WEBVTT - How Not to Invest With Barry Ritholtz 0:00:05.720 --> 0:00:06.440 What can I Chillians. 0:00:06.440 --> 0:00:09.119 I'm Joel Webber and I'm Eric Belchunas. 0:00:11.039 --> 0:00:14.000 Eric a friend of the show who's also on Bloomberg 0:00:14.120 --> 0:00:17.200 Radio and does podcasts here like Masters in Business. That's 0:00:17.239 --> 0:00:19.680 a new book. His name is Barry Whittholts and the 0:00:19.720 --> 0:00:21.680 book is How Not to Invest. 0:00:23.000 --> 0:00:23.280 Yeah. 0:00:23.360 --> 0:00:26.560 No, he's one of a kind. He was on this show, 0:00:27.160 --> 0:00:28.200 I don't know, a couple of years ago. 0:00:28.320 --> 0:00:33.080 We've had him on the podcast at least twice, but 0:00:33.159 --> 0:00:33.479 he was. 0:00:33.400 --> 0:00:34.880 The only one where we had to do a double 0:00:34.960 --> 0:00:37.800 episode because it was so long. Yeah, and so use 0:00:37.840 --> 0:00:41.560 your disillusion, use your dissolution one and two, and this 0:00:42.040 --> 0:00:44.519 time we definitely got a like you could see, we 0:00:44.560 --> 0:00:47.760 could have gone on and on and on. He's so interesting. 0:00:47.840 --> 0:00:50.440 This book is chock full. It's basically called How Not 0:00:50.560 --> 0:00:53.840 to Invest. I read it and found a bunch of 0:00:53.880 --> 0:00:58.160 passages that were really interesting, some funny lot of Malcolm 0:00:58.200 --> 0:01:00.840 Gladwellian kind of little factors. 0:01:00.240 --> 0:01:02.360 In there that are metaphors for the market. 0:01:03.160 --> 0:01:04.720 Just a lot to unpack and chew on. 0:01:05.120 --> 0:01:09.280 Also, we're going to disclose that this interview was recent 0:01:10.240 --> 0:01:12.920 and there have been a lot of things happening in 0:01:13.240 --> 0:01:17.399 markets of late What's interesting about Barry, though, is he's 0:01:17.400 --> 0:01:19.000 seen a lot of stuff, so he can kind of 0:01:19.000 --> 0:01:21.200 go a little bit more high altitude. So this is 0:01:21.560 --> 0:01:25.360 actually maybe the perfect year to be talking about a 0:01:25.360 --> 0:01:28.319 book like this. Joining us on this episode Barry Ritholtz, 0:01:28.680 --> 0:01:34.120 co founder, chairman and chief investment officer of Ritholt's Wealth Management, 0:01:35.920 --> 0:01:38.959 this time on Trillions, How Not to Invest? 0:01:40.760 --> 0:01:42.160 Berry, welcome back to Trillions. 0:01:42.319 --> 0:01:43.399 Well, thanks for having me. 0:01:43.600 --> 0:01:45.320 So this book is not small. 0:01:45.640 --> 0:01:48.760 I think it's like approximately it's more than an inch 0:01:48.760 --> 0:01:49.440 maybe less than. 0:01:49.320 --> 0:01:49.960 Two inches thick. 0:01:50.280 --> 0:01:55.440 It's deceptive. There's a few one hundred end notes, and 0:01:55.720 --> 0:01:57.960 the chapters are really short. They're page and a half 0:01:58.000 --> 0:02:01.160 two pages, three pages, so there's a lot a blank space. 0:02:01.600 --> 0:02:04.120 I had to argue with the publisher not to start 0:02:04.160 --> 0:02:07.840 each chapter in the middle. I made them started at 0:02:07.880 --> 0:02:10.560 the top of the page. Otherwise it'd be like, you know, 0:02:10.680 --> 0:02:13.799 Barbarer Streisan's photobiography being nine hundred and fifty pages long. 0:02:13.919 --> 0:02:16.320 So not your first book. Not my first book. The 0:02:16.400 --> 0:02:20.120 last one was Bailout Nation, was fifteen years. I crank 0:02:20.160 --> 0:02:24.000 them out, every fifth sequel to this twenty four. There's 0:02:24.000 --> 0:02:24.839 no stopping that time. 0:02:24.840 --> 0:02:27.920 I possessed you to write How Not to Invest. 