The Rational Reminder Podcast

Benjamin Felix & Cameron Passmore

A weekly reality check on sensible investing and financial decision-making, from two Canadians. Hosted by Benjamin Felix and Cameron Passmore, Portfolio Managers at PWL Capital.

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Understanding Crypto 11: Quinn DuPont: Understanding Crypto: An Interdisciplinary Approach
3d ago
Understanding Crypto 11: Quinn DuPont: Understanding Crypto: An Interdisciplinary Approach
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.
Understanding Crypto 11: Quinn DuPont: Understanding Crypto: An Interdisciplinary Approach
3d ago
Understanding Crypto 11: Quinn DuPont: Understanding Crypto: An Interdisciplinary Approach
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.
Expected Returns and Factor Investing (EP.213)
4d ago
Expected Returns and Factor Investing (EP.213)
In today’s episode, we beg the question: is factor investing worth it? Factor-tilted portfolios tend to perform independently of the market and today, we break down a few of the characteristics associated with higher expected returns, as well as the challenges of factor investing. We give a brief history of pricing models and walk step-by-step through a hypothetical factor investment; taking the Fama and French five-factor model into account. Additionally, we discuss liability duration and bond returns and speculate whether pooling finances results in greater relationship satisfaction. Tune in to hear our take on everything from book clubs and the impact of inflation on consumption liability assumptions to our final verdict on whether factor investing is, in fact, worth your while.   Key Points From This Episode:   The latest phenomenon of people paying to go on popular podcasts. [0:01:58]Interesting feedback we’ve received for our Crypto series. [0:03:49]Why not to make an investment decision based on one person's opinion. [0:04:53]The evaluation skills our Crypto series equips listeners with. [0:06:05]Upcoming guests on the Rational Reminder Podcast! [0:07:31]Some interesting LinkedIn connections we’ve made in the past few weeks. [0:16:06]Recommended book for kids: Way of the Warrior Kid 3. [0:18:11]Recommended book for adults: The Psychology of Money. [0:21:08]The model of our firm’s book club and our experience of it so far. [0:22:02]Does pooling finances result in greater relationship satisfaction? [0:24:35]Liability duration and bond returns according to the current change in bond yields. [0:26:22]How inflation impacts consumption liability assumptions. [0:29:11]The positive effect the changes in the bond market have had on pension funds, relative to their liabilities. [0:30:20]The main topic of the day: is factor investing worth it? [0:32:30]The long-term volatility for factor-tilted portfolios. [0:33:56]What factor investing is and the added risk it entails. [0:34:51]A brief history of pricing models. [0:35:53]A few characteristics associated with higher expected returns. [0:39:25]The challenges of factor investing. [0:39:47]How to determine the mix of factors that captures all relevant state variable sensitivities. [0:42:56]The significance of size premium. [0:46:07]Speculating whether factors deliver premiums. [0:47:57]The steps involved in a hypothetical factor investment. [0:48:57]A few important facts about factors. [0:53:23]The benefits of having more independent risk premiums in a portfolio. [0:54:56]Our verdict as to whether or not factor investing is worth it. [0:57:02]Why it’s important to take tracking error into account. [0:57:38]The tendency of factor-tilted portfolios to perform differently from the market. [0:57:48]
Understanding Crypto 10: Prof. Hilary Allen: DeFi: Shadow Banking 2.0?
05-08-2022
Understanding Crypto 10: Prof. Hilary Allen: DeFi: Shadow Banking 2.0?
