Where are all the Billionaires? & Why should We Care?: Victor Haghani at TEDxSPS
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- Опубліковано 11 гру 2024
- Victor Haghani uses the puzzle of the missing billionaires to help us explore how and why most investors fail to capture the returns offered by the market. He puts forward a simple but powerful solution for those who aren't satisfied with the status quo: it's called "Active Index Investing." This approach combines the best features of low-cost index funds with the appealing and successful aspects of active management, all for 1/10th the price that many investors currently pay. (filmed at TEDx St Paul's School for Boys, London)
Victor Haghani has spent nearly 30 years actively involved in markets and financial innovation. He started his career in 1984 in bond portfolio analysis research at Salomon Brothers, and later became a managing director in the bond arbitrage group run by John Meriwether. In 1993 Victor became a founding partner of Long-Term Capital Management. His participation in the failure of LTCM was a life-changing experience that led him to question and revise much of the way he thought about the economy, markets and investing. Since that time he has been involved in a variety of activities, including research and lecturing at the London School of Economics (his alma mater), where he is a senior research associate in the Financial Markets Group. Through a careful study of the academic literature on investing and many thought-provoking discussions with friends, colleagues, and investors of all backgrounds, Victor concluded that savers can and should do much better. He founded Elm Partners in 2011 to help investors manage their savings in an efficient and disciplined manner, and to capture the long term returns they ought to earn.
In the spirit of ideas worth spreading, TEDx is a program of local, self-organized events that bring people together to share a TED-like experience. At a TEDx event, TEDTalks video and live speakers combine to spark deep discussion and connection in a small group. These local, self-organized events are branded TEDx, where x = independently organized TED event. The TED Conference provides general guidance for the TEDx program, but individual TEDx events are self-organized.* (*Subject to certain rules and regulations)
Some of the best lessons in life are learned from our failures.
Victor's message shows the way for investors to have a positive investment experience.
Superbly crafted and communicated Victor
I was a little confused at first, but really nice drawings and I think it all made sense at the end; We invest to get quick money, leading to a lot of risk and loss.
Super explanation, I like it very much! Simply is best.
This was a very well prepared presentation.
By passive investing in US stocks are you not betting that US companies will continue to outperform the rest of the world. Just because a passive investment in the US economy was successful over the last 100 year, does that necessarily mean it will be over the next 30 years?
... Correct. Past is not precedent. But it's the only rule we know. Growth.
Just look at China/Russia and what ridiculous governing they have and then tell me that US won't outperform those clowns.
@@tomwallen7271Growth has nothing to do with long-run stock returns
I can't wait 100 years
Nikolay Klimchuk oh sweetie time is bullshit. You can wait this!!!
did he mention the face that 2 world wars occurred from 1900 to 1970
Saadman Yasar Best time to invest
That should have made US investors richer
Does Vanguard provide low cost "active passive" index funds or ETFs?
In my opinion, this simple graph captures the conditions of what to expect for "that woman's" future.
8:18 buffet and soros legendary investors, lol, more like legendary crooks
remember buffet's company took a massive bailout from the taxpayer 2008 other wise this so called legendary investor would of lost 60% of his portfolio over night
Berkshire, based in Omaha, Neb., owns stock valued at more than $13 billion in the top recipients of TARP funds, including Goldman Sachs Group, US Bancorp, American Express and Bank of America, which analysts all thought were in deep trouble before TARP was approved in October.
brian menendez Buffett purchased 5 billion USD of Goldman Sachs stock after the Lehmann collapse in Sept. 2008 (Headline at the WSJ): Buffett to Invest $5 Billion in GoldmanFamed Investor's Move Is Seen as a Vote of Confidence in Crisis-Stricken Banking System; Old Ties to Firm Paved Way for Deal
brian menendez And also this other Headline: Aug. 25, 2011 On Thursday, Berkshire Hathaway, run by Mr. Buffett, announced plans to invest $5 billion in Bank of America, a vote of confidence for the beleaguered financial firm.
brian menendez From Wikipedia: The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase assets and equity from financial institutions to strengthen its financial sector that was signed into law by U.S. President George W. Bush on October 3, 2008.
luis arredondo Florida will pay investor Warren Buffett $224 million to assure help in a bad storm season
July 3, 2008|By Aaron Deslatte, Tallahassee Bureau
TALLAHASSEE -- Florida will pay Warren Buffett's Berkshire Hathaway conglomerate $224 million in exchange for a pledge to provide cash if the state is rocked by this year's hurricane season.
