WEBVTT - An Interview With Jason Zweig: Masters in Business (Audio) 0:00:03.240 --> 0:00:07.560 This is Masters in Business with Barry Ridholds on Bloomberg Radio. 0:00:08.119 --> 0:00:11.879 So I'm I'm really excited about this week's guest. Jason's Wige. 0:00:12.119 --> 0:00:17.799 He is a reporter, columnist, author. UM. You probably know 0:00:18.000 --> 0:00:21.079 his work as the Weekend Investor column in the Wall 0:00:21.079 --> 0:00:24.160 Street Journal. I'm a big fan of some of his books, 0:00:24.160 --> 0:00:27.400 including Your Money and Your Brain, which is one of 0:00:27.440 --> 0:00:31.440 the earliest looks at neuroeconomics and neurofinance. He has a 0:00:31.440 --> 0:00:35.480 book coming up, uh it's an updated version of inspired 0:00:35.520 --> 0:00:40.440 by Ambrose Bierce's Devil's Dictionary. It's called The Devil's Financial Dictionary. 0:00:40.440 --> 0:00:42.680 And we we talked about that. We talk a little 0:00:42.680 --> 0:00:45.680 bit about journalism and what it's gonna be like going forward, 0:00:45.800 --> 0:00:50.000 or the impact of social media, Twitter, etcetera. I've read 0:00:50.080 --> 0:00:53.800 him for so many years and know his work for 0:00:53.800 --> 0:00:57.520 for just so long. It was really interesting sitting down 0:00:57.560 --> 0:01:00.880 and talking with him about his assess and who his 0:01:00.960 --> 0:01:04.679 mentors and influences were, and what sort of advice he 0:01:04.680 --> 0:01:07.679 would give to somebody in the in the finance world. 0:01:07.840 --> 0:01:11.640 And I just found it to be really quite fascinating. 0:01:12.200 --> 0:01:14.800 We probably went about ninety minutes, so given how long 0:01:14.840 --> 0:01:18.800 that is. UM rather than me, Babil, Let me just 0:01:18.959 --> 0:01:25.760 say here is my conversation with Jason's Why this is 0:01:25.840 --> 0:01:30.360 Masters in Business with Barry Ridholds on Bloomberg Radio This 0:01:30.440 --> 0:01:33.720 week on Masters in Business, our special guest is journalist 0:01:33.800 --> 0:01:37.600 and author Jason's Wage. He is a columnist for The 0:01:37.600 --> 0:01:40.319 Wall Street Journal. He is also the author of the 0:01:40.440 --> 0:01:45.040 upcoming The Devil's Financial Dictionary, loosely based on Ambrose Bierce's 0:01:45.200 --> 0:01:49.240 famous Devil's Dictionary. I actually have read several of his 0:01:49.320 --> 0:01:52.960 previous books and really enjoyed him, one of which Your 0:01:53.000 --> 0:01:54.840 Money and Your Brain Might have been one of the 0:01:54.920 --> 0:01:59.919 first books that looked at behavioral economics from the investor's perspective. 0:02:00.440 --> 0:02:04.720 He also helped Danny Kahneman edit Thinking Fast and Slow, 0:02:05.360 --> 0:02:08.720 as well as being the editor of the revised edition 0:02:09.320 --> 0:02:14.040 of Benjamin Graham's classic The Intelligent Investor. Jason's Wide Welcome 0:02:14.080 --> 0:02:16.680 to Bloomberg. Great to be here. Mary. So you have 0:02:16.760 --> 0:02:19.920 a long and storied history and financial journalism, and we'll 0:02:19.960 --> 0:02:23.119 we'll get into some of the more granular stuff, but 0:02:23.240 --> 0:02:27.240 let's let's just go a little bit over your background. UM, 0:02:27.280 --> 0:02:29.959 I would be remiss if I didn't mention in two 0:02:30.000 --> 0:02:33.240 thousand and thirteen you won the Lobe Award for Personal 0:02:33.960 --> 0:02:39.920 Finance Writing. You've also been a writer for Money magazine, Time, CNN, 0:02:39.960 --> 0:02:43.360 you covered mutual funds for Forbes, and today you're the 0:02:43.440 --> 0:02:47.080 personal finance writer at The Journal. How did you find 0:02:47.120 --> 0:02:51.400 your way into financial journalism? Well, I think, like a 0:02:51.440 --> 0:02:54.760 lot of your guests, Barry, I'm gonna talk about luck. 0:02:55.400 --> 0:03:00.880 I think I'm anybody who has done read intably well 0:03:00.960 --> 0:03:04.880 in just about any field who doesn't credit luck first 0:03:04.919 --> 0:03:09.239 and foremost is kidding himself? Or isn't that fascinating? When 0:03:09.280 --> 0:03:12.600 when I finally