0:02:28.240 --> 0:02:30.840 So you know, it has been a while since the 0:02:30.919 --> 0:02:33.760 last book, and in between, we just happened to launch 0:02:33.800 --> 0:02:36.480 a firm and have been growing it over the past, 0:02:36.600 --> 0:02:39.040 you know, twelve years, and I've had a number of 0:02:39.080 --> 0:02:43.000 friends and publishers and people kind of noticing me to 0:02:43.040 --> 0:02:46.960 do another one. And my answer was, we've had hundreds 0:02:47.000 --> 0:02:50.359 of thousands of books over the past century telling people 0:02:50.400 --> 0:02:54.280 what to do, and most investors are still pretty mediocre. 0:02:54.960 --> 0:02:59.080 And you know, I came home one vacation between Christmas 0:02:59.120 --> 0:03:01.720 and New Year's, those few days to kill before everybody 0:03:01.760 --> 0:03:03.960 goes back to the office, and I just started thumbing 0:03:04.000 --> 0:03:09.320 through some old quarterly calls and market commentary and research notes, 0:03:09.360 --> 0:03:12.400 and it seems like every other thing I wrote was 0:03:12.639 --> 0:03:17.160 debunking some nonsense or another. And you know, I just 0:03:17.240 --> 0:03:21.760 happen to start channeling Charlie Ellis, who wrote Winning the 0:03:21.800 --> 0:03:25.079 Losers Game, where he compared tennis to investing, and it's 0:03:25.120 --> 0:03:28.000 two games in one. Instead of trying to score points, 0:03:28.000 --> 0:03:30.919 how about just make fewer errors and you come out 0:03:30.960 --> 0:03:31.520 way ahead. 0:03:32.320 --> 0:03:32.680 All right? 0:03:32.720 --> 0:03:36.240 So, this book, as Eric mentioned, filled with hot takes. 0:03:36.680 --> 0:03:39.040 We've got a few that we've plucked. 0:03:38.920 --> 0:03:40.440 And we want to discuss them with that all right, 0:03:40.600 --> 0:03:43.480 By the way, I don't think they're hot takes because 0:03:44.400 --> 0:03:48.880 everything in there I've kind of discussed, granted in much 0:03:49.000 --> 0:03:50.119 much shorter format. 0:03:50.880 --> 0:03:55.040 Some stuff like the Cisco Fortune cover. I first wrote 0:03:55.080 --> 0:03:58.200 about that in the year two thousand to Crickets, So 0:03:58.640 --> 0:04:01.440 it might have been a hot take then, but nobody knew. 0:04:01.320 --> 0:04:03.280 Who would appreciate your humility. We're gonna call him. 0:04:03.560 --> 0:04:06.040 If we went to an RIA conference, these would not 0:04:06.160 --> 0:04:09.120 or bogel Heads conference, these wouldn't be necessarily hot takes. 0:04:09.440 --> 0:04:12.600 But inside a media apparatus as big as Bloomberg, a 0:04:12.600 --> 0:04:17.039 lot of these are somewhat controversial and definitely challenge a 0:04:17.040 --> 0:04:18.960 lot of the things you hear out there. 0:04:19.040 --> 0:04:21.040 For instance, number one, number. 0:04:20.760 --> 0:04:24.279 One, nobody knows anything. This is what you say. 0:04:24.279 --> 0:04:26.400 Your one of your favorite qutes from William Goldman, who's 0:04:26.400 --> 0:04:29.039 a Hollywood guy. I think he directed The Exorcist. 0:04:29.480 --> 0:04:30.560 No, he is a scriptwriter. 0:04:30.640 --> 0:04:31.080 Scriptwriter. 0:04:31.240 --> 0:04:33.800 He won two Oscars, one for All the President's Men, 0:04:33.960 --> 0:04:37.080 the other four I'm drawing a blank on it. Maybe 0:04:37.120 --> 0:04:39.680 it was Butchcasting and The Sundance Kid. He wrote The 0:04:39.720 --> 0:04:44.640 Marathon Man and famously wrote The Princess Bride, which later 0:04:44.680 --> 0:04:48.200 became a Rob Ryner cult favorite. A buddy mine gave 0:04:48.240 --> 0:04:51.039 me a copy of that book decades ago. I loved it. 0:04:51.520 --> 0:04:55.280 And when I moved my blog in two thousand and 0:04:55.360 --> 0:05:00.919 three from Yahoo GeoCities to six apart Type AD, I 0:05:01.000 --> 0:05:03.920 needed a name. And his new book had just come out, 0:05:04.240 --> 0:05:07.760 William Goldman's new book, and it was called The Big Picture, 0:05:07.760 --> 0:05:08.920 and I'm like done. 0:05:08.960 --> 0:05:12.800 So in this overall section, there's a really cool thing 0:05:12.839 --> 0:05:16.279 on the Beatles Jrol where Ed Sullivan turned them down twice. 