't miss out on advice from a respected figure in the industry, Dr. Igor Makarov!

Key Points From This Episode:

• A brief outline of Dr. Makarov's professional background and experience. [0:00:39]
• What role do intermediaries play in the traditional financial system. [0:02:36]
• Find out if economic rents that intermediaries collect are unwarranted. [0:03:36]
• Makarov explains the complexities of cryptocurrencies and the elimination of fees. [0:06:06]
• How rents are different on cryptocurrency exchanges. [0:09:44]
• Systemic risks associated with the traditional banking system. [0:11:24]
• Whether Bitcoin and DeFi can improve banking by reducing systemic risk. [0:13:22]
• Learn if blockchain or DeFi ecosystems can exist without human intervention. [0:15:06]
• Why it is unlikely decentralized autonomous organizations will improve governance. [0:17:06]
• Breakdown of the potential problems that concentration of ownership could have on governance. [0:19:53]
• Opportunities where cryptocurrencies and DeFi can improve the traditional financial system. [0:21:44]
• Some of the potential benefits of a permissioned distributed ledger system. [0:24:39]
• Why is it important to understand the Bitcoin ecosystem. [0:26:22]
• What are the limitations of understanding the Bitcoin ecosystem. [0:27:12]
• How Bitcoin addresses are associated with with real-world entities. [0:29:36]
• Ways to differentiate between addresses belonging to individual investors and those belonging to intermediaries. [0:31:42]
• What happens when you send Bitcoins to an exchange. [0:32:49]
• Details on how Dr. Makarov calculated the concentration of Bitcoins. [0:33:25]
• How did Dr. Makarov gain an understanding of what Bitcoin is used for. [0:37:14]
• The role exchanges play in influencing the total volume of Bitcoin transactions. [0:39:00]
• Why exchanges are essential to the overall network. [0:41:06]
• The challenges in enforcing KYC and AML rules for the crypto ecosystem. [0:41:56]
• How fungibility could effect the use of cryptocurrencies in the marketplace. [0:45:19]
• Whether most important cryptocurrency exchanges are generally decentralized. [0:46:36]
• What portion of Bitcoin transactions does Dr. Makarov consider to be economically meaningful. [0:47:06]
• Why most Bitcoin transactions comprise of irrelevant transactions. [0:48:08]
• What the meaningful Bitcoin transactions are being used for. [0:50:06]
• Why the estimates of illegal activities by Dr. Makarov differs from other studies. [0:52:56]
• A more in-depth explanation of what is driving the price of Bitcoin. [0:55:54]
• How Dr. Makarov was able to identify individual Bitcoin miners for his paper. [01:01:57]
• Makarov explains why the original vision of DeFi has not been realized. [01:05:52]
• Reasons for the concentration of miners in the Bitcoin space. [01:06:42]
• What are the risks are for the Bitcoin ecosystem when mining concentration is high. [01:08:24]
• How Dr. Makarov determined the geographic locations of mining operations. [01:10:52]
• What the function of a mining pool is. [01:13:36]
• How the concentration in mining power affects the security of smaller proof of work blockchains [01:16:20]
• How concentrated the ownership of Bitcoin in the hands of individual investors is. [01:22:40]
• We find out if cryptocurrencies are democratizing financial services. [01:25:03]

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]

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]

Designing a robust portfolio requires considerable expertise, data, and experience. And while there are plenty of published articles that can guide how you build your portfolio, they are not investment solutions by themselves. Wei Dai is the Head of Investment Research and Vice President at Dimensional Fund Advisors, and she joins us today for a comprehensive and informative conversation on portfolio design for higher returns. Her background includes a Doctor of Philosophy degree in Statistics, Operations research, and Financial Engineering from Princeton. She has also earned a bachelor's degree in mathematics and applied mathematics from Zhejiang University. Her work has been published in multiple journals, including The Financial Analysts Journal. She has also collaborated on articles with esteemed figures such as Professor Robert C. Merton and Robert Novy-Marx. In our conversation with Wei, we explore the contents of these articles, key findings from research conducted by Dimensional Fund Advisors, and how they are implementing this knowledge in their portfolios. We discuss the fundamental aspects of portfolio design, like expected return, risk, and costs, with Wei providing a detailed breakdown of each subject. There's a lot to be learned from today's conversation, and while things get pretty technical, you are in very capable hands! Tune in for a fascinating dive into the latest research on portfolio design and much more.

