The Rational Reminder Podcast Episode 18 – A Passion for Ottawa: Running, Luck, and the Ovarian Lottery with Mark Sutcliffe

Welcome back to another episode of the Rational Reminder Podcast. Our guest today is a great friend and associate, Mark Sutcliffe! Mark is a well know media personality, community worker, philanthropist, business person, and investor. He also happens to be a great speaker and listener, which probably has something to do with him hosting his own radio show. Today we are extremely excited to be able able to interview him and pick his brain on all things rational, financial, and beyond. We chat about what makes Mark tick, his passions, his motivations, and what keeps him going. From there we dive into the financial industry and hear first-hand about Mark’s own learning curve and how he currently views investing. We then turn to the subject of Ottawa and look specifically at Mark’s work in and commitment to the city. A strong theme that arises in this episode is Mark’s view of his own good fortune and we finish off our interview with a meditation on the success he has experienced and some of his ambitions for the future. For all this and much more, be sure to listen in!

Key Points From This Episode:

  • Mark’s passion and what keeps him motivated. [0:03:21.9]

  • A typical day in the life of Mark and how he gets through all this work. [0:04:34.3]

  • Mark’s forays into and experiences with investing. [0:06:44.2]

  • The gripes that Mark has with certain areas of the financial industry. [0:09:45.7]

  • Mark’s TED Talk and the role of luck in his life. [0:13:01.3]

  • Long term financial planning and how this links to the rest of Mark’s life. [0:17:17.4]

  • A big picture perspective and how this helps investors through volatility. [0:21:28.6]

  • The media’s role in public perception and culture around the markets. [0:23:07.2]

  • Mark’s current thoughts on the Ottawa business scene. [0:24:48.5]

  • The long standing association between Mark and PWL. [0:27:06.7]

  • The trend towards index investing in Canada and its growing popularity. [0:29:00.9]

  • Mark’s reflections on his successes and ambitions for the future. [0:31:19.2]

  • And much more!

Learn more and subscribe to the show at pwlcapital.com

The Rational Reminder Podcast Episode 17 – Evidence Based Investing: Sticking to Science When It Comes To Your Money

Welcome to the Rational Reminder Podcast everybody! Today on the show we welcome a good friend and someone who has had a massive influence on our lives and work. Bestselling investment author, Dan Solin, joins us on the podcast today. Dan has been a staunch advocate for evidence based investing for a long time now and although this approach is still far from dominant, it has grown immensely in the years he has been active. His focus on smart, client-centered investing has set the standard for a certain portion of advisors in the US and Canada, notably the ones hosting this show! In our conversation, we chat about Dan’s history and the foundations of his professional philosophy. We get into some of his work as a lawyer and how this influenced his overall career trajectory. Interestingly, we spend some time on the topics of happiness and kindness and their integral importance to financial success for any investor. For an inspiring and thoughtful conversation with a true industry leader, be sure to tune in!

 

Key Points From This Episode:

  • An overview of Dan’s career and his investing philosophy. [0:03:05.9]

  • Dan’s training as a lawyer and how this influenced his evidence based approach. [0:05:45.0]

  • The case that prompted Dan to a proactive strategy for fairness. [0:06:45.1]

  • Dan’s on air disagreement with CNBC’s Jim Cramer. [0:08:52.6]

  • Looking at the culture of active fund management in Canada. [0:10:59.1]

  • The time Dan spent on the concept of happiness in his latest book. [0:14:45.5]

  • Building trust with clients through genuine interest. [0:15:56.8]

  • Looking at the difference experiences of introverts and extroverts. [0:18:32.0]

  • The critical importance of empathy in all aspects of life. [0:19:40.7]

  • The full extent of what a wealth advisor should do. [0:21:06.9]

  • Perspective and care as two primary directives for advisors. [0:23:45.4]

  • The retirement-focussed project Dan is currently working on [0:26:05.8]

  • Dan’s own journey and struggles around happiness. [0:28:43.6]

  • And much more!

