In today’s episode, Errol Morris, Academy Award-winning film director and author, joins us to talk about his recently released documentary called Tune Out the Noise. The documentary focuses on the revolution that's happened in the financial system, how the markets work, and why the advancements made are so vital. Errol is an acclaimed figure in film and literature, boasting an impressive array of accolades, notably securing an Oscar for his renowned documentary The Fog of War. His work spans various arenas, encompassing short films for prestigious events and many charitable and political organizations. In our conversation, we delve into the significance of storytelling in communicating complex subjects, the power of serendipity, the evolution of finance, and the enigmatic nature of truth. We discuss the necessity of storytelling, the unexpected occurrences that influenced finance, the importance of empirical data in understanding truth, the central story of Tune Out the Noise, and much more. He also provides insights into the amazing economists, many of whom are past guests, who helped shape the financial landscape. Discover how chance, humility, and the pursuit of truth intertwine in this captivating episode, where the intriguing art of storytelling converges with the complexities of the financial world. Tune in now!   Rational Reminder listeners get exclusive first access to Tune Out the Noise, a documentary directed by Academy Award-winner Errol Morris until January 31.  Tune Out The Noise Access URL:  film.dimensional.com/podcast Access Code (available until Jan 31): RATIONAL   Key Points From This Episode: Introduction and background about our special guest, Errol Morris. (0:00:18) The central story of his new documentary, Tune Out the Noise, and why it is important for the average person to see. (0:07:33) Hear his personal thoughts on investing before the documentary and how his investment philosophy has evolved. (0:12:38) A brief history of the documentary and initial concerns surrounding the project. (0:16:10) Motivation for making it an “Errol Morris film” as opposed to a typical commercial project. (0:18:21) The moment he had an epiphany about making the documentary and telling the story of the financial revolution. (0:20:27) He shares his personal investment experience in the early days of Apple. (0:23:19) Errol’s skepticism about beating the market and the interviewees that had the biggest impact on him. (0:24:23) Iconic influencers of the overall financial revolution story that were not in the film. (0:27:50) The importance of storytelling for conveying complex financial concepts. (0:31:31) Unexpected revelations about the financial system and investing after making the documentary. (0:34:52) Explore the role of chance and serendipity in the financial revolution. (0:36:56) Aspects of the financial revolution story that are underappreciated by investors. (0:40:40) How the approach to making Tune Out the Noise differed from his previous projects. (0:44:30) Ben and Cameron share their opinions about the documentary. (0:50:09) Discover his “shut-up school” approach to interviewing and the fundamentals of a good interview. (0:52:13) Essential advice to become a better storyteller and Errol’s definition of success. (0:58:07)   Links From Today’s Episode:   Errol Morris — https://errolmorris.com Errol Morris Email — info@errolmorris.com Tune Out the Noise — https://www.austinfilm.org/films/test-screening-tune-out-the-noise/ The Fog of War — https://www.imdb.com/title/tt0317910/ The Thin Blue Line — https://www.imdb.com/title/tt0096257/ Believing Is Seeing — https://www.amazon.com/Believing-Seeing-Observations-Mysteries-Photography/dp/1594203016/ A Wilderness of Error — https://www.amazon.com/Wilderness-Error-Trials-Jeffrey-MacDonald/dp/B009GKGSEC/ Gates of Heaven — https://www.imdb.com/title/tt0077598 Dimensional Fund Advisors — https://www.dimensional.com/ The Art of Controversy — https://www.amazon.com/Art-Controversy-Arthur-Schopenhauer/dp/160459571X The Pigeon Tunnel — https://www.imdb.com/title/tt28486633/ Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on X — https://twitter.com/RationalRemind Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder Email — info@rationalreminder.caBenjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/  Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/ Cameron on X — https://twitter.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/  

It’s hard to believe, but today’s episode marks our fifth annual year-in-review episode — where we look back at some of our favourite conversations and takeaways from the past year! If there’s one overarching theme that stood out amongst our guests in 2023 it would be the power of purposeful decision-making to impact our future selves. Tuning in, you’ll hear our guests' remarkable views on the topic, from the power of regret when it comes to long-term decisions to the ‘hidden partner’ that accompanies us in all our decision-making. Another key theme that emerged is how the role of financial advisors is evolving. Key insights include why your financial advisor should collaborate with other advisors, why trust is essential, and how to prepare your children for wealth. We wrap things up with reflective tips on how to identify what your true goals are with a profound lesson on why setting your own scoreboard is essential. Tune in as we share some of our favourite moments from the past year and look back at the incredible guests we’ve had on the show in 2023!   Key Points From This Episode:   Our year with the Rational Reminder community: 23 in 23 reading challenge, memorable meetups, live recordings, a shoutout to our community moderators, and more. (0:00:19) Looking back at our conversation with Charles Ellis and Burton Malkiel on why money management is a loser’s game and navigating market efficiency. (0:08:42) Pim Van Vliet’s insights on the evidence supporting higher expected returns related to certain stock characteristics. (0:16:19) Discussing the relevance (and irrelevance) of dividends and why people tend to view dividends as particularly special, with Professor Samuel Hartzmark. (0:19:42) Our conversation with Will Goetzmann on the value of very long-term data and why historical data is still relevant today. (0:24:58) Nobel laureate, Robert Merton’s insights on putting together a long-term asset mix and taking into account your time horizon. (0:32:35) Highlights from our conversation with Professor Francisco Gomes on how asset allocation should (and should not) change over the lifecycle. (0:39:14) Our second interview with David Blanchett on how regret informs our long-term decisions and Daniel Pink’s insights on optimizing for future regret. (0:43:58) Hear from Charles Ellis on the most under-appreciated action that every investor should take to be more successful. (0:50:50) Making decisions on personal finance and John Cambell’s insights on how household beliefs tend to differ. (0:51:53) Professor Ralph Keeney on why decision-making is the only purposeful way you can influence anything in your life. (0:54:54) Input from Cass Sunstein on the extensive research he’s done on decision-making and how acquiring more information can help your decisions. (0:59:25) We hear from Professor Eric Johnson about the ‘hidden partner’ that accompanies us when we make decisions and Cass Sunstein explains when we should update our beliefs. (01:03:09) Professor James Choi shares his profound insights on why financial decisions are not always explained by economic theory. (01:10:26) Unpacking the effect of overconfidence on our decision-making with Itzhak Ben-David, along with his key ideas on miscalibration. (01:12:53) Answering the question “How good are we at understanding our future selves?” with Hal Hershfield. (01:17:20) Our conversation with Meir Statman on the third generation of behavioural finance and what that means for decision-making and advice. (01:21:13) Dr. Preet Banerjee’s research and insight on the value of having a financial plan. (01:23:48) Talking with YouTuber, Darin Soat, about the struggle to find high-quality financial information online and understanding YouTube as an entertainment-first platform. (01:25:02) Harold Geller on how to determine whether your advisor is properly understanding you and Robert Merton’s thoughts on how he views the role of financial advisors. (01:28:27) We hear from Dr. Preet Banerjee on the business of financial advice and how it has changed over time. (01:35:02) Victor Haghani and James White on the topic of intergenerational billionaires and why there are fewer than you might expect. (01:39:21) An update from Rob Carrick on the state of financial planning for the average Canadian in 2023. (01:44:09) Juhani Linnainmaa unpacks the impact of financial advisors on decision-making and the challenges of choosing a financial advisor. (01:48:48) Dr. James Grubman on identifying a financial advisor who understands the importance of Wealth 3.0, why collaboration is key, and how to prepare children for wealth. (01:51:21) A final takeaway from Shane Parrish on taking stock of your year and how to determine what your true goals are. (02:02:28)   Links From Today’s Episode:   Episode 234: Prof. Robert C. Merton — https://rationalreminder.ca/podcast/234 Episode 236: Harold Geller — https://rationalreminder.ca/podcast/236 Episode 238: Prof. Ralph Keeney — https://rationalreminder.ca/podcast/238 Episode 240: Prof. Eric J. Johnson — https://rationalreminder.ca/podcast/240 Episode 244: Charles D. Ellis — https://rationalreminder.ca/podcast/244 Episode 246: Daniel H. Pink — https://rationalreminder.ca/podcast/246 Episode 248: Prof. William Goetzmann — https://rationalreminder.ca/podcast/248 Episode 250: Prof. John Y. Campbell — https://rationalreminder.ca/podcast/250 Episode 252: Prof. Burton Malkiel — https://rationalreminder.ca/podcast/252 Episode 254: David Blanchett — https://rationalreminder.ca/podcast/254 Episode 256: Prof. Hal Hershfield — https://rationalreminder.ca/podcast/256 Episode 258: Prof. Meir Statman — https://rationalreminder.ca/podcast/258 Episode 260: Prof. James Choi — https://rationalreminder.ca/podcast/260 Episode 262: Prof. Francisco Gomes — https://rationalreminder.ca/podcast/262 Episode 264: Pim van Vliet — https://rationalreminder.ca/podcast/264 Episode 266: Prof. Cass Sunstein — https://rationalreminder.ca/podcast/266 Episode 268: Itzhak Ben-David — https://rationalreminder.ca/podcast/268 Episode 269: Preet Banerjee — https://rationalreminder.ca/podcast/269 Episode 270: Victor Haghani and James White — https://rationalreminder.ca/podcast/270 Episode 272: Rob Carrick — https://rationalreminder.ca/podcast/272 Episode 273: Professor Samuel Hartzmark — https://rationalreminder.ca/podcast/273 Episode 275: Live from Future Proof 2023 with Hal Hershfield — https://rationalreminder.ca/podcast/275 Episode 276: Darin Soat — https://rationalreminder.ca/podcast/276 Episode 278: Juhani Linnainmaa — https://rationalreminder.ca/podcast/278 Episode 280: Shane Parrish — https://rationalreminder.ca/podcast/280 Episode 282: James Grubman —  Episode 224: Scott Cederberg — https://rationalreminder.ca/podcast/224 Winning the Loser's Game: Timeless Strategies for Successful Investing — https://www.amazon.com/Winning-Losers-Game-Strategies-Successful/dp/1264258461 A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing — https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393358380 Your Future Self: How to Make Tomorrow Better Today — https://www.halhershfield.com/yourfutureself A Wealth of Well-Being: A Holistic Approach to Behavioral Finance — https://www.amazon.com/Wealth-Well-Being-Holistic-Approach-Behavioral/dp/1394249675 Strangers in Paradise: How Families Adapt to Wealth Across Generations — https://www.amazon.com/Strangers-Paradise-Families-Wealth-Generations/dp/0615894356 Wealth 3.0: The Future of Family Wealth Advising — https://www.amazon.com/Wealth-3-0-Future-Family-Advising/dp/B0C9SHFSGM Clear Thinking: Turning Ordinary Moments into Extraordinary Results — https://www.amazon.com/Clear-Thinking-Turning-Ordinary-Extraordinary/dp/0593086112 30 Lessons for Living — https://www.karlpillemer.com/books/30-lessons-for-living/ Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on X — https://twitter.com/RationalRemind Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder Email — info@rationalreminder.caBenjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/  Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/ Cameron on X — https://twitter.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://twitter.com/MarkMcGrathCFP