sit down and put together the Book 0:03:12.760 --> 0:03:16.560 of Masters in Business, how many guests, and not just 0:03:16.800 --> 0:03:19.880 guests who had like one lucky break, but guys who 0:03:19.960 --> 0:03:24.400 were billionaires like Howard Marks and Leon Cooperman. He'd say, well, 0:03:24.440 --> 0:03:28.040 you know, you got really lucky. That's an amazing statement, 0:03:28.080 --> 0:03:31.120 isn't it. It's and I think it's totally true. And 0:03:31.960 --> 0:03:35.320 we all like to pride ourselves on our abilities and 0:03:35.360 --> 0:03:38.640 our skills, but without luck, I'm not sure any of 0:03:38.720 --> 0:03:40.960 us would be where we are today. I mean, I 0:03:41.840 --> 0:03:45.400 always wanted to be a writer. I was always fascinated 0:03:45.440 --> 0:03:50.000 by business. I have no formal training in business or economics. 0:03:50.000 --> 0:03:51.880 You went to Columbia, but you didn't go to Columbia 0:03:51.920 --> 0:03:54.800 Business school. You went to Columbia College, And would you 0:03:54.800 --> 0:03:58.119 study undergraduate art history? And so of course that makes 0:03:58.160 --> 0:04:00.760 perfect sense. You go from that to prest fun right, 0:04:00.840 --> 0:04:04.120 and and I think it's probably worth pointing out that, uh, 0:04:04.200 --> 0:04:08.520 one of your former guests, Charlie Ellis, also also spent 0:04:08.640 --> 0:04:12.840 some time studying art history. What a delightful gentleman. He's great, 0:04:13.080 --> 0:04:16.560 one of the best. So so you you The real 0:04:16.640 --> 0:04:19.000 question I always wanted to ask you, and I'll do 0:04:19.040 --> 0:04:21.800 it now, is how did you manage to avoid a 0:04:21.839 --> 0:04:26.680 career and asset management. Uh? Well, I think I I 0:04:26.800 --> 0:04:32.320 learned early enough in my career as a financial journalist 0:04:32.920 --> 0:04:39.720 that uh, luck is supremely important in investment management, and 0:04:40.600 --> 0:04:44.080 very early on I had a hard time distinguishing luck 0:04:44.120 --> 0:04:47.680 from skill. And I still do. You need a long 0:04:47.800 --> 0:04:52.359 period and lots of data and the right decision making 0:04:52.480 --> 0:04:55.120 environment to stand a chance of telling whether something is 0:04:55.160 --> 0:04:57.279 luck or skill. But that's just a long way of 0:04:57.320 --> 0:05:01.120 saying that I didn't want to go into investment management 0:05:01.160 --> 0:05:05.160 because I felt I I sort of knew where the 0:05:05.200 --> 0:05:09.120 fundamental body was buried. And the body that was buried 0:05:09.279 --> 0:05:12.520 was that a lot of people who think they're skillful 0:05:12.640 --> 0:05:15.120 are just lucky. And I didn't really want to go 0:05:15.200 --> 0:05:19.400 through my professional career with that on my conscience. I 0:05:19.440 --> 0:05:21.440 guess I have other things on my conscience than that. 0:05:21.920 --> 0:05:23.920 The flip side of that is a lot of people 0:05:24.240 --> 0:05:29.240 who think they're unlucky merely or unskillful. Correct. So you 0:05:29.279 --> 0:05:32.520 mentioned you always were fascinated by business. We always interested 0:05:32.560 --> 0:05:34.960 in stocks and investing or was that something you came 0:05:35.000 --> 0:05:37.760 to later. Yeah, I bought my first stock when I 0:05:37.800 --> 0:05:42.120 was sixteen, Barry, it was, and it was a fascinating experience, 0:05:42.200 --> 0:05:46.760 especially in hindsight. I bought a stock based on an 0:05:46.760 --> 0:05:50.679 absolutely god awful book that when I was sixteen thought 0:05:50.760 --> 0:05:53.400 was pretty persuasive. It was called How I Made two 0:05:53.400 --> 0:05:57.520 Million Dollars in the Stock Market by Nicholas Darvis. I 0:05:57.560 --> 0:05:59.920 read that a long time. Yeah, and you remember that 0:06:00.120 --> 0:06:04.400 thing he talks about where you know, increasing volume on 0:06:04.720 --> 0:06:09.760 rising price proceeds price exactly and you wait for the 0:06:09.800 --> 0:06:12.560 price to confirm the volume, and then you then you buy. 0:06:12.720 --> 0:06:16.120 So you're a closet technician, Well