Learn more and subscribe to the show at pwlcapital.com

The Rational Reminder Podcast Episode 16 – Market Volatility

In Episode 16 of the Rational Reminder Podcast we talked about the following:

  • How bad was last week’s market volatility?

  • Should you make changes to your portfolio in this market?

  • Are people better at predicting when markets are volatile?

  • How the market prices securities

  • The economy vs. the stock market

  • When do bear markets typically occur?

  • Will passive investing exacerbate the next correction?

  • Do index funds affect price discovery?

  • The power of capitalism

  • Index reconstitution

  • Risk over the long-term

  • Quant investing does not always pass robustness tests

  • 50% of business is marketing

  • Devil’s in the HML details

  • Dimensional has thought of everything

The Rational Reminder Podcast Episode 15 – Dimensional Advanced Conference 2018

In Episode 15 of the Rational Reminder Podcast we recapped our time at the Dimensional Fund Advisors advanced conference. We recapped the following:

  • Eugene Fama

  • The history of the University of Chicago and Dimensional

  • Connecting economics with academia

  • Behavioral finance is a branch of efficient markets (according to Fama)

  • Crunching data for the first time

  • Starting the first index fund – before Vanguard

  • Volatility lessons

  • Black swans

  • Do you need a tstat of 3 in today’s world?

We referenced this paper https://www.cfapubs.org/doi/pdf/10.2469/faj.v74.n3.6

The Rational Reminder Podcast Episode 14 – An inside look at Canadian consumer debt

In Episode 14 of the Rational Reminder podcast we were joined by Martin Parizeau, a retired banking executive with extensive knowledge of Canadian consumer debt, and a PWL client. We discussed the following:

  • The start of the ETF boom

  • When proponents of active management realize they should index

  • Cutting wasteful expenses without sacrificing happiness

  • Pulling off a successful downsizing

  • Housing is not an investment

  • The real cost of owning a home

  • Defining the ideal lifestyle

  • Digging into Canadian consumer debt levels

  • The real debt to income ratio for debtors in Canada

  • Is mortgage debt always “good” debt?

  • The rising cost of debt and its effect on the economy

  • Credit card rates are justified

  • Choosing the right credit card

  • Never pay an annual fee on a credit card

  • The boom-bust lending cycle

  • Bankers saw the financial crisis coming, but had to keep going

  • Focusing on the things that you can control

 

The Rational Reminder Podcast Episode 13 – Unaffordable housing

In Episode 13 of the Rational Reminder podcast we discussed the following:

  • Getting into the DFA advanced conference

  • Cancelling whole life insurance

  • When permanent insurance makes sense

  • Unaffordable housing in Canada

  • Housing bubbles?

  • Bridging the gap with a HELOC

  • Undervalued financial advice

  • Money does not buy happiness

  • Defining a lifestyle

  • Walking to work

  • Active funds are still underperforming

  • Missing out on the best stocks

The Stories we talked about:

HOUSING TRENDS AND AFFORDABILITY

UBS Global Real Estate Bubble Index

It’s officially normal to have a big, fat balance on your line of credit

Stock Pickers Struggle to Beat Index Funds Once Again

The Rational Reminder Podcast Episode 12 – Living through the financial crisis

In Episode 12 of the Rational Reminder podcast we were joined by Doug McKenzie, an executive at a large US financial institution, and a PWL client. We discussed the following:

  • Attacking a retirement goal

  • Managing expenses before retirement

  • Toronto real estate in a retirement plan

  • Living (and working through) the financial crisis

  • The Investor’s Group Dividend Fund

  • Income investing

  • Robo advisors

  • Using prepaid credit cards for budgeting

  • CCP vs. CPM vs. DFA

  • Running regressions

  • Data sources

  • Come From Away

  • The value of knowledge and advice

The Rational Reminder Podcast Episode 11 - Simple vs. complex with Robb Engen

In Episode 11 of the Rational Reminder podcast we discussed the following:

  • Are DIY investors responsible for their actions?

  • Starting a blog

  • Switching from stock picking to index funds

  • Managing behaviour

  • The 4-minute portfolio

  • When does it make sense to optimize?

