Now Know This - Investments, Economics, Behavior

Link to Cole's article here: https://inscriptioncapital.com/insights/2021/9/22/why-investing-is-like-dietingIf you want to lose weight, it's relatively simple: Burn more calories than you consume. All else equal, if you follow this formula, you'll lose weight. Yet, as we all very well know, doing this day in and day out is anything but easy. Life, and more especially our behavior, gets in the way. This behavioral problem is of course well known and regularly exploited by the dieting industry, which is keen to provide all sorts of products and services promising an easy fix. So you get the endless fads. The gurus. The charlatans there to serve you up an easy way out. Do this craze diet. Take this pill. Buy my kale-watermelon-chia seed-detox-shake-system for only twenty-seven easy payments of $19.99! Who needs discipline when you can lose those pounds by that weekend pool party? All charge cards accepted.We're our own worst enemy. We know what we should do, but we don't do it. Consequently, there are a thousand different dieting books, trends, and gimmicks that we just can't seem to get enough of. Maybe this new chia seed shake system will let me eat those cookies, keep all my horrible habits, and still fit into those jeans I've been avoiding. Take my money! Deep down though I think we all know if you burn more calories than you consume you'll lose weight. The concept is easy. It's the behavior that's the problem. And boy do companies love to profit off our bad behavior. So it is with investing. We know, based on rigorous academic research what works over the long term. Yet, just like dieting, there are thousands of books, blogs, and “strategies” on investing—most of them offering a new get-rich-quick scheme. But oh would we be so lucky if it was just books being hawked! No, the more disturbing reality is that it's an entire industry, set up like a sea monster with hundreds of ever-growing, uncontrollable tentacles designed to cash in on our innately poor behavior and biases at the expense of our financial well being. It's asset managers creating whatever funds they think can be sold to meet a current fad; it's cable news shows and magazines constantly bombarding viewers with tales of greed, followed by fear; it's unscrupulous brokers and advisors earning commissions on products they sell you, no matter if they're appropriate or not; and, yes, it's all the “experts” making forecasts that never pan out (“My 2020 outlook obviously didn't account for Covid.”). For the most part, the entire investment industry is designed to get you to do things (i.e., buy and sell), and to do them regularly. Because it's not about earning you sufficient long-term returns, but rather raking in as much profit as possible.

If you are a US citizen or resident living abroad or thinking about moving abroad, or if you are a non US citizen/resident thinking about moving to the US or investing in the US then this episode is full of important things you need to be aware of. Sebastien Chain joined Chamberlain Hrdlicka in 2011 and concentrates his practice on federal, state and local tax controversies, both civil and criminal, and he represents clients at the examination level, administrative appeals, and trial. He also advises clients on a variety of international and domestic transactions. Mr. Chain's clients include domestic and foreign individuals, corporations, LLCs, partnerships, trusts and estates.Mr. Chain's tax controversy practice has covered a wide range of issues, and he has successfully resolved cases that involved worker classification issues, deferred compensation, ordinary and necessary business expenses, accountable plans, aircraft, transfer pricing, hobby loss, domestic and international information return penalties, and IRS collection enforcement actions. Mr. Chain has also prepared and submitted several Private Letter Rulings requesting relief for late tax elections.Mr. Chain has extensive experience advising clients on the U.S. reporting requirements associated with owning foreign assets, and he represents clients with unreported foreign income and foreign assets become compliant with their U.S. obligations. He has represented over 100 clients in connection with the IRS's various voluntary disclosure programs, including the 2009, 2011, 2012 and 2014 Offshore Voluntary Disclosure Programs, the Streamlined Domestic and Foreign Offshore Procedures, and the Delinquent Information Return and FBAR Submission Procedures.

The efficient market hypothesis is a hypothesis that states that share prices reflect all information and consistent market outperformance is virtually impossible. Dr. Eugene Fama, is the father of this theory and in today's podcast we take a deep dive explaining everything you need to know about it. 

Today we are talking about real estate. If you are at all interested in learning more about real estate investing you will definitely find todays conversation interesting. Our guest expert today is Adam Allen. Adam is a managing principal and founder of Marble Capital, LP a multimillion-dollar real estate private equity firm based in Houston, TX. 

In this episode we will cover everything you need to know about all the different types of fees and costs the investment industry charges. Understating these fees and costs is crucial to your longterm investment success.