Quietly negotiated during the past month with Gov. Charlie Crist's office, the deal pays the billionaire in exchange for a pledge to buy $4 billion in bonds if Florida's hurricane Catastrophe Fund needs a bailout this year.
Crist called the move a responsible step to ensure that the Cat Fund can meet its obligations if storms this year cause more than $25 billion in residential losses.
But the unusual arrangement was roundly criticized by the two other trustees on the State Board of Administration, Attorney General Bill McCollum and Chief Financial Officer Alex Sink, who called it a steal for the billionaire Nebraska investor.
"I think this is not a good deal at all," said McCollum, who said Florida stands only a "3 to 4 percent likelihood" of a catastrophic storm that would trigger the deal.
"Berkshire Hathaway will wind up pocketing the money," he said.
+brian menendez WOOOOW holy shit that's so ridiculous
It is only investing in 2 separate funds, an active fund and a passive fund. It is not a novel idea.
Lots of would-be economists and financial analysts in this comment section...
I doubt that I am the first to make the following observation: 4000 families worth $30 billion each equals $120,000 billion which is $120 trillion. The value of the entire US stock market is only about $25 trillion. It is a zero sum game with winners and losers .........
What does that mean to get the same returns as the market though? Over 100 years the companies listed certainly changed dramatically! So do you buy companies as they IPO? Do you sell them as they're de-listed?
And what was the point of the Japan example? Do we expect that global stock markets follow the same upward trend as the American market or not? Does this foretell that we will reach global parity so that slow growth is the new normal?
This may work........but what is proven best way to measure momentum over the 100 year period ? Relative strength or ? Look at 100 plus books on Amazon currently available under the term Technical Analysis.....lots of conflicting methods out there trying to forsee where the herd is going next and for how long. Yes...maybe its an art ?
Different methods work for different strategies and also have to factor in time frames, different type of markets etc. If you want to make money trading there is a very simple strategy. Buy low sell high lol Trading is not rocket science. Hardest part is psychological aspect and sticking to good money management. Outside that if you can learn something as simple as trendlines and how they work its nothing more than taking good risk/reward trades from key points and not be afraid to take a loss when good setup doesn't work out. Then just repeat over and over.
What presentation programm is he using
Better explanation: Rich people are usually spoiled. The curse of the lottery is just an extreme version of the curse of wealth.
magic profit cigarettes for all!!!
This speaker knows that earning rates of return in excess of 100 percent is easy even in today's economy.
Once you learn the methods is really easy.
When you have very little is much easier than when your talking in the millions or billions.
I recently did a deal that earned 460 percent annual return and that only tied up my investors money for 13 days. ...
It blows my mind that people invest in CD'S
2 percent yep I know that I will pay 6 percent to my investors and sometimes I even share 10 to 49 percent of the profits.
What this guy does not tell you is how to make money. He tells you where they want you to place your money so they can collect it off you as you lose it.
How much money do you think this guy has invested in what he just told you to invest in.
Yes making money is easy when you understand that so many people are losing money all you have to do is pick up after those who lose it.
The above paragraph is explained by what this guy said about so Many investing in stocks yet over 95 percent of those people losing money. .. yes he and soros and buffet were there to pick it all up. ....
I'm there to pick it up
If your thinking you want to invest with me I have high standards for investors.
+jolllyroger1 I'll invest with you!
would like to learn maybe you could show the how
But the question is do you know how to do so? Ya you can turn $100 in to about $2000 right now if you know how, but if you have no clue how the 9% sounds good, and is provided it is the best one on the table for your skills. Remember: the best top 5% of traders are who do that kind of return. If they are free to trade as they want: they are unregulated or darn near, and so SEC says that can not help more than 13 or so people invest. If they get licensed so they can help more: SEC says they have to implement rules that actually increase over all risk and so reduce return. Nice set up right?
thing is I make at least twice what you do and have been for decades. I'm the guy who will ultimately take every penny of your capital (and any supposed profits). My patience is endless. You want to believe you're a player but in the end you will be a payer. Think of me often. I will see you on the backend.
