Barry Ritholtz

How about another book? And I was kind of reluctant, and when pressed why, I gave a really honest answer. For the past century, there have been literally tens of thousands of books telling people how to invest, and after all that time, effort and wasted inc people are still pretty mediocre investors. So do we really need yet another tome saying buy this sell that do this, do that. I kind of was very much on the fence. I

came back from vacation in the Caribbean. You ever get home in between Christmas and New Year's you have a few days before January twod when the world sort of starts up again. And I just started thumbing through some old research notes I had put together. I had been a columnist for the Washington Post after the financial crisis, and then for Bloomberg for the past decade, and I just started sifting through my history. We do a I

do a quarterly call for clients. I started looking at some of my notes from that, and goddamn if every other thing I had written wasn't debunking some sort of financial bullshit or another. And so one of the publishers, Harriman House, I kind of reached out. I liked their editor and their publisher, and I reached out and said, how do you feel about a book debunking financial bullshit? And their answer was, well, Harry Frankfurt wrote a book

called on Bullshit and that's sold well. And ever since then, everybody who's used bullshit in a title hasn't done very well. And besides, it's a little broad it's a little crude. You know, the Brits are very proper, but they said keep working so in my office and your listeners won't be able to see this. But I have a giant bulletin board, and I started going through all of the ideas and that I was coming across and revisiting, and I just started putting them on three by five index

cards and putting them up on the bulletin board. And you know, I recently learned I wish I would have known about this when I started it. There's a program called Scrivener that allows you to do this virtually. I was using a I was using MindMeister, which is like an organizational chart sort of thing, but you know, more or less did the same thing. And the book didn't exactly self organize. But I started to recognize, well, this, this is a whole bunch of bad ideas. Let me

put them together. Look these people are getting the math wrong, they're not understanding this. Let me put that together. And oh, look at this behavior. Really dumb things. And so those three broad category ended up organizing themselves into ninety percent of the book, each category with three subcategories. And you know, the simplest way to break it down is we believe

things that are not true. We don't understand the math that underlies so much stuff, but especially investing, and that combination leads us to make bad decisions and engage in bad behavior, and all the above lead to bad outcomes. So I have been fortunate enough to have a gentleman named Charlie Ellis on my podcast multiple times. Ellis is

a legend in the industry. He was the chairman of the Yale Endowment, and for a long period of time, the Yell Endowment just beat every other endowment out there. He was on the board of directors of Vanguard Group, now managing nine trillion dollars and the reason indexing has become so popular. He ran Greenwich Associates. He's just a legend. And he wrote a paper in the seventies I want to say the Journal of Portfolio Management, but I can't swear by it called winning the Losers Game, and he

likens investing to tennis. By the way, that later gets expanded to a full buck like twenty years later. But you know, tennis is two games and one It's a winner's game and a loser's game. What does that mean, well, if you're part of the zero point one percent who are professional tennis players, you win by scoring points. You hit with power, you hit with accuracy, you serve aces, you hit the ball to where your opponent isn't, you kiss the line. You're able to do things because of

your skill set. That's the winners game, and very very few people get to play that game. Most of us hackers, myself included, I've been playing tennis since my fifties. We play the losers game. We don't win by scoring points. We lose through unforced errors. We double fault on a serve, we hit it wide, we hit it into the net, it goes long. We hit the ball right into our opponent's sweet spot, and they're able to put it where

we aren't. And so Ellis, who in his brilliance, says, if investors would be more like amateur tennis players and stop having all these unforced errors, just stay within yourself, return the ball, let the other guy beat himself. You're ahead of ninety percent of your peers as investors. And that was really the idea of to take that concept even further than Charlie Ellis did and say, let's rather

than tell people what to do. If we could just get them to stop shooting themselves in the foot, they're so much better off than there would have been otherwise.

this skeptical philosophy? You're known as a contrarian. I don't want to go deep into people's perception of you, but to what degree is that result of your upbringing?

He went out and launched his own business, and my mom was a real estate agent, and so I sort of short commerce at a you know, rough and tumble level, and it always felt that you know, you trust would verify, is what Reagan said. Here's the throughout the book, there's

all this reference to behavioral economics and academic research. I've always been fascinated by the fact that, you know, early in my career, I would listen to quarterly conference calls and you know, CEOs would talk about how great everything was, and then the stock would go on and get shell act because everything wasn't great. So I think my natural tension and how I was raised is on the one hand,

I'm an idiot. I tend to believe when someone looks me in the eye or says to a group of investors things are going great, couldn't be better, Like I believe that shit on the one hand. On the other hands, I've been around the block enough to kind of notice that, hey, a lot of these people say stuff and it turns out not to be true. So you know, the word

contrarian gets kicked around a lot. I think investors would be well served if you don't want to just say no to everything but you have to not be gullible. You have to be a little skeptical and less naive. And you know, I peppered the book with lots of quotes from some of my favorite authors, and one of them is Theodore Sturgeon, who is a science fiction writer in the forties and fifties, and he got tired of defending sci fi to accusations that, hey, all the science

fiction writing, it's just cheap garbage. And Sturgeon's response now known as Sturgeon's law. Sturgeon's rule is, hey, ninety percent of everything is crap, literally what he said. And in the fields of investing, that's really true. You look at the most hedge funds, most mutual funds, you look at most of the new products that come out, most of

the stocks that are out there. However, you want to invest your dollars, you have to recognize that, hey, the odds are I'm being generous one in ten, that you're picking a winner. It's it's you know, it's really challenging to find the needle in the haystack, gets really challenging to identify. We all know who the legendary traders are and who the great investors over time. But that's not

helpful knowing that. Hey, you know, if you were to put money with one and Buffing in nineteen seventy, you would have done great or Peter Lynch in nineteen eighty, or will Donoff in eighteen. Like, these guys in the world of finance are no names because there's a couple of dozen of them out of hundreds of thousands, if not millions, of investors, fund managers, traders, et cetera. So

they're really the uh, they're really the outlawers. And so my background, my upbringing was having seen my mom go through real estate transactions for decades. It was always like she would tell me, no one, by the way, no one's ever asked me this question. She would say to me, my mom had no filter, and when she was young, she had no filter. When she got older, it was all bets are off. But she would say, everybody in my industry is full of shit, Ma, what do you

mean by that. The clients who are looking to buy the house are lying because they don't tell you how much money they really have to spend. The agent on the other side of the transaction is lying because they want to keep the deal for themselves. They want to get both sides of the commission as opposed to sharing it with a buying and selling offer. The sellers are full of crap because they're saying, we can't take a penny less than this, and then you find out it

goes for way below it. So you kind of pick up a little bit of all right, if someone's telling you that, look at their motivations, look at what they really want, And that kind of leads me to say. That kind of leads me to say, what are they selling? Find out what's in it for them, and then at least you have a frame of reference to put context

for whatever they're saying to you. All Right, The agent wants the bigger commission, the seller wants as much money as they can get for the house, the buyer wants to spend as little as they can, and everybody is playing their cards close to the vest. So look past what they're saying and figure out what are they really doing. By the way, I think that's a Wadsworth quote. My dad used to say to me all the time, I can't hear what you're saying because what you're doing is

speaking so loudly. That really applies as well.

these back. There's a warrant. No, they're not one you'd hold the bottom of the shoe. Ma'am, don't take this the wrong way. But here's what a new shoe looks like. Here's what your shoe looks like once you wear them outside. They're yours. And my dad, who had lots of repeat customers and everybody loved him. My father would often take stuff back that dad, what the hell you're doing. He's like, she's bought a thousand pair of shoes from us. I'll

take this one back. I never understood. I couldn't wrap my head around I was like so offended by the bullshit, like no, you can't return this. So I think that contributed a little bit to me. You know, I just never would have the balls to walk into a store with a pair of shoes that were obviously used and return them. My sister worked in a dress shop in high school. She would tell me, She's like, I know the people coming in buying a dress on a fry and returning it on a Monday. They were it over

the weekend. I'm like, what do they do with the this is before the days of the you know, in the magnetic tags and the like, what do they do with the tags? She's like, they tuck it in under the collar and no one sees like that seems to be like really a form of minor theft and kind of egregious. If you can't afford the dress, why are you pretending that you can afford this dress? She's like,

that's just how some people are. Some people aren't honest, don't have a good ethical background, and very often are pretending to be something they're not. The related part in finances most of finance, this doesn't exist as much as it used to, but most of the big brokera shops and warehouses had a training program. It was, you know, ostensibly all about markets and inflation and interest rates and bonds, but really it was about a week of modern portfolio

theory and fifty one weeks of sales training. And this sort of cocky attitude, this fake it till you make it permeated that sales culture and kind of led a lot of people in the industry to be really full of shit at least during their faked phase. Some of them eventually grow out of it and become legit people, and the industry has very much changed over the past thirty forty years. But that whole thing, that whole attitude, always kind of pissed me off. And so a lot of this shows up in the book.

I want you to try these new Nikes. They're kind of crazy, and they were the Kobe Poison Dart Frog and they're like incredibly collectible now and they go for thousands of dollars. And you know I would. I would occasionally get a new pair of shoes and wear them and never think twice, never forget. It's got to be like twenty years ago. I don't even know how long ago.

