Money For the Rest of Us Subscriber Edition
By David Stein
The Money For the Rest of Us Subscriber Edition is the ad-free version of the Money For the Rest of Us Podcast. Money For the Rest of Us is a personal finance and investing podcast on money, how it works, and how to invest it. Subscribers get uninterrupted ad-free access to the entire catalog of over 350 episodes going back to 2014.
Is Small Cap Dead? Why You Shouldn't Abandon Small Cap Stocks
Why have global small-cap stocks underperformed large-cap stocks and will the trend continue? The investment case for allocating to global small caps.
Topics covered include:
- How have small caps performed relative to large caps over the past two decades
- What factors contributed to the underperformance
- How quality is an important factor to consider when investing in small caps
- What are the earnings prospects for small-cap stocks
- Why small-cap stocks could deliver double-digit returns over the next decade
Show Notes
Small stocks, big problems by Robin Wigglesworth—The Financial Times
The Death of Small Cap Equities? by Chris Satterthwaite—Verdad
The Quality of New Entrants by Chris Satterthwaite—Verdad
Related Episodes
466: Does Dividend Investing Still Work?
370: Should You Invest in Small-Cap and Mid-Cap Stocks?
253: Are IPOs the New Ponzi Scheme?
Inflation’s Illusion: Debunking the Normalcy of Currency Debasement
It is not normal to want prices to rise and currencies to lose their purchasing power. We look at the advantages of stable currencies and prices.
Topics covered include:
- What's more normal, an inflationary or deflationary mindset?
- Why it is more normal for prices to fall due to productivity increases
- How central banks seek to overcome productivity-induced deflation by increasing the money supply
- How inflation and ongoing currency debasement encourage debt, the financialization of housing, and keep unprofitable companies in business
- How gold, Bitcoin, stocks, real estate and other assets help us overcome currency debasement
Show Notes
Is Japan finally becoming a "normal" economy?—The Financial Times
A Complete Guide to Understanding and Protecting Against Inflation—Money for the Rest of Us
Related Episodes
431: The Long-term Bullish Case for Gold
429: Which Inflation Protection Strategies Worked and Which Didn’t?
Are Emerging Markets Bonds a Once in a Generation Opportunity?
Some analysts suggest that now is an incredibly attractive entry point to invest in emerging market bonds. We look at how to do this and whether you should.
Topics covered include:
- How emerging markets bonds have performed relative to U.S. bonds
- How frequently have emerging markets bonds defaulted
- What is the difference between local currency and U.S. dollar-denominated emerging markets bonds
- Why emerging markets nations are reforming
- What are the ways to invest in emerging markets bonds and what factors should you consider
Show Notes
Emerging Local Debt: A Once-In-A-Generation Opportunity? by Victoria Courmes—GMO
EM Sovereign Defaults at Record Level, but Rating Outlooks More Balanced—Fitch Ratings
The big opportunity in emerging market debt by Victoria Courmes—The Financial Times
The weakest links in the global economy are on the mend by Ruchir Sharma—The Financial Times
How to invest in closed-end funds - Money for the Rest of Us
Investments Mentioned
iShares JP Morgan USD Emerging Markets Bond ETF (EMB)
iShares JP Morgan Emerging Markets Local Currency Bond ETF (LEMB)
DoubleLine Low Duration Emerging Markets Fixed Income Fund (DELNX)
DoubleLine Emerging Markets Fixed Income Fund (DLENX)
Virtus Stone Harbor Emerging Markets Income ETF (EDF)
DoubleLine Income Solutions Fund (DSL)
Morgan Stanley Emerging Markets Debt Fund (MSD)
Morgan Stanley Emerging Markets Domestic Debt Fund (MSD)
Related Episodes
411: Is Emerging and Frontier Markets Investing Still Worth It? – With Asha Mehta
Investing Fundamentals and What Is Attractive Now
In this conversation with financial advisor Josh Jalinski, David shares his views on constructing and benchmarking portfolios, factor investing including growth versus value, and managing regret. We explore a number of asset classes and strategies including dividend investing, leveraged loans, closed-end funds, equity REITs, and China. We also discuss how to manage retirement assets.
Show Notes
Is the Economy as Bad as People Think?
Why most households are in better financial shape than prior to the pandemic, but remain frustrated at their lack of economic progress.
Topics covered include:
- How consumer sentiment surveys are designed and their current findings.
- Reasons behind consumer frustration with increasing prices amidst declining inflation rates.
- The magnitude of the inflation shock and its underlying causes.
- The concept of reference prices and their significant role in shaping consumer sentiment.
- Factors contributing to the high levels of economic uncertainty among households.
- Key elements required for enhancing consumer confidence in their economic future.
- The political repercussions stemming from widespread economic dissatisfaction.
Show Notes
Surveys of Consumers—University of Michigan
Consumer sentiment climbs amid split views on business outlook—University of Michigan
The Purchasing Power of American Households—U.S. Department of the Treasury
Unemployment Rate—St. Louis Fed
Kraft Heinz ups ad spend, changes leadership by Christopher Lombardo—Strategy
Covid-19 Coronavirus Pandemic—Worldometer
Related Episodes
380: How Stories Drive Our Happiness and Financial Success
Unlocking Income: A Comprehensive Guide to Investing in Covered Call ETFs
How to use covered call and buy-write strategies to generate income while understanding the risks and having realistic return expectations.
Topics covered include:
- How covered call strategies work
- How much can you earn investing in covered call strategies
- What are some numerical examples based on current option prices
- How covered call strategies can be used for both stock and bond ETFs
- What are some covered call ETF examples
Investments Mentioned
JP Morgan Equity Premium Income ETF (JEPI)
JP Morgan Equity Premium Income Fund (JEPIX)
Global X NASDAQ 100 Covered Call ETF (QYLD)
Global X S&P 500® Covered Call ETF (XYLD)
iShares 20+ Year Trs Bd Buywrt Stgy ETF (TLTW)
WisdomTree PutWrite Strategy Fund (PUTW)
Related Episodes
467: Unraveling the Truth About ETFs: Benefits, Analysis, and the Indexing Bubble Myth
418: Bond Investing Masterclass
321: How to Analyze Complex Investments
How the Economy Really Works: Savings, Investing, Consuming and Market Distortions
A primer on how the economic engine works through coordination between savers, investors, consumers, producers, governments and banks. How hoarding and unfair competition can lead to economic distortions.