WTF! 4000 millionars would have devided their money by the next generation and so on. That leaves 4000 billion dollar nest eggs divided by 120,000 ultimate heirs or 30 Million each, not a billion each.
1mil in 1900 invested in the stock market would be 30billion today
in 1900 there were 4000 mil families, therefore their worth would be 4000x30bil today.
Today they would have 120,000 families, divide that by 4000x30bil = 1 bil per family.
I think the mistake is in this statement: //That leaves 4000 billion dollar nest eggs//, it should be //That leaves 4000 x30 billion dollar nest eggs//.
If you look at the SP500's annualized return over that time period its around 9%, so I think that is what he was referring to as "the market".
The example of Japan was just to emphasize that passive index investing can mislead investors to overweight the overpriced assets in your portfolio. Which begs the question "do we believe markets are efficient?”。
Just my 2cents...but certainly an interesting discussion by Victor Haghani
nice ppt!!
Or you just accept the fact you are not Warren buffet nor an above average investor!! Most professional asset managers cannot generate alpha! What makes you think you would do better? Just invest in an index fund with low fees and tracking error each month a proportion of your salary and wait 20+ years. Shown time after time to deliver the best overall results
Saying that 4,000 millionaire families would produce 120,000 billionaire families is assuming at least 1 offspring independently made more than $1 million (whatever the present value of $1 billion in 2013). In reality - there would still only be 4,000 billionaire families if they passively invested it in 1900.
Correct
But much spreader wealth
Not only confined to small individuals and immediate families
Billionaires in a capitalist society is like highlander in the end there can only be one.Which is the ultimate goal of capitalism ofc, to have all the worlds wealth in the hands of one person.
But then because they have it all that money would become worthless. An economy is not a zero sum game: welcome to making one of the more common assumptions about economics out of ignorance. At least half the people who reach the Billionaires mark in a capitalist society do so by producing more for other (all be it summed over many people) than they did for them self.
This is the base math: lets say for every $1 I have other people got $10 (but that $10 was spread over 1000+ people, so it is worth $0.01 or less to them on an individual level on average) . While the gains may be marginal for the average person, I did not steal money from them.
Bill Gates is a good example of this: worth over $50 billion, and love or hate Microsoft you would have a hard time not putting a net gain in free time and money to billions of people because of what he has done over his working life.
In other words if we assume the only people he helped were the 300 million or so in the USA and ignored the internal benefits: that would mean over 20 years of working if on average if MS helped people produce or save $0.03+ a day then more than he has was produced for others. I think you could easily argue the value most people revece exceeds $0.03 a day and then some. I say that as some one on a Linux computer.
I agree but my friend always points out that the standard of living for all people in the US even the poor has gone 3000& since the 1800s all because of the free market. He then points out socialist Venezuela. Can you help me with a rebuttal?
garybsg First, are they claiming that "standard of living for all people in the US" has gone up or down 3000? "3000&" I do not follow... My guess would be they claim down? But want to check.
Assuming that is what they claim why do they claim it? Heck even min wage 1938 to today while not only going UP in relation to inflation has over all gone up faster than inflation. But I need to know their argument: "standard of living" and income are not the same thing. "standard of living" is easy. Compare the standard of living 1900 Vs 2000: they are not even the same. The POOR of 2000 are richer than half the rich of 1900 in terms of basic amenities as far as standard of living. The idea of: a refrigerator, your own at home printing press, your own music and books, much better selection of food, shale we go on? This is a lower standard of living for everyone?
But I need to know what they are claiming with that 3000 number?
As for "socialist Venezuela": which point? Are they claiming people are richer there? If so here is the argument you want to use:
www.numbeo.com/cost-of-living/compare_countries_result.jsp?country1=United+States&country2=Venezuela
That source points out that in Venezuela: Consumer Prices, Rent, Restaurant Prices, Groceries Prices... basically most stuff is cheaper. And that would be great if you had the same income.
But it also points out that the "Purchasing Power in Venezuela is 97.80% lower" than in the USA. So every thing is on sale but no one has the ability to buy it. A few things also cost more: cars, apples, some clothing and shoes... In addition a mortgage will be over 500%+ the interest it would be in the USA. Basically every $1 of purchase + mortgage in the USA = $1.33 over 15 years, where every $1 of purchase + mortgage in Venezuela = $3.54 over 15 years.