I was, at least 0:06:16.120 --> 0:06:21.440 I was. This is actually an interesting story because I 0:06:21.440 --> 0:06:24.240 I did exactly what he suggested. I took graph paper 0:06:25.320 --> 0:06:30.200 and I tracked ten stocks and um I had a 0:06:30.200 --> 0:06:35.440 copy of the SNP Stock Guide. This was five or six. 0:06:35.640 --> 0:06:37.520 It's not a great time to be an equity investor 0:06:37.640 --> 0:06:41.880 in the first place. And I found a stock that 0:06:42.080 --> 0:06:46.000 was called and I'm saying called mac a F. I 0:06:46.000 --> 0:06:48.520 didn't know what it was. The SNP Stock Guide said 0:06:48.560 --> 0:06:52.720 that it uh it produced liquorice and I think ball 0:06:52.760 --> 0:06:59.039 bearings or something like that, and uh so and it 0:06:59.040 --> 0:07:01.719 it turned out to be a perfect Darvis stock. And 0:07:01.800 --> 0:07:04.279 I bought a hundred shares at nine and five eighths 0:07:04.279 --> 0:07:08.320 with my you know, summer earnings, and it went up 0:07:08.320 --> 0:07:11.640 to twelve and seven eighths in a matter of days. 0:07:11.960 --> 0:07:14.760 And I didn't know a thing about the company other 0:07:14.840 --> 0:07:19.280 than this ridiculous theory that appeared to be confirmed. It 0:07:19.360 --> 0:07:22.880 turned out later to be mc andrews and Forbes Ron 0:07:22.920 --> 0:07:26.840 Perlman's original takeover vehicle. And I think this was around 0:07:26.880 --> 0:07:29.480 the time that he was first amassing shares. So I 0:07:29.520 --> 0:07:31.840 bought it for the wrong reason. I made money in 0:07:31.920 --> 0:07:34.640 it for the wrong reason, and I got stopped out 0:07:35.080 --> 0:07:39.040 at twelve and seven eighths, but this was so I 0:07:39.080 --> 0:07:41.920 didn't know I had been stopped out until the trade 0:07:41.960 --> 0:07:45.320 confirm arrived in the mail about a week later, and 0:07:45.360 --> 0:07:48.560 I went bonkers and I was like, I'm writing this 0:07:48.680 --> 0:07:51.440 thing all the way to twenty and I called my 0:07:51.520 --> 0:07:54.520 parents broker and I said, get me back in and 0:07:54.560 --> 0:07:57.760 then he flat out refused, and my dad had to 0:07:57.760 --> 0:08:01.120 buy it for me and went to fourteen and a 0:08:01.200 --> 0:08:06.160 quarter or something, and my dad browbeat me into selling it. 0:08:06.280 --> 0:08:09.800 And then where did it ultimately go? I it did 0:08:09.880 --> 0:08:12.040 very well in the long run. I don't think it 0:08:12.080 --> 0:08:15.080 did too well. Right after that, you're listening to Masters 0:08:15.080 --> 0:08:18.160 in Business on Bloomberg Radio. My guest this week is 0:08:18.280 --> 0:08:22.760 Jason's Wide, author of the upcoming The Devil's Financial Dictionary. 0:08:22.800 --> 0:08:24.400 Before we get into the book, I want to talk 0:08:24.440 --> 0:08:27.840 a little bit about social media. I see you tweeting 0:08:28.200 --> 0:08:32.520 pretty regularly. One of the questions I had for you 0:08:32.679 --> 0:08:38.160 as a professional journalist, what's the impact of Twitter, and 0:08:38.320 --> 0:08:42.240 to a lesser degree, blobs on the changing nature of 0:08:42.360 --> 0:08:46.760 financial journalism. Well, I think it's I think it's really big, Barry, 0:08:46.840 --> 0:08:49.280 and it's it's good and bad, And maybe let me 0:08:49.320 --> 0:08:54.120 talk about the bad first. You know, uh, up until 0:08:54.200 --> 0:08:57.960 a few years ago, certainly until ten years ago, probably five, 0:08:59.040 --> 0:09:04.200 um reading and investing public could rely on major media 0:09:04.280 --> 0:09:07.800 outlets to be their filters of information. If you saw 0:09:07.840 --> 0:09:10.680 something in the Wall Street Journal or the New York Times, 0:09:10.679 --> 0:09:14.920 for that matter, you could be fairly sure it was reliable, vetted, 0:09:15.080 --> 0:09:18.720 somebody had looked into what it wasn't just a random 0:09:17.960 --> 0:09:23.160 It's just not somebody spouting or repeating information generated by 0:09:23.480 --> 0:09:26.360 people with an axe to grind without checking at first. 