  • Index fund rebuttals

  • Fee-only vs. fee-based advice

  • Choosing a conflict of interest

  • Robb’s biggest beef with Canadian financial services

  • Trusting the bank

  • VGRO vs. robo advisors

  • One-fund retirement portfolios

We were joined by Robb Engen, author of the Boomer and Echo blog.

The Rational Reminder Podcast Episode 10 - Keep the deferred sales charge, more for us

In Episode 10 of the Rational Reminder podcast we discussed the following:

  • Grass fed beef

  • The benefits of independence

  • The Ontario government wants to keep the deferred sales charge (DSC)

  • DSC back in the day

  • The old financial advice model

  • DIY investors are responsible for their decisions

  • 1/3 of people say money is their biggest stressor

  • Locus of control

  • A better way to invest responsibly

The stories that we talked about:

The Rational Reminder Podcast Episode 9 - Dimensional’s Big Flaw

In Episode 9 of the Rational Reminder podcast we discussed the following:

  • Being a poor grad student

  • Budgeting

  • Stuff does not make you happy

  • Mental overhead is a real cost

  • The Globe’s Financial Facelift disaster

  • Rob Arnott’s slam of Dimensional

  • Are people afraid of stocks?

  • The 10-year anniversary of Lehman’s fall

  • Stories from the financial crisis

  • Volatility in dollars vs. percentage points

  • Automated rebalancing

  • My uncle told me to buy weed stocks

  • What does a rational investor worry about?

 

The stories we talked about:

 

The chart we talked about:

Chart1_9.jpg

The Rational Reminder Podcast Episode 8 - Sell Everything!

In Episode 8 of the Rational Reminder podcast we discussed the following:

  • Fidelity’s 0% MER index funds are already at $1 billion

  • When costs are 0%, how do you pick a fund?

  • Indexing is not a passive investment strategy

  • Index construction and product implementation > low fees

  • A three factor regression on the Manulife Multifactor ETFs

  • Indexing is still a tiny part of the market

  • Not all factors belong in a portfolio

  • Dividend investing shouldn’t be so controversial

  • Dividends are not a spending rule

  • Financial experts don’t sound like experts to non-experts

  • Sell everything!

The stories we talked about:

The charts we talked about:

Image Source: Vanguard

Image Source: Vanguard

Chart2-8.png

The Rational Reminder Podcast Episode 7 - Buying WEED

In Episode 7 of the Rational Reminder podcast we discussed the following:

  • Ottawa home prices

  • The longest bull market in history

  • What goes up does not have to come down

  • All time highs are normal and should be expected

  • Is the market overvalued?

  • Even the CAPE only explains 40% of future return differences

  • Should you dollar cost average or invest in a lump sum?

  • Your better off in the market than trying to time the market

  • Was WEED an obvious buy at $2.00?

  • There are still plenty of public companies to invest in

  • Small cap returns need to be taken in context

  • Bad behaviour is not always easy to spot

The stories we talked about:

The charts we talked about:

Image source: Dimensional Fund Advisors

Image source: Dimensional Fund Advisors

Image source: Ben Felix, PWL Capital

Image source: Ben Felix, PWL Capital

The Rational Reminder Podcast Episode 6 - Asset Location

In Episode 6 of the Rational Reminder podcast we discussed the following:

  • Subscribe to the podcast on iTunes!

  • Wealthsimple’s new no-commission trading platform

  • Do individual stocks ever play a role in a financial plan?

  • Can behavioural coaching be scaled?

  • Being aware of conflicts of interest

  • Wealth and happiness are not always connected

  • If you buy an R8, you’ll want a McLaren next

  • Retiring does not mean doing nothing

  • How do you retire without a financial plan?

  • The 4% rule is false! If you want to retire early

  • Asset location is hard to do, and might not add value

 The stories we talked about:

The Rational Reminder Episode 5 - Rethinking Mortgage Debt

In Episode 5 of the Rational Reminder podcast we discussed the following:

  • Checking your credit

  • Optimizing your credit score

  • Investing vs. paying off your mortgage

  • Asset allocation

  • Reframing mortgage debt

  • Are we in a tech bubble?