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]
Prof. Ralph Koijen: Demand System Asset Pricing & Inelastic Markets (EP.212)
04-08-2022
Prof. Ralph Koijen: Demand System Asset Pricing & Inelastic Markets (EP.212)
If you’re ready for a serious education on market elasticity, demand system pricing, and stock market flows, you’ve come to the right place (disclaimer: don’t expect light entertainment). Today’s guest is Ralph Koijen, AQR Capital Management Professor of Finance and Fama Faculty Fellow at the University of Chicago, Booth School of Business. Tune in for a fascinating conversation about some of the most fundamental characteristics of our economy. To say we learned a lot from this conversation is an understatement, and we’re sure you’ll walk away with just as many lightbulb moments and impactful lessons as we did.   Key Points From This Episode:   Ralph provides an in-depth explanation of demand system pricing. [0:02:48]An example of how valuations can be affected while the connection between fundamentals and valuations remain relatively unaffected. [0:08:18]How Ralph’s model for demand system asset pricing differs from other models. [0:41:26]The two components that investor demand is made up of. [0:14:54]Exploring the concept of latent demand and how to estimate it. [0:17:57]How the price impact from institutions and elasticity of markets has changed over time. [0:20:34]Understanding the surprising impact of households on stock market volatility in 2008. [0:20:34]How latent demand can be used to predict differences in expected returns. [0:25:46]Examples of factors that drive latent demand. [0:30:42]The most impactful group of investors (and why this is the case). [0:33:17]An overview of what would likely happen if the most influential investors switched to market cap indexing. [0:35:22]How huge firms influence the setting of prices. [0:36:25]Ralph shares his thoughts on the idea that index funds are distorting market prices as they continue to grow in magnitude. [0:35:22]What demand system pricing tells us about the effect of socially responsible investing on prices. [0:43:01]How US asset prices would be affected if foreign demand for US assets decreases. [0:35:22]Inelastic versus elastic markets. [0:47:23]Why prices are so much more volatile than fundamentals. [0:51:11]Comparing micro-elasticity and macro-elasticity. [0:52:18]Ways to estimate micro-elasticity and macro-elasticity, and the limitations of these approaches. [0:54:00]Ralph’s estimate of what the macro-elasticity is. [01:01:00]Risk factors that impact elasticity. [01:02:07]An example which shows how flows work. [01:03:32]Factors that impact how long the price impact of flows lasts. [01:05:24]Dividend irrelevance in inelastic markets. [01:10:30]The role of the increasing market share of cap weighted indices on market elasticity. [01:12:28]How investors should behave when markets are inelastic. [01:15:11]Ralph’s definition of success. [01:18:47]
Stocks for the Long Run...? (plus Reading Habits w/ Mark Sutcliffe) (EP.211)
28-07-2022
Stocks for the Long Run...? (plus Reading Habits w/ Mark Sutcliffe) (EP.211)
Welcome to another episode of the Rational Reminder Podcast! We start by reviewing The Fearless Organization, and learn some important concepts such as psychological safety in the workplace, allowing people to voice their concerns, and the value of continuously learning. We also discuss a paper on index investing followed by a quick discussion on gender equality in finance.  We then take a deep dive into today’s main topic, ‘Stocks for the Long Run…?’, by unpacking research to see if stocks are still a valuable long-term investment. Finally, we end the show with a conversation about our 22 and 22 book challenge with Mark Sutcliffe, and find out about his reading habits and the books that have had the biggest impact on him.   Key Points From This Episode:   An update about the podcast and feedback received about the crypto series. [0:03:55]A rundown of the guests we have planned for future episodes. [0:07:43]Outline of the ‘mixed-bag’ reviews received about the show. [0:08:28]News and updates regarding the Rational Reminder reading challenge. [0:13:07]This week’s book review of The Fearless Organization by Amy C. Edmondson. [0:14:45]We talk about an interesting paper ‘On Index Investing’ [0:24:42]Follow-up on and discussion concerning gender equality in finance from previous episodes. [0:28:34]We dig into today’s main topic, ‘Stocks for the Long Run.’ [0:33:38]Issues surrounding using Stocks for the Long Run data to draw insights. [0:35:22]What has been achieved to solve issues regarding a lack of data on stock returns. [0:41:45]An important insight from research on the value of stocks and bonds in the long term. [0:47:17]A breakdown of some interesting findings from the paper, ‘Global factor premiums’. [0:48:00]Overview of the research discussed and whether stocks are still valuable long-term investments. [0:53:54]The Rational Reminder 22 and 22 book challenge conversation with Mark Sutcliffe. [0:55:09]What Mark has discovered about the world of social media while working remotely. [0:56:58]Mark shares details about his reading habit and his favourite books growing up. [0:57:53]Whether he has a favourite genre of book. [01:00:11]How Mark sources books to read and how he captures interesting information. [01:00:44]The books that Mark commonly recommends to family and friends. [01:03:05]Find out if Mark thinks being an author changes how you read books. [01:05:12]Advice that he has for people who want to read more. [01:06:33]
Understanding Crypto 8: Tim O'Reilly: How does Web3 Compare to Web 2.0?