I'm on the subway and I'm a jeans and sneaker kind of guy, and I'm wearing the Kobe's and I see a young kid looking at my sneakers, and then he looks up at me. He's like, dude, what are you doing? Like just a young you know, a young brother heading to wherever he's having Like, who is this middle aged white guy in a pair of fucking, you know, poison blue darts? Kobe's and I'm like, I go you and shit, if you saw in my closet I had

Jordan Ones. I had this like that they were sneakers and you're war them and it's like, I've had these for I don't know since they came out. I never thought twice about it. And he's just hand you know, po facebomb. He was just like ugh, like you could see him thinking what is wrong with these people? And I'm like, you understand it was they were just around, like, Dad, how about can I take a pair of these? Sure,

go ahead and knock yourself out. It wasn't like I'm gonna take these and put them away for thirty years. It's like I'm gonna take these and put them on my feet and walk around town. And they were great for that. They were like every now and then my nephews are now big enough that I give them some of my old sneakers and I'll pull something out and I'll say, all right, here's a pair of Lebrons. They're brand new in the box. I don't care if they're

worth anything. I'm gonna give these to you, but you have to wear them. And like three days later, you can't imagine the ruck as I caused the school wearing the purple and yellow lebrons. It's just, you know, to me, it's funny that a lot of stuff I've done throughout my life when and suddenly rentiers middlemen jump in because oh, there's money to be made speculating. It doesn't matter if it's sneakers, if it's fixing up old cars, if it's

whatever it happens to be. It's really annoying when people find my favorite hobbies and turn it into a money producing enterprise. The sneakers are kind of laughable, Okay.

is law school is fascinating. I mean, if you go, if you're a rabbit hole type of guy, and I am learning about the legal doctrine and structure of the United States and what made it so unique and why it was so special. And really just a fascinating all right, does it really need to be three years? It could have been two years. The third years kind of a tuition grab waste of time. That said, it was just fascinating. And then you start practicing and you quickly find out

talk about bullshit. You quickly find out everybody's full of shit if you're doing criminal stuff. The person who swears up and down, I don't know where those drugs came from. I didn't have any drugs on me. How do you have fourteen prior arrest? The prosecutors they don't care. They're just looking at their batting average. They want to have

a good number. The rest of the defense bar, it's like they're just especially if you're looking at public defenders that wildly overworked, they don't have the time to put into this. I will never forget doing a criminal appeal. And it's on bank. There are five judges, and you know, ninety seconds in, one of the judges, who obviously had already decided, just spins his chair round like it's like it's you know, America's Got Talent or one of those shows.

They just turned the chair round and I'm like, hey, this son of a bitch is going to jail over here, And like it became really clear. So long before the current environment came along, I knew the legal system was broken. The Supreme Court was corrupt. Everybody was partisan, even though they take an oath swearing to faithfully up hold the Constitution and not be partisan. And it was like, I can't be in the system because because of my own pathologies, I will lose my mind with this. I have a

very heightened awareness of unfairness. And the whole system was just. And then once you if you go into the civil side, that's even worse because litigation is a cudgel that we could use to beat up people with less money than ourselves, and we could torture them and basically get what we want because we can outlet we're a big company. We

can you know, we are theoretically perpetual and infinite. They have a fire, at the very least, we'll outlast them, we'll certainly outspend them, and we'll get what we want. And so you come to realize, you know, I once had a judge, I once had a senior attorney say something very insightful to me, which is I was talking about a contract, And he says, Hey, the question isn't what's in the contract. The question is do you want

to do business with that guy? What do you mean, Well, a contract is only what a judge will enforce if you make everybody stand up and pay attention to the contract. After a lot of time and a lot of costs, he goes, so that's not that what's in the contract isn't the question? The question is do you want to get into bed with this person? Do you want to have a very significant relationship where if it works out, it's great, but if it doesn't work out, you're going

to spend a long time untying this. And are they going to be graceful in saying it didn't work out, Let's figure out an exbra way to cut our losses and move on, or are they going to make you take them to court? Like it's not what you can enforce, it's is the other person going to make you enforce it? All?

up in, So a little skepticism. Try not to be so gullible and naive, and make sure you know what the other guy is selling, because it seems like everybody is selling something.

it's almost thirty years. I started on GeoCities in the nineties, so in ninety eight, so we're three years away from thirty years. Then I moved to WordPress because in two thousand and one my office was headquartered in two World Trade.

During nine to eleven, I got my head trader on the phone and he just gave me a running that ration of everything was going on until the tower collapsed and the cell connection dropped, and I wrote it up, sent it to him and said, what do you think You're okay if I just throw this up on the side to let all our clients know we're okay. He's like, yeah, sure, do it, and I wake up the next morning there's one thousand emails from people. It was one of the

earlier first hand reports. I'm convinced that is why typead offered me a beta test with their newfangled Wizzywig blogging software. From there, I eventually ended up at WordPress. But I've been writing publicly for let's call it twenty five years, twenty seven years. And one of the things you learn when we were younger is if somebody is kind of upset at your writing. Well, they have to take a sheet of paper and a pen and they have to scribble a note and type it up and send it

into the editor. Then the editors review all these mail that comes in, and three weeks later, on page c seventeen, Deer ad that Ridoltz is a schmuck and here's why, and blah blah blah. There were gatekeepers, There were guardrails. It wasn't just hey, I have an Internet connection and therefore I'm entitled to shit all over whatever you did. And I'll give you. I'll give you example. You mentioned Michael Lewis. One of Michael Lewis's books came out. I

don't remember if it was Flash Boys. I was just talking to him Friday. He has a new book out now also, so one of his books come out and for whatever reason, not controlled by him. This is strictly between the publisher and Amazon. The Kindle version doesn't come out for thirty days, and a whole bunch of people are giving the book one star reviews because the Kindle and I just want to slap these people upside their heads. And it's like, first of all, most of you are

not qualified to write reviews. Let's just start there. Most of you are bad writers. You're terrible readers, like I'm amazed at reading comprehension, a broad indictment of the American education system. But then you're winding me up. I'm going on a rant. But then it's like, what do you have any idea? How much this is my second book, like the last one was fifteen years ago. That's how much work goes into it. Look look to the sequel for this coming in twenty forty. It's a pain in

the ass to write a book. It's a lot of time, it's a lot of effort. It's a lot of work. You submit the manuscript and then the editing process starts coming, and then you're back. And then once the book has published, the promotion and someone some I'm going to curse again. Some asshole says I have to wait four weeks for the kindle version. Ooh, I'm gonna give it one star. It's like I had I had comments on my blog during the Golden Age of blogging. At a certain point,

I just kind of got to reach it. So here's the answer to the contrarianism, long winded way. At a certain point, I'm like, yeah, this is no longer worth it. It's trolls, It's people trying to promote their own bullshit. It's spam. It's before we knew what bots were, it was bots. I'm like, hey, and I wrote like a two thousand word missive here's why I'm shutting the comments down. It's a shame, but it's the tragedy of the commons. Anytime you have a public space. Most of most people,

this is the funny takeaway. Most people are kind, decent human beings. So if only one percent of the world are assholes, hey, there's eight billion people in the world. Guess what you know, eight billion people, that's still eighty million assholes. That's a lot of assholes. And because they're assholes, they spend a lot of time online. And it's you know, you saw it happen with Twitter. Twitter. This is long before Elmo bought it. Twitter started circling the drain a

while ago. It just got worse and worse and worse.

type it, and it's just become. And you know, he's kind of like a sesame Street muppet. You know, if you know his history, if you know that he didn't found PayPal, he didn't found Tesla. He's really good at finding a parade and hopping in the front of it. He didn't find found Twitter. I'm trying to remember if he even found its space sex. He may have been

there at the beginning. I don't really remember, but you know, he And this is to get back to the question how you deal with the slings and arrows of other people in the industry. The reality is that back in the day, listen, when we were growing up, every library had that crazy guy outside, whether he had the aluminum on his head or not. What the Internet has allowed is all the crazies to link up and actually form a movement solo kind of wacky people who believed in

things that weren't true. You know, they they've found each other through the Internet. So I've kinda I've kind of become quick to dismiss nonsense. I got into a Twitter spat with the founder of Chewy who said something very ignorant about short sellers. There have been a lot of fraud, and his shop is perfectly legitimate, but there have been like Overstock and all these companies that had accounting fraud. And why is it that everywhere there's fraud. You know,

short sellers ferret out fraud and identify a mispricing. Hey, the market hasn't figured this out. This shouldn't be one hundred, this should be twenty. And why is it that every time someone complains about short sellers you find out that there's some sort of terrible garbage going on in the company. So I just think he didn't know better and said something, and I kind of mocked it, and he sicked his three million, you know, followers on me, and so I

don't know if I don't think he didn't intentionally. It's just that you know, young dumb on the internet. Hey, they're entitled to slag me because they paid twenty seven dollars a month for an Internet connection. They're experts now, and like some of the younger guys, it's like, dude, what's going on. I'm like, oh yeah, let me just mute that conversation. All right, it doesn't exist guys like us. The internet is a room in the house. We go

into the younger generation. The Internet in real life are the same thing. So like you could you could be very online, or you could be two online. So I think that something happened. Oh so I've been doing a bunch of pods and videos and I started going through the comments on one of the YouTube videos and I started laughing out loud. It's like, this is why I think it's like twelve years ago, I turned off comments and I had comments off on my Bloomberg and my

Washington Post column. Not because I don't want to engage in spirited debate, but there are rules for debate, and there's got to be like a basic fundamental understanding of here's what the topic is, here's how you can debate it. My I love mixing it up with people now. Moot

court was my favorite part of law school. I'm very happy to debate anything in the book, anything, But then, you know, as a friend once said, you know, when people are wrapped in a glass and steel vehicle and they're protected by five thousand pounds of you know, a vehicle moving fifty miles an hour, they'll flip you off, they'll give you the finger, they'll tell you to go fuck yourself, they'll yell whatever they want out the car.

You would never do that as a pedestrian or in an elevator, probably because you get your ass kicked, but also because that sort of screen of safety disappears. The Internet, unfortunately, has a tendency to encourage people's very worst behavior. And you know, it's not social media. Everybody complains about social media. It's algorithmic social media that is designed to reward attention and outrage, and they do it by tickling your emotions

and getting you frustrated and getting you angry. John Stewart calls Fox News bullshit Mountain. Algorithmic social media is the same way, and the fascinating thing you mentioned Fox News and CNBC. It's not all of them. You just have to pick what's worthwhile and useful and ignore the rest. By the way, CNN MSNBC, Bloomberg TV, Forbes, The Wall Street Journal, The New York Times, The Atlantic, go through all of them. Some writers are better than others, some

ideas they're better than others. It would be really, really helpful to us as individuals to be better critical thinking thinkers have an ability to understand framing and context. The world is complicated and filled with shades of gray. Anybody who reduces these things to a black and white thumbs up or thumbs down binary outcome, they're doing a great disservice to themselves and to everybody else. And so why

why don't I care what other people say? Either they don't understand the whole framework, they don't understand the math inside. They're not picking up the nuance. More often than not, they read the headline and that's what they form their opinion on.

