Sorry for the radio silence recently. I went on my first vacation in two years over the Thanksgiving week. But now we’re back and getting ready for 2023.
I was fortunate to sit down with Bill Brewster who runs the excellent Business Brew podcast. In this episode we talked about all things macro and why macro matters more than ever. My favorite part of the discussion was about the portfolio you need vs the portfolio you want. I am obviously a big believer in behavioral finance and rejecting the idea of trying to “beat the market”. Most people approach asset management trying to design the portfolio they want instead of the portfolio they need. And that can you into a lot of behavioral trouble as you discover that the the portfolio you want often results in taking risk you don’t actually want.
I think you’ll enjoy this wide ranging discussion.
5:54 – Housing as a central component not just to the economy, but to everyone’s balance sheet
8:16 – Housing in other countries whose Central Banks are more aggressive
16:32 – How consumers act in the beginning of economic slowdowns
17:43 – The Fed is worryied about the short term inflation rate
20:41 – The likelihood or more fiscal stimulus in a big downturn
23:08 – How banking operates in panics
32:33 – How Quantitative Easing works
47:36 – The Buffett approach in investing
52:40 – Focusing on investor behavior
54:07 – The inter-temporal (mismatched time horizons) conundrum
1:02:39 – Behavioral problems in a 60/40 portfolio
1:06:17 – Thoughts on diversification
1:15:20 – The biggest benefit of understanding macro finance
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