Basically to help you out I need to know what they say is so good about Venezuela? To point out why the one out of context number that looks good is not in context you need to know what number is being used. I do not think we can use OECD data for Venezuela...
The same with the standard of living argument: do they have anything in particular they claim is LOWER now than it was in 1899?
Nothing wrong with active investment it just that people do it without educating themselves. Would you fly a plane without first taking quality lessons?
This guy is asking the question where are all the billionaires? I would ask does it matter where they are? They exist and they are accumulating more wealth as we read. A lot of share trading is done by algorithms so its not active trading.
Once it was a big thing to be a millionaire, now that is nothing, even a Billionaire is not a big deal its all Multi billionaires now. The majority of Multi Billionaires are in the USA which coincidentally is the place where the Taxes for the wealthy are among the lowest, where health and medical costs are higher. Where the mortality is higher, where almost everyone has a gun, which makes the Gun industry well off and the cops so nervous they shoot first and ask questions later.
If a Billionaire loses his money another picks it up, the issue is the 1% verses the 99%.
Vanguard have solved this.
Already doing it =)
i invest in myself education and sales buy low sell high 100-300% interest thts makin money6% a yr is a joke. .. i turn 50cent to 5 dollers u do the math ...invest in wht u know stay away from stock market
Congratulations on investing in a system that rapes our adolescents' education.
Just wait till Josh finds out about the DSC OFF button
30 years ago all italians were millionairs (in lire). But a loaf costed 1000 lire and a simple jeans was like 10.000 lire. What's the use of being a millionair then?
I hope you were being sarcastic because that would be the silliest statement I've ever heard. Markets may not be efficient (I think they are) but it has nothing to do with whether money is made or lost. IF markets were efficient, which only means they fairly price securities, it doesn't mean that one can't buy a fairly priced security today and sell that fairly priced security in 20 years for a large profit because of the growth of that companies earnings over 20 years.
The guy has actually lost tons of money in LTCM fund believing the markets are efficient. I think that part he is speaking with tons of wisdom.
Moreover, more than half the historic return from stocks comes from dividends and not increases in earnings. Stocks pay a return because you're getting paid to bear risk. An efficient market simply means that you're getting rewarded fairly based on how much risk you take.
the Forbes magazine only focuses on publicly available information. These families probably split the wealth which is why single individuals dont appear in the magazine. Also these families are old money and they tend to be private individuals who probably invested into real estate or private companies. Or maybe stashed into foreign countries or other valuables.
Why care about monetary systems at all? We've got bigger and more productive projects at hand. I appriciate your sentiment of wanting to help your fellow man, but you're just trying to play a game that will never benefit the planet and it's inhabitants. And I think you know this.
So many naysayers in the comments when this is proven to work
i like it :D
What about pandemic ?
ok
You speak of investments as if they are nothing but money rising. Stocks and share profiting with people getting rich by their stock and dividend rises is very impersonal. What about the poor people in sweat shops and the environmental degredation that occurs at the expense of stock market increase?
Is this guy a billionare?
Probably not. He was involved in Long-Term Capital Management though.
yeah this bs even high school students know about it
SPS stands for St. Paul's School--- for students age 7-18 :)
JESUS CHRIST is GOD.
i don't miss any billonaires.
you would miss them if you were suppose to be one of them
oh... i am really sorry for you...
+marie gold You are employed by poor people?
why do you want to know that?
Bitcoin
losing 6% a year? I am an active trader I am making 6% a month if not more lol, who are these people lol.
+Eddie Deng True, but it's easy for people to over leverage their account while trading. Are you still trading?
+NDPdEport nah bruh I over leveraged it lol. didn't get wiped just took a big hit.
did you walk away with any profit?
+NDPdEport nah it took away my profits and some starting capital. it was brutal.
sorry to hear that, i was trading manually for 8 months last year until I crashed. i was lucky enough to get out on a plus, but that crash was a blessing for sure. Now I'm simply trading via this company's algorithm. And I'm very impressed, it's a very beautiful thing. :)
Uh ya I’d like to look in the mirror and see soros in a speedo looking back at me, no thanks....this whole talk assumes you’ve got some wealth to invest to begin w