Listening to the Masters of Wall Street

Recently I stumbled on Bloomberg’s new podcast series, “Masters of Business”, hosted by Barry Ritholz. I usually write these posts to pass along some financial tips, explain my view on the market, or tools to manage your retirement savings. But this podcast series is surprisingly easy to understand, and is great for n00bs to finance, or finance geeks. I highly recommend giving each of these a 30 minute listen. I’ve put my highlights/valuable lessons below each. If  there was one over-arching theme, it’s that some of the most successful Wall Streeters didn’t know even know what a stock or bond was, until their late 20’s. Then with a little discipline and willingness to learn, they were able to become multi-millionaires/billionaires.

Jack Brennan (CEO of Vanguard)

Professionals win with ease, amateurs win by reaking havoc

Active investing (most mutual funds) vs. Passive investing (ETFs) – Wall Street always “hopes” that hedge funds will beat the market, but that’s turning out to be very difficult, even with hedge funds have the “smartest men in the room”. All pointing to very little reason to invest in mutual funds/hedge funds, especially with fees.

Single biggest change in finance/Wall Street over the last 35 years – passive investing options (ETFs). Today, there are  ETFs available for people to implement low-cost and outstanding investment strategies/programs

Decent financial advisors are worth 2-3% of fees a year, but if you knew nothing else about funds and picked the lowest cost funds, your odds of outperforming (net of fees) are radically in your favor

Mike Mauboussin

Active fund managers are necessary for the market, but that doesn’t necessarily translate into beating the market consistently.

The three things to learn from successful investors:

1.) Have a very defined investing process and stick to the rules (never breaking them). Focus on process, not outcome

2.) Think long-term (trade less frequently)

3.) Believe that they have an edge (for example, investing in the least loved asset classes every year)

 Jeff Gundlach (More advanced, for the finance geeks)

Tesla’s reinvention of the battery space could radically change how we live. The battery that powers Tesla, could end up powering your home, removing the dependency on public utilities.

Sentiment is a very powerful trading tool


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