Topics covered include:
- How spending and saving are connected including the paradox of thrift
- How borrowing money can lead to higher income and savings and potentially to bubbles
- How hoarding differs from investing and why too much hoarding can deprive businesses of capital
- How lightbulbs, grocery stores, and kitchen appliances could be examples of unfair competition and planned obsolescence.
- What role do we play as participants in this coordinated economic dance?
Show Notes
Wait, Is Saving Good or Bad? The Paradox of Thrift—The Federal Reserve Bank of St. Louis
Rents: How Marketing Causes Inequality by Gerrit De Geest—Beccaria Books
FTC Challenges Kroger’s Acquisition of Albertsons—Federal Trade Commission
The Lifespan of Large Appliances Is Shrinking by Rachel Wolfe—The Wall Street Journal
Which Will Perform Better: Berkshire Hathaway or Utility Stocks?
Berkshire Hathaway doesn't pay a dividend, its cash pile keeps growing, and Buffet says it's gotten too big to make acquisitions that can impact the company. Meanwhile, utility ETFs have a steady 3.5% dividend yield. Which will be the better-performing investment going forward?
Topics covered include:
- How has Berkshire Hathaway performed relative to the S&P 500 Index and other active managers
- Why Warren Buffett believes Berkshire's electric utility holdings were a mistake
- Why California has some of the highest utility rates in the U.S.
- Why Berkshire Hathaway will eventually need to pay a dividend even though it doesn't currently
- Going forward, will it be more profitable to invest in Berkshire Hathaway, a utility ETF, or an index fund
Show Notes
Berkshire Hathaway 2023 Shareholder Letter
Active vs Passive Investment Management Barometer Report—Morningstar
Related Episodes
466: Does Dividend Investing Still Work?
463 Plus: Model Portfolios, UK versus US Valuations, MCI Premium, and MFD Proxy Battle
Lessons from Japan's 34 Years of Stock Market Underperformance
Japan's stock market recently exceeded the all-time high first set in December 1989. That's 34 years of zero price appreciation for the stock market. What drove this lackluster performance, will it continue, and what can we learn from it?
Topics covered include:
- How big was Japan's stock bubble, and how much did it contribute to the stock market's underperformance over the past three decades
- How do Japan's demographic trends impact to its economic challenges and what are the solutions
- Why Japan's houses are built to depreciate in value
- What lessons can we learn from Japan's extended bear market
Show Notes
Japan’s Nikkei 225 index eclipses record high after 34 years by Leo Lewis—The Financial Times
Related Episodes
235: What If Home Prices Always Declined
Unraveling the Truth About ETFs: Benefits, Analysis, and the Indexing Bubble Myth
How the ETF market is changing, why ETFs should be your preferred investment vehicle, and how to analyze ETFs to generate better investment performance.
Topics covered include:
- How large have fund flows been away from active mutual funds and into ETFs
- How big are the largest ETF families and how has their market share grown
- Why the rise of active ETFs blurs the distinction between active and passive investing
- Why there doesn't appear to be an indexing price bubble, but the rise of passive investing has impacted volatility and decreased stock price informativeness
- A framework for how to analyze markets and select ETFs for your portfolio
Show Notes
Global Fund Flows Dominated by Fixed-Income and ETFs—Morningstar
It’s Official: Passive Funds Overtake Active Funds by Adam Sabban—Morningstar
ETF Issuer League Tables—VettaFi
Global ETF Market Facts: three things to know from Q3 2023 by Samara Cohen—iShares
Investments Mentioned
SPDR® S&P 500® ETF Trust (SPY)
JPMorgan Equity Premium Income ETF (JEPI)
Avantis US Small Cap Value ETF (AVUV)
Related Episodes
426: Which is Best – Active or Passive, ETFs or Funds?
321: How to Analyze Complex Investments
Does Dividend Investing Still Work?
Stocks that grow their dividends have outperformed non-dividend-paying stocks over the long-term, but not in the past 5, 10, and 20 years. Why are non-dividend paying stocks outperforming dividend growers, and will it continue?
Topics covered include:
- What message do companies say when they initiate, grow, or cut their dividend
- What is dividend smoothing
- How have dividend payers performed relative to non-dividend payers
- Why have non-dividend payers, which are primarily growth stocks, outperformed dividend payers
- How the payout ratio and return on equity impact dividend strategies
- What are reasons to include dividend strategies in your portfolio
Show Notes
The dividend puzzle by Fischer Black—The Journal of Portfolio Management
Can Dividend Investing Rise From the Dead? by Jon Sindreu—The Wall Street Journal
Einhorn Says Markets ‘Fundamentally Broken’ By Passive, Quant Investing by Matthew Griffin—Bloomberg
Investments Mentioned
WisdomTree U.S. SmallCap Quality Dividend Growth Fund (DGRS)
WisdomTree Emerging Markets High Dividend ETF (DEM)
Vanguard Dividend Appreciation ETF (VIG)
iShares Core S&P 500 ETF (IVV)
Related Episodes
429: Which Inflation Protection Strategies Worked and Which Didn’t?
342: Is Another Great Inflation Coming?
Transforming Financial Regrets into Portfolio Gains: Five Strategies for Navigating Investment Emotions
Humans are wired to feel regret. Here's how to learn from financial regret to become a better investor.
Topics covered include:
- What cognitive biases make feelings of financial regret unavoidable
- We analyze two regret case studies - one from David and one from a Plus member
- Why do we avoid big regrets but manage through small ones
- Five cognitive tricks to help manage financial regrets
Show Notes
Related Content
448: Where Are Interest Rates Headed Next? Insights from the Jackson Hole Symposium
More Ways to Lock in Higher Yields in Case Interest Rates Fall
Professional investors and other market participants are lousy at forecasting interest rates. Here are three more options to lock in higher yields today.