0:05:16.360 --> 0:05:16.919 I didn't know that. 0:05:17.440 --> 0:05:19.600 And then after they were on the Ed Sullivan Show, 0:05:19.600 --> 0:05:21.120 which is how they made it, and you know how 0:05:21.120 --> 0:05:24.560 they got exposed in America. All the papers were basically 0:05:24.600 --> 0:05:27.440 like criticizing them. They're like, you know, this isn't going 0:05:27.520 --> 0:05:30.080 to last, that they aren't good. He's basically laying the 0:05:30.120 --> 0:05:34.200 groundwork that Hollywood misses a lot, the music industry misses 0:05:34.240 --> 0:05:36.520 a lot, financed misses a lot. Then he goes into 0:05:36.520 --> 0:05:39.440 people like Larry Summers and Michael Burry, which I thought 0:05:39.480 --> 0:05:42.400 was interesting because Burry had that one big call, but 0:05:42.440 --> 0:05:45.760 then you listed about ten other times he was yeah, 0:05:46.240 --> 0:05:50.480 and you know, you talk about how nobody knows anything. 0:05:50.560 --> 0:05:51.800 I mean it just. 0:05:51.800 --> 0:05:55.400 Elaborate a little bit like sure what that really challenges 0:05:55.440 --> 0:05:57.839 a lot of the whole complex. 0:05:57.960 --> 0:06:01.280 Well, stop and think about Wall Street training program, of 0:06:01.320 --> 0:06:03.640 which there are fewer and fewer these days. It's about 0:06:03.640 --> 0:06:05.800 a year long training program at least it used to be, 0:06:06.200 --> 0:06:09.159 and about a week of it is modern portfolio theory 0:06:09.160 --> 0:06:12.360 and acid allocation, and then fifty one weeks is essentially 0:06:12.480 --> 0:06:15.760 advanced sales training. And there's this very much fake it 0:06:15.920 --> 0:06:19.080 till you make it attitude. I mean, we've all kind 0:06:19.120 --> 0:06:21.560 of been there. You walk into a room, it's filled 0:06:21.600 --> 0:06:24.080 with people who have been doing this longer, no more 0:06:24.120 --> 0:06:27.359 than you, and nobody wants to say I don't understand this, 0:06:27.440 --> 0:06:31.120 I don't know. So that in finance is pretty endemic. 0:06:31.200 --> 0:06:35.159 But when you step back and objectively look at what 0:06:35.240 --> 0:06:38.560 do we really know, when do we know it, what 0:06:38.600 --> 0:06:42.000 do we know about the presence, it's pretty clear most 0:06:42.000 --> 0:06:46.159 of us are pretty misinformed about the present. What we 0:06:46.279 --> 0:06:51.320 recall are mostly you know, rose tinged nostalgia in the past, 0:06:51.640 --> 0:06:54.520 and what we're looking for is, you know, one part 0:06:54.560 --> 0:06:57.599 guess work, one part wishful thinking. And so when you 0:06:57.800 --> 0:07:02.480 use the examples of how many studios passed on Raiders 0:07:02.480 --> 0:07:05.599 of the Lost Ark Star wars Et. The list is endless. 0:07:05.600 --> 0:07:08.320 When you look at squid Games couldn't get made for 0:07:08.440 --> 0:07:13.800 ten years. John Wick, despite a stellar cast and the 0:07:13.840 --> 0:07:18.240 guys who did the stunts and special effects on the Matrix, 0:07:18.280 --> 0:07:21.240 which was a giant franchise. Canna Reeves had to write 0:07:21.280 --> 0:07:24.480 a check out of his own pocket to finish the movies. 0:07:24.800 --> 0:07:27.960 I'm assuming he got points. This is now a two 0:07:28.000 --> 0:07:31.160 billion dollar franchise. Nobody wanted to make it, nobody wanted 0:07:31.200 --> 0:07:33.240 to show it. People had no idea what was going 0:07:33.240 --> 0:07:37.080 on with it. So I am probably the wrong messenger 0:07:37.240 --> 0:07:41.800 for the concept that finance and investing requires more humility 0:07:41.840 --> 0:07:44.520 than we bring to it. But as you're reading all 0:07:44.560 --> 0:07:49.280 these things, it's pretty obvious that we really don't have 0:07:49.400 --> 0:07:52.360 a good