0:09:26.920 --> 0:09:30.560 And I think the danger that we're in in a 0:09:30.640 --> 0:09:34.520 world dominated by social media and kind of insta pundits 0:09:34.600 --> 0:09:37.640 through the blog of sphere that's literally a blog inst 0:09:37.679 --> 0:09:40.360 the plan yeah I know, um, but I wasn't referring 0:09:40.360 --> 0:09:44.520 to them in particular, is that it's it's much harder 0:09:44.559 --> 0:09:49.079 today to make qualitative judgments as a consumer of news 0:09:49.120 --> 0:09:52.840 about what's reliable and what's not, because you're just drinking 0:09:52.880 --> 0:09:56.400 from a fire hose all day long. And I think 0:09:56.440 --> 0:09:59.560 the value of Twitter is that by giving you those 0:09:59.679 --> 0:10:05.600 mic o bursts of information and opinion from people, you 0:10:05.640 --> 0:10:07.480 get to see that, you get to see what they 0:10:07.520 --> 0:10:12.440 think in short spurts, and you can fairly quickly form 0:10:12.559 --> 0:10:16.320 a judgment about how objective they are, how reliable their 0:10:16.360 --> 0:10:19.880 information is, and I think ultimately it's going to help 0:10:20.000 --> 0:10:23.160 people separate the good from the bad. You know, one 0:10:23.200 --> 0:10:27.040 of my favorite aspects about Twitter is just how easy 0:10:27.080 --> 0:10:31.720 it is to derive a conclusion from somebody's Twitter numbers. 0:10:31.760 --> 0:10:35.400 So if someone's got eighty thousand tweets and a hundred 0:10:35.440 --> 0:10:39.320 and forty seven followers, that's a pretty fair assessment that 0:10:39.400 --> 0:10:43.560 this person is not pranking out quality tweets. On the 0:10:43.600 --> 0:10:47.480 other hands, when and Warren Buffett is probably the extreme 0:10:47.559 --> 0:10:51.520 opposite of that, He's got four tweets and six million followers. 0:10:51.520 --> 0:10:54.880 But between those extremes there's a spectrum. And you know, 0:10:55.400 --> 0:11:00.000 I have under a hundred thousand followers, My partner has 0:11:00.320 --> 0:11:03.600 over a hundred thousand followers, and we have a lot 0:11:03.679 --> 0:11:06.199 less tweets than we have followers. So somebody who's looking 0:11:06.200 --> 0:11:08.720 at that can say, oh, there has to be something 0:11:08.800 --> 0:11:13.520 worthwhile and substance if here not that followers or everything. Otherwise, 0:11:13.720 --> 0:11:16.360 if that was the case, Justin Bieber would be philosopher king. 0:11:16.400 --> 0:11:19.120 And we know that's not the case, but that's a 0:11:19.120 --> 0:11:22.160 real good shorthand to say, hey, is this person putting 0:11:22.160 --> 0:11:26.720 out anything of quality? Is there some way to double check, validate, 0:11:27.120 --> 0:11:30.640 see if the crowd has any wisdom and they've endorsed 0:11:30.640 --> 0:11:34.840 this person. Isn't it remarkable? Barry? How how hard that 0:11:35.000 --> 0:11:38.439 simple algorithm you've just expressed is for so many people 0:11:38.480 --> 0:11:43.240 to understand? I mean every day on Twitter you see 0:11:43.559 --> 0:11:46.720 recommended lists of people who tweet, and then you look 0:11:46.760 --> 0:11:50.160 at them and you see, oh, here's somebody they're recommending 0:11:50.440 --> 0:11:56.000 because he has fifty thou followers without even noting that 0:11:56.160 --> 0:12:01.600 he follows eighty thousand people and he's tweeted forty thousand times. 0:12:01.600 --> 0:12:04.040 So you know, a lot of people are still using 0:12:04.280 --> 0:12:07.880 followers alone. No, it can't be as the metric. You 0:12:07.920 --> 0:12:10.800 have to it has to be a combination of quantitative 0:12:10.880 --> 0:12:13.839 and qualities. You have to say, has the crowd vallet 0:12:14.040 --> 0:12:15.600 you know, it's sort of like when when you go 0:12:15.679 --> 0:12:18.920 to Metacritic, you basically say what were the reviews? Like 0:12:19.000 --> 0:12:21.360 what did the audience say? When when you get a 0:12:21.440 --> 0:12:26.000 movie like Jurassic Park or Mission Impossible and both the 0:12:26.080 --> 0:12:28.880 reviewers like it and the crowd likes it. So that's 0:12:28.880 --> 0:12:32.320 how I use the Twitter