Topics covered include:
- The risk of buying long-term bonds and ETFs to benefit from falling yields
- How volatility drag has impacted a long-term bond ETF like TLT
- Why interest rates won't go up just because the government issues more bonds
- How CDs, fixed annuities, and zero-coupon bonds work
- We compare and contrast the seven fixed-income options reviewed in this two-part series
Show Notes
Investors may be getting the Federal Reserve wrong, again—The Economist
Today's Best Multi-Year Guaranteed Annuities—Immediate Annuities
Zero-Coupon Treasuries Flew Off Shelves During October Yield Surge by Elizabeth Stanton—Bloomberg
Investments Mentioned
iShares 20+ Year Treasury Bond ETF (TLT)
Invesco BulletShares 2029 Corporate Bond ETF (BSCT)
How To Lock In Higher Yields In Case Interest Rates Fall
With cash yields expected to fall, here's how you can keep your portfolio income elevated by purchasing longer-term individual bonds and bullet ETFs
Topics covered include:
- How future short-term interest rates, inflation expectations, and term premiums impact long-term interest rates
- How each of those rate drivers contributed to the close to 1% drop in interest rates in the past three months
- How yield to maturity is our guide to locking in a fixed return using individual bonds or bullet ETFs
- How bullet ETFs work and what are some examples
- What are callable bonds and how to analyze them
- How to analyze municipal bonds
- Why we might want to lock in higher yields today
Show Notes
Term Premium on a 10 Year Zero Coupon Bond—FRED Economic Data
Investments Mentioned
Vanguard Total Bond Market ETF (BND)
Invesco BulletShares 2030 Corporate Bond ETF (BCSU)
iShares iBonds Dec 2026 Term Trust ETF (IBTG)
Invesco BulletShares 2031 High Yield Corporate Bond ETF (BSJV)
Related Episodes
455: Easier Investing, Richer Life: TIPS Ladders to Annuities
453: The Price of Money – 700 Years of Falling, Can Interest Rates Keep Rising?
452: Beyond Stocks: The Allure and Strategy of Credit Investments
448: Where Are Interest Rates Headed Next? Insights from the Jackson Hole Symposium
418: Bond Investing Masterclass
Now Should You Buy Bitcoin? The Investment Case for the New Spot Bitcoin ETFs
We explore reasons for buying Bitcoin using one of the new Bitcoin ETFs. We also consider the risks.
Topics covered include:
- Why the SEC finally decided to approve spot Bitcoin ETFs
- What are the fees and structure of these new Bitcoin ETFs
- How Bitcoin is similar and different from the fiat money system
- Where Bitcoin fits in an investment portfolio
Show Notes
Statement on the Approval of Spot Bitcoin Exchange-Traded Products - SEC
Coinbase at the Center of Bitcoin ETF Draws Envy and Risks - Bloomberg
Related Episodes
362: Should You Invest in a Bitcoin ETF?
355: Which Money Is Crazier: The U.S. Dollar or Bitcoin?
How Much Should Your Net Worth Grow Each Year?
The intricate dance between profession, risk, lifestyle, and luck in determining how net worth grows.
Topics covered include:
- The various factors that shape the growth of net worth, including professional choices, risk tolerance, and lifestyle decisions.
- David Stein's personal account of how these elements influenced the trajectory of his financial growth.
- Insights into the range of net worth increases observed in 2023, driven by the performance of financial markets.
- The importance of focusing on one's output quality and personal journey of wealth creation, rather than fixating on comparisons with others' net worth.
Show Notes
Managing Oneself by Peter F. Drucker—Harvard Business Review
Soloing: Realizing Your Life's Ambition by Harriet Rubin—HarperCollins
Should You Be Invested 100% Stocks Before and During Retirement? A Recent Study Says Yes
The pros and cons of investing your retirement assets 100% in equity, including half in international stocks. Why the 4% spending rule is too aggressive.
- Why historical asset class return studies that use only U.S. data are biased
- How researchers build a broader database to study retirement outcomes and spending rates
- How a 100% stock portfolio performed compared to balanced portfolios and target date funds
- Why investors should have half their assets in international stocks
- Why a 4% spending rule is too high, and what is the alternative
Show Notes
Related Episodes
421: Beware of Survivorship Bias When Investing
326: The New Math of Retirement Spending and Investing
254: Should You Be 100% Invested In Stocks?
250: Investing Rule One: Avoid Ruin
Listener Q&A on Investing and Living
We close out 2023 by answering your questions on active vs passive management, market timing, investing for status, what we learned from Charlie Munger, thoughts on a coming recession, worst investment mistakes, recent books that changed us, and more.
Show Notes
How the World Really Works by Vaclav Smil—Viking
The Day the World Stops Shopping by J.B. Mackinnon—Harper Collins
Earth for All: A Survival Guide for Humanity by Sandrine Dixson-Declève, et al—Earth for All
Barbarian Days: A Surfing Life by William Finnegan—Penguin Random House
Dissecting Stock Returns: Financial Engineering or Genuine Growth?
Do the impressive returns in public and private markets stem from strategic financial engineering or reflect actual economic growth?
- How corporate profit growth is linked to economic growth, even though corporate profits are more volatile
- How interest rates, tax rates, and stock buybacks influence corporate profits and stock returns
- Why there are fewer publicly traded stocks
- How the increase in leveraged buyouts has impacted the economy
- How private equity funds use financial engineering to boost returns
Show Notes
US CEOs start to contemplate Trump, round 2 by Rana Foroohar—The Financial Times
10-Year Stock Market Returns—Crestmont Research
Stock Average—Crestmont Research
Stock EPS Reality—Crestmont Research
Nominal Gross Domestic Product for United States—FRED Economic Data
The Secretive Industry Devouring the U.S. Economy by Rogé Karma—The Atlantic
Key Drivers Behind Widespread Adoption Of NAV Financing by Matthew K Kerfoot—Proskauer
The Inevitable Rise of NAV Financing by Patricia Teixeira and Anastasia Kaup—Ropes & Gray
LBOs Make (More) Companies Go Bankrupt, Research Shows by Alicia McElhaney—Institutional Investor
Leveraged buyouts and financial distress by Brian Ayash and Mahdi Rastad—ScienceDirect
AI's Fork in the Road: Societal Bliss or Existential Threat?
One year after the release of ChatGPT, we explore the positive and negative paths AI could take and what individuals can do to assist with a positive outcome.
