The Rational Reminder Podcast

In this episode, we welcome back Alex Edmans, Professor of Finance at London Business School and author of Grow the Pie, May Contain Lies, and The Madness of Markets. Drawing on academic research and real-world market examples, Alex explores how emotions, social influence, and psychological biases shape investor behavior—and why even apparently irrational markets can be difficult to beat. We examine how a country's stock market can react to a football loss, why investors overreact to exciting stories and underreact to less visible information, and how identical assets can trade at different prices. Alex also unpacks the evidence behind reversal, value, and momentum strategies, the challenges of exploiting market anomalies, and why skewed stock returns make diversification so important. The conversation ultimately returns to a fundamental investing question: even if you can identify market inefficiencies, do you have the edge, patience, and cost advantage needed to benefit from them? Sources From Today's Episode — https://zbib.org/7d62d23b5efc45f7b0b908b769cbfa92 Key Points From This Episode: (0:01:49) How losing a World Cup match can affect a country's stock market—and what this reveals about emotion‑driven trading. (0:03:01) The relationship between weather, sunlight, and market sentiment. (0:03:49) Spurious correlations and data mining: why an apparent relationship needs a plausible economic explanation and out‑of‑sample testing. (0:06:42) Wisdom versus madness of crowds: when collective judgments can be useful and when social influence leads investors astray. (0:09:44) Overreaction in markets, from the pandemic‑era rise of Zoom to the dramatic response to Allbirds' AI rebranding. (0:12:06) The reversal effect: why past losers can outperform past winners when investors overreact. (0:12:53) Underreaction to long‑term information, including research linking strong workplace cultures with better stock performance. (0:14:57) Misreaction and anchoring: how purchase prices can lead investors to sell winners too early and hold losers too long. (0:16:50) Value investing and valuation multiples, including why a company's price relative to its fundamentals matters even when it is widely admired. (0:22:02) Limits to arbitrage: why investors can be right about a market bubble but still fail to profit from it. (0:24:56) The importance of investment horizons, illustrated by Alex's own equity allocation and a fund designed around a 40‑year horizon. (0:27:55) The illusory truth effect: how repeated information can feel new and move prices, as illustrated by the market reaction to EntreMed. (0:33:43) Momentum investing: why recent winners may continue winning, and how momentum appears across industries, sectors, and countries. (0:39:04) The law of one price and examples of identical or closely related assets trading at different prices, including 3Com and Palm. (1:02:20) The three recurring principles: markets work, diversification matters, and costs matter. Links From Today's Episode: Meet with PWL Capital: https://pwlcapital.com/ PWL Team — https://pwlcapital.com/our-team/ Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder on Spotify —https://open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=fe7f60349b584026 Benjamin Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Alex on LinkedIn — https://www.linkedin.com/in/aedmans/ Alex on X — https://x.com/aedmans Alex's website — www.alexedmans.com Books From Today's Episode: The Madness of Markets: Why Smart Investors Make Crazy Decisions—and How to Exploit Them by Alex Edmans — https://www.amazon.com/Madness-Markets-Investors-Decisions-Exploit/dp/B0GK117D54 Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this episode, we're joined by Victor Haghani, founder of Elm Wealth and co-author of The Missing Billionaires, for a wide-ranging conversation about how different types of investors shape financial markets. Victor explains the framework behind his forthcoming paper, Who Killed the Random Walk?, and how fundamental investors, static investors, and extrapolators interact to produce momentum, excess volatility, and other market anomalies. We explore why return chasing is different from momentum investing, how investor flows and inelastic demand can move markets, and how the Merton share connects expected returns and risk to portfolio allocation. Victor also discusses long-short direct indexing and tax-loss harvesting, his experiment giving investors tomorrow's Wall Street Journal today, how AI performed in the same trading game, the role of leverage in financial markets, and when borrowing to invest might make sense. We finish with Victor's advice to his younger self: be intentional about financial planning, build financial literacy, and make a plan. Key Points From This Episode: (0:01:20) Lessons from The Missing Billionaires—practical insights on sizing and the Kelly criterion. (0:03:13) Who Killed the Random Walk?