numbers, and we've now lost 0:12:32.360 --> 0:12:36.559 half our audience let's let's let's turn to The Devil's 0:12:36.559 --> 0:12:40.200 Financial Dictionary, which comes out in October. I've got a 0:12:40.240 --> 0:12:42.760 preliminary copy of of the book, and that's one of 0:12:42.800 --> 0:12:45.080 the reasons why I wanted to sit down and chat 0:12:45.120 --> 0:12:48.000 with you. I found it. Let me let me rather 0:12:48.040 --> 0:12:50.679 than me telling you what I think, let me go 0:12:50.960 --> 0:12:55.200 some of the early reviews. Bob Schiller, Nobel winner and 0:12:55.240 --> 0:12:59.360 Professor of Finance at Yale University. The most amusing presentation 0:12:59.440 --> 0:13:02.640 of principle is the finance I've ever seen. John Bogel, 0:13:02.800 --> 0:13:06.559 founder of the Vanguard Group. Laugh, cry, and learn as 0:13:06.559 --> 0:13:11.160 you enjoy the sparkling Devil's Financial Dictionary. The List of 0:13:11.240 --> 0:13:15.760 people who have given you blurbs Burton Malkiel, author author 0:13:15.800 --> 0:13:21.040 of Random Walked Down Wall Street, delightfully humorous and stunningly irreverent. 0:13:21.520 --> 0:13:25.440 James Grant opened this wonderful book to any page, try 0:13:25.520 --> 0:13:28.840 not to laugh, I dare you. And then Bill Sharp 0:13:29.320 --> 0:13:33.560 essentially created the Sharp ratio and another Nobel laureate at 0:13:33.600 --> 0:13:37.480 Stanford The run of People You got to um. I 0:13:37.559 --> 0:13:40.240 was like disappointed, No Buffett, and then I scrolled down 0:13:40.240 --> 0:13:44.679 and there's Warren Buffett's blured it. It's Um, it's an 0:13:44.679 --> 0:13:47.280 amazing run of people. Tell us a little bit about 0:13:47.360 --> 0:13:51.320 the motivation and thought process behind the book. Well, I've 0:13:51.360 --> 0:13:57.120 always loved Ambrose Beers's Devil's Dictionary. You know. Beers is 0:13:57.880 --> 0:14:04.160 maybe the most unjustly elected author of the nineteenth century 0:14:04.200 --> 0:14:07.560 in America. He was a contemporary of Mark Twain's. He 0:14:07.679 --> 0:14:10.520 was at least as brilliant. He wrote some of the 0:14:10.520 --> 0:14:16.719 most devastating epigrams ever written. And um, he was brutally 0:14:16.840 --> 0:14:22.200 cynical about American society and institutions, and he took on 0:14:22.880 --> 0:14:27.400 a few He he basically compiled The Devil's Dictionary as 0:14:27.440 --> 0:14:33.560 a collection of satirical definitions of terms most people think 0:14:33.600 --> 0:14:36.720 of in a very conventional way. And he just blew 0:14:36.800 --> 0:14:41.720 up every sort of bit of conventional wisdom and turned 0:14:41.760 --> 0:14:44.840 them all on their head. And it just occurred to 0:14:44.840 --> 0:14:48.880 me about two years ago that this project that I 0:14:48.880 --> 0:14:51.960 had had in mind for about fifteen years would be 0:14:52.000 --> 0:14:54.520 easier to do than I realized. And I just started 0:14:54.520 --> 0:14:57.120 doing it in my spare time. And my wife heard 0:14:57.160 --> 0:14:59.920 me cackling in the kitchen at night, and I really, 0:15:00.760 --> 0:15:03.320 if I was bothering her, I must be having fun. 0:15:04.000 --> 0:15:07.240 And I just kept at it. And you know, my 0:15:07.320 --> 0:15:10.320 goal was to try to do something like what Beers 0:15:10.320 --> 0:15:14.080 did and bring it to the world of Wall Street. 0:15:14.200 --> 0:15:17.320 And you know a couple of definitions from the original 0:15:17.400 --> 0:15:20.320 Devil's Dictionary or worth keeping in mind. I mean these 0:15:20.360 --> 0:15:22.560 are bear in mind. I'm going to read these. And 0:15:22.680 --> 0:15:25.080 first comes the word, then comes to the part of speech, 0:15:25.120 --> 0:15:27.680 then comes to the definition. So this is ambrose beers 0:15:28.640 --> 0:15:34.680 ambidextrous adjective able to pick with equal skill a right 0:15:34.720 --> 0:15:38.360 hand pocket or a left I gotta like that. In 0:15:38.400 --> 0:15:41.680 the in the last thirty seconds we have of this segment, Um, 0:15:41.720 --> 0:15:45.600 what are some of your favorite ones from