In this episode, we welcome back the esteemed Professor Scott Cederburg, Associate Professor of Finance at the University of Arizona. In this highly anticipated episode, Professor Cederburg revisits the show to delve into his groundbreaking paper on life cycle asset allocation. Professor Cederburg's latest research presents findings that disrupt traditional thinking in the field, prompting a deep dive into the implications of these new insights. In our conversation, we unpack the findings from the paper and how they challenge established norms in retirement planning and asset allocation. We discuss what the new paper adds to the discourse, his approach and methodology, the different assessment criteria used, and the main findings from the paper. We also delve into the different asset allocation strategies assessed, which strategy performed best, aspects that would influence the various strategies, and how to invest for the long term safely. We explore the nuances of stock versus bond returns and the hidden benefits of international diversification. Gain profound insights into the significance of social security, inflation-protected bonds, target date funds, and the repercussions of an all-equity strategy. Comparing his latest paper with prior research on withdrawal rates, Professor Cederburg highlights surprising aspects of the results and provides invaluable takeaways for financial advisors from these cutting-edge findings. Discover how this pioneering work challenges conventional wisdom, reshaping the landscape of retirement planning and investment strategies in this illuminating conversation with Professor Scott Cederburg.   Key Points From This Episode:   Background about Professor Cederburg and episode overview. (0:00:00) How his new paper challenges the central tenets in life cycle investing. (0:03:38) What sets his method apart regarding its ability to challenge the status quo. (0:06:56) How he characterizes the life cycle of the household modelled in his study. (0:09:40) The data set used and his approach for sampling and analyzing the data. (0:12:09) Retirement outcomes used to evaluate life cycle asset allocation strategies. (0:13:56) Asset allocation strategies investigated in the paper and which one performs best. (0:15:49) Left tail outcomes of all-stocks strategy, stock returns vs bond returns, and the benefits of international diversification. (0:22:52) Learn about the importance of social security in the model and the nuances of inflation-protected bonds. (0:28:29) Investing in target date funds and the downsides of an all-equity strategy. (0:32:05) Hear about the impact of large intermediate losses on retirement savings. (0:35:33) Unpacking the lag time on returns between stocks and bonds. (0:40:01) Exploring investing behaviour and reasons for underperformance. (0:42:15) The importance of return dependencies and what happens to the results if monthly returns are used. (0:45:03) Navigating and modelling flaws and common aspects overlooked in financial analyses. (0:49:29) Dissecting retiree adherence to traditional approaches to long-term investing. (0:50:36) Home country bias and its influence on portfolio allocation. (0:52:12) Currency effect and domestic stock hedging as a strategy. (0:55:32) Comparing the findings from his latest paper with those from his paper on withdrawal rates. (1:00:24) Aspects of the results that surprised him and takeaways for financial advisors from the latest research findings. (1:02:07)   Links From Today’s Episode:   Professor Scott Cederburg — https://eller.arizona.edu/people/scott-cederburg Professor Scott Cederburg on LinkedIn — https://www.linkedin.com/in/scott-cederburg/ Professor Scott Cederburg on Google Scholar — https://scholar.google.com/citations/ Eller College of Management — https://eller.arizona.edu/ Episode 224 — https://rationalreminder.ca/podcast/224 Episode 250 — https://rationalreminder.ca/podcast/250 ‘Beyond the Status Quo: A Critical Assessment of Lifecycle Investment Advice’ — https://dx.doi.org/10.2139/ssrn.4590406 ‘The Safe Withdrawal Rate: Evidence from a Broad Sample of Developed Markets’ — https://dx.doi.org/10.2139/ssrn.4227132 International Diversification Works (Eventually) — https://doi.org/10.2469/faj.v67.n3.1 ‘Stocks for the long run? Evidence from a broad sample of developed markets’ — https://www.sciencedirect.com/science/article/ Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on X — https://twitter.com/RationalRemind Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder Email — info@rationalreminder.caBenjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/  Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/ Cameron on X — https://twitter.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/  

Today’s episode features a series of in-depth segments, and includes a visit from our two favourite Marks; Mark Soth (aka The Loonie Doctor) and Mark McGrath! To kick things off we break down volatility and investor behaviour by looking back at our conversation with Scott Cederburg and what his research demonstrates about the topic. We then hear from Mark Soth about the project that he and Ben have been working on; the soon-to-be-released Money Scope podcast. Find out what you can expect from their financial curriculum, like the topics they’ll be covering and how the structure of their episodes is specifically designed to educate. Next up we have our Mark to Market Segment, with Mark McGrath providing a detailed overview of everything you need to know about physicians incorporating. We then cover a recap of our conversation with Gerard O'Reilly, before sharing our thoughts on why this episode is worth multiple listens. Following that you’ll hear Cameron share his review of Brave New Work: Are You Ready to Reinvent Your Organization? by Aaron Dignan, along with his key takeaways from the book. Finally, in our after-show section, we discuss some of the fantastic guests we have coming up, our recommended reading to prepare for those episodes, community updates, plus a few other goodies! Key Points From This Episode:   The biggest takeaways on volatility and investor behaviour from Scott Cederburg’s research; unpacking performance chasing, return gaps, fund expense ratios, and more. (0:02:06) An overview of the project that Mark Soth and Ben have been working on, the Money Scope podcast; why they started it, what it covers, and who it’s for. (0:14:13) Details on Money Scope’s format and the supplementary case study episodes. (0:19:12) Our Mark to Market segment on physicians incorporating; a rundown of the complexities, common misconceptions, and benefits to be aware of. (0:26:32) How much you should be retaining in a corporation to make it worthwhile. (0:33:30) A look back at our conversation with Gerard O'Reilly and why this episode is a must-listen. (0:37:58) Cameron’s review of Brave New Work: Are You Ready to Reinvent Your Organization? by Aaron Dignan, along with his top takeaways. (0:40:10) Our after-show section; guests to look forward to, recommended reading, community highlights, and more. (0:46:23)     Links From Today’s Episode: Episode 198: Gerard O’Reilly — https://rationalreminder.ca/podcast/198 Episode 224: Scott Cederburg — https://rationalreminder.ca/podcast/224 Episode 268: Itzhak Ben-David — https://rationalreminder.ca/podcast/268 ‘The Folly of Hiring Winners and Firing Losers’ — https://www.cannonfinancial.com/uploads/main/The_Folly_of_Hiring_Winners_and_Firing_Losers1725.pdf The Money Scope Podcast — https://moneyscope.ca/ The Money Scope Podcast on YouTube — https://www.youtube.com/@moneyscopepod Brave New Work: Are You Ready to Reinvent Your Organization? — https://www.amazon.com/Brave-New-Work-Reinvent-Organization/dp/0525536205 Aaron Dignan — http://www.aarondignan.com/ The Ready — https://www.theready.com/ The Fund: Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend — https://www.amazon.com/Fund-Bridgewater-Associates-Unraveling-Street/dp/1250276934 Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/  Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on X — https://twitter.com/RationalRemind Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder Email — info@rationalreminder.caBenjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/  Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/ Cameron on X — https://twitter.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ Dr. Mark Soth (The Loonie Doctor) — https://www.looniedoctor.ca/ Dr. Mark on X — https://twitter.com/LoonieDoctor Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://twitter.com/MarkMcGrathCFP  

Pim van Vliet is on a mission to put the low volatility factor on the map. In his role as Head of Conservative Equities and Chief Quantitative Strategist at Robeco, he focuses on leveraging the effect of low-risk investing. Pim has also published a book, High Returns From Low Risk: A Remarkable Stock Market Paradox, where he unpacks some of the key aspects that guide his work and underpin his success. During this conversation, Pim shares his insights on volatility, the changing market, and combining low-risk with other traditional factors. He equips listeners with key considerations for evaluating strategies or products when allocating low-risk and offers his perspective on out-of-sample-testing, distinguishing between global-factor and cross-sectional premiums, and more. Listeners will get Pim’s perspective on the pros and cons of the Sharpe ratio, and we examine risk-adjusted returns on long and short legs before hearing his Fama-French Five Factor Model analysis. We touch on inflation and gold, and finally, Pim shares his inspiring perspective on success in his financial and personal life. Tune in today to hear more!    Key Points From This Episode:   Introducing Pim Van Vliet and his mission to put low volatility on the map as a factor. (0:00:41) Defining the low-risk effect with reference to volatility and its impact on other asset classes. (0:04:47) Low-risk portfolio performance in relation to the changing market. (0:12:02) Combining low-risk with other traditional factors. (0:21:43) Considerations for evaluating strategies or products when allocating low-risk. (0:24:35) Out-of-sample testing. (0:31:28) Distinguishing between global factor premiums and cross-sectional premiums. (0:35:18) Weighing the pros and cons of the Sharpe ratio as an evaluation tool. (0:40:19) Examining the risk-adjusted returns of long and short legs. (0:41:20) Issues with the Fama-French Five Factor Model. (0:44:37) Why factor premiums vary through inflation regimes. (0:50:41) How an allocation to gold holds up as a downside hedge. (0:52:53) Pim’s definition of success in his life. (0:56:31)   Links:    Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-264-pim-van-vliet-the-volatility-effect-revisited-discussion-thread/24622 Book From Today’s Episode: High Returns From Low Risk: A Remarkable Stock Market Paradox — https://amzn.to/3rMkJxQ Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.  Rational Reminder Website — https://rationalreminder.ca/  Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Pim van Vliet on Twitter — https://twitter.com/paradoxinvestor Pim van Vliet — http://www.paradoxinvesting.com 'The Volatility Effect' — https://www.robeco.com/files/docm/docu-the-volatility-effect-2007.pdf 'The Volatility Effect Revisited' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3442749 'Ten Things You Should Know About Low-Volatility Investing' — https://www.robeco.com/en-int/insights/2017/07/ten-things-you-should-know-about-minimum-volatility-investing 'The Conservative Formula: Quantitative Investing Made Easy' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3145152 'Media attention and the volatility effect' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3403466 'When Equity Factors Drop Their Shorts' — https://www.robeco.com/en-int/insights/2021/02/when-equity-factors-drop-their-shorts 'The Cross-Section of Stock Returns before CRSP' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3969743 'Global factor premiums' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3325720 'Investing in Deflation, Inflation, and Stagflation Regimes' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4153468 'Five Concerns with the Five-Factor Model' — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2862317 'The golden rule of investing' — https://www.robeco.com/en-int/insights/2023/04/the-golden-rule-of-investing