idea of what's happening now. We know even 0:07:52.480 --> 0:07:56.440 less about what's coming next month and next year. Is 0:07:56.520 --> 0:08:01.240 such a long period of time that randomness disrupts even 0:08:01.280 --> 0:08:05.520 the most thoughtful forecast. Think about who was forecasting a 0:08:05.560 --> 0:08:10.440 pandemic in December twenty nineteen. Who was forecasting either double 0:08:10.480 --> 0:08:13.040 digit losses in stocks and bonds in twenty twenty two, 0:08:13.520 --> 0:08:16.960 the fastest five hundred basis point increase in FED hikes, 0:08:17.360 --> 0:08:19.640 the Russian that this is just one year, the Russian 0:08:20.000 --> 0:08:25.120 invasion of Ukraine, the Gaza attack, and the response of 0:08:25.200 --> 0:08:29.000 Israel to Haamad, Like nobody was talking about these things happening, 0:08:29.280 --> 0:08:32.720 and so whatever your forecast is, it's really easy to 0:08:32.800 --> 0:08:36.560 be derailed. And if your investing requires you to see 0:08:36.559 --> 0:08:38.360 the future, you're in trouble. 0:08:38.559 --> 0:08:40.719 So when I was writing my ETF book, I had 0:08:40.720 --> 0:08:43.120 this same premise. I was like, and I asked your 0:08:43.160 --> 0:08:45.640 colleague Josh Brown, who you work with, and he's on 0:08:45.960 --> 0:08:46.680 the other channel. 0:08:46.679 --> 0:08:48.120 We won't name the channel. 0:08:48.800 --> 0:08:52.400 But I said to him, why, you know, why even 0:08:52.400 --> 0:08:55.080 have a media like a TV station at all, like 0:08:55.120 --> 0:08:58.160 if all of it means nothing, And he said he 0:08:58.240 --> 0:09:00.480 basically said something like, well, look, if you turn on 0:09:00.679 --> 0:09:03.720 ESPN just because they say, you know such and such, 0:09:03.840 --> 0:09:05.959 this player is washed or this team is not good, 0:09:06.679 --> 0:09:12.360 nobody's acting on that. It's just basically like more information entertainment. Yeah, 0:09:12.440 --> 0:09:16.440 it's basically somewhat entertainment. And that's the general idea behind 0:09:16.480 --> 0:09:18.720 a lot of financial media. It's just to give you 0:09:19.440 --> 0:09:23.200 information around these things, but not necessarily investment advice. That 0:09:23.280 --> 0:09:26.240 was his take, because I did find he has the 0:09:26.280 --> 0:09:30.120 same opinion, but he also goes on and talks about stocks, right, and. 0:09:30.040 --> 0:09:32.280 He talks about stocks in his personal accounts. It's not 0:09:32.320 --> 0:09:36.240 how we manage money. We're not stock pickers. So essentially, 0:09:37.000 --> 0:09:39.280 you know, you go back to when I was a kid. 0:09:39.880 --> 0:09:42.880 Once a week on Friday night was Lewis Rukeiser for 0:09:42.960 --> 0:09:43.280 an Now. 0:09:43.240 --> 0:09:44.160 Yeah, Wall Street Week. 0:09:44.320 --> 0:09:44.880 That was it. 0:09:44.960 --> 0:09:49.120 That was the entirety of the financial media escape. Yeah, 0:09:49.200 --> 0:09:51.320 you had the Wall Street Journal and you had barons 0:09:51.320 --> 0:09:55.160 on weekends. I remember sitting out in my backyard at 0:09:55.200 --> 0:09:58.200 the picnic table with a cup of coffee, thumbing through 0:09:58.240 --> 0:10:01.200 barons because hey, I was starting on a training desk 0:10:01.240 --> 0:10:03.200 and I wanted to learn what the hell was going on. 0:10:03.600 --> 0:10:06.160 When you're young, you consume everything, and as you get 0:10:06.200 --> 0:10:09.680 older and older, you learn to filter everything and just 0:10:09.840 --> 0:10:13.200 select the best of what you can select. So you 0:10:13.240 --> 0:10:16.640 know the concept that it's just entertainment, if that's all 0:10:16.679 --> 0:10:20.359 it is. Then you got to wonder why the advertisers 0:10:20.400 --> 0:10:23.400 are getting such big bucks. The reason we went at 0:10:23.400 --> 0:10:27.520 one point we were peak financial media landscape when they 0:10:27.520 --> 0:10:31.640 were I want to say four so there was CNN, CNBC, Bloomberg, 0:10:32.480 --> 0:10:36.559 Fox Business, CNNfn to say nothing about a whole bunch 0:10:36.600 --> 0:10:39.480 of other shows, And now we're down to two and 0:10:39.520 --> 0:10:43.199 a half three channels. You know, I kind of liken 0:10:43.280 --> 0:10:48.240 it to somewhere between ESPN seven and the Weather Channel. 