During the start of the pandemic I invested a small amount in a "Good company".The national Starbucks and domino's pizza francise operator (Here in Mexico), because the stock plummeted a lot when they fired a lot of employees. A year later It turned out to be a pretty good investment with a 180-200% return. I know that I was very lucky and that it was not a rational investment decision... Thanks to this podcast I don´t plan to do that kind of investment again. Although I have the regret of not putting more money in that trade 😅
Thank you for the great episode! A suggestion for an interesting guest would be Eric Budish especially his views on high frequency trading and financial market design.
Ben, I really love how you explain everything. Really interesting and useful information, I'm really grateful for it. But, please, pleeease.. could you read a bit slower? My brain is so concentrated to understand that it might explode eheh! Thank you very much and a big virtual hug from Italy! :)
Does what you have had to say in this video have any relationship with quality & profitability factors? So, do the quoted research papers negate these factors? Quality and profitable companies tend to be pricier and hence both good and popular.
It would be ironic if researchers are themselves (invalidly) extrapolating from insufficiently controlled data (into how many 10 yr periods can market history be divided?Can each decade really be considered as the same except for the "independant" and "dependant" variables under investigation) and of too small a sample size. Is this the case? I've seen gymnastic statistical analysis but not plain language justification re apparent problems with interpreting from the available data
I would change the 2nd question on talking sense to: "Would you do an unknown objectively immoral act, at no risk to you, for a predefined amount of money?" Meaning, not knowing what immoral act you will be asked to do, but knowing how much you will be paid and that you bear no risk for your actions, would you accept the deal? Otherwise, the question becomes too easy. Would I steal a candy bar from a gas station if it meant getting USD 1MM? Yes and then I would pay for it :-D. Would I kill an innocent person and risk life in prison for USD 300 MM, no.
Isn’t Spotify vs musicians just the same old question of copyright? Spotify partners with labels. They own all the rights, so they make most of the money. New musicians who don’t have deals I think at this point can set up indies and go out on Spotify by themselves, but they don’t get the promotion machine. You can decentralize spotify but you can’t legally entitle artists to the all the rights from the songwriting and mechanical copyrights they signed away. All you can do is change the law. And, good luck building a decentralized Google to compete with actually-existing Google that’s already had the benefit of ingesting more data than we can conceive of. These are problems of monopoly, political economy, etc, not what kind of database you use. Open to pushback on it. I’ll look up the Tim Ferriss thing.
Tim Ferris podcast episode on this is worth a listen to understand the crypto-optimist angles, but I agree with your skepticism (which is why I'm trying deliberately to keep an open mind). George Gilder's take is also worth listening to ua-cam.com/video/cidZRD3NzHg/v-deo.html.
Interesting comparison of internet companies of the 90s and crypto currencies/decentralised finance. Owning Ethereum and Cardano now could be like owning Cisco, Nokia, Yahoo and Blackberry. Is there evidence that owning a diversified internet stock portfolio worked in the long term and can we do that with DeFi tokens now? There is high risk/fear that DeFi won't be a thing. How can we efficiently take that risk and get rewarded for it? Can't wait for the crypto currency episode!
If you believe that risk is rewarded and conversely that rewards are compensations for risk, then there's no way. A well diversified portfolio will have different assets other than stocks though. Perhaps tokens belong there too. Now, how to buy all of them, keep rebalancing them and what % they should take in my overall portfolio I don't know, so I don't personally bother with any of it.
I'm not that surprised to hear that reputable brands having lower returns, and the effect increases with retail ownership. I think the price appreciation happens in parallel to the brand getting established, and peaks when retail investors swarm to buy the stock.
During the start of the pandemic I invested a small amount in a "Good company".The national Starbucks and domino's pizza francise operator (Here in Mexico), because the stock plummeted a lot when they fired a lot of employees. A year later It turned out to be a pretty good investment with a 180-200% return. I know that I was very lucky and that it was not a rational investment decision... Thanks to this podcast I don´t plan to do that kind of investment again. Although I have the regret of not putting more money in that trade 😅
Haven't tuned in in a while, glad you changed "for Canadians" to "from two Canadians". Best Regards from Sweden.