Today we welcome James Choi, Professor of Finance at the Yale School of Management, to the show to share some of his insight into what he has dubbed practical finance. James has focused his research on behavioural finance, behavioural economics, household finance, capital markets, health economics, and sociology, and is turning this expertise into pragmatic knowledge marketed towards ordinary people. This reframing and reconfiguration of the theory for all people and the decisions they make, could not be more in line with what we are trying to do here at Rational Reminder, and this conversation with James was packed with so many surprising and informative responses to relatable questions. We ask James about index funds, the benefits of advisors, optimal equity, diversification, and much more. We also spend a little bit of time exploring the individual reasons that people have for their decisions, with James expanding on the disconnect between people's philosophy and their actions. Further topics include the role and impact of education, renting versus buying, and the formulation of his concept of practical finance, so make sure to join us and catch it all.   Key Points From This Episode:   The failure of economic theory to explain everyday financial decisions. (0:03:03) A little about James' course on personal finance at Yale. (0:06:29) Economic theory and popular personal finance advice on optimal savings and consumption. (0:12:06) Looking at economic theory and popular personal finance's suggestions about optimal equity allocations for households. (0:19:33) The kinds of personal aversions people have towards their finances. (0:27:07) The impact that James' survey research has had on his perspectives on equity. (0:29:42) Practical application of economic theory to household decisions. (0:32:29) Increased awareness of the benefits of index funds. (0:42:59) James shares a few famous economists' investment strategies. (0:44:11) Some thoughts on approaches to and avoidance of diversification. (0:45:48) Differentiating between mistakes and unique behaviours we cannot justify. (0:52:26) The efficacy of education, financial advice, and personal experience in improving investment decisions. (0:55:44) Liquid and illiquid assets and renting versus buying property. (1:02:26) James talks about his excitement around his current work in practical finance. (1:07:50) How James defines success at this point in his life. (1:09:52) Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-260-prof-james-choi-practical-finance-discussion-thread/24227   Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.  Rational Reminder Website — https://rationalreminder.ca/  Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore James Choi — https://faculty.som.yale.edu/jameschoi/ 'Behavioral Household Finance' — https://www.hbs.edu/ris/Publication%20Files/behavioral_household_finance_a3b33098-e0c7-40e0-bf2f-fa4ceb6e6d06.pdf 'Finance for the Rest of Us' — https://www.linkedin.com/posts/james-j-choi-finance_finance-for-the-rest-of-us-activity-6997910789097414656-5epq/?originalSubdomain=ba 'Popular Personal Financial Advice versus the Professors' — https://www.aeaweb.org/articles?id=10.1257/jep.36.4.167 'Millionaires Speak: What Drives Their Personal Investment Decisions?' — https://www.nber.org/papers/w27969 'What Matters to Individual Investors? Evidence from the Horse's Mouth' — https://onlinelibrary.wiley.com/doi/abs/10.1111/jofi.12895 'Are Empowerment and Education Enough? Underdiversification in 401(k) Plans' — https://www.jstor.org/stable/3805120 'Why Does the Law of One Price Fail? An Experiment on Index Mutual Funds' — https://www.nber.org/papers/w12261 '$100 Bills on the Sidewalk: Suboptimal Investment in 401(k) Plans' — https://www.nber.org/papers/w11554

Behavioural finance provides a realistic and comprehensive framework for understanding financial markets and decision-making. Incorporating insights from psychology, it enhances our understanding of investor behaviour, market dynamics, and risk management, leading to more effective investment strategies and improved financial outcomes. In this episode, Professor Meir Statman, a renowned expert in finance and behavioural finance, takes us on a captivating journey through the intriguing world of maximizing well-being through finance. Professor Statman is a distinguished financial expert and a leading authority in the field of behavioural finance. His groundbreaking research has shaped the understanding of investor behaviour and its impact on financial decision-making. Through his academic contributions and practical insights, Professor Statman has become a trusted guide in navigating the complex intersection of finance and human behaviour. In our conversation, he unravels the secrets of maximizing well-being through finance and the intricacies of the field. We explore the captivating world of behavioural finance and its connection to efficient markets, the distinction between normal and rational investors, the allure of lottery-like assets, and the downsides of consuming dividends. We unpack the aversion to realizing losses and the debate between dollar-cost averaging and lump-sum investing. We delve into the rising popularity of alternative investment strategies, the influence of status on rational investor behaviour, the role of financial advisors, and much more. Tune in for this enlightening conversation that will not only reshape your understanding of finance but human behaviour too.   Key Points From This Episode:   Defining what behavioural finance is and how it relates to efficient markets. (0:04:37) How traditional financial economists responded to Professor Statman's early behavioural work and the current state of behavioural finance research. (0:06:12) The various generations of behavioural finance and how they differ. (0:08:51) Differences between a normal investor and a rational one. (0:13:10) What investors really want and why normal investors like lottery-like assets. (0:15:48) Reasons normal investors have a preference for cash dividends. (0:20:17) Downsides of consuming dividends and not capital. (0:22:09) Unpacking why normal investors are averse to realizing losses. (0:25:40) Dollar-cost averaging versus lump sum investing. (0:27:57) The popularity of alternative investment strategies to normal investors. (0:31:13) Insights about the difference between an error and what a person wants. (0:34:49) The influence of status on rational investor behaviour and whether financial advisors should cater for elevating status. (0:36:37) Currency hedging, regret, the value of financial literacy, and the distinction between behavioural portfolio theory and traditional mean-variance portfolio theory. (0:40:50) Applying the market's portfolio theory to behavioural portfolio theory. (0:49:36) Exploring theories through a CAPM lens and behavioural theory's interpretation of return premiums from factors like size and value. (0:50:51) The role of financial advisors in correcting behavioural errors of clients. (1:00:16) Professor Statman's definition of success. (1:09:25)   Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-258-prof-meir-statman-financial-decisions-for-normal-people-discussion-thread/23934   Book From Today’s Episode: Behavioral Finance: The Second Generation — https://amzn.to/3qR7AmM   Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.  Rational Reminder Website — https://rationalreminder.ca/  Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Prof. Meir Statman on Twitter — https://twitter.com/meirstatman Prof. Meir Statman — https://www.scu.edu/business/finance/faculty/statman/ 'Behavioral Efficient Markets' — http://doi.org/10.3905/jpm.2018.44.3.076 'What Is Behavioral Finance?' — https://www.cfainstitute.org/-/media/documents/book/rf-publication/2019/behavioral-finance-the-second-generation.pdf 'Behavioral Finance: The Second Generation' — https://www.cfainstitute.org/-/media/documents/book/rf-publication/2019/behavioral-finance-the-second-generation.pdf What Investors Really Want — http://doi.org/10.2469/faj.v66.n2.5 Explaining investor preference for cash dividends — http://doi.org/10.1016/0304-405x(84)90025-4 The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence — https://doi.org/10.1111/j.1540-6261.1985.tb05002.x A Behavioral Framework for Dollar-Cost Averaging — http://doi.org/10.3905/jpm.1995.409537 Behavioral Aspects of the Design and Marketing of Financial Products — http://doi.org/10.2307/3665864 Options and structured products in behavioral portfolios — http://doi.org/10.1016/j.jedc.2012.07.004 Lottery Players/Stock Traders — http://doi.org/10.2469/faj.v58.n1.2506 Hedging Currencies with Hindsight and Regret — http://doi.org/10.3905/joi.2005.517170 Behavioral Portfolio Theory — http://doi.org/10.2307/2676187 Portfolio Optimization with Mental Accounts — https://www.cambridge.org/core/services/aop-cambridge-core/content/view/4B23CFB326982C52014A1BA447FA9244/S0022109010000141a.pdf/portfolio-optimization-with-mental-accounts.pdf Making Sense of Beta, Size, and Book-to-Market — http://doi.org/10.3905/jpm.1995.409506 Affect in a Behavioral Asset-Pricing Model — http://doi.org/10.2469/faj.v64.n2.8 From Financial Advisers to Well-Being Advisers; Well-Being Advisers — http://doi.org/10.3905/jwm.2023.1.202

What are your guiding philosophies on work and life? And how do they influence your daily decisions and the trajectory of your career? If these questions feel somewhat daunting, and you aren’t sure how to answer them, then this episode is a great place to start! Joining us today is Giorgio Ugazio, a self-described content creator, startup founder, and father. Giorgio is a software engineer by training, with a Master's degree in Artificial Intelligence and robotics, and spent over seven years working at Google. He is the founder of Retire In Progress, a blog where he shares his thoughts on life, work, achieving financial independence, and retiring early. The platform has amassed a dedicated following thanks to Giorgio’s many unique insights on life, design, and living intentionally. In today’s conversation, we talk with Giorgio about the underpinnings of his philosophies, the excellent book Designing Your Life: How to Build a Well-Lived, Joyful Life, and how his interpretation of it clarified his perspectives on life and work. We discuss the key tenets in Designing Your Life along with how you can use its many tools and exercises to determine your current position, assess your value, and define your compass. Giorgio goes on to share the thinking behind his foundational beliefs, like why you shouldn’t play the status game, before reflecting on who he believes would benefit most from reading Designing Your Life. To hear all of Giorgio’s fascinating insights and how to incrementally build your model of life, be sure to tune in today!   Key Points From This Episode:   A quick recap and review of episode 100 with Professor Ken French. (0:02:57) Introducing Giorgio Ugazio, aka Mr. RIP,  his website, Retire Your Life, and how you can access his extensive notes on the book Designing Your Life online. (0:05:16) An overview of Designing Your Life, guidance on how to classify problems, and a breakdown of what it means to prototype solutions. (0:08:49) Insight into the tools, exercises, and processes that the book offers: how it helps you determine where you are, assess your value, and define your compass. (0:13:05) How to do the Odyssey Planning exercises. (0:16:22) The four key areas covered in the book, why Giorgio added the categories learning, money, and creativity, and how he incorporates lessons from the book into his life. (0:18:18) Determining your views on life and work, and how the two interact. (0:21:54) The Pomodoro technique: what it is, and how to use it. (0:23:12) Giorgio’s perspective on work: why we do it, the purpose it serves, and the criteria he uses to assess his position. (0:25:11) What you learn when you take money out of the equation, why you should ignore the status game, and the importance of finding ways to enjoy your life. (0:29:46) Giorgio’s view on life, the philosophers that inspire him, and his guidelines for what he thinks a good life should be. (0:36:41) Some of the misalignments between Giorgio’s ideal life and his actual life. (0:42:29) How life and work both drive and complement one another. (0:44:16) Giorgio’s advice on applying lessons from Designing Life and who he thinks will benefit most from reading it. (0:48:51) Our thoughts on the movie Air, some of the wonderful reviews we’ve been getting from listeners, and news about upcoming meetups. (0:51:26)   Book From Today’s Episode: Designing Your Life: How to Build a Well-Lived, Joyful Life — https://amzn.to/3N5Xp57   Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.  Rational Reminder Website — https://rationalreminder.ca/  Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Giorgio Ugazio on Twiter — https://twitter.com/retireinprogres Giorgio Ugazio — http://retireinprogress.com Giorgio’s Notes on Designing Your Life — mr.rip/dyl Episode 100: Prof. Kenneth French: Expect the Unexpected — https://rationalreminder.ca/podcast/100