the new 0:15:45.680 --> 0:15:48.560 Financial Devil's Dictionary. I'll give you one of my favorite 0:15:49.000 --> 0:15:53.200 day trader see idiot. Yeah, that's to get some hate 0:15:53.200 --> 0:15:55.920 mail on that one. That might be my favorite too. 0:15:56.000 --> 0:15:57.600 And maybe we can, maybe we can get into some 0:15:57.640 --> 0:16:00.040 of the longer ones. A bit later, you're listening a 0:16:00.160 --> 0:16:04.280 Master's in Business on Bloomberg Radio. I'm speaking with jason's Wage, 0:16:04.400 --> 0:16:08.160 personal finance writer and author of numerous books, his most 0:16:08.200 --> 0:16:13.320 recent being The Devil's Financial Dictionary. Tell me, uh, some 0:16:13.440 --> 0:16:18.160 of your favorite selections from this volume? Well, Barry, maybe 0:16:18.200 --> 0:16:21.840 I can, maybe I can read one quickly, and you know, 0:16:21.880 --> 0:16:24.280 I'll read the definition, the part of speech, and then 0:16:24.680 --> 0:16:27.800 I have to warrnt everybody. There are what I call 0:16:27.920 --> 0:16:31.040 flights of fancy in these, okay, which are these little 0:16:31.280 --> 0:16:37.200 um imaginary passages featuring people who bear no resemblance to 0:16:37.240 --> 0:16:42.440 anyone you and I might? Alright, So option nown the 0:16:42.560 --> 0:16:44.880 right to buy or sell a financial asset at a 0:16:44.880 --> 0:16:48.240 fixed price on or before a specific time from the 0:16:48.320 --> 0:16:53.240 Latin opt o. I choose a boon for stockholders whose 0:16:53.280 --> 0:16:57.160 clients don't understand how options work and generate a fortune 0:16:57.200 --> 0:17:01.040 in commissions as they attempt to learn. And here comes 0:17:01.080 --> 0:17:06.320 the flight of fancy stockholders of stockbrokers. Stockbrokers, explained you, 0:17:06.680 --> 0:17:10.080 asking me, a client of the broker age firm born 0:17:10.240 --> 0:17:14.160 rich and how I put two children through Harvard by 0:17:14.160 --> 0:17:20.159 trading options. Unfortunately they were my broker's children. That's great, 0:17:20.760 --> 0:17:26.439 so um obviously ambrosepers huge, huge influence. You mentioned you 0:17:26.480 --> 0:17:29.720 were working on this at night. How long did it 0:17:29.760 --> 0:17:33.400 take you to assemble this is a pretty thorough financial distinary. 0:17:33.400 --> 0:17:36.879 How how long did this stake? It didn't take very long, actually, U. 0:17:38.520 --> 0:17:40.159 You know a lot of these I'd had in my 0:17:40.240 --> 0:17:42.000 head for a long time, so it's just a matter 0:17:42.000 --> 0:17:43.919 of getting it out and on some page. Yeah. The 0:17:44.000 --> 0:17:46.959 real what I'm trying to do with this book is 0:17:47.119 --> 0:17:49.800 in each case when I define a term, I'm saying 0:17:49.800 --> 0:17:54.040 to myself, you know, after more than a quarter century 0:17:54.160 --> 0:17:57.680 of you know, researching and reporting on the financial markets, 0:17:57.880 --> 0:18:01.320 can I take everything I've learned and boil it down 0:18:01.440 --> 0:18:05.720 into a hundred fifty words or less? And then if 0:18:05.720 --> 0:18:08.439 I can do that, how about fifty words? And in 0:18:08.480 --> 0:18:10.600 some cases I got them down to a single word? 0:18:11.119 --> 0:18:16.560 Give me us an example other than the day trader. Um. Uh, well, 0:18:16.600 --> 0:18:22.600 there's one which is human adjective biased. We're gonna talk 0:18:22.600 --> 0:18:26.960 a little more about the biases and cognitive issues of 0:18:27.080 --> 0:18:30.040 humans coming up in a bit. Uh. Who is the 0:18:30.119 --> 0:18:33.080 ideal audience for this? Is this scared for the professional? 0:18:33.240 --> 0:18:35.280 Is this for a mom and pop investor? Who are 0:18:35.280 --> 0:18:39.480 you thinking about when you were writing this? Well? Really everybody. 