D posters. You look at them out of focus and the dolphin jumps out. That's what was going on in the mid two thousands. If you looked at what was going on in the economy and the market correctly, it was pretty clear shit's about to hit the fan, right and it's at the time I was very public about this. I went on Cudlow's show after the I don't believe in forecasts, but I got into a debate with the editor way back then of BusinessWeek, Hey, you're doing your

big annual forecast issue. Why don't we run a little counter programming and talk about how no one's won this two years in a row. The outcome is random. You move the end date forward or back twenty four hours the whole number, order show the whole thing is and that the editor says, it's a double issue. We sell a shit ton of advertising. Do you want to participate or not? So I put in I had written rein Hart and Rogoff wrote a piece to academics that Harvard

and I don't remember whether they're married. I don't remember where. Maybe it's Harvard, MIT or Harvard and Boston College, but they're married. And they write this piece that looks at five financial crises. It's Helsinki, Mexico, the US, Japan. I always forget the fifth one, whatever it is. And it turns out that if you have a leveraged base financial crisis, too much debt and it blows up, real estate has a tendency to drop twenty five to thirty five percent.

By the way, that later that that paper later gets expanded into this time is different. Eight hundred years of financial folly by them. So I take that, let's take thirty percent as the average. What would happen to the dow if real estate fell thirty So I write up the series Forthstreet dot Com I did it with the Dow because the S and P five hundreds, five hundred companies, it would have taken forever to do. Hey, I could

kind of spit all my way through thirty companies. Long story short, I come up with a number at the time when the Dow is like thirteen thousand and change of sixty eight hundred, like down fifty percent or so, and so I dutifully. After I hang up the phone, I go back to that piece. I pull out those numbers. I put it into the Business Week forecast, and Dow sixty eight hundred. I don't remember. The SMP was like six eighty or six ninety something like that. The NASDAK,

I can't even remember the numbers. They were so low. Cudlow brings me on, and I've been doing his show pretty regularly, and he brings me on and basically mocks me for twenty minutes, and I'm like, Larry, this is a thought experiment, and here's here's what nobody is thinking about. This has been a backward real estate driven economy. Normally, people get jobs, they get raises, they go buy houses. Not Hey, we're cunning rates to zero. Everybody borrow money.

Anybody who could fog a mier borrow money go buy houses and then that stimulates that's backwards. That's not how this is supposed to work. And look over here at we're selling all these subprime mortgages and collateralizing them. That's the poison, that's the toxin getting into the bloodstream. All of this ends badly. And he's like, but look, everybody else is up here and you're all the way down here. I'm like, so for about a year I looked like a fucking idiot. And I remember going on CNBC with

my friend Peter Buchfar, He's a market strategist. Elsewhere I'm talking about housing and the impact on markets. He's talking about rates and the impact on profits, and the anchors literally, I want to say. This was like late seven. Our offices were downtown forty fourth Street and forty sixth Street. We were near each other and Madison and like fifty something was the remote CNBC studios, and the anchors laughed

at us on the air. Peter bookvar please reach out to Bob and confirm this, and we kind of we were walking back to our offices down Madison and just kind of hey, either we're really right or we're really wrong, because they just laughed us off the air, like we really look like idiots. And I'm like, I don't know

how much longer this goes. And you kind of see it in the movie The Big Short, even though Michael Burry makes his clients hundreds of millions of dollars, like, the two years heading into the collapse is just torturous for him. So I had nothing like that experience, but I understood, gee, you know this doesn't make sense. I know markets go longer and higher than anyone could expect.

So the funny part about that was, as soon as the shit starts hitting the fan, Larry starts having me on every week twice a week, I'm getting called constantly. So the fact that I more or less got that right, and then on by dumb luck, Henry Blodgett of Business Insider and Yahoo invites me on on I had I had said to a friend, Hey, the sixty eight hundred thing is, you know, a little embarrassing but starting to turn.

If please, if we get anywhere near that, don't let me be that jerk that doubles down and says thirty four hundred. So I'm on vacation when we cross sixty eight hundred and I get a phone call, So what are you doing. I'm like, I'm literally writing the note right now. I send it out Henry Blodgett immediately, Hey you want to come on Yahoo TV? Sure? So the biggest baron Wall Street, the guy who warned you about sixty eight hundred, seven thousand points ago. What are you

seeing now? Hey? Everything we're looking at is this pinned negative as it gets. Cover your shorts and go along.

And then, not only had I been blogging for forever, but when I moved over to Bloomberg, I told them I wanted to fool around with this new fangled podcast thing. They're like, what do you mean, Well, I want to speak to intelligent, accomplished people and have long form conversations. What do you mean long form like ten minutes? No, like two hours? And everybody laughed at the time. The way I the way I pitched it was Mark Maren's WTF meets Charlie Rose And then a few years later

I had to amend that, but with pants on. So Bloomberg came back to me and said, tell you what if you get us thirty two minutes, thirty two minutes of your content traffic, news, sports, weather, commercials, that's an hour of radio. Have at it. Whatever is longer than thirty two minutes will put online. No one's going to listen. But what the hell? And that was eleven years ago, five hundred and fifty episodes ago. And I've kind of gotten to meet everybody in the industry. And I'll never

make someone who's terrible look good. I will give somebody an opportunity to say, who are you, how did you get that way? What's your investment philosophy? What can we learn from you? And so I think I've kind of earned my way into a pass, even though I kind of you know, let's be honest. For most of its history, Wall Street was not Mom and Pop's friends. Wall Street existed for the wealthy, by the wealthy. I grew up

a really middle class kid. I mean, when I was younger, my dad was the business he was working for imploded. By the time my younger brother was in high school. Well by then he had switched careers, launched the store, and they were doing well. But I grew up very, very middle class. Went to a state school, paid for it myself, went to a local law school, paid for it myself, working my way through both, and so I

never intended to go into finance. It was never like, there was never a plan here other than that kind of looks interesting. I got a tour of my buddy's trading room. He's like, why don't you do this? You're good with computers, you're good with numbers. You would be a natural at this. I'm like, really, do you like being a lawyer. No, I hate being a lawyer. Well, then try this, and I did, and you know, thirty years later, here we are.

get down fifty percent. We've had we've had the financial crime sis, even the dot com implosion where the Nasdaq was down where all the technology companies were listed, was down eighty one percent, But I want to say the S and P five hundred was down something like thirty eight or forty per didn't quite get that low. So it's really really rare. And yet coming out of the financial crisis, all I heard for a long time was

the FED is repressing assets they've the manipulating markets. They've cut rates to zero, they're forcing people into the market. And I frequently found myself speaking to people saying, you know, over at NYU Start School of Business, around the corner on McDougal is Cafe Reggio, and if you're a grad student, you can go get some cappuccino, smoke clothes, cigarettes, stroke your beard or your goatee, and philosophically debate the propriety of what the Fed's doing. But you're an asset manager.

Your job is to manage your client's assets. If you want to fight the FED, well knock yourself out. But that's a different job than the one you were hired for. And people don't like hearing that, and they especially don't like hearing how come everybody who's anti FED has wildly underperformed their benchmark for the past fill in a blank one, three, five, seven years. It's almost as if whining against the central

bank is an excuse for poor performance. So stuff like that doesn't really win you friends, but it's, you know, more or less true. It's uh. I know people who are former bank regulators and former Federal Reserve researchers, and they've gone into academia. Those are the right people that should be debating FED policy, and you know they have because that's what they were hired to do. But if you're hired to manage someone's bond portfolio, well then shut

the fuck up and manage the bond portfolio. Whining about the FED isn't gonna help your your numbers. So I am occasionally a fly in the ointment. I am occasionally somebody that can piss people off, But for the most part, I have tried to make finance smarter, make it fairer, focus people on what matters, Debunk a lot of nonsense, and just keep mom and pop investors focused on, you know, purposeful investing. What are you saving for and why? Right?

What's the like money money, more money for money, More money's sake doesn't really get you anywhere. But if you're saving for a purpose, it could be five point twenty nine for kids college, for one K for retirement. Maybe you have enough money you're saving for philanthropy or generational wealth trener, whatever it is. Once you figure out the purpose that you're aiming your investments towards, well then you can figure out the best route there. With the least

taking you know, returns or a function of risk. You have to assume some level of risk risk free returns or what you get from the ten year treasury because you're guaranteed to get your money back now. Yielding four percent not a great return when inflation's two and a half three percent. Stocks tend to be eight ten percent of a long term better return. But as we saw last month, they don't just go up. They go up and down, and so you have to be prepared for that.

So if you, you know, if I can get people focused on here's how to do this, here's how to not shoot yourself in the foot, and here's how to manage towards a goal. You know, more for more's sake, is not a goal more because I want to leave all my money to the Humane Society because I don't like how we're treating cats and dogs. Hey, now you have a goal, you know how to we know how to map a path to that, and you can assume the right amount of risk relative to that purpose. And

so I think I'm sincere about that. Maybe that buys me a little bit of goodwill. I've had enough people call me an asshole, so I'm clearly pissing some people off. And I think as you read the book, you could tell so my wife got me this. She's like, now you have some fucks to give, because previously I had no fucks to give. Oh, you don't, dude, this was the cover story you wrote on the cover of Fortune magazine. Here's why Cisco is the one stock to own. You

have to own this. Don't own Microsoft, they say in the magazine. Own this one. Don't own Ge they say. They turn out to be right about that, but Microsoft, they were wildly wrong. And ever since that cover came out in May of two thousand, we're twenty five years later and that trade is still a loser. It's still below where they recommended it. I feel someone should be calling out people that put bad ideas out into the ether, and people will, unfortunately put money to work based on

what they're reading, what they're seeing, what they're hearing. And so I admittedly cherry picked the most egregious examples, and some of the examples in the book are just really horrifyingly egregious, But the lesson within the each is still the same. Whether it's the idiots who paid their asset managers a billion dollars. Two asset managers manage a family office for one family and managed to squeeze a billion each in fees out. That's egregious. Recip's a locutor. The

thing speaks for itself. I'm sorry, but I don't care how good you are. You shouldn't be getting a billion dollars for giving anyone advice, and so I thought that was worth calling out. The best selling personal finance book of all time is Rich Dad, Poor Dad. Robert Koyasaki always mispronounced his name. Thirty two million copies of that book sold. I haven't read it, but I've seen him on Twitter. In every week he's four care or every year he's forecasting an economic crisis and a market crash.