0:10:48.920 --> 0:10:52.360 If you're really into Australian rules Rugby, you know where 0:10:52.400 --> 0:10:52.920 to find that. 0:10:53.000 --> 0:10:55.679 It's ESPN plus now, I think, right, yeah. 0:10:55.200 --> 0:10:58.280 But the Weather Channel is when there's a storm a coming, 0:10:58.840 --> 0:11:01.160 we all flick to the Weather Channel. And that's what 0:11:01.280 --> 0:11:05.080 financial television has really when their ratings go up, when 0:11:05.160 --> 0:11:08.880 everything is clicking for them, it's in response to a storm. 0:11:09.559 --> 0:11:13.920 Always ask yourself a simple question. Anybody who's sharing financial 0:11:13.960 --> 0:11:17.000 advice with me, what are they selling? If you don't 0:11:17.040 --> 0:11:20.600 ask that, then you're a little gullible and a little naive, which, 0:11:20.640 --> 0:11:23.600 by the way, I very much was early in my career. 0:11:24.040 --> 0:11:26.559 Well, disclaimer, because you are selling something other than a 0:11:26.559 --> 0:11:27.360 book too, so. 0:11:27.440 --> 0:11:28.560 And I put that in the book. 0:11:28.640 --> 0:11:28.840 Yeah. 0:11:29.040 --> 0:11:31.960 I actually out myself as hey, listen, I run an 0:11:31.960 --> 0:11:35.400 asset management farm, I have a podcast, I have a blog. 0:11:35.760 --> 0:11:39.560 I want your time, attention and money. It's pretty straightforward, 0:11:40.040 --> 0:11:42.560 but I try and be honest about it and say here, 0:11:43.080 --> 0:11:46.240 it's right here. It's very public. Now. Our business model 0:11:46.360 --> 0:11:49.760 is a little weird because we're very on Wall Street. 0:11:49.840 --> 0:11:51.800 It's like, hey, you could do it yourself. Here's how 0:11:52.160 --> 0:11:54.720 knock yourself out. And the point oh one percent of 0:11:54.720 --> 0:11:57.200 you that don't want to do it yourself. We don't 0:11:57.200 --> 0:11:59.880 have any minimums. We're happy to take your cash and 0:12:00.000 --> 0:12:02.480 and we have some other things we do along with it, 0:12:02.960 --> 0:12:05.760 tax and estate planning and all the fun bells and 0:12:05.760 --> 0:12:11.160 whistles that go around wealth management. But essentially everything we 0:12:11.360 --> 0:12:16.160 produce in the firm individually is all here's how to 0:12:16.200 --> 0:12:18.439 do it better than you've been told. 0:12:19.120 --> 0:12:21.440 And you know this He kind of stole thunder from 0:12:21.440 --> 0:12:23.480 the second point, which is he says the majority of 0:12:23.520 --> 0:12:25.040 what the media turns out is irrelevant. 0:12:25.679 --> 0:12:26.760 Let's dig into this a little bit. 0:12:26.800 --> 0:12:27.360 We've hit this. 0:12:27.559 --> 0:12:30.800 Yeah, well, the word is a ephemeral. It's ephemeral, and 0:12:30.840 --> 0:12:33.720 that means it has a very short shelf life. 0:12:33.760 --> 0:12:35.719 One of the areas I was fascinated by, and I 0:12:36.000 --> 0:12:39.240 see this a lot, is denominator blindness. Yeah, this is 0:12:39.240 --> 0:12:43.160 a really interesting concept about purposely leaving out the denominator 0:12:43.640 --> 0:12:45.640 to make it sound more sensational. 