Show Notes
The economic and market impact of artificial intelligence—Capital Economics
The Fight for the Soul of A.I. by David Brooks—The New York Times
A.I. Belongs to the Capitalists Now by Kevin Roose—The New York Times
The ‘AI doomers’ have lost this battle by Benedict Evans—The Financial Times
What is the AI alignment problem and how can it be solved? by Edd Gent—NewScientist
Is Tourism Harmful or Helpful? The Economic and Cultural Impact of Global Travel
What are the economic and cultural benefits of tourism. What are the downsides to too much tourism. How to find the right balance.
Topics covered include:
- How short-term rentals have changed tourism
- How cities grapple with too many short-term rentals
- What is the outlook for short-term rentals
- How much does tourism contribute to economic output
- How can tourism be harmful and helpful
- The example of Cuba
Show Notes
International tourism revenue, percent of GDP - Country rankings—The Global Economy
2023 Short-Term Rental Mid-Year Outlook—AirDNA
Welcome to Hochatown, the Town Created by Airbnb by Julie Satow—The New York Times
Short-Term Rentals Attract Private Equity Seeking New Asset Class by Sean O'Neill—Skift
Related Episodes
93: Capitalism, Complexity and Cuba
389: Is Airbnb Intensifying the Housing Crisis?
449: The House of Cards: Evaluating Economic and Financial Warning Signs
Easier Investing, Richer Life: TIPS Ladders to Annuities
What are the pros and cons of partially funding retirement expenses with an inflation-indexed bond ladder versus an immediate annuity? There is a big downside to TIPS ladders that many investors don't realize.
Topics covered include:
- Why the stock market is more risky than many people realize
- Is it too late to invest in TIPS as one advisor suggests
- How TIPS and TIPS ladders work
- How immediate annuities work
- The pros and cons of a TIPS ladder versus an immediate annuity
Show Notes
Effortless: Make It Easier to Do What Matters Most by Greg McKeown
Essentialism: The Disciplined Pursuit of Less by Greg McKeown
Skin in the Game by Nassim Nicholas Taleb
Safe Haven: Investing for Financial Storms by Mark Spitznagel
A Complete Guide to Investing in I Bonds and TIPS
How To Invest Money - 10 Rules of Thumb for Individual Investors
We discuss ten rules of thumb for individual investors to consider when saving and investing for and in retirement.
- Don't use institutional hand-me-downs
- Stay close to home base
- Beware of dragon risk
- Mind your investment seasons
- Catch the popping corn
- Watch for market swarms
- Track the economic winds
- Follow the traffic lights
- Diversify your baskets
- Don't burn your ships
Show Notes
Related Content
Complete Guide to Mortgage REIT Investing - Money for the Rest of Us
Complete Guide to Equity REIT Investing - Money for the Rest of Us
The Price of Money - 700 Years of Falling, Can Interest Rates Keep Rising?
Interest rates have been sliding for seven centuries. Dive into the historical forces driving this trend and examine whether the recent interest rate spike is just a blip on the radar.
Topics covered include:
- How the supply of savings and the demand to borrow impact interest rates
- Why have interest rates been falling for over 700 years, and what might have changed recently to propel rates higher
- How lower rates have helped households increase their net worth and reduce their financial vulnerability
- What are some lower-risk ways to take advantage of higher interest rates
Show Notes
Secular stagnation is not over by Olivier Blanchard—Peterson Institute for International Economics
A big problem looming for bond markets by TOMASZ WIELADEK—The Financial Times
Eight centuries of global real interest rates - Paul Schmelzing - Bank of England
Changes in U.S. Family Finances from 2019 to 2022—The Federal Reserve
A Complete Guide to Investing in I Bonds and TIPS
Related Episodes
448: Where Are Interest Rates Headed Next? Insights from the Jackson Hole Symposium
450: How Higher Interest Rates Alter Our Financial Blueprint
452: Beyond Stocks: The Allure and Strategy of Credit Investments
Beyond Stocks: The Allure and Strategy of Credit Investments
Why investing in non-investment grade bonds, leveraged loans, and preferred stocks is potentially more compelling than investing in common stocks at present.
Topics covered include:
- Why Howard Marks told institutional clients to sell stocks and buy high-yield bonds instead
- The contractual agreements comprising bonds, leveraged loans, and preferred stock give them an advantage relative to common stocks
- How preferred equity exhibits attributes of both bonds and common stocks
- What is the expected return and risks for high-yield bonds, leveraged loans, and preferred stock
- How do we invest in these three asset types
Show Notes
Sea Change - Memo by Howard Marks
Further Thoughts on Sea Change - Memo by Howard Marks
Investments Mentioned
SPDR Bloomberg High Yield Bond ETF (JNK)
iShares iBoxx High Yield Corporate Bond ETF (HYG)
Invesco Senior Loan ETF (BKLN)
iShares Preferred Stock ETF (PFF)
Virtus Seix Senior Loan ETF (SEIX)
DoubleLine Flexible Income Fund (DFLEX)
BlackRock Debt Strategies Fund (DSU)
Barings Corporate Investors Fund (MCI)
Related Content
397: How to Invest Based on Cycles
451: How Much Should You Invest in Stocks? The Art of Position Sizing in a Volatile Market
423: A “Safe” 6% Yield: The Case for Investment Grade CLOs
How Much Should You Invest in Stocks? The Art of Position Sizing in a Volatile Market
Our allocation to risky assets should vary based on the expected return, volatility, risk aversion, and how much we can earn risk-free. That means we should be taking less risk right now. Listen to learn why.
Topics covered include:
- Why there are so few billionaires
- Why did the hedge fund Long Term Capital Management implode
- Why how much to invest is more important than where to invest
- How the Merton share formula can assist with determining what percent of our wealth to invest in risky assets
- Why are expected outcomes so much greater than the median outcome and why that matters to our investing
Show Notes
How to avoid a common investment mistake - Buttonwood - The Economist
The Missing Billionaires: A Guide to Better Financial Decisions by Victor Haghani and James White
Money For the Rest of Us List of Most Influential Books
Charles Feeney, Who Made a Fortune and Then Gave It Away, Dies at 92 - New York Times
Elm Partners Coin Flip Exercise
Evaluating gambles using dynamics - O. Peters and M. Gell-Mann
Related Content
250: Investing Rule One - Avoid Ruin
Why You Should Rebalance Your Portfolio
196: How to Survive Financially
How Higher Interest Rates Alter Our Financial Blueprint
We explore six impacts of higher interest rates on housing, capital projects, stock buybacks, excess returns for stocks, bonds, and other asset classes, and individual opportunity costs.
