William Bernstein: If You've Won the Game, Stop Playing

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• “I had to figure out how to save and invest on my own”: Bill’s crash course into investing and constructing a portfolio (1:29)
• Separating the wheat from the chaff: How Bill decides what investing research matters and what doesn’t (4:30)
• Top of the list: Books that profoundly influenced Bill’s investment philosophy and approach (5:45)
• “The overwhelming science of investing does not speak well of active management”: Bill on why empirical data ought to settle most questions (and why active-share doesn’t hold up to scrutiny) (7:02)
• “You approach it with extreme caution”: Bill explains why investors should be skeptical of most factors they encounter in the “factor zoo”, save a few (9:27)
• A question that’s giving Bill pause: Is value too crowded a trade? (10:33)
• Is low-volatility the most attractive factor from a behavioral standpoint? Bill worries it’s gotten too expensive. (12:02)
• Fingers (and toes) crossed: Bill thinks value is cheap enough to stick with (12:55)
• “Really, not very much”: Bill on how his approach to asset allocation has evolved over time (13:43)
• “The riskiness of stocks is not an intrinsic characteristic of stocks; it’s more a characteristic of the investor”: Why stocks’ volatility doesn’t fluster younger investors, but freaks out older investors (14:38)
• On how we tend to overrate our risk tolerance: “The difference between being able to see (losses) in a spreadsheet and actually manage (through losses) in real time is the difference between crashing an airplane in a flight simulator and in the real world” (15:38)
• “If you’ve won the game, stop playing”: How to shake older investors out of their complacency with equity risk and recency bias (16:53)
• “The very best physicians are consumed by self-doubt”: How a high ratio of “rumination-to-celebration” can help investors constructively reckon with shortcomings in their approach and improve (19:26)
• Getting it wrong and therefore right: Bill explains how advisors can use their own fallibility and uncertainty to fortify their relationship with clients (versus scaring them to death) (21:12)
• An argument with Jack Bogle: How a debate with the Vanguard founder about foreign-stock investing became an object lesson in how reality intrudes on theory (and how that informs Bill’s approach to managing clients) (22:56)
• “You don’t appreciate it until bad things happen”: On whether the rally in riskier bonds has changed Bill’s tune on limiting fixed-income investments to short-term, high-grade fare (24:25)
• “Investment is a process that transfers wealth to people that have a strategy and can execute it from those who don’t and can’t” (26:22)
• “A reasonable hypothesis, but it got tested” (and failed): Bill on the argument for active bond investing (27:02)
• Earthquakes and execrable returns: Why the best investing and economic gains have been realized in English-speaking countries. (Hint: It’s the law.) (27:48)
• Emerging-markets stocks: Why they’re only a bargain when they’re cheap relative to their own history and developed markets (and still might not be inexpensive even in that case) (30:23)
• Potential hazards: “The US markets are significantly overvalued relative to the rest of the world” (31:36)
• “You’d have your head handed to you”: On the impermanence of investment measures, why it’s dangerous to extrapolate, and the implications for investors (32:54)
• “When I think about my tombstone, ‘investment adviser’ is not one of the things I want to see up there” (34:00)
• “We’re extremely choosy in who we take on. So we have a very enjoyable practice as a result of that” (35:49)
• On retirement preparedness: “A slow-moving and fairly impressive disaster” (37:13)
• “I don’t think the system needs nudges. I think the system needs dynamite”: Steps to radically redefine the retirement system (39:20)
• “It would be nice if we had a system where people didn’t have to save quite so much, because that’s an unattainable goal for probably 80% of the population” (40:41)
• The skunk-in-the-suburb analogy: We’re evolved to avoid the snake or the tiger, not to plan for retirement fifty years into the future (41:24)
• What to do for investors who aren’t interested in finance or good with numbers: Limit investor autonomy, provide a generous match, offer a low-cost menu, default them into a target-date fund (43:03)
• “One of the most important people in my life”: Remembering Jack Bogle (44:32)
• “Something that everyone knows isn’t worth knowing”: Bill on the under-appreciated importance of corporate governance to security returns (46:46)
• How Bill navigates ESG with his clients: He discourages them from pursuing it (49:25)
• Principled but “bending”: How humility should make room for other ideas or priorities within a portfolio or plan (51:05)

• William Bernstein bio (CFA Institute) https://blogs.cfainstitute.org/investor/author/williamjbernstein/
• William Bernstein’s “Efficient Frontier” website http://www.efficientfrontier.com/
• Mean-variance optimization: Explainer https://www.effisols.com/basics/MVO.htm
• William Bernstein’s reading list http://www.efficientfrontier.com/reading.htm
• Fama and French research papers https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1455
• “A Random Walk Down Wall Street” by Burton G. Malkiel https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393081435/ref=sr_1_1?s=books&ie=UTF8&qid=1324493412&sr=1-1
• “Bogle on Mutual Funds” by Jack Bogle https://www.amazon.com/gp/product/111908833X/ref=dbs_a_def_rwt_bibl_vppi_i4
• “The Intelligent Investor” by Benjamin Graham https://www.amazon.com/Intelligent-Investor-Definitive-Investing-Practical/dp/0060555661/ref=sr_1_1?s=books&ie=UTF8&qid=1324493602&sr=1-1
• “The Theory of Interest” by Irving Fisher https://www.amazon.com/Theory-Interest-Illustrated-Irving-Fisher-ebook/dp/B00CR32KGK