Literally since two thousand and nine. Somebody else on Twitter found all of his tweets stacked him together, and it's like, oh my god, this guy has just never recovered from eight oh nine. He's been negative and bearish and has like two million Twitter followers, which is unfortunate because those poor bastards, if they listened to him, they missed what

was one of the greatest decades in market history. Every year he forecasted a crash My favorite forecast of his was twenty eighteen, sell residential real estate in the US, big housing crash coming. I'm hard pressed to find a better time to buy residential real estate in the United States than twenty eighteen, even with the dumb luck of

the pandemic. But here we are. Housing topped out in five oh six, we underbuilt single family homes for a decade, and by twenty eighteen, forget the pandemic, we were Depending on who you listen to, the Architects Association, National Association, and Realtors National Builders wear two three four million homes short as of twenty eighteen. Because we underbuilt homes for a decade. And this guy is telling people sell the US real estate. So nobody calls these people out. I

kind of feel somewhat obligate. That's my neuropathy, is that I just can't let the shit go. I have to call it out.

be kind of sort of eventually efficient. Now they're pretty efficient, meaning that if there's fraud out there, if there's something wrong with a company, forget fraud. If a business model is crapping out, short sellers are usually the first ones to figure that out. They tend to be negative because they're betting on things going down. They tend to see the glasses half full. But they serve a useful purpose.

They are the eyes and ears you know. Short Sellers are the one who identified and run as a fraud. Short Sellers are the one who identified world com overstuck. Go through the list of all the big frauds of the past ten twenty thirty years, It wasn't the SEC that uncovered most of these. It was typically short sellers. In fact, as much as you want to believe the SEC is the one who found out about Bernie Madoff, a handful of short sellers looked at that and said,

none of the strategy makes sense. This is clearly a fraud. I know three or four people quants that looked at that looked Renaissance Technologies. Is a quant that did that. I'm drawn a blank on the guy's name. A former MIT professor who wrote Beat the Dealer Right. He was one of the people there. There were a handful of folks who looked at who ed Thorpe, who looked at at made off and said, something doesn't smell right with this.

It wasn't. And he managed to skate through the dot com implosion, but he couldn't skate through the financial crisis. The SEC didn't figure it out. It was the market crash that you know, the tide went out and he was naked and everybody saw what was going on. So short sellers serve a really important purpose. It's become really challenging to do. People have been abusive with litigation. The SEC.

You know, they don't like being shown up. You would think they would work with short sellers to reveal to uncover fraud, but instead it's that they haven't been especially nice. And the way to make money, there's two ways to make money as a short seller. So the way it works is I borrow stock from you and then I sell it, and when I buy it back lower, I return the shares to you. Right, That's how and I pay you a fee for that. That's how short selling works.

So that's one way to make money as a short seller. The other way is to write up research reports. But that whole business, that side of the business. You know, back in the old days, when you would trade, it would cost you fifteen to twenty cents a share. Then it was ten cents a share, then it was five cents. And the way research shops would make money is, Hey, run all your trading through us. We'll give you all

our research for free, soft dollar. And so at five cents a share, people doing tens of millions of shares trading a day. Hey, it adds up to you know, ten million here, ten million there. Pretty soon it's real money. That business is really shrunk dramatically, so the you know, there is a need for newspapers that business says, and

local reporting that's shrunk. The fascinating thing about the Internet and digital and modern technology is a lot of the institutional building block blocks of our society have had their legs cut out from on them. Between Craigslist and eBay and then all the dating apps, and then all the bring a trailer and cars and bids like and Zillow. Each of these were giant real estate, giant newspaper advertising sections, the classifieds, garage sales, used cars, house listings. That's all gone,

and you know, you lose newspapers and democracy suffers. Well, the same thing happens in the market. The business of short selling has becomeing recently difficult. Trading is essentially free these days, so it's really hard. It's one thing to say, we have to trade, all right, run it, give some to him and some to her and some to them, and you know, well, that's how we'll pay for our research, as opposed to, oh, trading's free. I got to write a check for a quarter million dollars. I don't think

I want to do that. And so that business has become really, really challenging. And it's unfortunate because they served an important purpose in the market.

stuff that's just clickbait kind of nonsense. It pisses me off, all right, so I get so let me sum up, Dave Ramsey, Hey, get your personal budget together. Spend less than you earn, don't run up credit card debt, invest in yourself via education or whatever. Invest in your long term by saving for the future. This is really, you know, the sort of stuff we should be teaching in high school, you know, back in the day when there was home ech,

family budgeting. A lot of this stuff is pretty basic, and some people really need to hear this over and over again. Where it starts to get a little crazy is what I call the spending skolds, and it's never buy a sports car, don't spend a lot of money on a boat, don't do this, and they leave out the last part of the sentence, which is if you

can't afford it. Right, I'm a boater. My first boat was like a forty dollars row boat, and then a kayak, and then eventually a little thing with a little outboard, and now I have During the financial crisis, I bought a boat that was a short sale. The guy was about to lose it to the bank, and you can negotiate. So I've had that c Ray for twenty years. But the takeaway is I could afford it. If you're buying something as a flex, well, you're wasting your money, nobody.

And that's the flip side of Instagram and TikTok. You know, you just see the tip of the iceberg. You don't see the two thirds that are below the waterline. You see a big house or a fancy car, or jewelry or watch whatever. You're only seeing the asset. You're not seeing the liability on the other side of that. You're not seeing Hey, it's nice that you have a two million dollar house. How much is your mortgage? Two million dollars? All right, so you have nothing. Here's the asset, here's

the mortgage. They offset right, that's a very different experience. And when I see people flexing and buying things that they can't afford, that's where D Dave Ramsey and Stusie Orman one hundred percent right, where I kind of get a little pissed. Is you know, if you buy a latte, you're pissing away millions of dollars. Hey, not for nothing. I don't want to be a top ten percent or a top one percenter. If a five dollars latte is

the difference between a comfortable retirement or not. You're doing something else wrong. You're just doing something else wrong, no matter. And there's a concept called denominator blindness where you just see the numerator but not the denominator. All right, So five dollars, I guess over thirty years, you could say it extrapolates out to hundreds of thousands of dollars. That's

before you inflation adjusted. But hey, over that same thirty year period, how much is your earning going to go up if you're not buying a latte for the next thirty years because you're only making one hundred grand now, well, thirty years from now, you're not still making one hundred grand. You're probably making closer to eight hundred grand. And again,

who cares about a five dollars latte? When the funny thing is, when when all the latte crap came out, we were looking at about thirty years of no increase in wages for the bottom sixty percent of earners in America. And to me, rather than waste my time scolding people not to buy a latte, I think you should look at Hey, how come nobody's income in the bottom on a half of society is keeping up with inflation. We're watching hell health care go up nine percent a year

for the past twenty five years. We're watching education go up that much. Wages are badly lagging for pick a number, bottom forty fifty sixty percent of society. I don't think lecturing those people about five dollars lattes is going to help them. What would really help them is trying to

figure out why we are not keeping up wages. And that was the great irony of the pandemic is suddenly, not only was there a giant fiscal stimulus that made its way into everybody's pockets, but a lot of companies quickly realized, oh, we're competing for a modest pool of workers, and the only way we're going to be able to keep find the people we need is by giving them

a salary increase. I know a lot of folks aren't thrilled with Amazon and Bezos and the crapification of the site, but I think it was around twenty sixteen they realized, hey, we have a shit ton of money. We don't pay taxes because we don't show a profit. So they raised their minimum wage to fifteen dollars nationwide and scooped up all these people. And for a couple of years you would go through a Walmart and it looked like crap.

They couldn't hire enough people and their incentives were really misaligned. So over the past let's call it ten years, there's been a pretty big catchup for a lot of people. I think medium wage is up to like eighty thousand dollars now in the United States from like forty three. Not that much. That not that far. I'll go. Let's just take a quick look to see where we are. I mean, eleven ninety two per week, that's that's not bad. So when I see people complaining about five dollar lattes

or don't buy a sports car. Yeah, if you can't afford it, don't buy it. But if that's something that floats your boat and you want to go do it, and you're going to hang out with friends, you're gonna have fun going on road trips. And you know the thing about the I had a conversation with one of the people I work with who has a lake house. He lives in Michigan, and he, you know, is debating getting a small boat and he could easily afford it and kind of was hesitant because of the scolding. And

I'm like, the problem isn't never buy a boat. By the way, the boat is the least expensive part of boating. Then there's repairs and gas and maintenance and dock fees and winter storage and beer, and like, the boat is the cheapest part of boating. If you can afford this and you want to spend time with your family and your kids will go out and you'll you know, have great experiences and create memories, knock yourself out. And he

bought the boat and it's been a blast. It's not about it's just too lazy and easy to always say no. I don't think you should just say no. I think you have to think these things through and put it into some context and find some nuance, and hey, if you can't buy it, afford a boat or a latte. If you can't afford it, don't buy it. But if you understand the costs and what goes into it, like someone did, someone did something, Never buy a beach house. Why don't you want to go to the beach and

relax over the summer. The most fun I have had is hanging out reading a book, listening to the ocean. Why should I not buy a beach house? Well, it's expensive, and there are maintenance costs and this and that. Listen, you could buy a two hundred thousand dollars shack, you could buy a forty million dollar mansion and everything in between. Just saying no kind of seems lazy.