Topics covered include:
- Where current interest rates stand
- Central banker predictions for how long cash yields will stay this high
- Why housing is the least affordable since the early 1980s
- Why new apartment building construction has collapsed
- What has been the excess return for stocks, bonds, and other asset classes when interest rates are higher and lower
- Why there will be fewer stock buybacks and how that can impact earnings per share
- Which alternative investments do better when short-term interest rates are higher
- Why financial opportunity costs have increased and how that should impact our investment and other financial decisions.
Show Notes
Summary of Economic Projections—The Federal Reserve
The Apartment Market Is Hitting a Construction Lull by Will Parker—The Wall Street Journal
30-Year Fixed Rate Mortgage Average in the United States—FRED Economic Data
Americans Are Still Spending Like There’s No Tomorrow by Rachel Wolfe—The Wall Street Journal
Honey, the Fed Shrunk the Equity Premium by Portfolio Solutions Group—AQR
Related Episode
384: Has a Commodities Bull Market Supercycle Started? If So, How Do You Invest in It?
435: Is It Better to Rent or Buy a House?
448: Where Are Interest Rates Headed Next? Insights from the Jackson Hole Symposium
The House of Cards: Evaluating Economic and Financial Warning Signs
What are the economic and financial system early warning signs that we should heed rather than get caught up in fearmongering? When should we start to worry about ballooning budget deficits, the national debt, a currency collapse, or the stock market?
Topics covered include:
- Signals to monitor to see if things are falling apart
- How much government debt is too much and why interest rates are key
- Why central banks don't control the stock market
- Why the dollar remains dominant, and what has to change for it to plummet in value
Show Notes
The Dawn of Everything: A New History of Humanity by David Graeber and David Wengrow—Macmillan
U.S. National Deficit—Treasury.gov
Budget and Economic Data—Congressional Budget Office
Japan's growing debt mountain: Crisis, what crisis? by Andrew Sharp—Nikkei Asia
Currency Composition of Official Foreign Exchange Reserves—International Monetary Fund
Total credit to non-bank borrowers by currency of denomination: US dollar—BIS
Wonking Out: The Mysteries of the Almighty Dollar by Paul Krugman—The New York Times
Revisiting the international role of the US dollar by Bafundi Maronoti—BIS
Related Episodes
404: Why Is the U.S. Dollar So Strong? Will It Continue?
416: Your Nation’s National Debt: 5 Things You Need To Know
433: What Happens If The U.S. Defaults On Its Debt? Here’s Why It Won’t
Where Are Interest Rates Headed Next? Insights from the Jackson Hole Symposium
Why you might want to lock in higher yields now, given real interest rates are the highest they have been in 15 years.
Topics covered include:
- What was covered this year at the Federal Reserve Jackson Hole Symposium
- What are the primary policy actions central banks take, and how do they influence interest rates
- What is the neutral real rate of interest, and why is it important
- Why new ideas are central to an increasing standard of living
- What would drive interest rates higher or lower from current levels
- Why now is an attractive time to lock in longer-term yields
Show Notes
Policymaking in an age of shifts and breaks by Christine Lagarde—European Central Bank
Inflation: Progress and the Path Ahead by Jerome H. Powell—The Federal Reserve Bank
The Outlook for Long-Term Economic Growth by Charles I. Jones—Federal Reserve Bank of Kansas City
Our Car Was Attacked! Is Property Crime Increasing?
David shares how thieves recently tried to smash and grab his luggage from his car while he was still inside it. He then explores property crime trends, whether they are increasing or decreasing, and why.
Topic covers include:
- How thieves have stolen luggage from the same gas station multiple times per day
- What have property crime rates been in the U.S. over the past few decades and since the end of the pandemic
- What are reasons property crime rises and falls
- What is inventory shrink, and how is it impacting retailers
- What can we do to reduce the risk of being a crime victim
Show Notes
Chevron Oakland Hegenberger Rd—Yelp
Reported property crime rate in the United States from 1990 to 2021—Statista
Pandemic, Social Unrest, and Crime in U.S. Cities: Year-End 2022 Update—Council on Criminal Justice
CATALYTIC CONVERTER THEFTS NATIONWIDE SURGE ACCORDING TO NEW REPORT—Cision PR Newswire
OAKLAND NAACP CALLS ON POLITICIANS TO CRACK DOWN ON CRIMINALS—California Policy Center
What Caused the Crime Decline? by Lauren-Brooke Eisen—Brennan Center for Justice
What’s Behind All This ‘Shrink’? by Jordyn Holman—The New York Times
Retail Theft Costs US Merchants Like Walmart and Target $100 Billion a Year—PYMNTS
Retailers battle nearly $100 billion in shrink by Jason Straczewski—National Retail Federation
2022 Retail Security Survey—National Retail Federation
US Retail Workers Are Fed Up and Quitting at Record Rates by Devin Leonard and Diana Bravo—Bloomberg
Die With Zero: Why You Should Start Spending Now
How to balance saving, investing, and spending for a fulfilling life. Why you will probably reach your peak net worth sooner than you think and should start drawing down your nest egg earlier. Why we can't optimize for a fulfilling life but can still have one.
Topics covered include:
- How to estimate how much to spend from your retirement assets so you die with zero
- What is time bucketing, and why it doesn't work for everyone
- How to balance the fear of making a change with the fear of missing out
- The difference between making deliberate choices and maximizing our experiences
Show Notes
Die with Zero: Getting All You Can with Your Money and Your Life by Bill Perkins
The Pathless Path: Imaging a New Story for Work and Life by Paul Millerd
Four Thousand Weeks: Time Management for Mortals by Oliver Burkeman
Anderson Cooper Is Still Learning to Live With Loss by David Marchese—The New York Times
Bond Investing Masterclass Bonus Episode
Three additional insights to help you confidently invest in fixed income. First, what are the different measures of bond yields, and which is best? Second, how to estimate the return for a bond ETF or fund and how long do you have to own it to achieve that annualized return? Finally, we explore a bond type that yields more than U.S. Treasuries, has never defaulted, and has the implicit guarantee of the U.S. government.
