Below is our “Top Podcast” episode with our curator, Colby Donovan!
Today we have an episode with the creator of the $SPY ETF, an episode on how institutional investors are utilizing factors, a couple of great episodes on income sharing agreements, and an episode with Annie Duke on decision making.
- The Phil Bak Podcast: Jim Ross: How do you scale an investment vehicle? Ross was a pioneer in the ETF space, launching the SPY for SSGA when it was unknown whether it would be able to obtain assets and be successful (it’s now the largest ETF by AUM by a long-shot). He talks about the process when he was starting in his career, how he saw the growth in SSGA over time, what the current trends are in the asset management industry, and why he has decided to follow the trend of launching SPAC’s and focus on asset managers via M&A. [July 21, 2020–39 minutes] iTunes Podcast | Spotify | Overcast | Google | Breaker | Website Link
- Resolve Gestalt University: Dan Egan: Market Shrink. Egan is the Director of Behavior Science and Investing at the online advisor, Betterment. The episode is centered around the behavioral insights Egan has into what investors say they want compared to how they actually act. Egan says their goal is to help people reach their goals and objectives, whatever they are, in a safe way. They discuss the fact that learning how to invest is a ‘wicked environment’ and hard to learn due to long feedback cycles, the difference between nudging someone and manipulating them, and the fact that studies have shown it takes ~2.5 years of day trading to get the feedback you need to learn you’re a poor trader. [July 17, 2020–1 hour, 2 minutes] iTunes Podcast | Spotify | Overcast | Google | Breaker | Website Link
- Flirting with Models: Michael Hunstad — Institutional Trends in Factor Investing. Hunstad is the Head of Quantitative Strategies at Northern Trust and talks about the major trends he sees in the institutional factor space, which are (1) the adoption of factors to manage concentration risk in market-cap weighted benchmarks, (2) a move from single- to multi-factor implementations, (3) using factors to de-risk equity exposure, and (4) a tactical tilt towards value. He also touches on why he likes a mix of low volatility and quality, why he think’ factor implementation in the industry is poor, and why he thinks ESG ‘may be’ a factor. [July 20, 2020–1 hour, 2 minutes] iTunes Podcast | Spotify | Overcast | Google | Breaker | Website Link
When I look at the 10 years prior to the Global Financial Crisis, there were only 5 days in those 10 years when the VIX spiked more than 5 points. Since the GFC, there have been 56 of these volatility shocks; 7 of them have occurred in the last couple of months.
- The Rational Reminder Podcast: Dr. William Bernstein: Praying for a Bear Market. Bernstein, Ph.D., M.D., is a retired neurologist and well-respected for applying his medical evidence-based to investing. He frames how investors should think about long-term risk and returns, how the economy and market are inversely correlated which people haven’t seemed to understand in the past 6 months, why people are bad at assessing their own risk tolerance. He also discusses factors and why he still believes in both small-cap and value premiums. He finishes with thoughts around COVID and what the long-term effects will be based on his medical and investing background. [July 23, 2020–43 minutes] iTunes Podcast | Spotify | Overcast | Google | Breaker | Website Link
Whenever I hear from anybody that a certain approach is dead or a certain asset class is dead, I peak up my ears because that means all the weak hands have sold out of it. I think that’s whats happening with value now.