—persistent puzzles in stock returns: excess volatility, momentum, fat tails, booms, and busts. (0:05:06) Victor's three investor types: fundamental value investors, static investors, and extrapolators. (0:07:54) How static investors amplify market movements through inelastic demand. (0:11:11) How investor types interact to shape volatility, momentum, and equilibrium. (0:14:02) Wealth flows between investor types and how they create instability in simulations. (0:18:15) Distinguishing extrapolative return chasing from systematic momentum strategies. (0:20:34) How extrapolators create price trends that momentum investors exploit. (0:23:46) The Merton share—risk premiums, volatility, and risk aversion in determining equity exposure. (0:26:39) Combining value and momentum for higher Sharpe ratios. (0:32:34) Long‑short direct indexing and how leverage increases tax‑loss harvesting. (0:34:00) Why fees, complexity, and risk of direct indexing may not be worthwhile without alpha. (0:43:21) The "crystal ball" experiment—advance information, poor sizing, and excessive leverage. (0:49:28) The role of leverage in markets—ETFs, options, embedded leverage, and nonlinear instability. (0:52:50) Why leverage can create nonlinear interactions and amplify market instability. (0:52:55) When borrowing to invest can make sense, particularly for younger investors with substantial human capital and limited financial capital. (0:55:00) Why borrowing costs, expected equity returns, risk, and the possibility of losing a large portion of savings make leverage a difficult decision. (0:57:29) Why the risk-adjusted return from additional equity exposure matters more than the headline expected return. (0:58:42) The relationship between human capital and leverage—and why human capital is not necessarily bond-like. (1:00:01) Victor's advice to his younger self: be proactive, become financially literate, and make a lifetime financial plan. (1:02:18) Why dedicating time to financial education can meaningfully change how people approach financial decisions. Sources From Today's Episode — https://zbib.org/62e42e55fae14cb0a1aa62941d6996a2 Links From Today's Episode: Meet with PWL Capital: https://pwlcapital.com/ PWL Team — https://pwlcapital.com/our-team/ Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder on Spotify —https://open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=fe7f60349b584026 Benjamin Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Victor's website — www.elmwealth.com Books From Today's Episode: Get Rich Once: and Other Financial Wisdom for Our Younger Selves by Victor Haghani, James White — https://www.amazon.com/Get-Rich-Once-Financial-Younger/dp/1394479964 The Missing Billionaires by Victor Haghani, James White — https://www.amazon.com/Missing-Billionaires-Better-Financial-Decisions/dp/139430823X Papers From Today's Episode: Who Killed the Random Walk? How Extrapolators Create Booms, Busts, Trends, and Opportunity — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6062494 Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this episode, we're joined by Matthew Taylor, a litigation lawyer with Sotos Class Actions in Toronto who represents retail investors and pension funds in securities class actions. We take a deep dive into what makes a successful negligence claim against a financial advisor, how courts assess fiduciary relationships in Canada, and what investors should look for when evaluating the people managing their money. We explore the evidence that can strengthen or weaken a negligence claim, from one-size-fits-all portfolios and unexplained trades to poor communication and failures to account for changing life circumstances. Matthew also explains the distinction between suitability and fiduciary standards, the factors courts consider when determining whether a fiduciary relationship exists, and why professional affiliations and explicit fiduciary commitments can matter. The conversation then turns to class actions, including how securities claims differ from individual negligence lawsuits, what makes a claim suitable for class proceedings, and why regulatory investigations, specialist law firms, litigation funding, and parallel U.S. proceedings can provide important signals. We also discuss pension funds, their role as plaintiffs, and why monitoring potential claims and settlements can be part of managing beneficiaries' assets. Finally, we examine the growing retailization of private assets and the risks created by limited information, complex structures, opaque fees, illiquidity, and manager-determined valuations. Matthew explains what advisors and clients should consider before investing in private funds—and why he expects more litigation in this area. We close with the legal and regulatory challenges created by financial influencers, and how investors and advisors can build greater resilience against misleading financial content. Key Points From This Episode: (0:01:04) Advisor errors leading to negligence claims—KYC, KYP, suitability failures, plus warning signs like one-size-fits-all portfolios, unexplained trades, concentrated