0:12:45.800 --> 0:12:49.040 So if you hear somebody a company laid off ten 0:12:49.080 --> 0:12:53.199 thousand workers, what does that mean? Is that a lot 0:12:53.280 --> 0:12:55.320 or a little? Is it a regional company with thirty 0:12:55.360 --> 0:12:58.560 thousand employees laying off thirty three percent of your staff 0:12:58.600 --> 0:13:02.120 is giant? Is it Walmart? That means one person every 0:13:02.240 --> 0:13:06.240 five stores is losing their job, which probably happens every 0:13:06.280 --> 0:13:11.280 day randomly anyway, So you need the context. Then you know. 0:13:11.320 --> 0:13:15.000 There are some really funny examples of denominator blindness in 0:13:15.040 --> 0:13:18.440 the book. So the three things I always talk about layoffs, 0:13:18.880 --> 0:13:19.920 stock sell offs. 0:13:20.280 --> 0:13:22.360 We'll talk about that for a minute. So the Dow 0:13:22.440 --> 0:13:25.360 in points thing, which drives me crazy. Stock sold off 0:13:25.400 --> 0:13:28.000 five hundred points today. Well, if it's the S and 0:13:28.040 --> 0:13:30.559 P five hundred, that's a ten percent drop, and. 0:13:30.600 --> 0:13:33.760 Holy cow, that's a giant whack. If it's the Dow, 0:13:34.320 --> 0:13:37.360 it's less than a half a percent, and you know 0:13:37.880 --> 0:13:39.280 that's normal daily trading. 0:13:39.360 --> 0:13:40.160 Why do we care about that? 0:13:40.280 --> 0:13:42.840 Do you think that they purposely leave it out in 0:13:43.000 --> 0:13:44.080 order to get the clicks? 0:13:45.040 --> 0:13:47.360 Is it ignorance or clickbait? 0:13:47.400 --> 0:13:50.839 I'm not quite In the full Conspiracy X files, there 0:13:50.880 --> 0:13:55.040 are no such things as coincidences. But you know, as 0:13:55.200 --> 0:13:57.400 you know this, I always have to tell this to 0:13:57.440 --> 0:14:01.040 people when you write a column. Sponsored for all these 0:14:01.080 --> 0:14:04.760 things except the headline, right, The editors write the headline, 0:14:04.920 --> 0:14:08.160 and so the editlers want there to be reads, they 0:14:08.160 --> 0:14:11.120 want there to be clicks. No one is going to 0:14:11.160 --> 0:14:15.120 read the headline zero point one percent of Walmart's employees. 0:14:14.679 --> 0:14:15.200 Were let go. 0:14:15.400 --> 0:14:18.920 Nobody's going to read that. But ten thousand people fired 0:14:18.920 --> 0:14:20.240 at Walmart is a big headline. 0:14:20.240 --> 0:14:21.040 And this is something I. 0:14:21.040 --> 0:14:21.400 Deal with that. 0:14:21.440 --> 0:14:23.960 You're coming for me as the as an editor here. 0:14:24.600 --> 0:14:26.880 So there's a lot of subtext going on here. 0:14:27.040 --> 0:14:31.440 I know you should see that. Okay, Going back and 0:14:31.480 --> 0:14:33.560 forth between these two guys, it's really. 0:14:39.400 --> 0:14:44.520 We also have three words, the most important words in investing? 0:14:45.120 --> 0:14:45.760 What are they? 0:14:46.120 --> 0:14:49.960 According to Barry? And I think I agree. I don't know. 0:14:50.760 --> 0:14:52.600 I remember interviewing you once, I don't know, make ten 0:14:52.680 --> 0:14:55.040 years ago when I first met you really something like that, 0:14:55.080 --> 0:14:56.800 and you said something. I'm like, yeah, this guy's on 0:14:57.080 --> 0:15:01.400 I love this, he goes. He goes, I said something 0:15:01.440 --> 0:15:04.280 about this dichotomy of having an opinion but then also 0:15:04.320 --> 0:15:08.320 saying but I really know, and he said, but saying 0:15:08.360 --> 0:15:12.200 that the future is inherently unknowable. You will not get 0:15:12.240 --> 0:15:15.440 you on television, right, just you can't go on there 0:15:15.480 --> 0:15:18.240 and say I don't know. And so there's this motive 0:15:18.320 --> 0:15:20.120 to not say I don't know. 0:15:20.600 --> 0:15:21.040 Yet. 0:15:21.160 --> 0:15:22.440 I think at the end of the day, a lot 0:15:22.520 --> 0:15:25.160 of people would admit they don't know and the future 0:15:25.240 --> 0:15:25.920 is unknown. 