From Boom to Bust: Why China's Stocks Lagged Behind Its Economy and Where to Invest Next
Explore the surprising disconnect between China's booming economy and its underperforming stock market, and discover where the next investment opportunities lie.
Topics covered include:
- How badly has China's stock market performed except for one remarkable decade
- What are the economic and governance factors that contributed to the underperformance
- Why it's too soon to write off China despite the structural headwinds
- What are the factors that contribute to economic growth and a robust stock market, and which emerging market countries display those factors
- What are some ETFs to invest in countries with favorable economic tailwinds
Show Notes
State-Owned Enterprises Going Public: The Case of China by Xiaozu Wang, et al.—SSRN
A Model of China's State Capitalism by Xi Li, et al.—SSRN
Has China given up on state-owned enterprise reform? by Nicholas Borst—The Interpreter
China Regulator’s New Slogan Fuels Buying Spree in State Firms by Bloomberg News—Bloomberg
Investors sour on Beijing’s bid to boost state-owned enterprises by Sun Yu—The Financial Times
Natural Disasters: Are They Truly Increasing?
From raging wildfires to devastating floods, how are these natural events reshaping our financial landscape? What if anything, should we be doing with our investments as a result?
Topics covered include:
- The devastating Maui wildfire: What are the factors that led to one of the deadliest wildfires in US history.
- Global wildfire trends: Are they really increasing? The data might surprise you.
- The role of insurance companies: Learn how the giants of the reinsurance world, like Swiss Re and Munich Re, are navigating the increasing number of natural disasters.
- The complex interplay of climate change, urban expansion, and human choices
- Why IPCC is not highly confident regarding some weather impacts of climate change due to the natural variability in weather patterns.
- What should individuals do when there is a lack of details regarding a long-term potential threat?
Show Notes
Why the fires in Hawaii have been so bad—The Economist
CAMS: monitoring extreme wildfire emissions in 2022—Copernicus
A human-driven decline in global burned area by N. Andela et al.—Science
Seasonal Trend for Europe—Copernicus
World insurance market developments in 5 charts—Swiss Re Institute
When Disaster Strikes: Preparing for Climate Change by Seán Nolan and Krishna Srinivasan—IMF
California insurance market rattled by withdrawal of major companies by Michael R. Blood—AP
Five Surprising Insights About Stock Indexes and Funds
We share five things we have learned about stock index valuations, earnings, currency, and why value investing isn't dead.
Topics covered include:
- How index providers divide the stock universe into large and small, growth and value
- The difference between the price-to-earnings ratio and earnings yield and which is better
- How earnings volatility can impact annual earnings growth and what to use to estimate future earnings
- How value stocks often grow earnings faster than growth stocks
- How value has outperformed growth in the last three years
Show Notes
Related Episodes
Crisis-Proof Investing: Strategies for a Shaky Future
Given climate change and other risks, how should you invest for the next forty years?
Topics covered include:
- What predictions from the last forty years came true and which didn't
- Why the next forty years will have a lot of similarities to the last forty years despite the promise of AI
- Why the scale and complexity of the world make big transitions away from oil, cement, and natural gas unlikely
- Why economic growth and consumption will likely continue leading to positive investment returns
- How should our portfolios and lifestyle be structured to build resilience
Show Notes
The Third Wave by Alvin Toffler—Penguin Random House
Parcel shipping index 2022—Pitney Bowes
America Is Drowning in Packages by Amanda Mull—The Atlantic
How to Spend Way Less Time on Email Every Day by Matt Plummer—Harvard Business Review
World Population Prospects—United Nations Department of Economic and Social Affairs
Global Climate Change Vital Signs—NASA
Congestion Pricing Plan in New York City Clears Final Federal Hurdle by Ana Ley—The New York Times
New Jersey Sues Over Congestion Pricing in New York City by Ana Ley—The New York Times
How the World Really Works by Vaclav Smil—Penguin Random House
Does Sam Altman Know What He's Creating? by Ross Andersen—The Atlantic
Market Myopia's Climate Bubble by Madison Condon—Boston University School of Law
What Really Happens to the Clothes You Donate by Oliver Franklin-Wallis—GQ
OpenAI's Sam Altman launches Worldcoin crypto project by Anna Tong—Reuters
Worldcoin’s premise is a disturbing one by Tabby Kinder—The Financial Times
What If Social Security Had Been Privatized? The Value of Federal Government Pension Plans
In 2005, Congress debated giving U.S. workers private savings accounts to invest their Social Security contributions in the stock and bond markets. Sixteen later, we review how that would have worked out for workers.
Other topics discussed include:
- How the public and private sectors are both critical for a functioning social security systems
- Which countries pay the highest social security benefits
- How have other privatized social security plans worked out around the world
- How workers prefer defined contribution plans even though they are worse off than if defined benefit plans were still widely available
- How worried should we be about aging populations and rising dependency ratios
- Why Social Security won't go away
Show Notes
Social Security Quick Calculator—Social Security Administration
The average 401(k) balance by age by Pau Deer—Empower
CBO’s 2022 Long-Term Projections for Social Security—Congressional Budget Office
Policy Basics: Top Ten Facts about Social Security—Center On Budget and Policy Priorities
Beware of Platform Risk - How PeerStreet, a Real Estate Crowdfunding Firm, Went Bankrupt
Show Notes
LinkedIn Post by Brett Crosby—LinkedIn
Crowdfunding platform PeerStreet files for bankruptcy by Flávia Furlan Nunes—Housingwire
VC finds its footing as headwinds weaken by James Thorn—PitchBook
PitchBook-NVCA Venture Monitor—PitchBook
Real estate debt marketplace PeerStreet files for bankruptcy by Matt Carter—inman
Related Episodes
253: Are IPOs the New Ponzi Scheme?
301: Use Caution with Alternative Investments
393: What Happens If Your Brokerage Firm Goes Bankrupt
How and Why to Invest in AI
AI models like ChatGPT could lead to massive productivity gains, accelerated economic growth, and higher stock returns. Here's how to invest in AI.