And then it also ignored the other side of the equation. If you're also seeing your income go up and you're seeing you know, you're every time you bump up your salary, you put more money into your four oh one k. It worked out to be net of everything about what a car would cost, assuming there's still cars thirty years from now. So here's your choice. Never have another Starbucks or Blue Bottle or whatever your favorite local coffee brewer is.

Never have another one of their four five six dollars lattes, and thirty years from now it'll pay for a car or so right not, I'm going to bet thirty years from now they're probably not selling cars, or they're selling self driving cars and everybody is ubering everywhere, or not I have no idea, but it's not millions of dollars. You're not retiring. And I use the example of hey, the median income thirty years ago was twenty three thousand dollars.

Now it's twenty six thousand dollars. Now it's eighty something thousand. And the median home price was like forty five thousand, and now it's four hundred thousand. So now that's thirty years ago. So extrapola thirty years forward, and these hundreds of thousands of dollars in Latte save, it's really insignificant to homes that are going to be ten twenty million dollars in the future, and relative to salaries that are going to be half a million a million just for

the meeting and salary thirty forty years from now. So by just showing you half of the equation, you really miss it. I'll give you another example that I love and you by the way, there is a Twitter feed called TikTok Investors, and this guy goes out and picks out the dumbest, most ridiculous investment advice and financial advice on TikTok. You know, how do we maintain our lifestyle? We day traded Home says this handsome couple, what's their secret? We only buy stocks that go up. If they don't

go up, we don't buy them. And I'm like, are they purposefully channeling Will Rogers? Do they have any idea ps pandemic crash happens in twenty twenty two, they move into real estate. They're done with done with stocks. Hey, if you're on a boat on April fifteenth, you don't know any taxes, really, the IRS will beg to diff with you. In fact, the IRS had to put out a fact sheet forty two things that are on social media that are not true being in international waters. If

you're a US citizen, you still owe taxes. It's not a So one of the memes that he identified cracked me up. Somebody took the bag of groceries that Kevin from Home Alone bought, and way back then it was like twenty dollars and ninety cents. I think Home Alone was nineteen ninety or nineteen ninety three, something like that, so it was twenty dollars. The same bag of groceries today is fifty seven dollars. Oh my god, look at how much worse the American dollar is done. It's like,

wait a second. When I go to buy groceries today, I'm not using money I put aside in nineteen ninety. I'm using money I earned in twenty twenty five. So let's compare the groceries went up this much, how much have salaries gone up? And it turns out that salaries have gone up about ten percent more than the groceries went up. So in reality, the groceries are a little bit cheaper. But that's if you're just using your wages.

If Kevin would have taken the money he spent on groceries and invested in the market, well from nineteen ninety today it's worth two thousand dollars or some crazy number. I detail it in the book. He could have bought the groceries and still had, you know, ten x left over. The purpose of money is not a store of value. It's amazing people don't understand this. The purpose of money is a median medium of exchange change. You get paid

in dollars. You use those dollars to pay your rent or your mortgage, to buy the basic necessities of life, food, medicine, clothing, to pay your taxes, to occasionally buy entertainment, travel, movies, whatever, music, whatever, and to invest. You can start a business, you can put in the market. That's it. And when you look at money ten twenty thirty years later that's been invested, it's gone up appreciably. I always cracked up every time someone says, you know, the dollar has lost ninety six

percent of its value over the past hundred years. Why the fuck would you hold on to a dollar bill for one hundred years. Money only has value when it's in motion, when it's being put to work. If you want to sit on a dollar bill or one hundred dollars or one thousand dollars for a century and miss the opportunity to let it compound over time, time, that's on. You. Don't blame the dollar. My job is to get the dollars out of my hands as fast as I can.

The money comes in, I pay all my bills, and I put money into my four oh one k anything that's left and I pay my taxes anything that's left over. After that, now I have to figure out what am I going to do with this dollar that's going to either bring me or my family joy or bring someone else joy, or keep up with inflation and off that's the purpose of a dollar not sitting in a mason

jar in someone's backyard for a hundred years. But that's kind of and coming back to the original question, you know, what are they selling? Well, they're selling gold bullion, they're selling bitcoin, They're selling something. And the only way the story, the narrative works is if you realize dollars are not valuable. You know, I speak at a lot of public events and we open it up for Q and A, and in variably someone says, you know, what's your views on

the collapse of the dollar? But by the way, the dollar over the past six months has been pretty close to all time highs relative to other currencies. Remembered currency is always relative. Where else are you gonna go? You're gonna go to the Japanese yen? No, the Euro they have structural problems, the Chinese wand please don't make me laugh that we are the cleanest shirt in the hamper. There's no other way to describe it. So whenever and I get that question, I'm like, yes, you're right, dollars

are worthless. Their fiat currency has collapsed. My office, my firm, offers a very free service. Send me all your worthless dollars, and we will dispose of them properly. You don't have to worry about being weighted down by all that useless Fiat currency. And everybody kind of snickers. But the point is you get paid in dollars, You spend your dollars, you pay your taxes, and invest in dollars. That's all it's supposed to do. It was never supposed to be

a store of value. And it's shocking how obvious it is if you just think about it for a second. And these guys have been getting away with this bullshit for decades. I've heard that that was one of the things in the book. That man that was like I stubbed my toe on that twenty five years ago, and it's just slowly festered, and finally it all came out in the book.

very small number of stocks actually are profitable. Three have a plan, which you referenced earlier, You want to go. Four put your money in index funds. So if we look at that from the beginning, let's start with the forecast. The advice are you used to in even research? Are you saying, really we should ignore all of that?

My friend Jonathan Miller, my go to guy about real estate. Everything he writes about real estate is data driven, is based in reality, and he's been studying real estate for forty years, and on and on. I go through through the list of people who I find have some things in common. First of all, they've all they're all little seasons. They've been through cycles before, they know how the movie ends. They know you know this too, shell pass, So that's helpful.

They have a defendable process. They're not just throwing darts. They're not just getting lucky. They think about markets from a broad perspective, and their insights and way of analyzing things and sharing that information is incredibly useful. But like Sturgeon's law, you know, ninety percent of the stuff coming out really isn't isn't useful. So the people on my All Star list, and you know I had a limited to ten. Who's writing about music, it's Bob left Sets

and Ted Goya. Those are the people that I can rely on that I'm getting somebody who knows their industry, who knows the ups and downs, who's seen all the wartz in it, and basically can give you some insight into that, you know the fact that something's on TV on CNBC. I'm a big fan of Bob Pasani and Carl Kantonia. They're rational, they make sense. They could take, you know, what could be very emotional challenging things and

put it into context. My partner Josh Brown is on CNBC two or three times a week, and I could always rely on him to be a voice of reason when everybody's running around with their hair on fire. But there's a bunch of people I could give you more people from CNBC. Santoli used to be over at Barons. He's at CNBC. Very very Mike Santoli, very rational guy. I like the way he thinks about the world. It's historical, it's analytical, and you know, you could go through sector

bi sector. Dana Telsey has been covering retail for forever. Nobody understands the retail world better than her. So my advice to people is not to just say, hey, it all sucks, turn it off, because again, the world isn't black and white, it's nuanced. You have to be a little selective. You have to choose people who you know have a good track record. It's not just dumb luck. They're thoughtful, they're experienced, and they add value. There are lots of things out there. I had to stop my

list at ten. I probably could have made it one hundred. There are so many great substacks out there. There's so many great sources. You'll as you go through the book, you'll find I'm coding everybody from Derek Thompson to trunk fan to on and on people with an expertise in a specific area that I've been watching them for years and realizing, oh, these guys are or girls are onto something.

They're consistently more right than wrong. So I don't when it comes to you know, I don't want to just say turn off the TV, never open a newspaper, magazine again, just read nonfiction and books and novels. I think that's overstating, and I think you just have to be a little skeptical, be critical, and when you do decide to read someone on a regular basis and trust what they're saying, make

sure they're worthy of your trust. I don't want to say, hey, everybody's full of shit and everybody's wrong, because I know that's not true, but enough people are full of shit and so many people have been wrong. You have to really be a little selective into who you're following, who you're taking advice from, and TikTok and Instagram Are you are you kidding me? Every It's not just the irs.

I just got something from a friend. One of the journals of psychology has said had a whole article that all of this advice on how to manage ADHD on Twitter and TikTok. It's mostly wrong. It's not quite vaccine denial, but it's mostly wrong. And if you listen to this, you will it will not serve you well. And so

this comes up on a regular basis. I talk about the Dunning Kruger effect in the book, which is our ability to evovaluate our own skill set, and we end up, as it turns out, that is a discrete skill, separate from the underlying skill. And so we have a tendency to think we have an ability to do something when

often we don't. And then the next adjacent step to that is something called epistemic trespass when somebody is an expert in this area and they're like, what the hell, I'm an expert in this, I'm going to try my expertise in that field adjacent field When all right, you spent thirty years researching, writing, studying about this. You have a point of view, and you have a good track record. That's great in field A field B is wholly unrelated. Why would you imagine you have an expertise in that?

But that's how us humans are. We step over the line, and you know, I give a lot of examples of people who are great real estate investors but terrible economic forecasters, and so epistemic trespasses is just another one of those examples. So if you find people who know what their skills are, stay within that, like the tennis, operate within their own abilities by all means, subscribe to their substracts, watch them

on TV. But you have to go through that, you know, information hygiene process, that filtering process to get to the good stuff, because there's so much let's just call it noise that's distraction and doesn't help you get to where you have to go.

going to get what the market gives you. That's your starting point if you are compelled, if this is the sort of thing that you really want to do, and you want to decorate the tree, says two Jews talking about finance, Well, the index is the tree, The ornaments, the lights, the garland, those were all the little seasonings.