Key Points From This Episode:

(0:03:37) The main risk premiums that Dimensional Fund Advisors target in their portfolios.

(0:05:42) How long-term drivers of returns vary across different regions: an overview of the tests and outcomes they've seen at Dimensional Fund Advisors.

(0:07:15) Unpacking whether the value premium differs from the profitability premium across regions; why it makes sense to be globally diversified.

(0:08:57) Typical approaches to a multi-premium strategy in a portfolio: a rundown of the three approaches they take at Dimensional and the trade-offs between each.

(0:13:44) How they evaluate portfolios at Dimenstional: the benefits of taking a holistic, integrated approach, and instances where that doesn't make sense.

(0:17:24) Weighting schemes: Dimensional's approach to assigning individual security weights to achieve the desired level of exposure and how investments factor into weights.

(0:26:46) Advice on how investors should decide whether to currency hedge their foreign asset exposures, and insights on how to approach currency hedging.

(0:30:42) Premium timing: Why timing exposure to premiums is so tempting; parameters that must be defined to implement timing strategies; and which strategies worked in their research.

(0:39:21) Valuation ratios: why it theoretically makes sense that they would be related to differences in expected returns and why they aren't useful in timing premiums.

(0:42:11) An overview of the main implications for pursuing premiums that arise from Dimensional's research.

(0:44:10) Diversification and how to improve your odds of capturing return premiums.

(0:46:38) The tradeoff between concentration and expected returns, and defining the optimal balance.

(0:49:06) What investors should look for when choosing a systematic investment manager, why not all systematic strategies are created equal, and Dimemsional's approach.

(0:52:52) The downsides of performance fees, specifically for systematic managers and what it was like writing a paper with Robert Merton.

(0:57:41) How short-term reversals differ from momentum, ways that reversals are related to liquidity, and how reversals vary across different stocks.

(01:03:12) The ways that Dimensional is implementing this knowledge in their portfolios; how their ideas go from research to publication to implementation.

(01:08:18) What sets Dimensional apart, and the value that they add, despite their research being available online.

Links From Today's Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://twitter.com/RationalRemind

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca
Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Wei Dai on Linkedin — https://www.linkedin.com/in/wei-dai-64a3071a/

Wei Dai's Academic Papers — https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=2888456

Dimensional Fund Advisors — https://www.dimensional.com/

Episode 234: Prof. Robert C. Merton — https://rationalreminder.ca/podcast/234

Papers From Today's Episode: 

Assessing the Relative Magnitude of Premiums — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3981766

Pursuing Multiple Premiums: Combination vs. Integration — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3793594

Weighting for the Right One: Weighting Scheme Design for Systematic Equity Portfolios — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4016481

To Hedge or Not to Hedge: A Framework for Currency Hedging Decisions in Global Equity & Fixed Income Portfolios — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3703333

Another Look at Timing the Equity Premiums — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4586684

Premium Timing with Valuation Ratios

How Diversification Impacts Investment Outcomes: A Case Study on Global Large Caps

How Diversification Impacts the Reliability of Outcomes — https://carlsoncap.com/wp-content/uploads/DFA_-How-Diversification-Impacts-the-Reliability-of-Outcomes.pdf 

On the Valuation of Performance Fees and Their Impact on Asset Managers' Incentives — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3686987

Reversals and the returns to liquidity provision — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4339591