Topics covered include:
- How workers are already using AI models like ChatGPT to boost productivity
- Why ChatGPT is better at search than Google for certain queries
- How AI models will change the economic narrative
- What are ways to invest in AI, including specific ETFs
Show Notes
Sarah Silverman Sues OpenAI and Meta Over Copyright Infringement by Zachary Small—The New York Times
ChatGPT saw its first-ever user decline in June by Igor Bonifacic—Engadget
Lessons From the Catastrophic Failure of the Metaverse by Kate Wagner—The Nation
To Drive AI, Chip Makers Stack ‘Chiplets’ Like Lego Blocks by Yang Jie—The Wall Street Journal
Investments Mentioned
iShares Semiconductor ETF (SOXX)
Roundhill Generative AI & Technology ETF (CHAT)
Robo Global® Artificial Intelligence ETF (THNQ)
iShares Robotics & Artificial Intelligence Multisector ETF (IRBO)
iShares Exponential Technologies ETF (XT)
Vanguard Total World Stock ETF (VT)
How to Live Like You Are Already Retired
How to create and sustain a life of freedom and happiness you don't want to retire from.
Topics covered include:
- What are the physical and mental aspects of living like you are already retired
- What is the good life, and what are the basic goods that contribute to it
- How we handle time is the key to the good life and living like we are already retired
Show Notes
Soloing: Realizing Your Life's Ambition by Harriet Rubin—HarperCollins
Saving Time: Discovering a Life Beyond the Clock by Jenny Odell—Penguin Random House
An Early Resurrection: Life in Christ Before You Die by Adam S. Miller—Deseret Book
Four Thousand Weeks: Time Management for Mortals by Oliver Burkeman—Macmillan Publishers
Related Episodes
19: Live Like You’re Already Retired
371: Find Your Retirement Investing and Living Style
How Did They Do? - Revisiting Carbon, SPACs, Silver, Convertible Bonds, and Frontier Markets
We review the performance and investment prospects for carbon, SPACs, silver, convertible bonds, and frontier markets.
Topics covered:
- What has been the performance of these five asset types since they were discussed on the podcast two to three years ago
- What are the underlying performance drivers and expected returns going forward
- Which asset types are most and least attractive
Show Notes
Two SPAC ETFs Close in One Month, Suggesting End to Wall Street Boom by Emily Graffeo—Bloomberg
Investments Mentioned
Vanguard Total World Stock Market ETF (VT)
SPAC and New Issue ETF (SPCX)
iShares Convertible Bond ETF (ICVT)
iShares Silver Trust (SLV)
ProShares Ultra Silver (AGQ)
iShares Fronter and Select EM ETF (FM)
Kraneshares Global Carbon ETF (KRBN)
Related Content
318: What Are SPACs and Should You Invest in Them?
330: Is Silver the Next GameStop? How to Invest in Silver
A Complete Guide To Investing In Convertible Bonds
The Opportunity and Risk of Frontier Markets
What You Need to Know About Carbon Investing and its Effect on Climate Change
Is It Better to Rent or Buy a Home?
How to decide whether to rent a house or apartment or purchase a home or condo. What has been the financial return from owning a house?
Topics covered include:
- How much have home prices increased in major cities since 1980
- What drove the greater than 50% jump in home prices in some U.S. cities since 2020
- Why there aren't more new starter homes
- What will it take for the housing shortage to abate so houses can be more affordable
- Why now could be a more advantageous time to rent versus buy
- What academics estimate the long-term return is for owning a house, and why the calculations are incomplete
- How to determine what your total cost of ownership is for buying a house in order to compare it to renting
Show Notes
The housing theory of everything by John Myers & Ben Southwood & Sam Bowman—Works in Progress
Irish property: the boom that shows no signs of slowing by Jude Webber—The Financial Times
Whatever Happened to the Starter Home? by Emily Badger—The New York Times
The Housing Revolution Is Coming by M. Nolan Gray—The Atlantic
In Today’s Housing Market, It’s Timing Over Location by Joe Pinsker—The Wall Street Journal
Don't Be Afraid to Invest In Commercial Real Estate - The Bullish Case for Equity REITs
Why equity real estate investment trusts should be part of your investment portfolio despite the office sector's struggles.
Topics covered include:
- Why some office REITs are down 30% in 2023, and owners are walking away from buildings
- How commercial mortgages differ from residential mortgages
- The broad sector diversification found within equity REIT ETFs
- What have equity REITs performed long-term and what drove those returns
- What is a reasonable return expectation for equity REITs
- Why equity REIT prices adjust more quickly than private real estate values
- Why you should be wary of private REITs
Show Notes
Slow Return to Work Pummels Office Stocks by Peter Grant—The Wall Street Journal
Related Content
A Complete Guide to Equity REIT Investing
414: Use Caution with Private REITs like Blackstone’s BREIT
428 Plus: CMBS Risks, ETF Replacements for Money Market Mutual Funds, and Comparing Two Value ETFs
What Happens If The U.S. Defaults On Its Debt? Here's Why It Won't
What are the grave consequences if the U.S. debt ceiling isn't increased and the government defaults? What would the Federal Reserve and the Executive Branch do to prevent default if Congress doesn't act?
Topics covered include:
- What are the potential impacts of a U.S. default on the stock and bond markets, and the overall economy
- What causes the U.S. to have a perennial debt ceiling crisis
- Why it is uncertain when the U.S. government would run out of money to meet its obligations
- What the Biden Administration could do to prevent a default
- What the Federal Reserve could do to prevent a default
- Given the ongoing crisis, should you shift assets from stocks to cash?
Show Notes
The Debt Limit Since 2011—Congressional Research Service
7 doomsday scenarios if the U.S. crashes through the debt ceiling by Jeff Stein—The Washington Post
Why I Changed My Mind on the Debt Limit by Laurence H. Tribe—The New York Times
The Trillion-Dollar Coin Might Be the Least Bad Option by Annie Lowrey—The Atlantic
If U.S. again risks default, Fed has 'loathsome' playbook by Ann Saphir—Reuters
Are the Economy and Financial Markets Zero-Sum Games?
Does there need to be a loser for every winner when it comes to investing and economic growth?