22-07-2022
Understanding Crypto 8: Tim O'Reilly: How does Web3 Compare to Web 2.0?
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]
Prof. Ludovic Phalippou: Private Equity, Under the Hood (EP.210)
21-07-2022
Prof. Ludovic Phalippou: Private Equity, Under the Hood (EP.210)
If you have any interest in private equity or have thought about it as an asset class, then this episode is for you! What is private equity? This might seem a simple question but the answer is more complex than you think. Private equity is a nuanced subject that requires a deep understanding to make successful investments. To help unpack this non-trivial subject is expert Ludovic Phalippou, a Professor of Financial Economics at the University of Oxford Saïd Business School. Although he studied economics in general, his research mainly focuses on unravelling the complexities of private equity. He has written many papers on the topic, including a book called Private Equity Laid Bare. He has a Masters in Economics and a Masters in Mathematical Finance from the University of Southern California and a Ph.D. in Finance from INSEAD, making him well versed in the subject. Besides his impressive qualifications and experience, his insight and ability to speak to the data make him stand out from other experts. In our conversation, we get into the basics of private equity and what makes it attractive to investors. During our conversation we discuss the challenges for measuring performance, how to best measure the performance of private equity funds, the different facets associated with private equity, how to tell if certain private equities are a good investment, and the differences between private and public equity. We also hear how it is applied as he walks us through some real-world scenarios and gives us some insider knowledge on the best private equity options. As you will hear from our conversation, there is no easy answer!   Key Points From This Episode:   We learn what asset classes are included in the broad term of private equity. [0:03:39]The end-to-end process for investing in a typical private equity fund. [0:06:49]The challenges with measuring the performance of private equity managers. [0:09:48]How investments that have not yet been sold are treated when a manager is reporting on their performance. [0:12:48]Professor Phalippou explains how well the IRR captures the economic results delivered by a fund. [0:14:04]Whether there are alternative approaches to evaluating performance. [0:17:52]A discussion about the typical characteristics of a buyout fund. [0:19:35]The best approach for evaluating your private equity. [0:21:24]Find out if a public equity benchmark has to be adjusted for leverage, regarding buyouts. [0:24:26]We learn about the fees that private equity limited partners typically pay. [0:26:34]Outline of the less obvious fees that limited partners might be paying. [0:28:11]Whether an investor paying carry is a sign that the investment has done well. [0:31:07]Comparison of private equity performance relative to public equities. [0:32:31]What number Professor Phalippou would assign on an expected return to private equity, as an asset class. [0:38:46]How successful investing in private equity has been for institutional investors. [0:39:32]The performance of Blackstone and KKR is discussed relative to an average private equity fund. [0:42:11]We get details about the Yale situation and how it manifested. [0:44:24]Reasons why private equity is regarded as the best performing asset class for institutions. [0:45:32]Professor Phalippou tells us if he thinks private equity offers diversification benefits to a public equity portfolio. [0:46:01]He discusses a recent case study regarding Hilton. [0:47:11]Why he thinks sophisticated investors are allocating funds to private equity. [0:48:14]Professor Phalippou shares how to be successful when investing in private equity. [0:50:00]Whether the returns of private equity can be replicated in public equity. [0:53:09]How Professor Phalippou defines success. [0:55:18]We end the show by finding out if the value premium is risk-based or behaviour-based. [0:55:35]
Understanding Crypto 7: Nicholas Weaver: A Computer Scientist's Perspective on Cryptocurrencies and Blockchain
15-07-2022
Understanding Crypto 7: Nicholas Weaver: A Computer Scientist's Perspective on Cryptocurrencies and Blockchain
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]