If you want to buy a tech fund, or if you want to add a shareholder yield fund or something like that, sure you could put whatever stink you on it knock yourself out, as long as you're starting from a core point of I'm not market timing, I'm not stockpicking. I'm just gonna buy the whole market and let it do its thing. History has told us that's the best way to accumulate wealth. When we look at the data, and there's there are a number of The SPIVA, which

is the SNP Investor Analysis. Each year they do an annual report and they tell you how many mutual fund managers beat the index, beat their benchmark, and in any given year about half of them, a little more than half of them fail to beat the benchmark. So you're not even a fifty percent in year one, you go five years out net A fees, it's eighty three percent of them fail to beat the Plane Jain Boring index.

You go ten years and you're in ninetieth percentile, and by the time you're twenty years out, it's essentially no, oh buddy. A handful of people, the Warren Buffets, the Peter Lynches of the world their household names because there's so few of them. But for those couple of guys, and even Warren Buffett will tell you the bulk of his outperformance was in the early part of his career. The latter part, you probably would have been better off

in an index than Berkshire Hathaway. That's just the academic research, that's just the math. Start out, and you know, our whole business is so asked backwards. I started attracting capital from people because I would say, here's how you should invest. You could do it yourself. Buy a broad index. You want to diversify a little bit. Okay, you can own a little overseas assets, you can own some momentum, you can own shareholder yield India and Japan, look interest, whatever

you wanna tag onto that. Knock yourself out, but start with this. Rebalance it every three years to whatever you're starting numbers are supposed to be. You know, if it's supposed to be sixty percent, it's run away, and it's now eighty percent of your portfolio. Right, cut a little back, put some of that into other the other holdings you have, and that's it. You're good for the next thirty forty years.

Our whole business really grew from that because enough people said, yeah, that makes sense, but I don't trust myself, and I don't have the time or the interest. You do it, and so we started managing money for people kind of that way. The core is a broad index. Some of it's US, some of its overseas. We add certain flavors to it. Here's a little here's a little momentum, here's a little emerging market small cap value. Ultimately, ten twenty years down the road, you kind of end up in

the same place. Anyway, we want to reduce a little volatility for our clients. We want to get to the same place, but without the crazy swings like we've seen the past few weeks. But it almost doesn't matter what the portfolio is. What matters is your behavior, because we see time and time again, if you just whatever that portfolio is, if you just let it do its thing for a few decades, it'll compound and add up to a shock shockingly large amount of money over the decades. Instead,

we try and get in the way. I don't like this president, I don't like the way this market looks. I don't like I mean, I use the examples of Bush and Obama and Biden and Trump, and you know, there are some studies that have shown when a president of one party gets elected and you're looking at zip codes by how that zip code voted, if they didn't vote for that president, they end up selling a lot of equities by zip code and missing the ongoing rally.

And it happened with Bush, it happened with Obama, it happened with Trump one, it happens with Biden, and it happened again with Trump two. That the fact that you don't like this guy's politics leads you to sell stocks. And you know, you go back to I think it's nineteen fifty, right. If you invest a dollar when Democrats were president, it turns into something like fifty two dollars. If you only invested when Republicans were president, it turns out to be forty eight dollars, And if you invested

the whole time, it's two thousand dollars. So markets don't really give a crap about presidents. Now, if you're retiring next year and you're unhappy about all this volatility, Monday,

there are tariffs Tuesday, they're off Wednesday. This we're recording on a day where a market scream hire because over the weekend Trump said, you know, maybe we'll reduce some of the tariffs and we'll make it more focused and it won't be as crazy, and like it was an offhand remark, and the next thing, you know, the markets to the races. So if you sold last week, you missed all of this. It's impossible to time his sort

of crazy, erratic comments. And so I understand if you need the money in the next year or two, this is really disconcerting. But if you don't need the money for ten years, you have to look past the other side of this. Presidency, just as you had to look past the Biden presidency where stocks did really well, and you had to look past the first Trump presidency where stocks actually did even better despite the pandemic and everything.

Trump had one of the best stop market returns from when he took office from twenty seventeen until when he left in a cloud from January sixth. It's not whose president. The presidents get way too much credit when the markets are doing well, and they get way too much blame when the economy and the markets are doing poorly. It's not just who's in the White House. It's a whole lot of moving parts. Politics is really just a teeny part of it.

in a constitutional crisis. Two things, are you saying that the market exists outside of all of this, or you choose not to pay attention, or is it possible that we're entering a new era? You know.

assume that whatever he does goes to hell. Now the narrative has changed in a couple of ways, because initially it was hey, tax cuts, Hey deregulation, business friendly environment. Markets ran up in anticipation of that, right up until February twenty twenty five, where oh, this guy's serious about these twenty five percent tariffs? What the hell? Then they were on again, off again, on again, off again, And the sentiment today seems to be, all right, this is

all you know what, China hasn't treated us fairly. Maybe this should be more tariffs, but we're gonna definitely take it down a couple of notches. So those two things are right. I am not comfortable with a lot of the autocratic things we're reading about. And you know, if you read jv. Last and the Bulwark, he's pretty negative about the outcome of all this. The debate is will or won't Trump follow what court's rule? Is the rule

of loss still in effect. After January sixth, I wrote up an analysis and kind of came to the conclusion that how is it possible that the US is four percent of the world's population, Right, we're about twenty percent of global GDP, but we're like fifty something percent of the total market cap of all the publicly traded stocks in the world. And the answer was three things, so sanctity of personal property, sanctity of contracts, and rule of law.

And I kind of spitballed. That's worth about twenty five trillion dollars, right, And so that was the problem with January sixth was there's a whole political and partisan issue. There's a whole debate about the pardons. I don't really think there should be any debate there. There's a whole lot of stuff that's going on that a lot of thoughtful people are really unhappy with, regardless of party affiliation. But the real question is, hey, is there is there

still going to be a rule of law? And some people are very negative and think that a lot of

these things. We've seen some deportations and some issues. You had John Roberts, Chief Justice of the Supreme Court, who had an embarrassingly laughable, you know, dread Scott type of a opinion about the personal exemption from criminal liability for presidents, even if they're not quite doing their jobs, if they're sort of operating outside of that, Like law students centuries from now are gonna mock every jackass justice that signed that.

Their whatever reputation they had flushed down the toilet. But now you have John Roberts coming out and rebooking, rebuking Trump for implying that courts don't apply to him, judges don't apply to him. I am not thrilled with how many you know, the Camelot and the Kennedy's were the best and the brightest. I'm not all that keen about uh, the worst and the dumbest that he surrounded himself with.

And I can't disagree with friends who say he's doing permanent damage to a man in society, to the government. Michael Loui we talked about Michael Lewis's new book, Who Is Government. The stories in the book about what functions governments perform, the US government performs, and how crucial it is for the successful functioning of the US society is so perfectly timed. He just has a knack for skating

to where the puck is. And it's really disheartening to see a lot of these things that what this is really a mass rapid privatization of the public commons. Here we are back to the tragedy of the commons. Somebody has figured out how to capture a lot of the value of the US government and bring for the private site. So that's the negative, that's the downside risk the positive,

and it's always hard to be positive. You go back through history and you had the Red Scare and McCarthy, and you had, you know, the Japanese internment during World War Two, and then you had prohibition, and you had you know, to say nothing of the Civil War, and then all of the parts of the South that you know, never quite got over the Civil War and put a lot of laws into place that were just overtly unfair

and overtly racist. And so we've come through a whole lot of problems in the United States, and it always feels terrible, it always looks terrible. I want to be a glass half full and not a glass half empty sort of guy and say, on the one hand, the United States has survived all these things. And then the second part of that is, and there's so much money at risk that I can't imagine that, you know, all right, a couple, a couple of the big law firms have

knuckled under, and that's always disappointing to see. Paul Weiss in particular, is getting slagged these days for really whimping out. But they are part of the judicial system. They're part of the legal system, I think, and I'm hopeful that the financial system. You know, you saw what happened. He was acting erradically and saying wacky things and doing crazy shit with tariffs, and the market said, hold my beer, we don't want anything to do with this, and it

started selling off. I don't think in my entire thirty years in finance, I have heard so much angst and anguish and complaints about a ten percent drop, you know, ten percent happens twice every three years, about once every eighteen months. It's not clockwork, but you look over a century, that's about the average. And so I think the takeaway is and I think, what the reason we had those constructive comments from him? He tweeted, once the Dow is

down a thousand points in two days. Any president that has that should be impeached. Well, bad news. Don the Dow has been down a lot more than that on a short number of days. Your own standard is, hey, you're screwing up. If the market is your measure, and I know he looks at the market, it's pretty well understood. So I think that's a little bit of a check on his worst impulses, because if he does stuff and the market says, oh no, this won't stand that scene.

I don't know if the courts are going to be a check on him. Certainly, unlike he's the president forty seven. When he was president forty five, there were pe adults around him that kind of restrained his worst impulses. He does not have that now. Now he's surrounded by people who were of the same ILKs and gold, to say nothing of the unelected Elmo doing his thing. So that's a real risk. It's a genuine risk. The follow up post to Lose the Noise was seven potential errors, and

I named recession, market crash, dollars, geopolitical chaos. I went through like seven things and said, hey, four months ago, these were really low. Now they're still kind of low, but they're somewhat higher than where they were before January twentieth, and so I don't see a recession imminent. I don't see a market crash imminent. I don't see a collapse of the US dollar happening anytime soon. But all of those things are now higher probabilities of occurring than they

were before the noise. I don't you know, people think they know my politics, They really don't. My favorite thing about Biden was I didn't have to hear from him every day, and the constant noise out of this White House will see if it kind of fades. So if you remember in twenty sixteen, when Trump was elected but not inaugurated until January twenty of twenty seventeen, he was tweeting at people, he was calling them names. I love Tim Apple, Tim Cook of Apple was Tim Apple, And

the first couple of months of him doing this. Every time he would single out a company, the stock would get shellacked. For a couple of days, it would get whacked, and then people kind of figured out, oh, this is just paper tiger stuff. He's not going off after any of these companies, unlike China where they're unhappy with a couple of companies and they disappear the CEOs for a few years. We still have contract rights, property rights, rule of law, and it's worth tens of trillions of dollars.

