Thank you (x10) also for those interviews in the past with Cliff Asness, Ken French, Marlena Le, and Larry Swedroe. I will be listening to them again several times as I go about my chores. Just in case I forget to post my appreciation in the comment area of each of those videos.

Thank you for your time, gentlemen.

Solid episode, takes me 2x the time because I need to rewind so much to catch up on some concepts, but love the learning process.

I just recently have discovered your podcast. This is so amazing, especially this episode, because I wanted to learn more about this topic anyways. I love how you summarize all those papers and focus on evidence. Most of the Investment Community (even most "professionals") is/are still driven by short term thinking and behavioral biases. Your podcast is really unique and insightful!

This just reminded me that I haven't gone for a walk in awhile. I should do that. Thanks Ben! :)

@muffemod

3 жыл бұрын

me too

I can't begin to express my gratitude for these wonderful podcasts. The amount and quality of information is just incredible.

I read Cliff's paper almost the day he posted it, and then I read it a few more times over the weekend, because it was just that good. It validated what I was hoping for in the international markets, namely that there's no reason to believe that foreign markets should return any less than the U.S. I also appreciated greatly his study on value and how, if anything, expected returns going forward are higher. I was thinking, "gosh I wish someone would do a video/podcast on this." Wish granted!!

I love seeing you two! I have listeneed through spotify since the beginning. I recently moved to Ottawa from Toronto. I am a Financial Planner with a Credit Union, on the path to IIROC and then I will be applying to PWL!

@cameronpassmore1561

3 жыл бұрын

Great to hear from you and welcome to Ottawa. Keep an eye on our jobs board :)

Can't help chuckling at Ben's "can't question the outcomes" heheheh.

Thanks for reasserting every week why i invest in value stocks.

11:45 topic starts.

Let’s goooo!!

This is so helpful. Can you guys talk about how this impacts the returns you would expect from ETFs like IUSV or SLYV, where they presumably rebalance their portfolio every so often. I have a hard time understanding whether you're really getting exposure to the value premium if you are changing the stocks in your bundle periodically

I wonder if there is public data available to reproduce the migration paper? It would be really interesting to see if the trends they found have continued

Fantastic episode!

There appears to be a rift between Ben and Cameron regarding Elon Musk. I would love to see the 2 of them have a debate over something they disagree on.

@cameronpassmore1561

3 жыл бұрын

We do not disagree on much. We are both motivated to do the best we can in our work, without the aggressive need to change people’s minds or disagree. If people have a different opinion on something, that’s ok.

Companies are compounding machines. They take in capital and earn a return on it and usualy reinvest the retainded earnings, throw out dividends or buy back stocks. Thus, compound interest. Good companies earn a return on equity of 15% and more. If something compounds at 15% p.a. there is a lot room for compensation of failed companies. That is where most of the real returns come from over longer periods of time. A smaller part comes from multiple expansion. But multiples always go up and down.

So if Value funds are better than Growth, then what’s better small cap, mid cap or large cap funds

@baules3323

3 жыл бұрын

value premium is especially pronounced in small caps

5:20 to skip the intro. And here's a bit of feedback guys, I can't stand conclusive introductions that podcasts like yours do. I wish you would just start already. Great podcast though ;)

Sorry but I'm a bit confused by all this. If value goes down, then it's cheap, so we should buy more. If value goes up, it proves the theory that value brings better returns, so we should buy more. Is that summary (buy no matter what, and nothing can prove the theory to be wrong) a complete straw man or actually not really? 30 years is a long time in someone's life. When should we expect the return to the means to occur? Is that going to be in another 30 years? The idea of indexing is to just buy the whole bunch and get the beta, not chase after some possible but elusive alpha, as that could make you lose the solid beta. Isn't the whole factor model about trying to chase alpha? It seems to me the whole thing is like this: some factor has seen better returns in the past (a far distant path), and clever people can come up with clever ways to kind of rationalize that past return ex-post-facto; ergo that "proves" this factor will always see better returns. (Even though it hasn't for the past 30 years). I do admit maybe I just don't "get it", that is very possible. Sorry for the rant.

@isaacongzy

3 жыл бұрын

Most people index only via S&P 500 which is largely dominated by US large cap growth stock. Studies have shown that their recent outperformance was largely due to increased valuation rather than fundamental changes. In the video, Ben explained that international stocks also trail US stocks largely because of increased valuation. When this happens, history has shown that expected future returns tend to be lower. If you mean by indexing everything you mean exposing yourself to ALL COUNTRY equities then yes you will be expected to able to ride the expected value / size premium of the market, which would be, to a degree, offset by the expected future underperformance of large cap growth. To effectively capture the value/size premium, you can tilt your portfolio towards small and value to get that bit of higher expected returns but be warned, it's harder to implement than one would think (DFA funds does it well). The S and P 500 is expected to underperform due to its valuation but when? Who knows. If it doesn't happen in the near future, you won't be that worse off since you will have exposure to US large cap growth in a total world index like MSCI All Country. If a Japan situation happens to the US then you'll also be alright too since the index has the liberty rebalance away US stocks to match the world stock market cap. For the US to maintain it's outperformance over international stocks, its valuation has to increase at the same rate as it has the past decade. It's up to individual investors to decide if a 80-100 p/e S&P 500 is likely. If that were to happen, holding onto the S&P 500 would likely to produce the best performance. For me personally, i rather not take country / size concentration risks. If my portfolio underperforms the S&P 500 by 1-1.5%% a year for the next decade due to the persistent valuation increase of US large growth, so be it. Im quietly confident that won't be the case, and accepting of it if it were the case. To each his own!

does this latest video change anything about investing long term in index funds? If not maybe I shouldn't watch it and keep my life simple.

@pran10000

3 жыл бұрын

Nope. Good old index funds are the way to go. These guys would like to add a small value tilt to it that's all!

@3sm1rost84

3 жыл бұрын

The question remains "what index funds precisely ?" and in this video they'll discuss possible answers to that question

@pran10000

3 жыл бұрын

@@3sm1rost84 I feel it's a moot point though. If your benchmarks always going to be the S&P 500 just buy it and move on. This is a nice academic discussion but unnecessary for individual investors.

@johnyjsl9219

3 жыл бұрын

@@pran10000 I would agree. There is a value tilt school of thinking, however another group that says, there is no way to determine if value or growth tilts will give better returns moving forward. SO, buy a broadly diversified index, keep calm and carry on !!

@3sm1rost84

3 жыл бұрын

@@pran10000 This was not addressed in the video, but I personally think that geographic diversification is also important, so I wouldn't only buy the S&P 500. I'm not sure to which point the data support this position though. I think that Jack Bogle used to insist that there is no need to invest in foreign companies.