Optimal Allocations to Owned Housing & Gender Equality in Financial Planning (EP.209)
14-07-2022
Optimal Allocations to Owned Housing & Gender Equality in Financial Planning (EP.209)
Welcome to another episode of the Rational Reminder Podcast! In today’s jam-packed episode, we start by going through the feedback received on our limited crypto series and outline upcoming guests. We also give a breakdown of Cal Newport’s book, Deep Work, and the importance and long-term benefits of engaging in deep work. We then follow-up on our recent episode with Rebecca Walker by discussing gender equality in financial planning. Lastly, tune in to also have a rundown of the housing market and its investment potential, price risks associated with home ownership, the effects homeowner’s occupation has on their household investment and more!   Key Points From This Episode:   We go through feedback received on the limited edition crypto series. [0:01:40]An outline of the upcoming guests we are going to have on the show. [0:05:51]This week’s book review, Deep Work written by Cal Newport. [0:09:01]Some of the common workplace problems highlighted in the book. [0:14:30]How work can be more enjoyable than free time and reasons why. [0:15:56]Ways to overcome common workplace problems and engage with ‘deep work.’ [0:16:47]The long-term benefits of engaging with deep work and why it is needed. [0:20:21]A follow-up on our recent episode with Rebecca Walker and the feedback received. [0:20:49]Discussion about the data that is related to Rebecca’s points from the episode. [0:22:10]We unravel the nuance concerning the gender pay gap and financial planning. [0:26:10]An important takeaway concerning our discussion on the gender pay gap. [0:33:19]Rundown of the housing market and its investment potential. [0:33:58]Find out how an owned home can act like an investment. [0:37:42]Learn more about ‘Portfolio Theory’ concerning property investment. [0:40:50]An interesting aspect regarding peoples’ occupation and property investments. [0:46:18]How people reduce the risk associated with property investments. [0:47:45]
Understanding Crypto 6: Bruce Schneier: Security, Trust, and Blockchain
08-07-2022
Understanding Crypto 6: Bruce Schneier: Security, Trust, and Blockchain
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]
Rebecca Walker: Women Talk Money (EP.208)
07-07-2022
Rebecca Walker: Women Talk Money (EP.208)
There’s no doubt about it; money is a taboo topic in our society. But not talking about money only serves to uphold inequalities and injustices. Rebecca Walker is an advocate for transparency and, during this episode of the Rational Reminder Podcast, she shares the importance of exploring the factors that have influenced our relationship with money so that we can begin to understand how we can use money as a tool to effect the kind of changes we want to see in the world. This is the intention behind her latest collection, Women Talk Money. No matter your gender, race, or financial standing, this episode will provide you with a new perspective on how to approach money. Rebecca is a well-known speaker, author, consultant and was named by Time Magazine as one of the most influential leaders of her generation. Tune in today.   Key Points From This Episode:   What money represents and why it is so important that we understand it better. [0:02:21]The intention behind Rebecca’s latest collection, Women Talk Money. [0:03:05]A brief overview of some of the stories Rebecca shares in her book about our relationship with money and how it impacts our lives and society as a whole. [0:05:13]How race, class, and gender impact how knowledge about money is transferred. [0:08:50]Problems that arise when we aren’t transparent about our finances. [0:11:22]How the way we approach money ties into many broader societal issues. [0:15:45]Examples of how not talking about money renders people powerless. [0:17:45]Rebecca explains how she has taught her son about money from a young age. [0:20:58]Rebecca’s approach to talking to other people about money. [0:22:30]Issues that may stem from an obsession with money. [0:24:32]How Rebecca defines “enough.” [0:27:09]The role that men can play in empowering women in relation to money. [0:29:24]Advice for women who are struggling to form a healthy relationship with money. [0:33:33]How Rebecca defines success in her own life. [0:36:04]
Understanding Crypto 5: Stephen Diehl: The Case Against Crypto