You don't need to be a rocket scientist to work at Dimensional Fund Advisors, but Gerard O'Reilly sees it as an asset, particularly when it comes to problem-solving. Now the Co-CEO and Chief Investment Officer of one of the fastest-growing US investment businesses, Gerard received a Ph.D. in aeronautics before entering fund management, attracted to Dimensional because of the opportunity it afforded him to learn from the world-leading economists at the company; including Eugene Fama, Myron Scholes, Merton Miller, Robert Merton, and Ken French. We recently sat down with Gerard to discuss the firm's research-based culture and rules-based approach to investing. In this episode, we get into the nitty-gritty regarding Dimensional's distinctive portfolio management decisions and the data sources they draw from and Gerard answers some technical questions regarding risk assessment, factor tilted portfolios, operating profitability, goodwill, and more. We also touch on the value of combining multiple metrics, why small-cap stocks deserve a place in your portfolio, and some of the biggest changes that Gerard has witnessed in Dimensional portfolios over the past decade, as well as how he applies his scientific learnings to make unique portfolio adjustments and some of the various benefits of Dimensional's integrated approach. Make sure not to miss this informative, insightful, and in-depth conversation with Dimensional CIO and Co-CEO, Gerard O'Reilly!

Key Points From This Episode:

• Market-cap-weighted passive strategies versus Dimensional's rules-based higher expected return strategy. [0:03:45]
• Assessing risk based on the Intertemporal Capital Asset Pricing Model (ICAPM). [0:07:07]
• Diversification in a factor tilted portfolio versus a cap-weighted market portfolio. [0:10:57]
• What criteria the variables that Dimensional uses need to meet before they're considered dimensions of expected returns. [0:13:00]
• Sources Dimensional draws from regarding portfolio decisions and implementation. [0:16:09]
• How Gerard decides between underweighting or excluding securities in portfolios. [0:19:59]
• Why Dimensional uses operating profitability rather than cash-based profitability. [0:22:38]
• Gerard's view on intangible assets, goodwill, and Dimensional's investment strategy. [0:29:31]
• The value of including internally developed intangibles in value and profitability metrics. [0:37:49]
• Gerard reflects on the opinion that Fama and French's findings are no longer valid. [0:42:58]
• Whether or not it's better to combine multiple metrics to measure relative price. [0:46:41]
• How Dimensional targets value and profitability together (for large and small caps). [0:50:39]
• How Gerard thinks about capacity for investment strategies in small and micro-cap stocks as Dimensional continues to grow. [0:54:03]
• Understanding how entering into the ETF market has impacted his thinking. [0:57:24]
• Expected premiums for owning smaller stocks over larger ones. [0:58:50]
• The importance of security lending revenue for expected returns on Dimensional funds; improving the investor experience. [1:00:12]
• How Dimensional deals with sector weights and the role that diversification plays. [1:04:12]
• Why they decided to implement credit, despite research to suggest that it doesn't add an independent source of expected returns. [1:06:08]
• Some of the biggest changes in Dimensional portfolios over the past 10 years. [1:10:23]
• How Gerard applies his scientific learnings to make unique portfolio adjustments. [1:12:52]
• Comparing Dimensional's core and vector strategies with a combined cap-weighted portfolio; from fees to the benefits of hindsight and more. [1:15:15]
• Papers that seemed compelling but were deemed ineffective by their research team. [1:19:11]
• Insight into Dimensional's decision to make their internal research public. [1:21:42]
• Why their rules-based approach is the hardest part of Dimensional to replicate. [1:25:55]
• What to be aware of when comparing backtests: how data can be manipulated. [1:30:06]
• Valuable lessons and perspectives Gerard has learned from their competitors. [1:32:22]
• Commonalities between aeronautics and asset management, like problem-solving. [1:35:20]
• Why Gerard believes that having his own financial advisor is invaluable. [1:36:55]
• Gerard explains why we might expect factor premiums to persist in equilibrium. [1:38:28]

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]