How does the connection we have with our future self impact the decisions we make today? And what active steps can we take to improve our connection with our future selves? Today on the show we welcome back Hal Hershfield, whose new book Your Future Self: How to Make Tomorrow Better Today delves into the science of our relationship with our future selves and what we can do to change it for the better. In our conversation with Hal, we discuss the concept of the self, how we change over time, and why so many of us feel disconnected from our future selves. He describes the research surrounding these subjects and their findings, including how the brain scans they performed demonstrate that we mostly see our future selves as strangers, and why this is caused, at least in part, by the fact that our future selves don’t technically exist yet. We also discuss the interventions that have been shown to improve our relationship with our future selves, like viewing age-progressed images or exchanging letters with our future selves, and why everyone responds to these interventions differently. Having a strong connection with your future self has many benefits. It means you’re more likely to make decisions that will serve you later in life, like saving for retirement, eating healthily, and exercising regularly. But Hal also warns that we risk losing sight of the present and what truly matters when we focus solely on the future. To hear all of Hal’s knowledgeable insights on this topic and what he wants to explore next, be sure to tune in today! Key Points From This Episode: Defining the self and how our identity shifts depending on age, context, and the people we surround ourselves with. (0:04:08) An overview of Hal’s research and what it reveals about how most people connect (or don’t connect) to their future selves. (0:08:29) How empathy can influence our connection to our future selves. (0:11:36) Insights into why we tend to think of our future self the same way we think about strangers or acquaintances. (0:14:19) Our level of connection to our future self and how it affects wealth accumulation and financial well-being. (0:17:53) The definition of ‘present bias’ and ‘hyperbolic discounting’ and the role they play in decisions about the future. (0:19:28) The end-of-history illusion and the impact it has on our decisions. (0:23:02) How viewing age-progressed images of yourself can help you build a connection with your future self. (0:26:35) The research Hal is conducting with MIT Media Lab using an AI chatbot called Future You. (0:29:35) © 2023 Rational Reminder Podcast 1 RRP 256 Show Notes Dan Pink’s work on the power of regret and how it overlaps with Hal’s research and findings. (0:31:59) The findings on being presented with age-progressed images of ourselves and how they impact our decision-making and relationship with our future selves. (0:35:20) How writing to your future self can improve your decisions. (0:40:16) The problems that arise when we become too focused on improving life for our future self and how to find harmony between the present and future. (0:44:03) The COVID-19 pandemic and its impact on our collective relationship with the future. (0:48:10) Learn about the live episode we’ll be recording at the upcoming Future Proof conference with Hal as our guest. (0:51:24)   Links From Today’s Episode: Hal Hershfield — https://www.halhershfield.com/ Hal Hershfield on Twitter — https://twitter.com/HalHershfield Hal Hershfield on LinkedIn — https://www.linkedin.com/in/hal-hershfield-a2b91510/ Your Future Self: How to Make Tomorrow Better Today — https://www.halhershfield.com/ yourfutureself Episode 141: Hal Hershfield: The Psychology of Long-term Decision Making — https:// rationalreminder.ca/podcast/141 The Power of Regret: How Looking Backward Moves Us Forward — https://www.amazon.com/ Power-Regret-Looking-Backward-Forward/ Episode 246: Daniel H. Pink: How to Use Regret — https://rationalreminder.ca/podcast/246 Future Proof Festival — https://futureproof.advisorcircle.com/ Brian Knutson — https://profiles.stanford.edu/brian-knutson Dan Martell — https://www.danmartell.com/ Derek Parfit — https://www.britannica.com/biography/Derek-Parfit Daniel Gilbert — http://www.danielgilbert.com/ ING — https://www.ing.com/Home.htm Merrill Lynch — https://www.ml.com/ Shlomo Benartzi — http://www.shlomobenartzi.com/ Stephen Shu — https://steveshuconsulting.com/ Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder- podcast/id1426530582. 
 Rational Reminder Website — https://rationalreminder.ca/ Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder Email — info@rationalreminder.ca
 Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on Twitter — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/ Cameron on Twitter — https://twitter.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

There are many different objective functions you can use when building optimal portfolios. The majority of these approaches define risk from the perspective of variability or bad outcomes, but positive returns could be viewed as “risky” for those that don’t experience them, which is another way of saying that people experience regret (or FOMO, for our trendier listeners). Today, we are joined by David Blanchett, a return guest and the Managing Director and Head of Retirement Research for PGIM DC Solutions, the global investment management arm of Prudential Financial. He is also an Adjunct Professor of Wealth Management at The American College of Financial Services and a Research Fellow for the Alliance for Lifetime Income. David returns to the podcast for an articulate discussion about regret in portfolio construction, what drives it, and how financial advisors can cater to it. We then delve into how David is redefining optimal retirement income strategies, looking at retirement tools, retirement planning, compensation models in the industry, risk exposures, and portfolios. We also get a high-level overview of some of the fascinating work that David has done on home-country bias, plus so much more. For highly technical content presented in an accessible and practical way by one of the brightest minds in retirement planning, be sure to tune in today! Key Points From This Episode: • Differences between risk aversion and regret aversion. (0:03:57) • The distinctly human element that drives “investment FOMO.” (0:06:34) • Insight into how David models regret in his research. (0:09:06) • The asset pricing implications of approaching portfolio optimization this way. (0:12:11) • Tips for deciding on what the regret benchmark should be. (0:13:19) • How a portfolio optimization routine based on regret affects asset allocation. (0:14:08) • Ways that the effect of optimizing over regret changes depending on risk aversion. (0:16:55) • Other asset characteristics that might drive optimal allocation to regret assets. (0:18:04) • Why moving away from self-direction is the best thing to happen to 401(k) plans. (0:20:53) • How financial advisors should cater to investors interested in speculative assets. (0:24:00) • Unpacking some of the social and story-driven sources of regret. (0:29:03) • Downsides to modelling retirement liability as a static inflation-adjusted amount. (0:32:00) • Why it’s important to understand the composition of retiree spending and saving. (0:33:57) • David’s research into dynamic spending rules for retirement planning. (0:42:06) • Some of the key pitfalls of existing financial planning tools and solutions. (0:44:38) • Ways that safe withdrawal rates change when you incorporate dynamic spending. (0:51:10) • How advisor channel affects passive fund choice and how clients should respond. (0:57:56) • Insight into David’s research on foreign revenue and home-country bias. (1:02:27)     Links From Today’s Episode: David Blanchett — https://www.davidmblanchett.com/ David Blanchett on Twitter — https://twitter.com/davidmblanchett David Blanchett on LinkedIn — https://www.linkedin.com/in/david-blanchett-b0b0aa2/ © 2023 Rational Reminder Podcast 2 RRP 254 Show Notes PGIM — https://www.pgim.com/ E137: David Blanchett: Researching Retirement — https://rationalreminder.ca/podcast/137 ‘Regret and Optimal Portfolio Allocations’ — https://www.pm-research.com/content/iijpormgmt/ early/2023/02/01/jpm20231464 ‘Keep Keeping Your Distance: An Updated Look at 401(k) Participant Behaviors During the COVID-19 Crisis’ — https://www.morningstar.com/articles/1032011/keep-keeping-your- distance-an-updated-look-at-401k-participant-behaviors-during-the-covid-19-crisis ‘Save more with less: The impact of employer defaults and match rates on retirement saving’ — https://onlinelibrary.wiley.com/doi/abs/10.1002/cfp2.1152 ‘Redefining the Optimal Retirement Income Strategy’ — https://www.tandfonline.com/doi/full/ 10.1080/0015198X.2022.2129947 ‘Focusing on Both Sides of the Balance Sheet: The Benefit of Liability Optimization’ — https:// web.p.ebscohost.com/abstract ‘The Problems with Monte Carlo are in Your Mind’ — https://www.advisorperspectives.com/ articles/2023/04/24/the-problems-with-monte-carlo-are-in-your-mind ‘Does Advisor Channel Influence Passive Fund Choice?’ — https:// www.financialplanningassociation.org/learning/publications/journal/APR22-does-advisor- channel-influence-passive-fund-choice-OPEN ‘Foreign Revenue: A New World of Risk Exposures’ — https://www.pm-research.com/content/ iijpormgmt/47/6/175 Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder- podcast/id1426530582. 
 Rational Reminder Website — https://rationalreminder.ca/ Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder Email — info@rationalreminder.ca
 Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on Twitter — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/ Cameron on Twitter — https://twitter.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Critics of blockchain often say that it is nothing more than a database, but today’s guest, Ari Juels, has a different opinion. His technical expertise (he is a Professor of Computer Science at Cornell Tech), combined with his ability to understand both sides of a divisive topic like this one, make for a very insightful conversation about Bitcoin, NFTs, and smart contracts. We talk about the reasons for the valid skepticism that surrounds blockchain technology, the various reasons that Ari believes that it is a powerful, useful tool, despite its downfalls, pyramid schemes, decentralized exchanges and more!   Key Points From This Episode:   The significance of the Bitcoin innovation to Ari’s field of study. (0:03:40) What piqued Ari’s initial interest in digital currency. (0:04:46) Ari explains the difference between permission and permissionless blockchains. (0:06:27) Comparing a permission blockchain with a distributed-append-only database with authorized contributors. (0:08:34) A number of reasons why permissionless blockchains have been so widely embraced (despite Ari’s initial prediction to the contrary). (0:12:24) Fraud in the cryptocurrency space; Ari shares his thoughts. (0:14:28) The benefits of the cultural phenomenon of NFTs. (0:19:25) Examples of NFT-related issues that still need to be addressed. (0:26:04) How smart contracts can be used by criminals to their advantage. (0:30:09) Why smart contracts are well suited for compliance. (0:32:02) An example of a smart contract pyramid scheme. (0:35:48) Some of the pros and cons of the inflexibility of smart contracts. (0:41:09) What flash loans are and what they can be used for. (0:46:11) Understanding the value of oracle systems. (0:50:04) How the Candid system that Ari’s group developed helps to mitigate the problem of lost Bitcoin keys. (0:57:04) Ari explains the advantages and disadvantages of a decentralized exchange. (01:01:19) How the blockchain has improved code writing. (01:07:57) The importance of balancing privacy and accountability in DeFi systems. (01:09:38) Ari’s thoughts about the future potential of blockchain technology. (01:14:03) The biggest concerns that Ari has about the blockchain space. (01:15:24) Why skepticism about blockchain technology is valid. (01:17:31) The facet of the blockchain space that Ari is most excited about. (01:19:51)     Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/  Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Ari Juels on Twitter — https://twitter.com/AriJuels Ari Juels — https://www.arijuels.com/ The Ring of Gyges: Using Smart Contracts for Crime — http://www.arijuels.com/wp-content/uploads/2013/09/Gyges.pdf NFTs for Art and Collectables: Primer and Outlook — https://www.arijuels.com/wp-content/uploads/2022/04/NFTs__Primer_and_Outlook.pdf ‘Huge mess of theft and fraud:’ artists sound alarm as NFT crime proliferates — https://www.theguardian.com/global/2022/jan/29/huge-mess-of-theft-artists-sound-alarm-theft-nfts-proliferates Incomplete Contracts and Control — https://www.nobelprize.org/uploads/2018/06/hart-lecture.pdf Chainlink 2.0: Next Steps in the Evolution of Decentralized Oracle Networks — https://research.chain.link/whitepaper-v2.pdf?_ga=2.99068702.124468793.1661870135-1990502175.1661870135 Flash Boys 2.0: Frontrunning, Transaction Reordering, and Consensus Instability in Decentralized Exchanges — https://arxiv.org/pdf/1904.05234.pdf Themis: Fast, Strong Order-Fairness in Byzantine Consensus — https://eprint.iacr.org/2021/1465.pdf Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains — https://energycommerce.house.gov/sites/democrats.energycommerce.house.gov/files/documents/Witness%20Testimony_Juels_OI_2022.01.20.pdf The Seven Grand Challenges — https://www.initc3.org/projects.html