So he hasn't been doing as much of that nonsense as he did last time. I think he's been focused on a different agenda. So I don't again it's nuanced. I don't want to just say tune it out, because you really can't, but you have to put it into context. Then, one of the things I wrote in Tune out the Noise was, Hey, it's been three weeks of tariff stuff. Tariff stuff. Tariffs were on, tarafts were off, tariffs with Canada and Mexico, and then Canada and Mexico agreed to

do shit they were already doing. Then the tarafts were off, Then the taraffs came back, and then this taffs for Europe and taraffs for China. China is a much savvy, savvyer geopolitical player than I think a lot of people give them credit for. And so China turned around and said, what are the reddest of the red districts? Great, we're not buying your soybeans. You're gonna put tariffs on us. We're not buying your soy beans, We're not buying your cars,

we're not buying your liths. And they're going to say, you want to tarif us, We're going to tarify you back. Same thing kind of with Canada. What are you talking about Canada? Like when you build a car in North America. By the way, forty five negotiated the More North American Trade Agreement, which forty seven criticized. It's like, dude, that was yours. What do you mean? So parts are made in some places, they're shipped to other places, they're assembled,

they get chipped into other places. The tariffs that were proposed would have raised the cost of US cars. I think it was something like twelve grand, and Japanese cars something like eight grand. Even the Japanese cars made in all the plants. There's Honda plants here there's Tiota plants here, just as there's Mercedes and BMW plants. They didn't go to the Midwest. They went to the union free places like Alabama, and you look at all these different places

where these cars are made. I'm this is wishful thinking on my part. I don't know how this plays out. I don't imagine it goes on forever. I don't even think it goes on for four years. I think two. I'm hopeful that two years from now, you know, Obama got elected, big swing to the left. What happens during the midterm elections, swings back and now you have to reach a course the isle and negotiate the way every president is done for for forever. Hopefully we see a

little more of that, a little more negotiation. A lot of Republican congressmen have been afraid of getting primaried from the right, and what we've been seeing in these deep red states. And this isn't Antifa showing up, this isn't Democrats showing up. These are Republicans showing up and booing their congressmen. I think they should start to get worried about being primaried from the middle right. They're not going to be primaried from the left and the far right.

People are unhappy about Wait, my social security is getting cut. I have to call the Social Security office. You fired all the people to answer the phones. Like. It's kind of fascinating watching all these groups suddenly realize, Hey, we should have been a little more skeptical, we should have been a little less gullible, we should have thought about this a little more critically before we cast our vote,

because this isn't what we were voting for. And so I don't care if it's politics or investing or what have you. You really have to think about things intelligently, not just make emotional decisions off the seat of your pants, because you end up either with a portfolio you're unhappy with or a Congress you're unhappy with. And you know what is today, we're recording the towards the end of March,

so we're barely two months into this presidency. I can't imagine the sort of mayhem is going to keep up forever. I kinda I'm hoping that they settle into a groove, the noise level comes down and some of the volatility goes away. But truth be told, that's wishful thinking I have no idea what's going to happen.

We used to talk about the sixty forty portfolio. You run into a longevity problem with that because when social security was set up, Hey, you'd retire at sixty five, you'd play a few rounds of golf, you drop dead.

might not be enough equity to cover that. So maybe you stay with a seventy thirty portfolio until you're pick a number seventy five, and then you can throttle back the equity and have a little less volatility. But when I say rebalance, what I mean is if your portfolio is sixty percent Vanguard Total Market and five percent whatever the next eight things, over the course of time, those numbers will get out of whack, and every couple of

years you should. By the way, the software, I don't care if you're with Fidelity or Schwab or Think or Swim or what or Morgansteen, whatever e Trade, whatever online broker you're using. There you push your button and it automatically you can set your portfolio up to say here's my portfolio. I want to rebalance this every three years, or I want a notification when it gets more than five percent away from my starting percentages. The technology has

made it really simple to do that. It's not eight guys in green visors in the basement working around the clock, it's the software just makes it fast and easy to do.

all and it wants? You're better off spreading it out. So there are a lot of variations on this But the first thing is I have to ask the question, do you really want to pay that close attention to the market? Do you want to buy every ten, twenty percent, thirty percent down? Is that something? Is that how you want to spend your time. If the answer is yes, I really like tracking the market in the economy, and I could manage my own behavior and I feel comfortable

doing this, then here's what I would say to people. Hey, you should be putting money into your four to oh one K or your portfolio every month. The little money comes out of your paycheck every month to do this. Anytime the market's down ten percent, you want to double up and throw a little more money in. Great, the odds are that's going to work out in your favor.

Anytime the market is down twenty percent, guess what. Well, Now that happens even less frequently we get down twenty percent, I want to say, once every four or five years, step up, increase that cash flow even more into the market. What about down thirty percent? Hey, we were down thirty four percent in twenty twenty. We were down much more than thirty percent in eight oh nine, we were down thirty percent in two thousand. You go back to nineteen

eighty seven, the crash was just twenty two percent. For the whole year, you were from peak to trough, you were down over thirty percent. Anytime markets in the US go back to nineteen twenty nine, anytime you're down thirty percent, back up the truck. Buy as much as you can afford. Don't borrow money to do this. But if you have spare cash, absolutely down thirty percent, buy the caveat is under.

For the vast, vast majority of people, it will be the most difficult thing in their life to fight the negative hair headlines, to fight the panic, and actually be a contral and do the opposite of what most of the crowd is doing, which is panic selling ps. Down thirty percent doesn't mean you're not gonna end up down forty or fifty percent. Uh eight oh nine, you were down fifty six percent, seventy three, seventy four, down fifty seven percent. It happens all too frequently, and you just

have to be prepared. Hey, I'm gonna throw a little more money in down ten percent, a little more down twenty into broad index funds. If you're picking a stock, you got to make sure that down forty percent you're not buying a Lehman Brothers or Silicon Valley Bank or you know, an en Run. So when you buy a broad index, you don't have to worry about it going to zero. You have to worry about it doing poorly for a decade or so. And the if buying down

thirty percent is hard. You look at market history and you see nineteen sixty six to nineteen eighty two the Dow kissed one thousand and ninety sixty six. It didn't get over that on a permanent basis till nineteen eighty two, and that's before we start talking about inflation. So sixteen years your return is effectively zero. Then you adjusted for inflation, your turn is down sixty or seventy percent, and inflation

adjusted returns. But if you diligently put money in the market every month over those miserable sixteen years, well from eighty two to two thousand the market was up one thousand percent, and that's where you know you really kill it. So the fact that markets go through these long periods of time where and I don't believe we're in one of those periods. Now, they'll go through a secular bear market where it's flat to negative for ten fifteen years.

That's an opportunity to save. It's going to feel terrible, but when you're on the other side of it, it feels great. So long answer cut down to short a little at ten twenty thirty percent. But even buying down thirty percent is no guarantee that the market bottoms and turns around. Every generation we see a down fifty percent, and that's an amazing buying opportunity. Nineteen twenty nine being the exception. Down fifty percent. Hey, you still had a

whole lot way to go before the market's recovered. But it's a different world. It's a different market than it was a century ago.

ten thousand worked on the lunar Apollo missions. How you going to get ten thousand people to keep a secret if you can't get three people to keep a secret. So I don't think there's any fraud there. It would have come out number one, number two. He is one of those Michael Jordan type gifted mutants that does things that the average person simply cannot do. And you can name a bunch of them, Renaissance technologies in Jim Simon's d E Shaw, David Shaw, there are Jane Street Tray.

There are a handful of these companies that have just shot the lights out for decades. They don't want your money. You don't have enough money to give them. And if you have a billion dollars maybe they'll talk to you. But and even then they don't want to put you in their flagship funds because they tend not to do as well. They tend to do really well, and they don't do as well when too much money flows in. So yeah, if you have the opportunity to be in

a top ten funds by all means. Jim Chano said this, and I'm pretty sure I put this in the book, but I'm in quoting it for forever. He was a short seller and a hedge fund manager. He's semi retired and ran Kinnekosa Associates, and he said, when I started forty years ago in the nineteen eighties, there were one hundred hedge fund managers, and all of them produced alpha, all of them beat the market, They produced amazing returns. Now there's ten thousand hedge funds, it's kind of the

same one hundred guys still producing great returns. The problem, as we've expanded to three trillion dollars in hedge funds and I think it's eleven thousand funds now, is you dilute the talent. It makes the market more efficient. The way a lot of these funds make their money is they identify an inefficiency and they sort of, you know, mine that vein until it's exhausted. And as an inefficient market,

as the price is closed, the inefficiency goes away. So Renaissance Technologies, Jim Simon's just passed away a few years ago, was head of He was a codebreaker for the NSA disagreed with them about Vietnam and left. He eventually, I think he started an MIT, ended up at Sonny Stonybrook where I went to college, eventually led the math department, and then he launched Renaissance. And they have like they

don't hire people from Wall Street. They have hundreds and hundreds of applied physics and coders and math whizzes, and they're using computer technology long before most other firms were to identify these little anomalies to capture whatever the gap is and to close the trade out quickly. They supposedly I think it was Greg Zuckerman's book, The Man Who Beat the Markets. It's really the man who figured out how to trade on a very profitable basis. Nobody's even

close to them. They put up like sixty percent a year for forty years. The numbers are just mind blowing.