01-07-2022
Understanding Crypto 5: Stephen Diehl: The Case Against Crypto
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]
What is Money? (plus Reading Habits w/ Dan Solin) (EP.207)
30-06-2022
What is Money? (plus Reading Habits w/ Dan Solin) (EP.207)
In today's episode, we share some updates from our Financial Goals Survey, respond to a listener who says we are wrong about dividends, and talk about Scout Mindset by Julia Galef. We then respond to a listener question about whether our comments in Episode 205 on private equity extend to private real estate. In our main topic, we unravel what money is by looking back at its origin story and the two competing theories about what it is. We discuss the ideological underpinnings of money and how these ideologies can make choosing a definition of money highly political. We end the episode talking to Dan Solin about his reading habits. Dan Solin joined us almost four years ago for an episode on evidence-based investing. Tuning in, you’ll hear how Dan finds the books he reads, what his favourite types of books are, and whether he recommends books to people, plus he shares why he believes reading is so essential, and much more. Don’t miss out on another well-rounded and informative episode of the Rational Reminder Podcast.   Key Points From This Episode:   An update on the progress of our Financial Goals Survey. [0:03:32]Your monthly update on the reading challenge and how to get involved. [0:04:52]An update from our limited crypto series and some of the feedback we’ve received. [0:08:00]This week’s book review: The Scout Mindset. [0:16:29]Simple set of tools to help you assess biases when receiving new information. [0:19:18]Following up on private investments concerning real estate. [0:24:32]Onto the main topic of the show with Dan Solin: money and what it is. [0:29:09]Where the perception and definition of money originated from. [0:31:00]Unpacking an alternative definition of money by Adam Smith. [0:37:32]The quantity theory of money and its application in the economy. [0:40:14]An interesting political aspect to forming John Locke’s theory of money. [0:46:49]Outlining of the history of opposing views on the theory of money. [0:47:25]A break down of the findings of an anthropological review investigating money. [0:49:47]How money is neither commodity nor quantity but rather a measure of credit. [0:51:32]The state theory of money and how it is different from other theories. [0:53:39]What sets the price level of money based on credit theory. [0:55:06]A discussion around money based on the several theories of what it is. [0:57:22]Why fiat money is not a derogatory term for currencies. [0:59:30]Some of the nuances regarding the definitions of money in a modern context. [1:00:07]Dan shares his reading habits as an author. [1:01:05]Whether Dan reads hard copies, audiobooks, or Kindle. [1:01:32]The difference between reading and streaming in Dan’s opinion. [1:02:08]Insight into some of Dan’s favourite types of book. [1:03:11]How he finds new books to read and what inspires his reading interests. [1:05:40]Ways in which Dan organizes what he reads and learns. [1:08:47]Whether or not he recommends books to other people. [1:09:33]Reasons why Dan believes it is important to read books similar to his latest book. [1:12:21]Dan’s advice for people that want to read more. [1:14:10]
Understanding Crypto 4: Prof. Tobin Hanspal: The Characteristics of Crypto Investors
24-06-2022
Understanding Crypto 4: Prof. Tobin Hanspal: The Characteristics of Crypto Investors
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]
Prof. Vanessa Bohns: You Have More Influence Than You Think (EP.206)
23-06-2022
Prof. Vanessa Bohns: You Have More Influence Than You Think (EP.206)