In this episode, we speak to Chris DeRose, software developer and former co-host of the Bitcoin Uncensored podcast, about both the downsides and upsides of cryptocurrencies and the associated technologies. We took the time to dive deep into the subject with Chris and learned about some of the common misconceptions about blockchain technology, the value of cryptocurrencies to society, ways in which the crypto space has evolved, using economic theories to understand financial systems, the definition of money, what he thinks about the associated technologies, the role blockchain technology can have in society and why cryptocurrencies will not replace the dollar.   Key Points From This Episode:   The motivation behind Chris’s decision to get involved with Bitcoin in 2010. (0:00:48) How the Bitcoin community has evolved since Chris got involved in 2010. (0:03:00) Some of the common misconceptions associated with blockchain technology. (0:06:03) Whether new technologies pushing back against regulations is common. (0:08:08) Ways in which Chris’s perception of crypto has changed since he discovered it. (0:09:53) Chris explains what his definition of money is. (0:11:19) Find out what Bitcoin actually is, if it is not money. (0:14:39) Aspects of the current financial system that Bitcoin improves on. (0:16:42) A discussion around the recent controversy regarding Canadian trucker convoys. (0:17:54) Some of the problems anonymity associated with cryptocurrencies causes. (0:20:33) Why not being able to verify transactions is a problem for privacy coins. (0:21:18) A discussion about the US monetary system and the US dollar. (0:24:12) Chris discusses the reliance on economic theories to understand the economy. (0:30:59) What he thinks about crypto markets through the lens of market efficiency. (0:32:26) Whether crypto markets can be manipulated or not. (0:33:49) Why Chris thinks Bitcoin will not make traditional regulations around payments obsolete. (0:35:32) Another discussion regarding the economy through a theoretical lens. (0:39:15) Reasons why Chris thinks cryptocurrencies have value. (0:40:32) Chris explains what fungible value is. (0:45:49) Why Bitcoin is regarded as digital gold. (0:49:25) How possible it is for Bitcoin to replace the dollar. (0:50:46) Chris tells us if he thinks Bitcoin and Ethereum are (0:53:39) Why Chris thinks there is a mythical aspect to the economy. (1:00:49) We find out if Chris thinks blockchains are immutable. (1:02:29) Immutability: find out if this is a good aspect of cryptocurrencies. (1:03:37) An explanation of consensus and if proof of work alternatives offer solutions. (1:04:33) Reasons why he thinks Vitalik Buterin is a charlatan. (1:09:22) Chris tells us if Vitalik’s claims are living-up to the expectations. (1:12:41) The role that blockchains can play regarding international money transfers. (1:15:22) Outline of how ransomware could be beneficial to society. (1:16:20) How possible is it to see nation-states existing only on the blockchain. (1:17:43) Learn what value private blockchains offer. (1:18:37) What are the most promising crypto products/technologies in Chris’s opinion. (1:19:49) The technical aspects of NFTs are explained. (1:21:23) Find out what his opinion on DAOs is. (1:24:20) Examples of the best application of smart contracts that Chris has seen. (1:25:13) Whether cryptocurrencies and public blockchains are revolutionary technology. (1:27:38) What role cryptocurrencies can play in reducing wealth inequality. (1:28:35)   Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/  Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Chris DeRose — http://www.chrisderose.com  

Today, we speak to Vili Lehdonvirta, Professor of Economics, Sociology, and Digital Social Research at the Oxford Internet Institute at the University of Oxford. Professor Lehdonvirta is a social scientist whose research focuses on ways digital technologies are reshaping the organization of economies, including their associated social effects. He is also the author of two books, Cloud Empires and Virtual Economies, which provide readers with an in-depth look into the power that crypto platforms hold and a well-rounded characterization of digital markets. In this episode, we talk about the ideological underpinnings of crypto and the role of governance in making cryptocurrencies possible. We discuss the role of states in scaling markets, how states and platform companies differ, the impacts of smart contracts on governance issues, and how control and power are centralized within crypto markets, as well as the social implications of blockchain technology. Listeners will also learn about past controversies within the crypto space, why people are still needed within crypto, and the blockchain paradox, plus more!   Key Points From This Episode:   We start by learning about John Perry Barlow’s vision for cyberspace. [0:05:06] Find out about the role that states play in markets. [0:07:03] How markets function at scale if the state is not involved. [0:07:55] Professor Lehdonvirta’s view on whether governance may precede markets. [0:08:59] The role massive platform companies play in today’s economy. [0:09:44] Ways in which states and platform companies differ. [0:10:42] Why he thinks public blockchain technology has garnered so much attention. [0:11:27] An explanation of the influence John Perry Barlow’s vision had on cryptocurrencies. [0:13:04] Learn what a Kleroterion is and the role it played in Athenian democracy. [0:14:01] Professor Lehdonvirta shares what it means to ‘trust in the code.’ [0:17:05] An outline of the new properties smart contracts created. [0:18:59] Social and economic implications of unstoppable censorship-resistant contracts. [0:21:08] A brief rundown of how impactful smart contracts have been. [0:22:27] How the trustless and unstoppable claims of cryptocurrencies and DAOs were affected by the DAO story. [0:24:20] Whether the Bitcoin block-size conflict affected the perception of crypto as a trustless system. [0:28:17] We find out the current size of the Bitcoin development team. [0:31:05] Other examples of human discretion affecting the direction of Bitcoin. [0:31:46] Professor Lehdonvirta explains the strategies used to preserve trustlessness after the human interventions took place. [0:35:16] Details about an important strategy: the appeal to technical expertise. [0:38:53] Find out if the ability to fork blockchain networks restores trustless claims of crypto. [0:39:42] Whether users of a blockchain network, who are not miners, can influence crypto markets. [0:45:02] Professor Lehdonvirta’s opinion on who has the most control over cryptocurrency networks. [0:49:35] Hear what aspect of Athenian democracy Nakamoto failed to replicate. [0:54:26] We learn what the blockchain paradox is (also known as the governance paradox). [0:56:50] Find out if Professor Lehdonvirta thinks technology changes the fundamental aspects which shape how societies are organized. [01:00:11] Find out if blockchain has eliminated the need for nation-states. [01:02:11] What cryptocurrencies have accomplished since their inception. [01:03:40]

Welcome to our limited edition crypto series. In this episode, we welcome back Professor John Cochrane, who was a guest on the Rational Reminder series, to talk everything money. Professor Cochrane has immense experience on the topic and is a Senior Fellow at the Hoover Institution at Stanford, as well as Stanford Institute for Economic Policy Research. He is also a Research Associate of the National Bureau of Economic Research, an adjunct scholar at the Cato Institute, and was a professor of finance at the University of Chicago Booth School of Business. He is also the author of several books and writes a popular blog called The Grumpy Economist. In this episode, we take a deep dive into the concept of money. We learn what numeraire is, how a numeraire is defined, and explore some of the intricacies of money. We also discuss and unpack the differences between fiscal theory and monetary theory, along with other ideas regarding the value of money. We then delve into how all this relates to cryptocurrencies, what future he sees for crypto, and much more. Tuning into this episode, listeners will challenge their thinking about the economy and how economic relations work.   Key Points From This Episode:   Professor John Cochrane explains to us the short version of fiscal theory. [0:04:35] Find out the definition of numeraire and how it is determined within an economy. [0:05:21] Learn whether government backing is required to define a numeraire. [0:07:05] What Professor John Cochrane thinks is the primary function of money. [0:08:55] Whether money needs to be a medium of exchange that stores value. [0:09:45] He explains why money is valuable according to fiscal theory. [0:11:22] The role of taxes in adding to the value of money according to fiscal theory. [0:12:59] How fiscal theory’s explanation for why money is valuable differs from the monetarist explanation. [0:13:33] Find out whether the term ‘fiat’ is still a good adjective to describe money in a fiscal world. [0:17:24] We learn if ‘fiat’ is an appropriate term to describe money according to the monetarist view. [0:19:10] What the government debt valuation equations suggest about the stability of the price level. [0:20:21] An outline of what happens when discount rates become volatile. [0:23:29] Ways in which sticky prices affect the stability of the price level. [0:27:24] Whether the supply of money is still a useful perspective today. [0:31:01] Why monetarism theory has gained so much traction. [0:33:51] He unpacks the purpose of monetarism theory. [0:35:21] How fiscal and monetary actions set expected and unexpected inflation regarding fiscal theory. [0:37:10] The level of fiscal and monetary coordination required for price stability. [0:39:58] Whether the level of coordination needed is realistic considering the independence of the central bank. [0:42:10] Ways in which monetary policy debt sales and fiscal policy debt sales differ. [0:45:02] What effect the size of the central bank's balance sheet has on the price level. [0:49:52] Repercussions of inside money issued by private banks on the price level. [0:53:06] Statistical tests available that can be used to prove fiscal theory. [0:58:55] Find out why COVID-related effects on the economy lead to inflation. [1:04:17] Breakdown of the fiscal explanation for the US inflation of the 1970s. [1:11:24] Reasons why inflation targets have been successful in some countries and not in others. [1:16:14] A discussion about whether we have always lived in a fiscal-based economy. [1:19:24] Whether citizens should behave differently living in a fiscal world. [1:27:51] How the value of the dollar will be affected if more people buy cryptocurrencies. [1:28:49] Professor John Cochrane shares if he thinks anonymous digital cash is a good thing. [1:30:51] We discuss what the future has in store with regard to fiscal theory. [1:39:31]

Welcome to another episode from our limited edition crypto series. The previous guests we have spoken to about crypto generally have experience in economics, finance, or technology. In this episode, we have a look at crypto through a legal lens with Professor William Magnuson, an Associate Professor of Law at Texas A&M University School of Law. He is also the author of Blockchain Democracy, which provides readers with a guide into the world of blockchain and Bitcoin, and highlights the reasons for their growing popularity. In our conversation, we delve into everything law and order within the crypto world as Professor Magnuson explains the causes of crime, the jurisdiction of crypto, the impact of decentralized cryptocurrency on the legal system, and how to overcome the legal challenges surrounding crypto. We also talk about the underlying ideology of crypto, the origins of cypherpunks, the people who are being negatively affected by, mechanisms to enforce regulations, and much more. Tune in to learn more about crypto and blockchain through the lens of the law with Professor Magnuson! Key Points From This Episode: A brief overview of the political philosophies of Thomas Hobbes and John Locke. [0:02:48] Find out which of the two political philosophies is closer to reality. [0:04:55] What it means for political or economic systems to be decentralized. [0:05:26] An overview of the advantages and disadvantages of a decentralized system. [0:07:36] Causes of a decentralized system to become centralized. [0:09:54] Where power in an initially decentralized system tends to centralize. [0:11:38] The systems that democracies use to maintain a desired level of decentralization. [0:12:33] How close the underlying political philosophy of Bitcoin falls to the philosophies of Locke and Hobbes. [0:13:34] We learn about the origins of cypherpunks and the associated ideology. [0:14:55] Whether the current state of our world resembles the dystopian future that the cypherpunks imagined. [0:16:41] Why digital cash was so important to cypherpunks and why early attempts failed. [0:17:36] The relationship between anonymity and crime is explained. [0:20:16] What role crime has played in the development and proliferation of cryptocurrencies. [0:22:48] Why comparing cryptocurrency to cash as a similar mechanism for crime is incorrect. [0:25:53] Professor Magnuson explains how social norms affect criminal behaviour. [0:27:48] He outlines the norms seen empirically within the blockchain communities. [0:30:12] Challenges in applying existing laws and regulations to cryptocurrencies. [0:33:04] Where cryptocurrencies fall under current regulatory and legal interpretations. [0:37:44] Whether cryptocurrencies are a regulation problem or a law problem. [0:39:43] How to enforce regulations and laws for cryptocurrencies. [0:40:44] He tells us if public blockchains jeopardize the existing legal system and democracy. [0:43:17] The costs of lightly regulated or unregulated markets in terms of capital allocation. [0:47:11] Who is bearing the cost of unregulated markets. [0:51:09] Hear what he thinks blockchain's greatest accomplishments are so far. [0:51:36] We end the show by hearing whether professor Magnuson thinks it is a revolutionary technology. [0:53:07]