positions, churning, and double dipping. (0:02:20) Why evidence matters: the gap between what people know and what they can prove in court. (0:04:08) How investors can recognize poor advice—changes in communication, failure to address life circumstances, or lack of transparency. (0:06:41) Importance of checking an advisor's regulatory history before entrusting significant assets. (0:07:51) Investor vulnerabilities: age, education, language barriers, or sudden wealth. (0:11:27) Steps after negligent advice—seek a second opinion, adjust the portfolio, and consider legal recourse quickly due to limitation periods. (0:13:30) Risk capacity vs. risk tolerance, and overlooked risks such as liquidity, sequence-of-returns, and withdrawal risk. (0:16:34) Advisors' uneven understanding of risk, shaped by firm/product-provider education and low industry entry barriers. (0:19:48) Courts' five fiduciary factors—vulnerability, trust, reliance, discretion, and professional standards—and how fiduciary duties differ from suitability standards. (0:28:28) Individual lawsuits vs. group/class actions, with securities class actions focusing on disclosure problems and asset-manager claims. (0:42:45) Case studies: Sino-Forest fraud and challenges of private assets—opaque structures, layered fees, liquidity risk, and valuation issues. (1:01:00) Regulatory challenges of finfluencers, difficulties in enforcement, and how advisors can inoculate clients against misinformation by teaching evaluation skills. Sources From Today's Episode — https://zbib.org/71e494008bb74d18a17de20419ca0647 Links From Today's Episode: Meet with PWL Capital: https://pwlcapital.com/ PWL Team — https://pwlcapital.com/our-team/ Rational Reminder on Spotify — https://open.spotify.com/show/6RHWTH9iW7hdnA7eAg7ukO?si=fe7f60349b584026 Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Matthew on LinkedIn — https://www.linkedin.com/in/matthew-w-taylor/ Geller Law — Legal Legacy - Webflow Ecommerce Website Template Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this episode, we're joined by Philippa Hann and Dr. Moira Somers, co-authors of The Fault Lines of Finance: Understanding and Preventing Financial Misconduct, for a deep dive into why good people can do bad things with other people's money. Philippa brings two decades of experience suing financial advisors, wealth managers, and banks, while Moira brings her expertise as a clinical neuropsychologist working with financial professionals, families, and the human side of money. We explore the psychology and systems that can allow financial misconduct to happen, from financial stress, incentives, and information asymmetry to workplace culture, poor training, exhaustion, and the pressure to please. Philippa and Moira explain why ethical behavior is not simply about knowing right from wrong, and why developing "ethical health" requires understanding your own vulnerabilities, building a moral operating system, and having people you can turn to when doing the right thing becomes difficult. We also discuss how investors can evaluate financial professionals, why complexity and exciting financial products deserve extra scrutiny, the role of regulators and insurers, and why financial sophistication doesn't necessarily protect people from being exploited. Along the way, Philippa and Moira share case studies illustrating ethical drift, confirmation bias, and the ways seemingly small decisions can compound into serious misconduct. The conversation ultimately makes the case for moral humility, strong relationships, healthy organizational cultures, and the willingness to tolerate discomfort when something doesn't feel right. Key Points From This Episode: (0:00:00) Introduction. (0:02:02) What financial misconduct means and why "other people's money" matters. (0:02:35) Philippa's 20 years in litigation and the core question: why do good people do bad things? (0:05:02) Moving beyond harm prevention toward promoting positive change in financial services. (0:07:36) Why financial services are especially vulnerable: access, incentives, and opportunity. (0:09:40) Information inequality and extraordinary client trust in advisors. (0:11:15) Even sophisticated investors can fail to ask critical questions. (0:11:57) Misconduct isn't simply "good vs. bad people." (0:12:45) How systems, incentives, and culture can draw well-intentioned people into misconduct. (0:17:40) Ethical drift: how innocent mistakes can escalate into lying and misconduct. (0:19:05) Building a personal "moral operating system" to prepare for dilemmas. (0:20:00) Identifying vulnerabilities: people-pleasing, exhaustion, dependence, conflict avoidance. (0:21:00) Journaling, defining non-negotiables, and developing ethical self-awareness. (0:25:22) Importance of trusted people who can challenge your thinking. (0:27:13) Personal strengths (confidence, ambition) can become vulnerabilities. (0:28:38) Systems and culture can enable misconduct or make ethics easier (0:30:10) Organizations must make it safe to surface mistakes. (0:34:43) Developing "ethical health" alongside physical and mental health. (0:40:15) Ethics requires more than knowing the right answer—it requires character and motivation. (0:44:29) Why traditional ethics training often fails in real-world dilemmas. (1:14:11) The moral operating system as an actionable framework for behavioral ethics. Links From Today's Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this special episode, we are joined by Mike Sullivan, Co-Founder and Chief Growth Officer at OneDigital, and Vinay Gidwaney, OneDigital's Chief Product Officer, to discuss their new book, Workforce Intelligence: The People-First Playbook for Leading Your Company Through AI Transformation. Together, they offer a practical, pro-human framework for navigating a future where artificial intelligence becomes deeply embedded in how organizations operate. We explore why leaders should focus on tasks rather than headcount, how AI can amplify uniquely human capabilities, and why companies may need to rethink how they manage their workforce. Mike and Vinay explain their concepts of reducible and irreducible skills, AI coworkers, workforce intelligence, collaborative AI use, and the importance of building an organizational intelligence layer. They also share practical lessons from OneDigital's own AI transformation—including why leadership activation, trust, reskilling, and a partnership between technical and non-technical leaders are essential. This conversation offers an alternative to the prevailing narrative of AI-driven job elimination. Instead, it asks a bigger question: if AI can take on more of the work we currently do, what might humans become capable of doing next? Key Points From This Episode: (0:00:00) Highlights. (0:00:25) Introduction. (0:01:23) Why AI adoption affects employers, employees, and financial markets—and why the conversation is relevant far beyond technology. (0:02:27) Two possible paths for companies: replacing people with AI or using AI to amplify human capabilities. (0:03:53) How PWL is already using AI to help financial planners and portfolio managers work more strategically and serve clients better. (0:06:22) Mike and Vinay's five-year partnership around deploying AI inside OneDigital. (0:09:07) The "radiating red dot": Why Mike's analysis suggested that up to 25% of OneDigital's workforce could be disrupted by AI. (0:11:09) "See faces, not headcount": The decision to pursue transformation by amplifying people rather than simply reducing jobs. (0:12:19) Why Mike and Vinay felt a responsibility to offer a more practical, human-first narrative about AI and work. (0:13:40) Vinay's realization that widespread access to AI makes human differentiation even more important. (0:17:22) Mike's first experience with an AI coworker—and the endless possibilities it unlocked for curiosity and exploration. (0:18:22) Human intelligence versus artificial intelligence: Why AI's greatest value may be its ability to help people think differently. (0:22:19) Why the future of work should be analyzed at the task level rather than through predictions about jobs disappearing. (0:23:58) The coming reskilling challenge—and why the allocation of work between AI and humans needs to be more deliberate. (0:25:12) Why Vinay believes companies that discard their human talent could lose their most important competitive differentiation. (0:26:30) Why AI transformation should be viewed as a "movie, not a snapshot," with work continually being reshaped. (0:28:10) What "workforce intelligence" means: Managing the combined intelligence of human talent and AI talent. (0:30:07) Why Mike and Vinay believe HR—not just IT—must play a central role in leading the transition to a blended workforce. (0:31:54) Reducible versus irreducible skills: Letting AI handle work that can be broken into processes while humans spend more time on judgment, experience, and other "squishy" capabilities. (0:34:10) Applying the framework to financial planning: AI for modeling and information processing, humans for judgment, relationships, and helping clients navigate life decisions. (0:37:00) How AI can reduce meeting preparation from hours to minutes while generating insights that would otherwise be missed. (0:37:48) The importance of trust and communication as employees try to understand what AI means for their future. (0:39:53) The Workforce Intelligence score: Treating AI as talent and measuring the evolving mix of human and AI work. (0:42:09) Transactional versus collaborative AI use—and why collaboration can be more amplifying for both people and organizations. (0:45:40) Why companies need agency over their AI systems and should think carefully about intelligence lock-in. (0:48:47) Codifying organizational intelligence: Building systems where human expertise improves AI, which in turn helps humans become more capable. (0:50:24) What it means to become "activated" by AI—and how using AI as a coach and teacher can expand human potential. (0:52:44) Ambient AI: Systems that continuously observe information and surface