0:18:39.800 --> 0:18:42.199 There's a lot of inside jokes in this book that 0:18:42.280 --> 0:18:45.200 I think only a professional audience will get and will 0:18:45.280 --> 0:18:50.119 certainly be annoyed by and I hope amused by. I 0:18:50.160 --> 0:18:52.320 think one of the wonderful things about the Wall Street 0:18:52.320 --> 0:18:57.280 community is that people do have an ability to laugh 0:18:57.320 --> 0:19:00.720 at themselves. UM, at least the better people in the 0:19:00.880 --> 0:19:04.119 in the field do. And there's a lot to laugh about, 0:19:04.280 --> 0:19:07.679 so to say the least, I'm curious as to how 0:19:07.800 --> 0:19:10.359 the research for this win. I know you said this 0:19:10.400 --> 0:19:13.480 has been kicking around your head for fifteen years, but yeah, 0:19:13.520 --> 0:19:17.640 I just picture you doing a pretty deep dive, if 0:19:17.720 --> 0:19:20.919 not wearing the white gloves and the stacks of Yale, 0:19:21.560 --> 0:19:26.639 certainly working your way through UM either Lexus or Google 0:19:26.720 --> 0:19:30.760 to try and find some so early ideology of some 0:19:30.840 --> 0:19:33.560 of these words. Yeah, a lot in a lot of cases, 0:19:33.680 --> 0:19:37.240 because it is a true dictionary. So I was trying 0:19:37.280 --> 0:19:41.000 to get at where a lot of these terms derived from. 0:19:41.080 --> 0:19:44.359 And in many cases, people who use these terms all 0:19:44.440 --> 0:19:47.000 day long don't really know what they mean, so they're 0:19:47.080 --> 0:19:50.680 just using them as jargon, not as as true exactly. 0:19:50.720 --> 0:19:53.600 And and so yes, there's I did a lot of 0:19:53.680 --> 0:19:57.359 historical and archival research trying to figure out when a 0:19:57.440 --> 0:20:00.640 certain term was first used, where came from. I spent 0:20:00.680 --> 0:20:03.720 a lot of time with the Oxford English Dictionary and 0:20:04.160 --> 0:20:08.639 UM all kinds of historical research as well. And you 0:20:08.680 --> 0:20:11.600 have quite the background as an editor. One of the 0:20:11.680 --> 0:20:16.040 questions I had to ask, So, the very famous classic 0:20:16.119 --> 0:20:21.120 book by Benjamin Graham, The Intelligent Investor, you actually were 0:20:21.160 --> 0:20:24.879 the editor of the revised edition. How on earth did 0:20:24.920 --> 0:20:29.640 that invitation come along? Well, I don't think it hurt 0:20:29.800 --> 0:20:34.400 that I was a Graham afficionado. I mean I I 0:20:34.440 --> 0:20:40.800 first read The Intelligent Investor in March when I started 0:20:40.840 --> 0:20:45.960 as a financial journalist at Forbes Magazine, and I probably 0:20:46.000 --> 0:20:50.600 read it cover to cover at least six times. I'd 0:20:50.600 --> 0:20:54.000 read almost all of Graham's shorter writings as well, and 0:20:54.320 --> 0:20:56.960 all the biographies of him that existed at the time. 0:20:57.400 --> 0:21:01.240 But ultimately it was it was uck like everything else 0:21:01.560 --> 0:21:05.240 we've been talking about. Um. A friend of mine had 0:21:05.680 --> 0:21:10.240 written a book for Harbercollins. Uh, one of the top 0:21:10.359 --> 0:21:13.760 editors at the publishing house, was out to lunch with 0:21:13.800 --> 0:21:16.800 her and said, uh, you know, we have this book. 0:21:16.840 --> 0:21:18.880 Who do you think should do it? And she said, oh, well, 0:21:18.920 --> 0:21:21.239 there was only one person who should do it, and 0:21:21.320 --> 0:21:24.320 she told him to ask me. And why did she 0:21:24.400 --> 0:21:27.760 do that? Because we had both been at a party 0:21:27.880 --> 0:21:31.080 about a month beforehand. We hadn't seen each other in years. 0:21:31.320 --> 0:21:34.000 I had seen her across the room and I said, oh, 0:21:34.119 --> 0:21:37.360 I haven't seen her in years, and so I made 0:21:37.359 --> 0:21:39.280 a special point going to say hi. And if I 0:21:39.280 --> 0:21:41.640 hadn't said hi to her, she would have recommended somebody else. 0:21:42.040 --> 0:21:45.160 You're listening to Master's in Business on Bloomberg Radio. We're 0:21:45.200 --> 0:21:49.520 speaking with Jason's Wide, personal finance writer and author. Um. 0:21:49.640 --> 0:21:51.720 One of the things I wanted to really go over 0:21:51.760 --> 0:21:57.680 with you, uh, is your perspective as a personal finance columnist. 