What is the real value of cryptocurrencies? Can crypto technology be applied to traditional financial markets? In this episode, we welcome David Gerard, a technologist and author of the books Libra Shrugged and Attack of the 50 Foot Blockchain.  He uses his skills as a journalist to investigate the uses and hype around cryptocurrencies and is an outspoken skeptic of the technology. Although not originally from the technology sector, he has become an authority on the topic and has briefed the UK House of Commons Science and Technology Committee on the technology. He also runs a blog covering important aspects of the cryptocurrency space. In today’s conversation, we learn some harsh realities about the benefits of cryptocurrencies and why they will not last in the long term. We learn what the real value of crypto-markets is, why he considers it to be a Ponzi scheme, what needs to change about cryptocurrencies, whether there are any benefits to the technology and the role of financial journalism in the crypto space. Listen as we unravel the political ideology which underpins crypto and whether it can be separated from the technology. We also discuss the outcome of El Salvador’s bitcoin experiment and why it did not work. We also learn the reasons behind the recent crash in some crypto markets and find out which book David thinks everyone should read.   Key Points From This Episode:   We start the show by finding out the real dollar value of crypto markets. [0:03:45] The role financial journalism played in getting crypto to where it is today. [0:06:02] Reasons why he does not trust the value of cryptocurrencies. [0:11:04] Why he thinks cryptocurrency journalism is not credible. [0:12:00] He explains Bitcoin’s underlying political ideology and the associated problems. [0:13:25] The classic debate of who should have control over financial markets. [0:16:41] Whether it is possible to remove the political ideology from crypto-technology. [0:17:34] What the most important aspect of cryptocurrency technology is. [0:18:24] The reasoning behind the argument, ‘You just don’t understand the technology.’ [0:21:52] How to make cryptocurrency work in traditional financial markets. [0:23:50] Why the recent crash in the cryptocurrency markets occurred. [0:28:03] Find out if cryptocurrencies can be beneficial for the ‘bankless’. [0:30:25] We discuss the outcome of El Salvador’s bitcoin experiment. [0:32:20] He outlines why Salvadorans did not like the proposed bitcoin market. [0:38:11] Learn what the UK House of Commons Science and Technology Committee wanted to understand about cryptocurrency. [0:41:23] How his views on cryptocurrency were received by the commission. [0:43:46] An example of a crypto-based business that was operating illegally. [0:45:01] Whether NFTs will allow artists and musicians to keep more financial gains from their work. [0:46:13] We discuss whether crypto-based technologies will improve over time. [0:47:57] Examples of good uses for crypto and blockchain technology. [0:49:22] What would need to happen for David to change his opinion on crypto. [0:52:25]

In this episode, we speak to Quinn DuPont, a self-described technology historian and researcher of everything crypto. He is fascinated by what humans do and how technology affects what humans do. Quinn focuses his research on the history, meaning, use, and socio-technical development of cryptography. He has published many academic papers on the subject, including the book Cryptocurrencies and Blockchains, and is currently an adjunct professor at the UBC School of Information. He approaches investigating the world of crypto as a scientist making him neither a skeptic nor a proponent of the technology, offering listeners an objective perspective. In this episode, we unpack the basics of crypto and take a deep dive into the theoretical and technological concepts. We learn about the ideological foundations of crypto, how crypto technology will impact governance, what the definition of money is, the potential of the technology to society, and the social components associated with cryptocurrencies. We also find out the real value of crypto and learn about the ethical challenges Quinn faces as a researcher in the space.   Key Points From This Episode:   [0:05:16] The ideological worldview that resulted in cryptocurrencies.  [0:10:51] Quinn explains his standard criticism of the critics.  [0:13:43] Why the ideological origins of crypto are irrelevant today.  [0:15:50] The nuance surrounding the immutability of crypto technology is discussed.  [0:17:04] What the benefits of the cryptosystem are for governance.  [0:19:48] How well he thinks crypto fits within a democratic society.  [0:25:41] Reasons why political ideology needs to be taken into account.  [0:28:19] Quinn tells us his definition of money.  [0:31:18] What impact decentralized censorship-resistant monies have on society.  [0:38:52] How valuable a cryptocurrency in the real world is.  [0:40:48] Why paying your taxes gives money value.  [0:44:25] Whether Quinn considers Bitcoin to be money.  [0:46:09] He walks us through the benefits of DeFi to societies.  [0:49:30] We learn what the downsides of DeFi to societies are.  [0:50:22] Learn if blockchain solves any of the problems that exist in traditional finance.  [0:57:57] The advantages of bitcoin-based technology for business logistics.  [01:03:00] Why some blockchain business technology is marketing hype.  [01:04:32] How a DAO is different from a traditional corporation.  [01:10:24] Find out what would happen if we turned our podcast into a DAO.  [01:15:35] Whether smart contracts replicate the role of traditional contractual relations.  [01:19:51] Quinn outlines the ethical challenges to researching cryptocurrencies and blockchain.  [01:27:32] Hear what he thinks the greatest disappointments and successes of crypto are.  [01:31:32] We end the show by finding out if Quinn considers crypto and blockchain to be a technological revolution. 

There is a lot of hype surrounding cryptocurrencies and DeFi technology, with excitement around the potential innovations they offer financial systems. Often lacking in the discussion is an objective and critically informed viewpoint, leading to confusion and misunderstanding. In today’s conversation, we get the balanced perspective that we need with Professor Hilary Allen, who has a wealth of experience in banking, law, financial regulation, corporate finance, and business administration. She is a law professor at the American University of Washington College of Law and her research focuses on the impact of new financial technologies on the stability of the current finance system. She has written many academic papers on the subject, including the book Driverless Finance, which provides readers with a balanced perspective on the opportunities and threats of fintech innovations. In our candid and fascinating conversation with Professor Allen, we learn about the threats and opportunities DeFi technologies pose to the financial system. We hear what shadow banking is, the similarities that decentralized finance has with shadow banking, the risks of cryptocurrencies, if innovation in finance is always positive, why regulation is essential, whether DeFi is actually decentralized, the basics of stablecoins, how you can help affect change in the financial system, if you should invest in cryptocurrencies, and much more. Tune in to get the clarity you need about the world of crypto with expert Professor Hilary Allen!   Key Points From This Episode:   We start the show by learning what shadow banking is and how it is associated with the financial crisis in 2008. [0:04:05] Professor Allen explains what DeFi is and gives us some examples. [0:07:16] Learn about some of the innovations that DeFi technology proposes. [0:09:21] Similarities between shadow banking activities and DeFi technology. [0:11:06] Other risks that Professor Allen sees with the DeFi system. [0:12:12] What effect replacing intermediaries with algorithms have on financial systems. [0:16:03] The effect complexity has on a financial system. [0:17:19] She explains what financial stability is and the objective of financial regulation. [0:19:27] How the financial stability of the existing system compares to the DeFi system. [0:21:01] Whether stability of the existing financial system is exposed to problems within DeFi. [0:22:14] Which DeFi innovations pose the biggest risk to the current financial system. [0:23:23] Find out if stablecoins could affect monetary policy. [0:25:23] The regulatory lessons from the 2008 financial crisis that are relevant to DeFi. [0:26:28] Outline of the problems that the existing financial system has. [0:30:44] How successful DeFi has been at being decentralized. [0:33:14] If Professor Allen has any concerns that regulation might stifle innovation in DeFi. [0:36:06] Find out if financial innovation is always a good thing. [0:37:41] What the best possible regulatory outcomes are regarding crypto and DeFi. [0:39:30] Whether it is too late to regulate cryptocurrencies. [0:42:48] Why Professor Allen thinks some politicians are pushing crypto-friendly agendas. [0:43:52] How people can affect change in the right direction regarding the financial system. [0:46:08]  

For this week’s episode, we are revisiting a portion of our conversation with the legendary Professor Campbell R. Harvey and and his more optimistic viewpoint on the crypto space.  Campbell is the Professor of International Business at Duke University and is also a Research Associate at the National Bureau of Economic Research. In 2016 he served as the President of the American Finance Association, and from 2006 to 2012 he occupied the incredibly demanding role of Editor for the Journal of Finance. We hear about Campbell’s latest book DeFi and the Future of Finance along with his most recent research. Discover how Campbell first became interested in the topic several years ago and decided to put together a course for his students. We also delve into the rise of decentralized finance (DeFi) and how we can expect it to shape global finance, trading, and the future of the internet. 

Welcome back to another comprehensive and informative episode in this limited series of the Rational Reminder Podcast, a weekly reality check about the world of cryptocurrencies. We are lucky to have another respected figure in the crypto world on our show, technology veteran Tim O’Reilly. Tim is a well-known educator and publisher in the crypto community and the Founder, CEO, and Chairman of O'Reilly Media. He has been involved in the technology industry since the inception and rise of Silicon Valley and, with over 35 years of industry experience, he is known for popularizing the terms ‘open-source software’ and ‘Web 2.0’ and is a respected commentator on the space. In today’s show, we do a lot of looking backwards with Tim and draw insight from his vast experience in the industry to discuss what the future of cryptocurrencies holds. We also talk about what separates companies that survive from those that do not, problems in society that blockchain technology can be used for, and changes that have taken place in the technology industry during Tim’s career, as well as what the definition of true innovation is, and much more.   Key Points From This Episode:   What Tim’s definition of a technology unicorn is. [0:03:07] The problems that Web3 could solve and what makes a product innovative. [0:04:39] Differences between companies that survived the .com bust and those that did not. [0:11:05] Whether Tim thinks there are promising projects in the crypto or Web3 space. [0:18:36] How society would change if Web3 became the new normal. [0:22:19] Examples of the applications blockchain technology could have for record-keeping. [0:24:36] Tim shares his thought son whether or not we need blockchain technology for aspects where the state is involved. [0:27:24] Ways in which the evolution of crypto has changed Tim’s mental map of the future. [0:31:37] The role public blockchains could play in breaking the recentralization trend in decentralized technologies. [0:35:02] Tim tells us if he thinks centralization is a bad thing. [0:37:15] Past mistakes and innovation within the tech industry. [0:41:39] Tim’s opinion on the support of Web3 from venture capitalists. [0:44:02] Whether or not building technology outside of the government's reach is the right way to improve society. [0:46:46] Advice Tim has for those who are looking to get rich from cryptocurrencies. [0:50:35]

Dr. Nicholas Weaver’s well-known lectures on cryptocurrencies explain why he believes it needs to be “burned with fire.” Today, we speak to Dr. Weaver, an expert in computer science and a long-time observer of the cryptocurrency space. He holds a BA in Astrophysics and Computer Science and a Ph.D. in Computer Science from UC Berkeley, where he was also a lecturer until recently. His primary research focus has been network security, among other topics. His interest and search for comedy “godl” have also resulted in published papers on cryptocurrency. In our conversation, Dr. Weaver untangles the complexities of the perceptions of cryptocurrencies with the actual technology. We talk about decentralization, if cryptocurrencies are achieving it, and the underlying concept of blockchain technology, as well as whether or not blockchains are secure and what the potential benefits of cryptocurrencies are to developing countries. We then go into detail about why Dr. Weaver thinks the crypto space is not beneficial, why prestigious academic institutions are teaching about it, and why he thinks it will never work in the log-run. Please tune in for a truly eye-opening, no-holds-barred episode as we learn the harsh truth about cryptocurrencies with expert, Dr. Nicholas Weaver!   Key Points From This Episode:   What public blockchain technology can achieve that was not previously possible. [0:02:51] How well the original concept, introduced by Satoshi Nakamoto, is living up to its theoretical promise. [0:04:06] Weaver explains and outlines the general appeal of decentralization. [0:04:57] He elaborates on his perspective on trusted and honest authorities. [0:09:39] An explanation of how Lightning Network attempts to solve throughput limitation. [0:10:36] We find out if major blockchains like Bitcoin and Ethereum are decentralized. [0:13:08] Differences between how nodes and miners influence the network. [0:16:23] How secure public blockchains really are. [0:17:45] Whether a facility for censorship-resistant transactions, like Bitcoin, is a good thing for society. [0:20:30] Potential benefits of cryptocurrencies for people in countries with limited access to banking and a good legal system. [0:24:35] Steps governments can take to regulate and control cryptocurrencies. [0:26:47] Weaver’s opinion on why the regulation of cryptocurrencies has been so slow. [0:29:17] Outline of how Dr. Weaver sees cryptocurrencies developing in future. [0:31:38] How to incentivize miners not to attack the system to retain the value of Bitcoin. [0:38:24] Weaver on how stablecoins fit into the crypto ecosystem and if they’re decentralized. [0:39:18] A rundown of the new properties the blockchain data structure provides. [0:45:59] Find out if Walmart using a private blockchain is just marketing hype. [0:51:20] Why the popularity of cryptocurrencies amongst venture capitalists is rising. [0:53:12] Why prominent schools like MIT and Cornell are emphasizing blockchain programs. [0:55:23] Weaver explains what the smartest way to invest is, in his opinion. [0:58:34] Who the technologists in the crypto-space are that he respects professionally. [0:59:51] He tells us whether he has heard any compelling arguments for cryptocurrencies. [1:00:31] A discussion about Dunning-Kruger economics in relation to cryptocurrencies. [1:04:38] What the general opinion of other technologists is on crypto and blockchain. [1:06:23] We end the show with a final takeaway from Dr. Weaver. [1:07:31]

Welcome back to another episode of our limited addition Crypto Series on the Rational Reminder Podcast, a weekly reality check about sensible investing and financial decision-making. Are cryptocurrencies and the associated technologies beneficial? Could they change the world for the better? There is a lot of controversy surrounding the use and application of cryptocurrencies and the associated technologies. Some say the innovation is ultimately useless while others think it is the answer to society’s problems. To help us unpack this complicated and hot-button topic is Bruce Schneier, an internationally-renowned security technologist, author, and educator. The focus of his work is the intersection of security, technology and people. Bruce also has an immense passion for educating people about cryptocurrencies. Examples of his well-known books include Liars and Outliers and Data and Goliath, which provide much-needed insight to readers about DeFi technologies and big monopolies. He also lectures in public policy at the Harvard Kennedy School and is a fellow at the Berkman Klein Center for Internet and Society. In our conversation, we discuss the debate surrounding cryptocurrencies such as privacy concerns of digital cash, what makes Bitcoin different from earlier digital currencies, aspects of public blockchain technology, the misapplications of crypto technology, the different forms and approaches to cryptocurrencies, and whether DeFi technologies can be beneficial to society, and what the biggest concerns are regarding cryptocurrencies. Join us today as we take a detailed look into the value and drawbacks of crypto and DeFi technology with Bruce Schneier!   Key Points From This Episode:   What the objective was of early digital cash projects, like DigiCash. [0:03:27] The privacy concerns associated with digital cash. [0:04:45] Whether financial surveillance should be a concern for people. [0:05:45] Differences between Bitcoin and earlier forms of digital cash. [0:08:35] How good technology is at solving economic and political problems. [0:09:30] Details about the pieces that come together to make public blockchains work. [0:10:29] Why Bruce considers proof of work to be an idiotic way to form consensus. [0:13:43] Whether alternatives to proof of work resolve wasteful energy practices. [0:16:01] The new properties that public blockchains offer. [0:17:04] We find out if public blockchains do what their proponents say they do. [0:17:37] The claims that crypto proponents make regarding blockchain are discussed. [0:19:29] We discuss the misapplications of crypto and DeFi technologies. [0:20:23] Outline of the systems of trust that humans use to incentivize good behaviour. [0:23:26] Whether cryptocurrency technologies will become secure and trusted. [0:27:49] Reasons for the perspective ‘code is law’ from crypto technologists. [0:30:02] Whether ‘one CPU, one vote’ is how blockchains are working in practice. [0:31:35] We discuss other ideas and emerging technologies in the crypto space. [0:33:24] If government intervention is needed for crypto technologies and currencies. [0:36:21] How cryptocurrencies can be included in the mainstream financial system. [0:39:06] Bruce shares his opinion on the future of NFTs for artists to be able to capitalize on their creativity. [0:40:08] What the potential impacts of crypto technologies on younger generations are. [0:43:48] How blockchain erodes moral and reputational incentives to act responsibly. [0:45:26] Ways in which cryptocurrencies can help people who are ‘bankless’ and avoid high bank fees. [0:46:13] Break down of a real-world scenario where blockchain is being used in an alternative way. [0:49:00] Bruce tells us whether Bitcoin is suitable as a global currency. [0:50:55] The message that Bruce hopes his students will take away after his class. [0:51:59] If the government is beginning to take regulation of cryptocurrencies seriously. [0:52:43] What aspects, if any, excites Bruce about cryptocurrencies. [0:53:04] What Bruce’s biggest concerns about cryptocurrencies are. [00:53:43]

Welcome back to another limited series of Rational Reminder Podcast, focused on learning about cryptocurrencies. Our journey about cryptocurrencies has led us to speak to various experts on the subject, all of whom see some benefits to cryptocurrencies and the underlying blockchain technology. However, what does a skeptic think about cryptocurrencies and the benefits to the current financial system? In today’s episode, we speak to Stephen Diehl, a software engineer who works with financial technology within the finance sector and is an outspoken cryptocurrency skeptic. His engineering background, coupled with his experience working with financial technology, provides a unique perspective on the future of cryptocurrencies. We move through the episode learning about public blockchain technology, different consensus mechanisms, what potential problems blockchain technology can solve, whether crypto can improve the current financial system, if Bitcoin really is decentralized, what drives crypto prices, reasons why crypto will not work, what makes it similar to gambling, and more. Tune in today to hear a unique opposing view of cryptocurrencies and DeFi technology with expert and skeptic, Stephen Diehl!   Key Points From This Episode:   A brief breakdown of public blockchain technology. [0:03:28] The current problems that public blockchain technology is trying to solve. [0:04:16] Proof of work consensus and how it tries to eliminate the need for a trusted third party. [0:05:44] Some of the downsides associated with the proof of work concept. [0:07:41] How other consensus mechanisms have improved the proof of work concept. [0:09:21] What the costs associated with proof of stake relative to proof of work are. [0:11:09] Problems that both consensus methods have regarding recentralization. [0:12:07] What other problems blockchain technologies can be used to solve. [0:12:50] The problems in the financial technological system that public blockchains solve. [0:14:29] Why finality of payments associated with cryptocurrencies is not a good thing. [0:15:42] What limitations can blockchain technology remove regarding international money transfers. [0:17:06] How to prevent double-spending under the current financial system. [0:20:34] What Stephen thinks drives the value of cryptocurrencies. [0:21:15] Whether Bitcoin is decentralized in Stephen’s opinion. [0:23:19] Reasons why concentrated mining power does not cultivate decentralization. [0:24:46] How permissioned blockchains can improve on the pitfalls of public blockchains. [0:25:40] A discussion about the potential benefits of private blockchains. [0:27:15] We learn what a smart contract is. [0:29:49] Outline of other useful applications for smart contracts. [0:31:25] Examples of illicit activities associated with cryptocurrencies. [0:32:08] Code is law: deferring to code for implementing law. [0:33:17] What Stephen thinks is the value of the underlying blockchain technology. [0:34:32] Stephen explains what Web3 is and if it improves the financial system [0:37:05] We find out if there is anything about crypto technologies that excite him. [0:41:06] The most compelling argument for crypto that Stephen has heard. [0:43:08] He explains what he means by suffering stemming from cryptocurrencies. [0:44:40] Stephen shares his experiences as an outspoken crypto skeptic. [0:45:26] How he began working with researchers from the London School of Economics. [0:47:03] Discussion about the narrative of cryptocurrencies and why Stephen is outspoken on the subject. [0:50:33]  