patterns when human judgment is needed. (0:54:11) The Charlotte-Denver redundancy and the challenge of making the best organizational intelligence available to everyone. (0:57:26) OneDigital's five-tier fluency model for developing AI capabilities across employees, advanced users, managers, and builders. (1:00:13) Why democratized software development creates a new governance challenge—and how AI may help manage it. (1:00:54) Why OneDigital gives AI coworkers names, faces, profiles, skill sets, and human managers. (1:04:01) Mike's belief in the dignity of work—and why employers need to approach the AI transition with humanity and care. (1:06:53) Vinay's belief in human potential and why the goal should be to expand what people are capable of doing. (1:08:56) Why organizations should avoid measuring AI success solely through cost cutting and instead consider human amplification. (1:12:41) The four questions for Monday morning: Turning big ideas about AI transformation into practical actions leaders can take immediately. (1:13:55) Why AI transformation needs leadership from the top and a partnership between someone who understands technology and someone who deeply understands the business. (1:15:40) Leadership activation: Why organizations are unlikely to change until their leaders personally experience how AI can transform their own work. (1:17:44) What we still don't know about AI—and why the guests believe we are still in the very early innings of this transformation. (1:18:55) The three-minute-mile analogy: AI may optimize human minds in ways we cannot yet imagine. (1:20:00) A final call for a pro-humanity, blended workforce—and the need to move faster in adapting to what AI makes possible. Links From Today's Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this episode, we welcome back William Bernstein to discuss the final book of his longtime friend Jonathan Clements, Money and Me. Bill reflects on Jonathan's ideas about spending, happiness, retirement, investing, inheritance, and the psychology of financial decision-making, while sharing personal stories that bring those ideas to life. We explore why material purchases often lose their appeal quickly, why autonomy can be one of the best things money can buy, and how worrying about money can be a greater problem than spending it. Bill also discusses the four horsemen of financial disaster—inflation, deflation, confiscation, and destruction—why diversification matters, and why investors should be skeptical of assumptions about future returns and market forecasts. The conversation also examines what it means to "win the game" financially, why retirement should be thought of as a verb rather than a destination, and the three foundations of well-being: connection, competence, and autonomy. Bill shares Jonathan's approach to teaching children about money, the concept of "Omega" as a way to think about spending versus saving, and why the people around us can have an enormous influence on our expectations and consumption. Key Points From This Episode: (4:56) Why success can contain the seeds of its own destruction—and the role of competition, organizational hubris, and luck. (6:15) Why dynastic wealth is so difficult to preserve across generations. (8:28) A hierarchy of spending: material purchases, experiences, autonomy, and the relief from worrying about money. (10:54) Why some people continue worrying about money no matter how much they have. (11:44) Why we are poor at predicting what purchases and lifestyle changes will actually make us happy. (13:36) How to pressure-test large purchases by considering their downsides and their effect on your time. (14:20) Why the happiness generated by spending does not necessarily scale with the price of a purchase. (15:21) The importance of gratitude and savoring small pleasures. (16:39) The four horsemen of financial apocalypse: inflation, deflation, confiscation, and destruction. (18:15) Why inflation is the financial risk Bill focuses on—and how investors can blunt its effects. (19:26) Why relatively inexpensive international markets can still offer optimism for long-term investors. (21:02) Jonathan Clements' "investment sin": slightly overbalancing when rebalancing. (22:04) What it means to have "won the game" financially. (24:36) Why a TIPS ladder or annuity can help defuse retirement spending needs. (25:19) Why the math of financial planning often fails to account for human psychology. (27:21) Why diversification matters when bad returns arrive at the same time as bad circumstances. (28:20) The challenge of variable spending in retirement. (29:10) Why retirement should be a verb—and why simply stopping work can leave people searching for meaning. (30:00) The three foundations of happiness: connection, competence, and autonomy. (32:03) Investment assumptions people should avoid, including confusing great companies with great stocks. (33:10) Why eloquence can be an alarm bell when evaluating financial forecasts. (34:18) Jonathan's three-pronged strategy for getting more