0:15:26.400 --> 0:15:28.800 So I think that's a given. By the way, are 0:15:28.840 --> 0:15:31.040 any of these hot takes that are controversial yet? I 0:15:31.080 --> 0:15:32.040 don't think any of these are. 0:15:32.160 --> 0:15:35.280 It's elegant bs okay. 0:15:35.000 --> 0:15:38.600 So here's a little pushback that I thought was kind 0:15:38.640 --> 0:15:43.720 of fascinating. Someone asked me, A client asked me, so 0:15:44.440 --> 0:15:49.360 the whole COVID nineteen thing. Was that a design biochemical 0:15:49.440 --> 0:15:54.280 biowarfare weapon that escaped the lab? Or was it something 0:15:54.320 --> 0:15:57.280 that trans species hopped from the wet market? And I 0:15:57.960 --> 0:16:01.640 perfect teachable moment. I'm like, not only do I not 0:16:01.760 --> 0:16:06.560 have the slightest idea, I'm aware that I have no 0:16:06.720 --> 0:16:09.000 national security clearance, so I don't know what those guys know. 0:16:09.320 --> 0:16:12.560 I'm not a virologist, I'm not an epidemiologist. But here's 0:16:12.600 --> 0:16:13.640 the important thing with. 0:16:13.880 --> 0:16:16.160 But I did watch financial television this morning. 0:16:16.160 --> 0:16:20.040 Right, I stayed at a Hampton's Inn. But why do 0:16:20.080 --> 0:16:23.800 you feel that anybody outside of a tiny sphere of 0:16:23.840 --> 0:16:27.920 experts should even profer an opinion about that. It's not 0:16:28.080 --> 0:16:30.600 just that you don't know, because if you remember during 0:16:30.640 --> 0:16:35.920 the pandemic, we had this rotating cycle of fake experts. Right, 0:16:36.280 --> 0:16:38.960 First you're an expert in vaccination, then you're an expert 0:16:39.360 --> 0:16:42.720 in constitutional law, then you're an expert in war strategy. 0:16:42.760 --> 0:16:45.080 Then you're an expert and it's like, here's an idea. 0:16:45.760 --> 0:16:49.840 I understand the American school educational system is built on 0:16:49.960 --> 0:16:54.280 standardized testing, but you're not obligated to have an opinion 0:16:54.320 --> 0:16:58.400 on everything. And I really like the way Warren Buffett 0:16:58.480 --> 0:17:01.800 describes it in you could stand at the plate with 0:17:02.040 --> 0:17:05.120 your bat on your shoulder. There are no cult strikes. 0:17:05.119 --> 0:17:07.600 You could just wait for your pitch. I think that 0:17:07.680 --> 0:17:10.760 includes when you go on TV. You don't have to 0:17:10.840 --> 0:17:13.800 and you are an expert in a given space, you 0:17:13.920 --> 0:17:18.320 don't have to engage in epistemic trespass and opine on 0:17:18.440 --> 0:17:23.280 areas of which you have zero expertise. I do annual 0:17:23.320 --> 0:17:25.760 MEA culpers every year. And here's what I got wrong. 0:17:26.280 --> 0:17:29.080 I can't tell you how often when I get something wrong, 0:17:29.119 --> 0:17:31.880 it's because I kind of ventured out of my area 0:17:32.400 --> 0:17:36.320 where I have expertise and allowed myself to wander into 0:17:36.359 --> 0:17:39.760 areas where really I have no business speculating or a 0:17:39.840 --> 0:17:45.200 pining and that is a relatively rare perspective in finance. 0:17:45.240 --> 0:17:47.399 I also think I don't know, in my opinion, if 0:17:47.440 --> 0:17:51.200 you brought it out to politics, religion, there's so much 0:17:51.840 --> 0:17:54.560 A little I don't know goes a long way towards 0:17:54.640 --> 0:17:59.000 just soothing a lot of division, like people get stuck 0:17:59.000 --> 0:18:02.760 in these rigids and it just creates all kinds of friction. 0:18:02.880 --> 0:18:05.240 I think, so I don't know to me is almost 0:18:05.280 --> 0:18:09.240 like a philosophical outlook that I think is very positive. 