Today we are going to talk about the Texas energy grid. Last week the grid came very close to a complete meltdown that could have made Texas go dark for months. An unprecedented winter storm hit the state so hard that many power producers from Natural Gas to Nuclear and wind were brought to their knees. With us to help explain what happened, why it happened, and what can be done so this does not happen again are Nick Altman and Peter Selber. Nick and Peter are the founders of Infinity Power Partner, one of the fastest growing full-service energy management and consulting firms in the country with offices in Houston and Cleveland Ohio. Infinity is licensed and operating in every de-regulated state across the US and Canada for both power and gas. After achieving double digit growth rates in each years of its existence the company will be celebrating its 10th year in business in 2021.

If you are an entrepreneur and at all interested in international business and how to evaluate risks more efficiently then you will certainly find todays podcast super informative. We are going to take a deeper dive into the types of risks investors take by hearing the story behind two successful entrepreneurial brothers, Mohammed and Subhi Khudairi. Mohammed and Subhi, together with their father Aziz, started Khudari Group in 2004 and have since grown the company from a small office in Houston to a thriving company with 5 business sectors employing over 250 full-time employees across its offices in Houston, Dubai, Erbil, Basra, Baghdad, Sulaymaniyah, and Amman; and continues to grow as a leading provider of services with a range of business units committed to rebuilding Iraq.

Today we are going to be talking about the recent news involving GameStop and a few other companies that have recently skyrocketed in the stock market.

If you are at all interested in learning how to create optimal investment portfolios to achieve your long-term goals you are definitely going to want to listen to our podcast about the two main types of risks investor take, Idiosyncratic and Systematic risks.

Today we’ll be talking about ESG Investing which stands for Environmental, Social, and Governance. ESG has gained a lot of traction in the investment world lately and is often referred to as sustainable investing. The idea here is that ESG investors look for companies that not only seek great cash flows or EBITA numbers but also positive returns and long-term impact on society and the environment. Investors are starting to demand that companies try and seek profitability financially and morally at the same time. This should be considered a great thing for the future growth of our economy because it helps sustain the infinite growth pressures investors demand while also being conscious of the environmental and social impacts business might have on society.

In this episode, we summarize a great new book that came out in 2020 called The Psychology of Money by Morgan Housel. The book takes a deep dive into exploring how we behave with money. "Doing Well with money isn't necessarily about what you know. It's about how you behave. And behavior is hard to teach, even to really smart people". - Book summary of The Psychology of Money.

Understanding whether your investment outcomes are attributable to luck or skill is extremely difficult to disentangle which makes it virtually impossible to identify a skilled investor before they become skillful. Lots of research has been done on this topic and I am very excited to have the author of those published academic papers with us today. Dr. Alan Crane is a Professor of Finance at Rice University’s Jones School of Business. He has degrees in economics, finance, and accounting and a Ph.D. from the University of Texas at Austin. His research focuses on the interaction between institutional investors and corporations with an emphasis on those investors’ performance and the impact they have on corporate financial policies. In particular, he studies the performance of mutual funds and hedge funds and examines how ownership by these and other financial institutions interacts with firm governance. He has published academic articles in the top finance journals such as Journal of Finance, Review of Financial Studies, Journal of Financial Economics, Journal of Financial and Quantitative Analysis, and Management Science. He is a two-time winner of the Jones School’s Award for Excellence in Research. Alan has presented research at a number of major universities and conferences in both the U.S. and internationally, and his research has appeared in the popular press in such places as CNBC and Bloomberg.

Understanding the zero-sum game theory is crucial to understanding why it's so difficult to outperform the markets in the long run. The theory basically states that the market consists of the holdings of all investors, and that the aggregate market return is equal to the asset-weighted return of all market participants and that based on this, for each position that outperforms the market, there must be a position that underperforms the market by the exact same amount.

In this episode, we talk about Bitcoin. What it is, the pros and cons, and how it is making us rethink what money is.

The economics of the media episode explores how the industry's current business model might be damaging our democratic norms and examines possibilities of how it could change.

Risk and reward are two sides of the same coin. This episode takes a deep dive into how they are related and how you should think about them when investing.

Everything you need to know about equity in less than 25 minutes.

Part 1 of a 2 part series on financial assets covering all things debt.

What does science say about active and passive investing?

There is an allure to trying to time the market. Get it right and your investment returns will skyrocket, get it wrong and you will wish you had just left your money in cash.

Investors should split their money up into three buckets, Risk-Free, Sleep-well at night, and long term aggressive.