And it's not anyone fund. It's an entire organization that deploys hundreds and hundreds of different strategies, and as long as each strategy generates enough return, they keep doing it, and they keep tweaking this when they their core fund, the medallion funds, when they opened it, so after a few years they essentially kicked out all their outside investors, returned their money and said, this is just for us because it worked if it had, you know, a billion

dollars in it, When it had three or four billion, you couldn't generate those sort of returns. It's the inefficiencies are that small, all right. And when I say a billion dollars is small, US equity markets are fifty sixty seven. It depends on what we close today. Trillion dollars A billion dollars is pocket change, but at sixty percent compounded, it's just an astonishing amount of money. That was one organizational approach to Shaw is a very specific quantitative approach.

Jane Street Trading has figured out Citadel Millennium. There's like, like I know the names off the top of my Head's cause year in, year out, these guys are at the top of the league charts. They're putting out numbers. They all have outside investors, they're all audited sacks. Steve Cohen's original funds became a family office and now it's point seventy two. They have, you know, mainstream auditors. People

are looking at the books. I would be stunned if any of them were doing anything you know, way too far off the reservation, and people figure out ways to identify these little inefficiencies. Citadel Ken Griffin runs Citadel. They were one of the earliest high frequency traders. They figured out, as the Nasdaq and the NYC, we're moving to electronic trading, how can we do this cheaper, faster, better than everybody else and capture you know, the market does hundreds of

billions of shares a day. If you can find out we want to buy buy this at a dollar fifty seven and sell it at a dollar fifty eight to make a market for somebody. If you could do that billions and billions of time, it adds up. So that was their genius high frequency training. Each one of these giant funds, giant hedge funds that have been so successful, they've all like the six blind men describing the elephant. They've all figured out different ways to identify something that

the market doesn't understand. First, get in there, capture the profit, and get out and then move on to the next thing. And I mean that's really a gross oversimplification, but they've been so consistent over you know, at least the top twenty have been so consistent over time. It's kind of shocking. Every now and then they have a bad year, they have an off year. But and that's kind of makes me hopeful because I don't imagine these guys are going to allow the guys in DC to mess it up.

They just have too much money at risk. Steve Cohen just bought the New York Knicks. What do you mean You're gonna put tariffs on this stuff? Like, I'm hopeful that, you know, I can't say I've been the world's biggest fan of the point one percent. I'm hoping that for a change, the point one percent's interest now aligns with the rest of Americas. And Hey, we want a functioning economy, we want to functioning market, we want the rule of law. This is important. Please don't let this go to help.

me alone. But Ken Feinberg, what does he have to do with finance? What's this about? And I'm like, well, not for nothing, but the insurance industry. And nine to eleven was focused on Wall Street and then what went on in the Gulf, and like I had a fight to get that on, not just Bloomberg, Like some of the guys I work with, what are you doing? My research assistant at the time was like, what the hell

does this have to do with what we do? And of course he comes on and he's this thick New York accent, soft spoken guy American hero, talk about a thankless task, taking this giant victim's fund and having to get everybody who lost someone in the nine to eleven attacks to sign up for it, right, So that's every family, every spouse, every whatever. And then explain, Hey, I don't think it's right that the guy who jumped out of the hundredth floor, the bond trader who landed on the

firemen and they both died. I don't think it's right that his family is getting more money than the fireman's family. But that's what Congress has forced me to do, is to make these payments based on economic loss. My hands are tied. If you want, you could go to court and maybe in ten years you get something, or you take the money now. And by the way, it was,

this was all like decent chunks of money. Put this, start grief, wrap up the grieving process, put this behind you, and start living your life instead of being stuck in court. Like so, I the person who told me this is a terrible idea. What are you doing on that much So broadcast over the weekend. That Monday, I go into the office and I get a hug and he's like, you're a son of a bitch. First podcast that made

me cry. He's an American hero. I'm like, right, it's by the way, you can't listen to that without having the hair on the back of your next stand up. I have a hundred, but I'm going to give you a recent one that stands out because you know, most of these people are successful and smart and accomplished, and like, wow, that guy's really interesting. Every now and then you meet someone and it's just like what the so I've been kind of I was scheduled to have him on during

the pandemic. Then the pandemic hit, and so I finally got him back, like years later, finally got to him. David Rubinstein of the Carlisle Group is just one of these human beings that everything he touches is better for his involvement. And let me just give you and all this stuff is you know, none of this is off the record. All this stuff was sent on the air. So I used to think he stole my gig at Bloomberg. I'm like, God, damn chairman of founder of Carlisle Group.

It's doing my podcast stuff on. Like I used to jokingly to someone who worked for him, your boss stole my gig and I finally he had a book. So it's always a great opportunity to get people when a book comes out. So he comes on the show and he just starts talking about, you know, I have a we do deep dive a lot of research, and I start asking him questions. So they started in DC and it was a pretty successful business right from the out

of the gate forty years ago. And he started holding these I don't even know what to call them, just conversations. He would get somebody who was an expert in a space and he would interview them. But the audience were closed door. Senators and congressmen across the aisle, no party affiliation. Everybody was there just to hear this conversation and becomes smarter and better elected officials. He's just doing that. It's there's no record, there's no broadcast, there's no book. It's

all on the side. And and that's what he did. And then he like everything he touches. So the Washington Monument in DC starting to crumble, they get occasional earthquakes. Wasn't built to last forever. It's not an Egyptian pyramid, but it's still an American, you know, part of American icography. It's absolutely a landmark. He goes to Congress and says, hey, you guys, this has falling apart. You know you're gonna be embarrassed if the Washington Monument comes down on your

watch and the like. Nobody wants to do anything, so he like they they the budgeting argument, whatever, it just no one can get the shit together. And he turns around and said, all right, I'm gonna start the ball rolling. You guys will figure out a way to pay for it.

And he just goes a couple of buddies, Hey, I need a couple of million dollars, and everybody throws money in the kiddy, and he hires an architect and an engineer and they figure out how to shore up the Washington Monument, and eventually Congress comes through and does the bulk,

but he goes deep out of pocket. And then he starts looking around the country and Monticello with Thomas Jefferson and just all these monuments no one's taken care of, and then all these the Constitution, the Declaration of Independence. There are multiple copies of this. He buys them and donates them to the Smithsonian. So it's not in Bill

Gates's layer. It's there for the American people. And he grew up in Baltimore, a city that's kind of hard scrabble, and he buys the Baltimore Orioles and essentially promises the town, I'll build a new stadium, probably the best stadium in Major League Baseball, and I'll keep the Orioles here, and I'm gonna keep hot dogs two dollars and beer four dollars, and this will be a core part of the waterfront revival. Like wherever he goes, it's not I'm going to buy

a baseball team as a flex. It's all right. Someone has to do something otherwise the Orioles are out of here. You know, Baltimore is suffering. Let's see if we can lock them here for ten or twenty years. And like, as I'm having the interview, like, I don't know what you think about me. As we're talking, hopefully you're saying, oh, he seems to know what he's talking about. And he's kind of amusing and Jesus Fucking this guy babbled. But you know that's kind of the perspective you come away from.

I'm with him for an hour in change, and I'm like, Jesus Christ, everything this guy touches is not just a little better, it's so much better. And I'm just like four or five things off the top of my head. We spoke for like just that sort of stuff. We spoke for twenty minutes, and that that's the most recent one that has stood out with me, like, oh there are You know, it's very easy to become when you're looking at how not to invest that how bad a

lot of stuff is. It's easy to let yourself become cynical. And that's why I really tried to say, don't just say no to everything. Find the best in each and that's your team. Like, you see a person like that, and it's inspiring and it kind of gives you hope. Hey, not everybody is an asshole out for themselves and running rough shot and doesn't give a shit over what happens. There are people, including some with assets and resources and

abilities that are making things better. So that kind of makes me a little hopeful.

there is no one black of white answer. There is no one, you know, definitive response. It's a little art, it's a little science. The reason I use bad ideas, numbers, and behavior because those are three different ways to describe

how humans go through the world. We you know, we grow up, we get jobs, we live our lives, and we consume a lot of ideas and very often we ignore the data and the numbers that either confirm or deny those ideas, and that combination leads us to making certain decisions and behaving in a certain way, and sometimes if it's based on either a bad idea or not understanding the numbers and data around it, the behavior leads to a bad outcome. And so the concept of gee,

this is a giant wordle puzzle. How do I put this together? How do I figure out? You know, how comes? Sometimes stocks are cheap and other times stocks are expensive, and in how come cheap stocks sometimes go down? It's sort of the opposite word to od it. Oh, don't buy expensive stocks. Expensive stocks keep going up. How can we spend so much time on these aspects of investing

when really it's irrelevant. It doesn't matter. It really doesn't matter if five percent of your portfolio is in shareholder yield that's dividends and buybacks or momentum. In the long run, it kind of all comes out in the wash. It kind of all evens up. Yeah, maybe this portfolio will

outperform that portfolio a little bit. But when you run the numbers and it's a you know, look at all these different simulations or a rolling ten year returns, you find out, Hey, you know, I was really lucky to be born in a part of the world where whatever skills I had, and certainly to quote Professor gall Scott Galloway lucky to be born in the US as a straight white male in the nineteen sixties. Like you, you already won the lottery. When we look at how people's

portfolios return, there's an awful lot on randomness. There's an awful lot of luck. If you start investing in a recession, it feels terrible, but you're gonna end up doing really well. You start investing in the late nineties, hey, you're gonna feel it for a couple of years. And some of the data shows that when people pan exel out of markets, thirty one percent of them never you know, that's stock market. It's not for me, and that's really hard to save

for retirement over long periods of time. So to me, what's most interesting about the markets is trying to tease out this. It's not just that it's a puzzle, but it's a dynamic puzzle that constantly changes. This is never a solution. You think you figured out the solution, and then the market shifts and the market changes, and it's a never ending thing. And it's kind of the most to me of all the things I look at. And I have a lot of different interests. It's the most

fascinating game in town. If your intellectual curiosity moves in that direction, if you're good with numbers, if you understand the human factors and the psychology of it, it's fascinating.

if you know a certain group of people. Bob is a legend in that space.