Income Sharing Agreements (ISAs)
- Rebank: Pooling Upside in Baseball and Business with Pando. This is a really interesting episode with Charlie Olson, Co-Founder and CEO of Pando, a Series A stage fintech that provides a platform for professional baseball players and recent MBA graduates to utilize income sharing agreements (ISAs). For those who don’t know, ISAs consist of a group of people coming together to contractually agree to contribute a small portion of his or her future upside to the shared pool. Olson explains ISAs are great for careers where there’s a huge disparity of outcome for future earnings. The way they structured it for MLB players is after you make the major leagues and earn $1.5 million, you contribute 10% of earnings to the pool. They recently started to apply this to recent MBA graduates and are looking to continually grow into other industries. [July 22, 2020–34 minutes] iTunes Podcast | Spotify | Overcast | Google | Breaker | Website Link
- Animal Spirits Podcast: Talk Your Book: Edly ISA’s — Invest in Student Achievement. This episode is with the co-founders of Edly, a marketplace for income-sharing agreements. After explaining what an income-sharing agreement is (see the above episode), he explains how it works with their company: students pay no interest or payments until they get a job after graduation that has a salary over a certain hurdle rate. They don’t underwrite based on FICO scores or parents cosigning applications — it’s purely based on the student’s earning potential. This leads them to focus on engineers, technology, and nursing jobs. Interestingly enough, their business has actually grown during COVID because private loan providers are pulling back. [July 24, 2020–32 minutes] iTunes Podcast | Spotify | Overcast | Google | Breaker | Website Link
- The Meb Faber Show: #238 — Mark Straub, Smile Identity — Face Recognition Is, In A Sense, Deep Technology. Face authentication and biometrics have been in the news lately and this episode is all about that. Straub is the co-founder and CEO of Smile Identity, a universal KYC enrollment and authentication solution for enterprises in mobile-first economies (and a lot of business in Africa). He talks a lot about the technology that’s required to build the company out, the growth story he’s witnessed in Africa and why it’s so important to have this type of technology in emerging economies to prevent fraud, and how both his business and Africa are holding up during COVID. [July 20, 2020–1 hour, 4 minutes] iTunes Podcast | Spotify | Overcast | Google | Breaker | Website Link
- The Meb Faber Show: #239 — Chris Fernandez, EnsoData — There Was One Particular Area That Felt Like It Was At Least 5 Years Behind…And That Was The Application Of AI To Waveform Data. Fernandez is co-founder and CEO of EnsoData, a startup with technology using artificial intelligence and machine learning help improve people’s sleep. They explain how the process was to attend Y Combinator, how their product shifted to using AI for sleep, how they are able to improve sleep apnea testing (similar to AI reading x-rays better than humans), what the process has been like to train the algorithm over time, and what other areas they can translate their algorithm to besides sleep. [July 22, 2020–50 minutes] iTunes Podcast | Spotify | Overcast | Google | Breaker | Website Link
- Conversations with Tyler: Annie Duke on Poker, Probabilities, and How We Make Decisions. Cowen does a great job interviewing Annie Duke, the former World Series of Poker Champion turned author and decision-making expert. Their conversation focuses on her new book, How to Decide: Simple Tools for Making Better Choices. They discuss the probabilistic mentality that both poker players and investors need to have to be successful, how we should frame when to utilize hedges (homeowner’s insurance or tail risk for your portfolio), how focusing on process over outcome leads to a happy life, and a lot more. [July 1, 2020–54 minutes] iTunes Podcast | Spotify | Overcast | Google | Breaker | Website Link
The best leaders are those who get results in a way that inspires trust.
Tyler Cowen (Professor, George Mason University):
- Remembrance of Things Past by Marcel Proust
- Uncle Tom’s Cabin by Harriet Beecher Stowe
- Ultralearning: Master Hard Skills, Outsmart the Competition, and Accelerate Your Career by Scott Young
Ann Miura-Ko (Co-Founder, Floodgate):
- How Will You Measure Your Life? by Clayton M. Christensen
- The Dovekeepers by Alice Hoffman
- The Righteous Mind: Why Good People Are Divided by Politics and Religion by Jonathan Haidt
Ian Cassel (Founder, Micro Cap Club; CIO, Intelligent Fanatics Capital Management):
- Think and Grow Rich by Napolean Hill
- Free Capital by Guy Thomas
Sahil Lavingia (CEO, Gumroad, Previously the #2 Employee at Pinterest):
- How to Win Friends & Influence People by Dale Carnegie