Thank you for the great episode! A suggestion for an interesting guest would be Eric Budish especially his views on high frequency trading and financial market design.
Yes he is on our list. We identified him for his paper on Bitcoin.
What exactly is a “good company” as mentioned in the video and how does it relate to the quality factor?
Explained in detail here community.rationalreminder.ca/t/episode-174-the-good-company-is-a-good-investment-fallacy-discussion-thread/12858/16
Shout out to Cameron! Congrats on 700!
Thanks.
bass is a little high on Ben's microphone.
Be that as it may I much prefer this to the alternative of robot Ben we received with the first upload
Ben, I really love how you explain everything. Really interesting and useful information, I'm really grateful for it. But, please, pleeease.. could you read a bit slower? My brain is so concentrated to understand that it might explode eheh! Thank you very much and a big virtual hug from Italy! :)
The Crypto divergence was annoying
Does what you have had to say in this video have any relationship with quality & profitability factors?
So, do the quoted research papers negate these factors?
Quality and profitable companies tend to be pricier and hence both good and popular.
Aha, so this was not a dream! This video does exist and not a figment of my imagination. Looks like it disappeared and reappeared :)
The original had issues with Ben's audio, I assume this is a reupload with a fix.
Yea I thought the same thing
It would be ironic if researchers are themselves (invalidly) extrapolating from insufficiently controlled data (into how many 10 yr periods can market history be divided?Can each decade really be considered as the same except for the "independant" and "dependant" variables under investigation) and of too small a sample size. Is this the case? I've seen gymnastic statistical analysis but not plain language justification re apparent problems with interpreting from the available data
I would change the 2nd question on talking sense to: "Would you do an unknown objectively immoral act, at no risk to you, for a predefined amount of money?" Meaning, not knowing what immoral act you will be asked to do, but knowing how much you will be paid and that you bear no risk for your actions, would you accept the deal? Otherwise, the question becomes too easy. Would I steal a candy bar from a gas station if it meant getting USD 1MM? Yes and then I would pay for it :-D. Would I kill an innocent person and risk life in prison for USD 300 MM, no.
Yahoo! was a "good company" about the same time Netflix had just lost a class action lawsuit and no one wanted to own it.
Wellll if there is a value factor for beat up stocks, good companies are offering less yields aha
Isn’t Spotify vs musicians just the same old question of copyright? Spotify partners with labels. They own all the rights, so they make most of the money. New musicians who don’t have deals I think at this point can set up indies and go out on Spotify by themselves, but they don’t get the promotion machine. You can decentralize spotify but you can’t legally entitle artists to the all the rights from the songwriting and mechanical copyrights they signed away. All you can do is change the law. And, good luck building a decentralized Google to compete with actually-existing Google that’s already had the benefit of ingesting more data than we can conceive of. These are problems of monopoly, political economy, etc, not what kind of database you use. Open to pushback on it. I’ll look up the Tim Ferriss thing.
Tim Ferris podcast episode on this is worth a listen to understand the crypto-optimist angles, but I agree with your skepticism (which is why I'm trying deliberately to keep an open mind). George Gilder's take is also worth listening to ua-cam.com/video/cidZRD3NzHg/v-deo.html.
Interesting comparison of internet companies of the 90s and crypto currencies/decentralised finance.
Owning Ethereum and Cardano now could be like owning Cisco, Nokia, Yahoo and Blackberry. Is there evidence that owning a diversified internet stock portfolio worked in the long term and can we do that with DeFi tokens now?
There is high risk/fear that DeFi won't be a thing. How can we efficiently take that risk and get rewarded for it? Can't wait for the crypto currency episode!
If you believe that risk is rewarded and conversely that rewards are compensations for risk, then there's no way. A well diversified portfolio will have different assets other than stocks though. Perhaps tokens belong there too. Now, how to buy all of them, keep rebalancing them and what % they should take in my overall portfolio I don't know, so I don't personally bother with any of it.
I'm not that surprised to hear that reputable brands having lower returns, and the effect increases with retail ownership. I think the price appreciation happens in parallel to the brand getting established, and peaks when retail investors swarm to buy the stock.
The 90s. Back when Republicans cared about presidential character.