0:21:58.119 --> 0:22:01.720 And I'm going to start by quoting you and then 0:22:01.800 --> 0:22:06.399 and then we'll discuss it. You once wrote, my job 0:22:06.520 --> 0:22:10.480 is to write the exact same thing between fifty and 0:22:10.600 --> 0:22:13.800 one hundred times a year in such a way that 0:22:13.840 --> 0:22:17.840 neither my editors nor my readers will ever think I'm 0:22:17.880 --> 0:22:23.720 repeating myself. Explain. Um, Yeah, there's a simple reason for that, Barry. 0:22:23.960 --> 0:22:26.399 I'm and I think you and I think alike on this. 0:22:26.560 --> 0:22:29.240 There's there's really only a handful of things you can 0:22:29.280 --> 0:22:36.240 tell investors about their portfolios that are true before you 0:22:36.280 --> 0:22:40.159 get into things that are bad for them. And you know, 0:22:40.480 --> 0:22:43.200 we could disagree about the number. There might be six 0:22:43.280 --> 0:22:47.679 things they are good for people, there might be thirty, 0:22:48.520 --> 0:22:53.320 but there aren't a hundred. And I'm and there's at 0:22:53.440 --> 0:22:56.320 most a couple dozen. So We're not going to see 0:22:56.320 --> 0:23:00.400 a daily television show for you where an hour day 0:23:00.560 --> 0:23:04.480 you wax eloquence on the issues of the moment. Well, 0:23:04.560 --> 0:23:08.200 probably not, because you know, as I, as I also 0:23:08.240 --> 0:23:10.760 mentioned in the same piece you're quoting from, you know, 0:23:13.119 --> 0:23:16.440 five per cent of the time, the right thing for 0:23:16.480 --> 0:23:22.840 people to do is nothing. And uh, there's a financial 0:23:22.880 --> 0:23:27.720 media that exists all day long, NonStop, having to provide 0:23:27.720 --> 0:23:31.720 people with what appears to be information, well certainly content content. 0:23:32.119 --> 0:23:34.920 And if you you can't do that, if you believe 0:23:35.160 --> 0:23:37.359 that the right thing to tell people to do is nothing, 0:23:37.680 --> 0:23:40.800 So that Jason's wide TV show would be have a 0:23:40.920 --> 0:23:46.040 broadly diversified asset allocation model, rebalance regularly, watch your fees, 0:23:46.240 --> 0:23:50.760 see you tomorrow. Yeah, diversify, buy and hold, minimize your 0:23:50.800 --> 0:23:56.080 costs and your taxes. And I keep your hands in 0:23:56.119 --> 0:23:59.399 your pockets, don't. Don't just do something? Sit there right 0:23:59.440 --> 0:24:02.520 and keep other people's hands out of your pockets. That 0:24:02.600 --> 0:24:07.320 makes sense. So let me let me re ask that 0:24:07.440 --> 0:24:09.960 that question in a slightly different way, along the same 0:24:10.000 --> 0:24:14.520 spirit of that that question, what does good financial advice 0:24:14.640 --> 0:24:20.480 look like? Good financial advice on keeps people from being 0:24:20.520 --> 0:24:24.120 their own worst enemies? You know. Benjamin Graham famously wrote 0:24:24.160 --> 0:24:28.120 about that in the introduction to the Intelligent Investor, and 0:24:28.800 --> 0:24:31.840 I think it all really boils down to one very 0:24:31.960 --> 0:24:37.040 very simple thing, which is that markets regrets to the mean, 0:24:38.320 --> 0:24:42.080 and the way you in the short run, the way 0:24:42.119 --> 0:24:46.280 you attract attention to yourself if you're providing financial advice, 0:24:46.760 --> 0:24:51.320 is by encouraging people to bet against regression to the mean. 0:24:51.600 --> 0:24:54.959 So if an asset is rapidly going up in price, 0:24:55.040 --> 0:24:58.479 you tell people buy more while you still can, and 0:24:58.520 --> 0:25:01.240 if it's going down, you tell him to sell before 0:25:01.280 --> 0:25:04.679 it's too late. But if you're trying to help people 0:25:05.520 --> 0:25:07.720 get on the right side of regression to the mean, 0:25:08.560 --> 0:25:12.520 then you give them countercyclical advice. When an asset is 0:25:12.560 --> 0:25:15.000 going up and Brice, you tell them be cautious, and 0:25:15.040 --> 0:25:17.720 when it's going down, you tell them to become more aggressive. 0:25:18.640 --> 0:25:21.440 Quite interesting, So let me ask you the flip side 0:25:21.440 --> 0:25:24.520 of that. Uh, why is it that so much bad 0:25:24.560 --> 0:25:28.920