Welcome back to another exciting and informative episode of the Rational Reminder Podcast, a show all about finances and how to get the most of your money responsibly. To make the right decisions regarding your investments, besides the knowledge and understanding of financial systems, you also need to understand the psychology behind your decisions. To help us unpack this complicated and interesting subject is Professor Vanessa Bohns, a Social Psychologist and Professor of Organizational Behaviour at Cornell University. Professor Bohns has a Ph.D. in Psychology from Columbia and is the author of You Have More Influence Than You Think: How We Underestimate Our Power of Persuasion, and Why It Matters. The topic of the book is exactly what today’s show is about, as we delve into the intricacies of human behaviour and decision-making. In today’s episode, we learn about the influence that people have on one another, how people perceive one another, the human behaviours that scammers take advantage of, why people worry about saying the wrong thing, what the default behaviour of people is, why people struggle to say no to a request, and so much more! Don’t miss out on this fascinating episode with special guest and expert, Professor Vanessa Bohns!   Key Points From This Episode:   How much impact and influence people have on one another. [0:03:09]What people tend to notice about other people. [0:04:50]Why people don’t realize what other people are paying attention to. [0:08:58]How being in the presence of other people affects experiences. [0:10:31]Whether communicating with someone about a shared experience amplifies it. [0:12:41]Reasons why some people are underconfident in their social lives. [0:13:20]Problems that stem from underconfidence. [0:15:52]The consequences of underestimating how much people like us. [0:18:02]Why people worry about saying the wrong thing. [0:20:53]Whether it is default to believe or disbelieve when assessing information. [0:22:55]The impact of people interacting with people anonymously. [0:26:01]How the default to believe people impacts receiving advice from experts. [0:27:22]The authority on a subject can switch between domains of expertise. [0:31:19]Ways in which scammers take advantage of behavioural biases. [0:32:22]Problems caused by people being dishonest or spreading false information. [0:34:47]Approaches to ensure that you are not spreading misinformation unintentionally. [0:36:04]Why asking for what you want is so effective. [0:38:21]Whether asking for what you want becomes easier over time. [0:40:33]The effect that money has when asking for something. [0:42:24]Differences in response to small or large requests. [0:43:48]How responses differ between direct and indirect requests. [0:45:23]What effect asking in person as opposed to over email or text have on responses. [0:47:20]Reasons behind the hesitancy for people to ask for what they want. [0:49:04]Why people find it difficult to reject a request from someone. [0:50:36]Whether saying no in person is the same as saying no over email. [0:52:12]Feeling guilty and whether you should feel bad asking for things. [0:53:52]How people generally respond to unethical requests. [0:56:21]Find out if people with authority realize how much influence they have. [0:59:01]Approaches to help people be more aware of their influence. [1:00:58]A rundown of the impacts of not being aware of other people has. [1:05:12]We end the show with Professor Bohns sharing her definition of success. [1:07:41]
Understanding Crypto 3: Eswar Prasad: Bitcoin, Banking, and the Future of Money
17-06-2022
Understanding Crypto 3: Eswar Prasad: Bitcoin, Banking, and the Future of Money
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]
Tech vs. Value, and Private Equity vs. Public Equity (EP.205)
16-06-2022
Tech vs. Value, and Private Equity vs. Public Equity (EP.205)
Welcome to another episode of the Rational Reminder Podcast. In today’s jam-packed episode, hear updates regarding our goals survey, the schedule for upcoming guests on the show, the latest news and highlights from the financial world, and some of the feedback we have received about the show. We also highlight interesting articles and papers regarding tech valuations, expected stock returns, the performance of venture capital funds, and a book recommendation that will help you understand the finance game. Tune in to learn about the results of the recent social survey in Canada, the basics of private equity funds, the challenges of calculating the Internal Rate of Returns for investors, some of the misconceptions surrounding private equity, and much more! Don’t miss out on this informative and well-rounded episode of the Rational Reminder Podcast with your two favourite Canadians!   