out of your money: pause before making important decisions. (35:01) How to audit your past spending to identify what actually made you happy. (37:11) Hedonic versus eudaimonic happiness—and why life satisfaction can outlast momentary pleasure. (39:05) Why enjoying your work can be more valuable than maximizing your salary. (40:56) A different perspective on FIRE: working less and doing work you enjoy rather than simply retiring early. (41:37) Why giving money to children while you're alive can be more useful than leaving it as an inheritance. (42:29) How parents teach children about money by modeling their own spending behavior. (44:13) Jonathan's practical approach to teaching children about spending and saving. (44:49) The "Omega" concept: avoiding both YOLO spending and dying as the richest person in the graveyard. (46:26) How social comparisons influence spending and expectations. (48:54) Why rising markets can encourage investors to take on more risk. (49:06) How recency and the availability heuristic shape investment beliefs. (49:46) Bill's favorite memories of Jonathan and his remarkable outlook while facing a terminal diagnosis. Links From Today's Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this Ask Me Anything episode, Ben Felix, Ben Wilson, and Louai Bibi tackle a wide-ranging collection of listener questions spanning investing, retirement, family finance, and financial planning. Along the way, they combine academic research, practical experience, and thoughtful discussion to separate evidence-based decisions from intuition. The conversation explores everything from teaching children healthy money habits and the long-term behavioral challenges of value investing to sequence of returns risk, retirement spending strategies, and global portfolio construction. The episode concludes with an in-depth discussion of Louai Bibi's National Financial Planning Award-winning financial plan, highlighting the importance of holistic advice, evidence-based planning, and continuous improvement through client feedback. Key Points From This Episode: (00:00:00) Introduction (0:05:30) Advice for aspiring financial planners: Building skills, credentials, networks, and mentorship early in your career. (0:07:35) Why young advisors should be "a sponge" and learn from both good and bad professional experiences. (0:09:41) Ben Felix on completing the CFA, CIM, and CFP early—and why creating content accelerated his learning. (0:11:51) Why getting large numbers of client-facing "reps" can dramatically improve an advisor's ability to communicate advice. (0:15:44) Choosing the right firm, team, and mentors—and how networking helped Ben Felix ultimately join PWL. (0:18:53) Should a young physician borrow from a professional line of credit to invest? (0:24:55) Robert Merton's perspective on leverage for young investors and the risks of implementing leverage through margin borrowing. (0:28:21) Why the psychological experience of investing borrowed money can be very different from owning an unleveraged portfolio. (0:30:35) How much leverage is needed before it meaningfully changes a long-term financial plan. (0:31:36) Should investors increase their equity allocation before considering leverage? (0:33:39) Louai's experience working with physicians and why becoming debt-free can change how people feel about borrowing to invest. (0:36:00) Louai and Ben Felix share their own experiences with leverage. (0:36:59) How to teach children about money, scarcity, saving, generosity, and spending. (0:38:26) Ben Wilson's approach: Save 50%, give 10%, and let his kids decide what to do with the remaining 40%. (0:40:02) Using wealth for memorable family experiences rather than simply giving children more money. (0:42:51) Why anticipating an experience can be an important part of the enjoyment it creates. (0:43:42) Is the value premium worth the behavioral challenge of potentially enduring years of underperformance? (0:44:11) Ben Felix explains why the difficulty of sticking with value may itself contribute to the premium. (0:45:47) Can having a sufficiently large portfolio eliminate sequence-of-returns concerns? (0:49:41) Reframing "sequence of returns" as "sequence of withdrawals"—and why flexible spending matters. (0:51:21) Separating retirement expenses into fixed needs and flexible spending. (0:52:47) The purchases that have delivered the best personal ROI for Ben, Ben, and Louai. (0:53:08) Ben Felix on his indoor basketball hoop, family travel, sauna, and prepared meal delivery. (0:56:56) Ben Wilson on family vacations, skiing, cycling, and why his family chose a pool over a cottage or boat. (0:58:27) Louai on his 49-inch monitor, his dog, and investing in health and fitness. (1:00:42) How should investors geographically weight a global small-cap value portfolio? (1:05:13) Why a globally diversified portfolio that an investor can actually stick with matters more than finding a theoretically perfect country allocation. (1:07:19) What should investors approaching retirement or FIRE do about