0:18:09.320 --> 0:18:12.320 Go back to Socrates, go to Aristotle. I think was 0:18:12.400 --> 0:18:14.520 Socrates who said the only thing I know is how 0:18:14.520 --> 0:18:18.440 little I know. And so that's three thousand years ago. 0:18:19.040 --> 0:18:21.720 None of this is new, which just sort of placed 0:18:21.800 --> 0:18:24.520 in a different context. And when you look at the 0:18:24.600 --> 0:18:27.480 example I like is Therahnose, when you look at how 0:18:27.480 --> 0:18:32.720 many people from outside of medical field devices biotech were 0:18:32.760 --> 0:18:36.040 on their board, none of those guys had any clue 0:18:36.200 --> 0:18:39.399 what was going on, and how are they capable of 0:18:39.440 --> 0:18:43.080 identifying if it's a fraud or not. They just saw 0:18:43.240 --> 0:18:47.320 the coverage everybody relied on everybody else's. You know, they 0:18:47.400 --> 0:18:50.640 must have done their due diligence, and apparently nobody did. 0:18:51.520 --> 0:18:54.160 There's another quote that was in this section. I don't 0:18:54.160 --> 0:18:55.840 think it's totally really, I don't know, but it kind 0:18:55.840 --> 0:18:58.280 of is a little bit. It's from Eddie Elfenbeinin, who's 0:18:58.320 --> 0:19:01.639 a famous thought picker and has an ET. Anyway, he says, 0:19:02.520 --> 0:19:05.040 somebody says this or market, This market reminds me of 0:19:05.119 --> 0:19:08.199 nineteen eighty seven. The response is, really, you think the 0:19:08.240 --> 0:19:11.359 market will return thirty fivefold over the next thirty seven years? 0:19:12.240 --> 0:19:13.119 That's your voice. 0:19:13.359 --> 0:19:17.280 No, that's Eddie saying it, but he couldn't. It's irresistible. 0:19:17.400 --> 0:19:19.680 I see why I had so good right That. 0:19:19.640 --> 0:19:20.680 Reminds me of right now. 0:19:20.720 --> 0:19:23.200 There's a lot of like ugh, and I'm like, I 0:19:23.240 --> 0:19:27.159 think a lot of people have settled into not selling, 0:19:27.200 --> 0:19:29.480 and I think the Bogel give him a lot of credit. 0:19:29.560 --> 0:19:32.840 Vanguard cheap index funds. People can get married to that 0:19:32.920 --> 0:19:35.960 product and they're like, you know, I can't market time, 0:19:36.560 --> 0:19:38.840 and if I do, I'll sell the and they just 0:19:38.960 --> 0:19:40.639 like the hell with it. And I'm not going to 0:19:40.640 --> 0:19:43.720 go to an active manager. So the passive money which 0:19:43.840 --> 0:19:46.960 you are a part of Never Sells, and I think 0:19:47.520 --> 0:19:50.840 has seen through some of this stuff and is like, yeah, 0:19:51.119 --> 0:19:52.320 I don't really care what you say. 0:19:52.359 --> 0:19:55.159 And I think the passive money found its way to 0:19:55.680 --> 0:20:00.240 Blackrock and Vanguard not because of an emission of I on. No. 0:20:00.880 --> 0:20:04.160 My pet theory and you could see it post financial 0:20:04.240 --> 0:20:07.920 crisis is think about the decade leading up to the GFC. 0:20:08.359 --> 0:20:11.000 So you had the analyst scandal and the IPO scandal, 0:20:11.000 --> 0:20:14.160 and you had all these crazy things going on. That's 0:20:14.240 --> 0:20:17.720 before you know, the financial crisis, and before Madeoff and 0:20:17.760 --> 0:20:20.520 all this stuff, and it just got to the point 0:20:20.520 --> 0:20:22.880 where it felt like mom and Pop took their ball 0:20:22.960 --> 0:20:25.439 and went home. And by ball I mean money and 0:20:25.440 --> 0:20:27.920 by home I mean Vanguard. That's kind of Hey, you 0:20:27.960 --> 0:20:29.640 know what I need to invest for the future. I'm 0:20:29.680 --> 0:20:33.719 saving for buying a house, paying for the kids, college, retirement, whatever. 0:20:34.240 --> 0:20:36.760 But I don't want to pay high fees and I'm 0:20:36.760 --> 0:20:41.040 not confident that anybody who's picking stocks for me is 0:20:41.080 --> 0:20:43.080 doing a good job. So I'm just going to own 0:20:43.119 --> 0:20:45.280 the whole market see in thirty years. 0:20:45.359 --> 0:20:46.960 By the way, that was he gave me that quote 0:20:46.960 --> 0:20:49.359 for the bogal effect. You got like olies, but goodies. 0:20:49.400 --> 0:20:53.080