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Season 3, Episode 19: When Investors Become Gamblers — And Why It’s Happening Now

Published August 17, 2021

With William L. Silber, Author of ‘The Power of Nothing to Lose: The Hail Mary Effect in Politics, War, and Business’

William L. Silber, author of the book ‘The Power of Nothing to Lose: The Hail Mary Effect in Politics, War, and Business,’ joins the podcast to discuss his thesis that individuals, including investors, can become reckless gamblers if they have nothing to lose.

Silber has a career dating back to 1966 in academia and Wall Street. His comments are pertinent in the present day of cryptocurrencies, the ‘retailization’ of options trading, NFTs, and meme stocks, among others. So is his recommendation (not investment advice) to reduce risk exposure.

Content Highlights

  • When people have downside protection and limitless losses, “they tend to become reckless and almost gamblers” (3:48)

  • Rogue traders and the skewed payoff that makes them go rogue (14:41);

  • What to make of the present day and investors’ collective risk appetite, especially regarding meme stocks? (17:32);

  • Background on the guest (24:55);

  • A valuable lesson learned at Odyssey Partners in the 1980s: what’s an exit strategy? (27:47);

  • Is this a time for investors to reduce risks and sell stocks? (30:26);

  • Precious metals and their place in a modern portfolio (36:52);
MoreSeason 3, Episode 19: When Investors Become Gamblers — And Why It’s Happening Now
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Season 3, Episode 15: Colin Lancaster is Fed Up!

Published June 23, 2021

The macro trader discusses his book and what to make of central bank policies.

Colin Lancaster, global head of macro/fixed income at Schonfeld Strategic Partner Fund, joins the podcast to discuss his book Fed Up! Success, Excess and Crisis Through the Eyes of a Hedge Fund Macro Trader.

The book spans the period from October 2019 to June 2020 and includes the height of the coronavirus crisis. This features heavily into the conversation. We also discuss the Federal Reserve and his view of current markets.

Content Highlights:
(Spotify users can click on the timestamp to link to the segment directly)
  • What went into him writing the book? What was the impetus? (3:50);
  • Macro investing and the need to be a diversifier and disaster hedge (7:38);
  • What is he most concerned about right now in markets? (12:07);
  • What does an investor do in this market, especially with the Fed continuing to hold rates near zero? (14:30);
  • The Fed’s experiment is “dangerous” and the central bank has “very little credibility” when it comes to inflation (18:55);
  • Background on the guest (23:49);
  • The Fed’s role in creating and fostering wealth inequality is significant, despite its good intentions (27:48);
  • How to go about fixing this? Does the Fed perhaps have too much autonomy? (31:30);
  • The book is technically a novel and has quite a few characters. Are these fictional or based on real people? (36:28);
  • Alternative data; some ideas of what to look for (40:35).
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Season 3, Episode 9: Risk Versus Returns: Rethinking the Connection

Published April 15, 2021

With Chris Belchamber, Author of ‘Invest Like The Best: The Low-Risk Road To High Returns’

Chris Belchamber joins the podcast to discuss his book Invest Like The Best: The Low-Risk Road to High Returns and challenge the axiom that market-beating returns are not possible without taking on large amounts of risk.

Belchamber has studied the most successful investors’ track records over decades. One thing they all have in common is prioritizing risk aversion and behavioral discipline. There are simple lessons to be learned for ‘novice’ investors.

Content Highlights:
(Spotify users can link to the segment directly by clicking on the timestamp)

  • Most financial advisers have bought in to the idea that more risk will generate higher returns. This “simple line of argumentation is just wrong.” (6:39);
  • ‘Paradox investing’ and Radobank’s model (10:57);
  • The mindset of successful investors is all about risk aversion. The biggest problem facing investors is their own behavior (13:56);
  • ‘The optimization of the brain’ function: what it is and how to go about it without getting exhausted (17:23);
  • Background on the guest (23:05);
  • Belchamber’s meeting with John Meriwether (26:42);
  • Jim Simons and Renaissance Technologies (28:52);
  • Red flags and other things investors should look for (33:07);
  • The current state of the economic and market cycle and why the second half of this year could be a lot different — and worse (38:29).

More Information on the Guest:

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