sequence-of-returns risk? (1:09:00) Research comparing declining, rising, and static equity allocations during retirement. (1:13:38) Why risk tolerance, time horizon, spending needs, and financial-plan resilience should drive retirement asset allocation. (1:15:07) The National Financial Planning Awards, the judging process, and the sponsorship conflict disclosure surrounding Louai's award. (1:18:37) Inside Louai's 47-page award-winning financial plan and the range of planning issues it addressed. (1:20:06) What Louai believes actually distinguished the submission: Not one clever strategy, but a holistic decision-making process. (1:21:39) Why Louai sought feedback from planners outside PWL and how the award process can improve the broader team. (1:23:26) Why Louai believes financial-planning knowledge and feedback should be shared rather than "gatekept." (1:23:56) How feedback from the Rational Reminder community changed Louai's thinking about investment risk. (1:24:40) Why defining risk purely as short-term volatility can overlook the bigger risk of failing to achieve financial goals. (1:27:59) How public feedback through the podcast creates a powerful learning loop for the PWL team. (1:28:29) A PWL client review on the value of planning, professional experience, and advice that puts the client's interests first. Links From Today's Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)

In this episode, we are joined by Elroy Dimson, Professor of Finance at Cambridge Judge Business School and co-creator of the Dimson-Marsh-Staunton (DMS) dataset, for a sweeping and deeply insightful conversation on financial history, market behavior, and the evolution of global investing. Elroy walks us through the origins of the groundbreaking Triumph of the Optimists, the challenges of assembling over 100 years of global return data, and the critical biases that once shaped our understanding of markets. We explore how expanding beyond U.S.-centric data reshaped expectations for the equity risk premium, why economic growth doesn't necessarily translate into higher stock returns, and what history reveals about diversification, factor investing, and investor behavior. Elroy also shares lessons from his work with major institutions like Norway's sovereign wealth fund, discusses the surprising long-term outperformance of railways, and offers a grounded perspective on future expected returns. This episode is a masterclass in using history to inform better financial decisions. Key Points From This Episode: (0:04:00) Introduction to Elroy Dimson and the significance of the DMS dataset. (0:05:07) Why understanding financial history is essential for thinking about the future. (0:05:24) The origin story of Triumph of the Optimists and assembling global return data. (0:09:06) How long-term datasets are built from academic and commercial sources. (0:11:33) Survivorship bias in historical indices and why it matters. (0:13:35) "Easy data bias" and how it leads to overstated historical returns. (0:15:32) Accounting for failed markets and geopolitical disruptions in global data. (0:18:33) How global data changed expectations for the equity risk premium. (0:21:09) Why 20th-century equity returns were a "pleasant surprise." (0:22:17) U.S. market dominance and the challenge of extrapolating its success. (0:24:11) Market composition in 1900 and the dominance of railway stocks. (0:25:52) Why railways outperformed despite shrinking market share. (0:29:03) The surprising disconnect between economic growth and stock returns. (0:31:28) Why investing in recovering markets requires extreme patience and conviction. (0:33:32) Value investing: historical success and recent struggles. (0:35:00) Why economic growth benefits many—but not necessarily stock investors. (0:35:59) The long-term benefits of global diversification. (0:40:01) Why diversification reduces risk—but doesn't create returns for everyone. (0:42:29) Explaining persistent home country bias among investors. (0:47:46) Industry diversification becoming more important over time. (0:49:50) The rise and evolution of size, value, and momentum factors. (0:54:17) Why factor premiums should be monitored—not blindly followed. (0:57:27) The equity risk premium: why it's crucial—and uncertain. (1:00:15) A realistic estimate: ~3% equity risk premium going forward. (1:02:33) Translating that into ~5% real expected equity returns. (1:05:10) Staying optimistic: invest long-term and live modestly. (1:05:58) The risk of pessimism: losing purchasing power in safe assets. (1:08:06) The evolving role of bonds as diversifiers. (1:09:55) Why market timing is a losing strategy. (1:11:00) Elroy's definition of success: happy children and grandchildren. Links From Today's Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Benjamin Felix — https://pwlcapital.com/our-team/ Benjamin on X — https://x.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Benjamin Warwick on LinkedIn - https://www.linkedin.com/in/braden-warwick-a40b48a3 Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)