• “The Arithmetic of Active Management” by William F. Sharpe
• https://web.stanford.edu/~wfsharpe/art/active/active.htm
• Active Share website https://activeshare.nd.edu/
• “Presidential Address: Discount Rates” by John H. Cochrane https://faculty.chicagobooth.edu/john.cochrane/research/papers/discount_rates_jf.pdf
• Value (aka “book-to-market”) factor http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/Data_Library/det_form_btm.html
• Momentum factor http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/Data_Library/det_mom_factor.html
• Profitability factor http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/Data_Library/tw_5_ports_beme_op.html
• “Your Complete Guide to Factor-based Investing” by Andrew L. Berkin and Larry E. Swedroe
• https://www.amazon.com/dp/B01N7FCW2D/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1
• Factor performance http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html#Research
• Berkshire Hathaway 2018 shareholder letter http://www.berkshirehathaway.com/letters/2018ltr.pdf
• “Betting Against Beta” by Andrea Frazzini and Lasse Heje Pedersen http://pages.stern.nyu.edu/~lpederse/papers/BettingAgainstBeta.pdf
• “Betting Against Beta” factor vs. value factor performance (10 years ended Feb. 2019) https://www.portfoliovisualizer.com/factor-statistics?s=y&factorDataSet=-1&marketArea=0&__checkbox_ffmkt=true&__checkbox_ffsmb=true&__checkbox_ffsmb5=true&ffhml=true&__checkbox_ffhml=true&__checkbox_ffmom=true&__checkbox_ffrmw=true&__checkbox_ffcma=true&__checkbox_ffstrev=true&__checkbox_ffltrev=true&__checkbox_aqrmkt=true&__checkbox_aqrsmb=true&__checkbox_aqrhml=true&__checkbox_aqrhmldev=true&__checkbox_aqrmom=true&__checkbox_aqrqmj=true&aqrbab=true&__checkbox_aqrbab=true&__checkbox_trm=true&__checkbox_cdt=true&startDate=03%2F01%2F2009&endDate=03%2F31%2F2019
• “The Intelligent Asset Allocator” by William J. Bernstein https://www.amazon.com/gp/product/0071385290/ref=s9_simz_gw_s0_p14_i1?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-2&pf_rd_r=1NNWXTETT62HJ8QM9ZM6&pf_rd_t=101&pf_rd_p=470938631&pf_rd_i=507846
• “Availability” heuristic https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/availability-heuristic/
• Dunning-Kruger effect https://www.ncbi.nlm.nih.gov/pubmed/10626367
• “Why Jack Bogle Doesn’t Own Non-U.S. Stocks” with Christine Benz and Jack Bogle (Oct. 22, 2018) https://www.youtube.com/watch?v=P54trh0Rre8
• “Will Active Stock Funds Save Your Bacon in a Downturn?” by Jeffrey Ptak https://www.morningstar.com/articles/852864/will-active-stock-funds-save-your-bacon-in-a-downt.html
• “Global Stock Markets in the Twentieth Century” by Philippe Jorion and William N. Goetzmann, Journal of Finance https://onlinelibrary.wiley.com/doi/abs/10.1111/0022-1082.00133
• “Legal Determinants of External Finance” by Rafael La Porta, Florencio Lopez-de-Silane, Andrei Shleifer, Robert W. Vishny, NBER Working Paper https://www.nber.org/papers/w5879
• Online Data Robert Shiller http://www.econ.yale.edu/~shiller/data.htm
• S&P 500 Shiller PE Ratio https://www.multpl.com/shiller-pe
• S&P 500 Price/earnings ratio https://www.multpl.com/s-p-500-pe-ratio
• S&P 500 Price/book ratio https://www.multpl.com/s-p-500-price-to-book
• National Retirement Risk Index, Center for Retirement Research at Boston College https://crr.bc.edu/special-projects/national-retirement-risk-index/
• “National Retirement Risk Index Shows Modest Improvements in 2016” by Alicia H. Munnell, Wenliang Hou, Geoffrey T. Sanzenbacher, Center for Retirement Research at Boston College https://crr.bc.edu/wp-content/uploads/2017/12/IB_18-1.pdf
• “In Memoriam”, William J. Bernstein, Efficient Frontier http://efficientfrontier.com/ef/0adhoc/RIP-JCB.html
• David Yermack, Albert Fingerhut Professor of Finance and Business Transformation, NYU Sterm, Publications https://its.law.nyu.edu/facultyprofiles/index.cfm?fuseaction=profile.publications&personid=20547

12 episodes available. A new episode about every 0 hours averaging 50 mins duration .