Key Points From This Episode:   We start the show with an exciting announcement for our listeners. [0:02:07]An update regarding the Goals Survey Project and what needs to be done. [0:03:30]A rundown of the upcoming guests for the show. [0:04:44]Outline of the reviews and criticisms received about the show. [0:05:55]A breakdown of the book for today’s review, Finite and Infinite Games. [0:10:07]Background about the author of the book, James P. Carse. [0:10:57]The main point of the book: the differences between finite and infinite games. [0:11:16]An interesting quote from the book regarding culture. [0:14:42]Highlights of the recent news and updates in the financial world. [0:17:02]Insights from an interesting article about tech valuations by Cliff Asness. [0:19:47]Another interesting paper by David Blitz about expected stock returns. [0:23:09]A discussion regarding the recent social survey implemented in Canada. [0:26:07]We discuss the basics of private equity as an investment strategy. [0:30:06]Why the math used is problematic for calculating the Internal Rate of Return. [0:32:35]The results of a paper which investigated the performance of venture capital funds. [0:39:01]More insights from follow-up papers about private equity. [0:42:24]Examples of the type of risk exposures that private equity provides. [0:49:36]The impacts associated with the preference for illiquid assets. [0:52:00]Some of the misconceptions surrounding diversity in private equity funds. [0:52:44]What are the best metrics to use to measure returns on private equity. [0:56:00]
Understanding Crypto 2: Igor Makarov: Economics of the Crypto Ecosystem
10-06-2022
Understanding Crypto 2: Igor Makarov: Economics of the Crypto Ecosystem
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]
John A. List: Improving the World with Economics (EP.204)
09-06-2022
John A. List: Improving the World with Economics (EP.204)
John List is the recently appointed Chief Economist at Walmart, and is also a Professor of Economics at the University of Chicago, having worked as the Chief Economist at Uber and Lyft. He has published a huge array of important papers in the field of economics and is also the author of the recent book The Voltage Effect, which deals with the question of how to scale ideas successfully. We are very excited to bring you this episode, which is a particularly illuminating one, in which we draw on John's treasure trove of insight and experience, to answer a long list of questions related to personal finance decision-making. A large portion of our chat focuses on the central ideas of critical thinking and fieldwork, practices that our guest views as indispensable in making the world a better place. Along the way we get John's thoughts on retirement planning, public policy, charitable donations, and much more, so make sure to press play on this fantastic episode of the Rational Reminder Podcast.   Key Points From This Episode:   John explains the importance of fieldwork in the study of economics. [0:03:51]Examples of field experiments that overturned a supposed economic truth. [0:05:15]Finding ways to test theories that previously proved difficult. [0:08:30]The question of generalizing findings from an experiment to a wider rule. [0:13:30]Replication in academic studies; John unpacks its central importance. [0:20:46]Why positive results tend to garner a publication bias. [0:23:38]John's perspective on checking in on investment portfolios. [0:24:40]What the data shows us about investment behaviours of men and women. [0:28:38]Accounting for the drive to give to charity. [0:35:20]Advice for how to make the most of your donations. [0:39:42]John unpacks his findings on scaling, its importance, and what he calls 'the voltage effect'. [0:44:41]The impact of technological advancement on our ability to scale certain solutions. [0:48:27]How field experiments can influence the process of scaling big ideas. [0:54:47]Hindrances to healthy scaling; confirmation biases, and herding. [0:56:17]Impacts of loss aversion and marginal thinking when scaling ideas. [1:05:28]Reasons for the difficulty of tackling globally important issues; multidimensionality and politics. [1:15:10]Weighing the utility of incentives when trying to encourage retirement savings. [1:19:16]Thoughts on bringing more reliable science into the policy-making process. [1:21:26]How parents can approach the promotion of critical thinking in their children. [1:25:45]John's approach to the questions he pursues; how he evaluates potential ideas and questions. [1:31:10]A little bit about John's new post as Chief Economist at Walmart and what the job entails. [1:33:53]How John defines success at this point in his life and his focus on inputs. [1:33:53]