Welcome to another special episode of Rational Reminder Podcast, a show to help us learn about cryptocurrencies and their role in our current and future financial systems. In today's show, we speak to Tobin Hanspal, an Assistant Professor of Finance at the Vienna University of Economics and Business who has written several papers focused on household finances. Tobin's research area offers insights into the behaviours of retail investors in the crypto space and how this may affect household finances. In this episode, we take a deep dive into some of the papers that Tobin has authored and how his findings relate to the behaviours and biases of crypto adopters. We discuss the investment behaviours of early crypto adopters, the role of EFTs in reducing risk, the different types of investor groups, how past experience negatively affects investor confidence, how behaviours change after an initial crypto investment, the disposition effect, how cryptocurrencies are an extension of existing behaviours, and much more! Be sure not to miss out on this informative episode with expert, Tobin Hanspal!   Key Points From This Episode:   How Tobin investigated the investment behaviour of early crypto adopters. [0:04:24] Whether indirect crypto investments are a good proxy for crypto investors. [0:08:10] Why it is important to consider the different types of investor groups. [0:10:23] The differences between individual characteristics of crypto adopters and non-adopters. [0:10:55] Comparison of eventual crypto adopters and non-adopters [0:12:37] What kind of sector ETFs do crypto adopters choose to invest in. [0:13:48] Differences between the crypto and non-crypto investors, in terms of typical investor behaviour biases. [0:15:01] How cryptocurrencies are an extension of traditional high-risk investing. [0:16:39] Whether the behaviour of investors changes after their first crypto investment. [0:17:37] The differences in behaviour between early and late adopters. [0:19:15] What insights Tobin has regarding the geographical location of crypto adopters. [0:20:36] What percentage of their portfolios’ do adopters allocate to crypto. [0:21:11] Find out if crypto investors buy lower-risk assets to make up for cryptocurrencies. [0:21:36] What differences exist between crypto and non-crypto investors regarding efficiency. [0:22:51] Description of the typical crypto investor characterized in their study. [0:23:39] Tobin explains the disposition effect and how belief systems play a role. [0:25:56] How risk appetite is related to the disposition effect. [0:28:05] People’s beliefs: are expected returns affected by past experience in expected realized returns. [0:29:20] Whether positive or negative realized past return experiences have the same effect on beliefs. [0:31:19] How peoples’ beliefs affect investing in riskier assets. [0:32:07] Changes in behaviour on a household level from past negative investment experiences. [0:33:23] The role experiences of peers and/or relatives have on investment belief. [0:38:16] Reasons for people reducing risk in their portfolios. [0:38:50] Tobin shares if he thinks cryptocurrencies will have similar effects on peoples’ behaviours. [0:39:42] How applicable the findings are from Tobin’s study to other parts of the world. [0:41:54] What the ideal theoretical response is to losing money on an investment. [0:42:47] Important takeaways that Tobin has for crypto investors. [0:43:23]

Welcome back to another episode of our series focusing on cryptocurrencies. In this episode, we dive into conceptual complexities surrounding cryptocurrencies and how this might affect the financial system in future. To help us unravel this nuanced subject is Professor Eswar Prasad, a senior professor of trade policy and Professor of Economics at Cornell University, and a senior fellow at Brookings Institution. He is also a research associate at the National Bureau of Economic Research and was a former head of the IMF China Division. Besides his wealth of experience regarding traditional economies, he is also an authority on cryptocurrencies, which he explains in detail in his book The Future of Money: How the Digital Revolution Is Transforming Currencies and Finance. In today’s conversation, we discuss broad conceptual ideas surrounding money and finance, such as the basic functions of money, the difference between outside and inside money, the limitations on creating wealth, how cryptocurrencies work, how cryptocurrencies may disrupt financial systems, why cryptocurrencies need trust to work, the future of cryptocurrencies, and much more. Tune in today to get insider information on cryptocurrencies with our special guest, Professor Eswar Prasad.   Key Points From This Episode:   A brief outline of Professor Eswar Prasad’s professional background. [0:01:14] Professor Prasad explains what the basic functions of money are. [0:01:59] We learn if money is a commodity or a social contract. [0:02:33] The problems associated with fiat currencies. [0:03:00] What the concepts of inside and outside money are. [0:04:12] Factors that constrain the creation of outside money. [0:05:34] Whether mechanically constrained money is good for economies. [0:07:07] Learn whether commercial banks need deposits to make loans. [0:08:46] What the definition of fungibility is. [0:10:24] How and why reserves are usually maintained by a central bank. [0:11:19] What the differences are between physical cash and electronic money. [0:12:25] The anonymity associated with each of the payment methods available. [0:13:28] What the main functions of the financial system are. [0:15:14] Find out what the definition of shadow banking is. [0:17:01] How trust in the financial system is facilitated. [0:18:29] We find out if modern financial systems can be disintermediated by technology. [0:20:33] The potential effects that intermediaries can have on economies. [0:22:59] What Satoshi Nakamoto’s 2008 innovation was. [0:25:51] The resilience of the underlying system for Bitcoin is explained. [0:28:12] Learn about the three elements that make Bitcoin decentralized. [0:30:12] How the decentralization of Bitcoin can be overcome. [0:31:39] Learn about the value of blockchain and emerging validation technology. [0:34:07] The key reasons why cryptocurrencies have value. [0:36:14] Ways in which a decentralized system would be beneficial. [0:38:32] Outline of the downsides to decentralized finance. [0:41:01] Why trust is also essential to the long-term viability of cryptocurrencies. [0:43:03] What role unofficial digital currencies will play regarding monetary policy. [0:44:05] The influence that Satoshi’s innovation had on the development of a central bank digital currency. [0:45:49]

Understanding the complexity surrounding cryptocurrencies is essential in making the correct decisions regarding investing in DeFi technology. To help us understand the basics, we talked to Dr. Igor Makarov who is an expert on cryptocurrency and Bitcoin, particularly Bitcoin and the associated mining processes. He is based at the London School of Economics, where he serves as an Associate Professor of Finance. Dr. Makarov is also the author of several papers focusing on DeFi and crypto markets in general and has provided new insights surrounding governance and mining processes. In today’s show, we learn about the basics of cryptocurrencies, mining and the future of DeFi. In particular, we talk about the role of intermediaries, what drives the prices of Bitcoin, how concentrated mining processes are, the role DeFi in increasing governance, the upsides and downsides of cryptocurrencies, and much more. Tune in to make sure you don’t miss out on advice from a respected figure in the industry, Dr. Igor Makarov!   Key Points From This Episode:   A brief outline of Dr. Makarov’s professional background and experience. [0:00:39] What role do intermediaries play in the traditional financial system. [0:02:36] Find out if economic rents that intermediaries collect are unwarranted. [0:03:36] Makarov explains the complexities of cryptocurrencies and the elimination of fees. [0:06:06] How rents are different on cryptocurrency exchanges. [0:09:44] Systemic risks associated with the traditional banking system. [0:11:24] Whether Bitcoin and DeFi can improve banking by reducing systemic risk. [0:13:22] Learn if blockchain or DeFi ecosystems can exist without human intervention. [0:15:06] Why it is unlikely decentralized autonomous organizations will improve governance. [0:17:06] Breakdown of the potential problems that concentration of ownership could have on governance. [0:19:53] Opportunities where cryptocurrencies and DeFi can improve the traditional financial system. [0:21:44] Some of the potential benefits of a permissioned distributed ledger system. [0:24:39] Why is it important to understand the Bitcoin ecosystem. [0:26:22] What are the limitations of understanding the Bitcoin ecosystem. [0:27:12] How Bitcoin addresses are associated with with real-world entities. [0:29:36] Ways to differentiate between addresses belonging to individual investors and those belonging to intermediaries. [0:31:42] What happens when you send Bitcoins to an exchange. [0:32:49] Details on how Dr. Makarov calculated the concentration of Bitcoins. [0:33:25] How did Dr. Makarov gain an understanding of what Bitcoin is used for. [0:37:14] The role exchanges play in influencing the total volume of Bitcoin transactions. [0:39:00] Why exchanges are essential to the overall network. [0:41:06] The challenges in enforcing KYC and AML rules for the crypto ecosystem. [0:41:56] How fungibility could effect the use of cryptocurrencies in the marketplace. [0:45:19] Whether most important cryptocurrency exchanges are generally decentralized. [0:46:36] What portion of Bitcoin transactions does Dr. Makarov consider to be economically meaningful. [0:47:06] Why most Bitcoin transactions comprise of irrelevant transactions. [0:48:08] What the meaningful Bitcoin transactions are being used for. [0:50:06] Why the estimates of illegal activities by Dr. Makarov differs from other studies. [0:52:56] A more in-depth explanation of what is driving the price of Bitcoin. [0:55:54] How Dr. Makarov was able to identify individual Bitcoin miners for his paper. [01:01:57] Makarov explains why the original vision of DeFi has not been realized. [01:05:52] Reasons for the concentration of miners in the Bitcoin space. [01:06:42] What are the risks are for the Bitcoin ecosystem when mining concentration is high. [01:08:24] How Dr. Makarov determined the geographic locations of mining operations. [01:10:52] What the function of a mining pool is. [01:13:36] How the concentration in mining power affects the security of smaller proof of work blockchains [01:16:20] How concentrated the ownership of Bitcoin in the hands of individual investors is. [01:22:40] We find out if cryptocurrencies are democratizing financial services. [01:25:03]

Fundamentals of the Blockchain with Daniel Mescheder   Episode 1: Show Notes   Welcome to the first episode of our limited series focusing on cryptocurrencies and everything you need to know about them. Our first guest is Daniel Mescheder, who joins us to appropriately break down some of the basic concepts and engineering of the blockchain, using his expertise as a software engineer as the lens for this discussion. We felt this chat was the best way to launch the series and prepare listeners for the following episodes on the subject, and you can expect to hear Daniel share very helpful insight and explanations of fundamental terms and concepts such as distributed systems, consensus, hashing, digital signatures, and more. We also have time for our guest to weigh in on the subjects of smart contracts and NFTs, both of which are regular points of intrigue for the uninitiated. Importantly, we do hear from Daniel about the limitations of the technology at present, and which types of technological problems that he believes the blockchain is well-suited to address. So for all this and more, and to start this journey with us into such an important and hot topic, make sure to listen in.   Key Points From This Episode:   The reasons for Daniel's interest and involvement with the blockchain and cryptocurrencies. [0:03:33] Daniel compares the hype around AI in the 1980s and the current atmosphere for crypto. [0:04:50] Getting to grips with Daniel's specific perspective on the blockchain and explaining distributed systems. [0:06:34] How the concept of consensus fits into the subject of distributed systems. [0:11:17] Looking at Byzantine consensus problems and how these occur on the blockchain. [0:13:51] Daniel gives an overview of the elements that make the blockchain functional; hashing and digital signatures. [0:19:17] How Satoshi Nakamoto introduced an economic incentive to comply with the protocol. [0:24:09] Differentiating between the public and permissioned blockchains, and databases. [0:27:33] How Bitcoin achieves consensus and some of the downsides of proof of work. [0:33:31] An assessment of the decentralized status of the Bitcoin and Ethereum blockchains. [0:41:16] The amount of control that is held by miners in relation to transactions. [0:45:27] Understanding interactions between the blockchain and other external systems. [0:49:16] Immutability and the blockchain; what the rules allow and the questions that still need to be answered. [0:52:47] Basic engineering downsides to the blockchain. [0:54:40] Vulnerabilities on the blockchain and how these have been exploited by hackers. [0:58:23] NFTs, DAOs, and smart contracts; weighing how neatly these fit into the current blockchain ecosystem. [0:59:27] The abundance of rhetoric surrounding discussion about the future and validity of the blockchain. [1:06:09] Which problems would be well-suited to a solution found within the blockchain? [1:08:10]  

In this special episode, we review the relationship between war and financial markets. War is a tragedy. We are not minimizing the humanitarian tragedy of what is happening in Ukraine by focusing on the potential impact on financial markets. But we are offering a Rational Reminder for investors in a stressful time. Wars and financial markets have coexisted, and often been intertwined, for hundreds of years. Countries that have lost major wars have had their financial markets decimated, while global markets have been relatively resilient, even to major conflicts. In addition to the historical perspective, we offer some timeless lessons for investors to remember in times of stress.