Topics covered include:
- What are zero-sum games
- How trading can be a zero-sum game
- Why active management and seeking excess returns through security selections or country weights are zero-sum games
- Why the U.S. stock market has outperformed the rest of the world
- Why economic growth overall is not a zero-sum game, but some aspects of the economy are zero-sum games
Show Notes
With the Odds on Their Side, They Still Couldn’t Beat the Market by Jeff Sommer—The New York Times
The (Time-Varying) Importance of Disaster Risk by Ivo Welch—The Financial Analysts' Journal
The Economics of Biodiversity: The Dasgupta Review by Dasgupta P.—GOV.UK
Why the economy is not a zero-sum game: a simple explanation by Nathan Mech—Acton Institute
Defending the Free Market: The Moral Case for a Free Economy by Robert Sirico
The Long-term Bullish Case for Gold
Why you should allocate a small percentage of your assets to gold.
Topics covered include:
- What is money, and how does gold fit with that definition
- Why central banks bought more gold last year than at any time since 1967
- Which central banks own the most gold and which are increasing their gold holdings
- How fast is the gold supply growing compared to the U.S. dollar money supply
- How financialization, greater leverage, and contagion risk should motivate us to consider gold
Show Notes
Central bank holdings—Gold Hub
Does the Federal Reserve own or hold gold?—The Federal Reserve
Related Episodes
37: Gold – Without the Hype and Politics
53: Should You Invest In Bitcoin?
How Should Personal and National Wealth Be Measured?
How we measure wealth, riches, abundance, and well-being are more important today than ever.
Topics covered include:
- How late 18th century philosophers Adam Smith and the Earl of Lauderdale defined wealth and the role of capital. Why they worried about income inequality and excess profits
- What led to the dramatic increase in life expectancy and wealth in the 20th and 21st centuries
- How a long life expectancy and well-being can be attained at much lower levels of wealth
- Why John Maynard Keynes was right about the expansion of the economy but wrong about how many hours we would work
- How the U.S. expanded its wealth relative to the rest of world, and at what cost
- Why natural capital should be included in measuring wealth
Show Notes
An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith—Early Modern Texts
About Adam Smith—Adam Smith Institute
The Economics of Biodiversity: The Dasgupta Review—GOV.UK
Less Is More: How Degrowth Will Save the World by Jason Hickel—Penguin Random House
Economic Possibilities for Our Grandchildren by John Maynard Keynes—Yale
America’s economic outperformance is a marvel to behold—The Economist
Which Inflation Protection Strategies Worked and Which Didn't?
With a total U.S. inflation rate of 14% in the past two years, we review how various inflation hedges performed over the past twenty-four months.
Topics covered include:
- What were investors' and the Federal Reserve's inflation expectations two years ago
- What led to the big inflation increase
- Why was the Federal Reserve forced to raise its policy rate by almost 5% in a year
- How successful were inflation-index bonds, stocks, commodities, and real estate in beating inflation over the past two years
- How did two active ETFs that set out to protect against inflation perform
- What is the current outlook for inflation, and what should investors do
Show Notes
CPI Inflation Calculator—U.S. Bureau of Labor Statistics
Inflation Beneficiaries ETF—Horizon Kinetics
Investments Mentioned
iShares TIPS Bond ETF (TIP)
Vanguard Short-term Inflation Protection Securities ETF (VTIP)
Invesco DB Commodity Index Tracking Fund (DBC)
Vanguard Total World Stock ETF (VT)
Vanguard Total Stock Market ETF (VTI)
WisdomTree U.S. High Dividend Fund (DHS)
WisdomTree Global High Dividend Fund (DEW)
Horizon Kinetics Inflation Beneficiaries ETF (INFL)
Schwab U.S. REIT ETF (SCHH)
Quadratic Interest Rate Volatility and Inflation Hedge ETF (IVOL)
How the Coming Credit Crunch Could Harm the Economy and Real Estate Prices
How accelerating bank deposit withdrawals could harm the economy, including real estate prices. How dollars slosh around the financial system but always seem to end up at the Federal Reserve.
Topics covered include:
- How many deposits have left banks since the Silicon Valley Bank collapse
- How much have banks borrowed from the Federal Reserve to meet deposit withdrawals
- Why exiting deposits are harming bank profits and causing them to make fewer loans
- How the credit crunch could hurt commercial real estate values
- How money market mutual funds differ from banks
- How today's banking crisis is similar to the 1980s savings and loans crisis
- What should investors do to protect their wealth
Show Notes
Assets and Liabilities of Commercial Banks in the United States—The Federal Reserve
All U.S. Banks Net Interest Margin—BankRegData
Current Treasuries and Swap Rates—Chatham Financial
Bank Turmoil Squeezes Borrowers, Raising Fears of a Slowdown by Jeanna Smialek—The New York Times
Money Market Funds: Investment Holdings Detail—The Federal Reserve
FAQs: Reverse Repurchase Agreement Operations—Federal Reserve Bank of New York
US Resolution Trust Corporation by Aidan Lawson and Lily Engbith—SSRN
Did the Tariffs Work? The Trade War Five Years Later
What has been the impact on trade and the trade deficit since the U.S. implemented tariffs on steel, aluminum, and goods made in China?
Topics covered include:
- Has the shipping backlog been reduced at U.S. ports
- What are the dangers of running too high of a trade deficit
- How large is the U.S. trade deficit
- What has been the impact of U.S. tariffs on trade, domestic production, and prices
- How Chinese direct-to-consumer retail companies Shein and Temu are driving prices of goods ever lower
- Why consumers should demand greater visibility on how products they purchase are made
Show Notes
The ‘ship backup has ended’ at Los Angeles, Long Beach ports by Alejandra Salgado—Supply Chain Dive
America’s Trade Deficit Surged in 2022, Nearing $1 Trillion by Ana Swanson—The New York Times
The other Chinese apps taking the US and UK by storm by Chelsea Bailey—BBC
Shein sets ambitious revenue target ahead of IPO by Rachel Douglass—Fashion United
Temu’s Big Haul by Ella Apostoaie—The Wire China
The High Price of Fast Fashion by Dana Thomas—The Wall Street Journal
Shein’s Cotton Tied to Chinese Region Accused of Forced Labor by Sheridan Prasso—Bloomberg
Worn: A People's History of Clothing by Sofi Thanhauser—Penguin Random House