  • The rise in the US market is backed by fundamentals

  • How the largest Canadian pension funds invest

  • Skewness in VC returns

  • It’s still really hard to beat index funds

 The stories we talked about:

The charts we talked about:

Source: Raymond Kerzhéro, PWL Capital

Source: Raymond Kerzhéro, PWL Capital

Source: Raymond Kerzhéro, PWL Capital

Source: Raymond Kerzhéro, PWL Capital

Source: Raymond Kerzhéro, PWL Capital

Source: Raymond Kerzhéro, PWL Capital

Source: Correlation Ventures

Source: Correlation Ventures

The Rational Reminder Episode 4 - The Race to 0%

In Episode 4 of the Rational Reminder podcast we discussed the following:

  • After a successful launch, the podcast will live on! Thanks for the support and feedback
  • The longest bull market in history?
  • Are we repeating the tech bubble?
  • Why it still makes sense to hold bonds
  • Rebalancing isn’t always easy
  • The Lost Decade, sort of
  • Is tax-loss selling worth it?
  • Horizons’ marketing mistake
  • One decision funds
  • Index fund fees are finally at 0%
  • Sec lending is the future of index fund revenue
  • Charley Ellis on the history of active management
  • There are less willing losers today than there were in the past
  • The paradox of skill
  • Active managers underperform consistently
  • Daniel Kahneman does not believe active management works
  • If you think you have intuition about stocks, you’re wrong
  • Corporate DB pension plans are not risk-free

The stories we talked about:

The charts we talked about:

Source: PWL Capital

Source: PWL Capital

The Rational Reminder Episode 3 - Amazon Eating the Stock Market

In Episode 3 of the Rational Reminder podcast we discussed the following:

  • Should you lease or buy your vehicle?
  • How are the new mortgage stress tests affecting Canadian real estate?
  • Home ownership is not required to build wealth, with a little discipline
  • Amazon’s size is not unprecedented
  • Successfully investing in growth stocks is really hard
  • Consolidation in the Canadian asset management industry
  • Independence benefits wealth management clients
  • Are backend loads on mutual funds still a thing?
  • Fund companies pushing anti-evidence
  • Financial advice is about more than just the portfolio
  • We are still waiting for lower stock valuations, high inflation, and high interest rates
  • If you’re not worried, you don’t have a high expected return
  • Are we living in exceptionally uncertain times?
  • Small cap and value returns comes from rebalancing

The stories we talked about:

The charts we talked about:

The Rational Reminder Episode 2 - Indexing is Here to Stay

In Episode 2 of the Rational Reminder podcast we discussed the following:

  • The underperformance of value stocks
  • Are we in a Winner Take All market?
  • Facebook’s crash
  • Global value performance
  • Canadian value premium at ~+5.5%
  • Rebalancing into the pain
  • Factor diversification
  • Having a philosophy and sticking with it
  • Index fund flows are slowing down in the US
  • Canadian active funds are still dominating passive ETFs
  • Markets are still efficient
  • Deciding to be an index investor takes work
  • Fewer highly skilled active managers make markets more efficient
  • Canadians might need to buy real estate to retire
  • Doctors were sold out by MD Management
  • Should you listen to the yield curve?
  • Michael Batnick’s chart crimes
  • DFA’s weights vs. the S&P 500 weights

The stories we talked about:

The charts we talked about:

Rational_Reminder_EP2.jpg

The Rational Reminder Episode 1 - The Cheapest Advice Probably isn't the Best

In our first ever episode of the Rational Reminder podcast we discussed the following:

  • The purpose of the podcast
  • How we invest
  • DFA
  • Factor investing
  • Our worst investment ever
  • Tripling our money in JDS
  • Hedge funds still can’t beat the market
  • CSA won’t deploy a statutory best interest standard
  • The cheapest financial advice may not be the best
  • Is a financial advisor worth it?
  • Cost vs. complexity

The stories we talked about: