Yale vs. Norway, Income Splitting, and Avoiding Ponzi Schemes (EP.107)

<p>As the expression goes, another day, another dollar. Today’s episode is a roundup of news and analysis with deeper dives into behavioural and risk-based market explanations, active management, and endowment investing models. We open with a book review of <em>Essentialism: The Disciplined Pursuit of Less</em> by Greg McKeown, a book that’s getting a lot of attention at the moment. Another topic that’s getting a lot of attention, we discuss how Tesla’s huge market cap growth makes it feel like it’s 1999. We also offer our opinions on why Tesla has been so highly valued despite increasing competition in the electric car market. Answering a listener question, we explore how Robinhood makes money through ‘payment for order flow’ and the debate about if this is in the retail client’s best interest. Following another listener question, we answer if the podcast suffers from confirmation bias and how you can never know the ‘why’ behind stock returns. We talk about risk versus behaviour market explanations and use sound clips from previous episodes to present views on this subject. We then discuss Yale and David Swensen’s endowment investment model, focusing on his strategy of finding uncorrelated asset classes and then hiring active managers to meet target allocations. We look at the model’s benefits and its similarities to Canada’s CCP before examining how Norway invests based on oppositional ideas of the marketplace. Near the end of the episode, we continue our conversation on spousal loans by listing more family income splitting strategies. Tune in to hear more from the financial world.</p> <p> </p> <p><strong>Key Points From This Episode:</strong></p> <ul> <li>A quick book review of <em>Essentialism: The Disciplined Pursuit of Less</em> by Greg McKeown. <strong>[0:03:25]</strong></li> <li>Key ideas of this book; being busy isn’t always a positive, and if you don’t prioritize your life then someone else will. <strong>[0:06:02]</strong></li> <li>Why Tesla surpassing General Motors’ market cap makes it feel like it’s