The Long View
The Long View
Jan 8, 2020
John Rekenthaler: Fund Manager Financial Incentives Are Irrelevant
Play • 52 min

Our guest this week is John Rekenthaler. Rekenthaler is a director in Morningstar Research Services and a feature contributor to our platforms, including Morningstar.com. A lucid thinker and brilliant writer, his popular "Rekenthaler Report" column has become a must read among investors, financial advisors, fund industry participants, and beyond.

Rekenthaler began his career at Morningstar in 1988 and has worn a number of hats, including leadership roles in our research and investment management divisions. Among other achievements, Rekenthaler has been a key player in developing some of Morningstar's best-known tools, including the Morningstar Rating for funds and the Morningstar Style Box. He holds a bachelor's degree in English from the University of Pennsylvania and a master's degree in business administration from the University of Chicago Graduate School of Business.

Background

The Rekenthaler Report

Morningstar Rating for funds methodology

Morningstar Style Box methodology

Investor Behavior 

Morningstar's Mind the Gap study

Rekenthaler Report: "Mutual Funds: Where Fun Came to Die"

Rekenthaler Report: "3 Reasons Index Investors Deserve Perdition (or Not)"

Rekenthaler Report: "Up-Front Investment Fees Are (Almost) No More"

Incentives

Rekenthaler Report: "Give Performance Fees a Chance"

How John Invests

Rekenthaler Report: "What's in My Portfolio?"

Most and Least Popular Columns

Rekenthaler Report: "Enough with Revenue Sharing!"

Rekenthaler Report: "About that Rigging Claim"

Flash Boys: A Wall Street Revolt, by Michael Lewis, March 2014.

Compelling Academic Research

Rekenthaler Report: "Predicting Mutual Fund Returns With the Ownership Lens"

"Judging Fund Managers by the Company They Keep," by Randolph Cohen, Joshua Coval, and Lubos Pastor; NBER Working Paper No. 9359, December 2002.

The State of Retirement

Rekenthaler Report: "The Retirement Crisis That Isn't?"

Teresa Ghilarducci

"A Perplexing Tale About 401(k)s," by Scott Cooley; Morningstar.com, Nov. 26, 2015.

Rekenthaler Report: "The British Show How to Improve 401(k)s"

Best and Worst Innovations

Rekenthaler Report: "Why ETFs Succeeded for Retail Investors"

Rekenthaler Report: "Tactical-Allocation Funds: Even Worse Than Expected"

Jack Bogle

Rekenthaler Report: "Jack Bogle Strikes Back!"

Rekenthaler Report: "Jack Bogle's (Somewhat) Accidental Legacy"

Corporate Governance

"Anticompetitive Effects of Common Ownership," by Jose Azar, Martin Schmalz, and Isabel Tecu; Journal of Finance, May 2018.

Rekenthaler Report: "Are Index Funds Too Soft on CEOs?"

Rekenthaler Report: "The Latest Salvo Against Indexing"

Rekenthaler Report: "The Doctrine of Shareholder Value Has Indeed Helped Shareholders"

Albert J. "Chainsaw Al" Dunlap  bio

What John Reads

Berkshire Hathaway shareholder letters

Joe Mansueto bio

Reflections on Investing

Rekenthaler Report: "My Investment Howler"

Bogleheads On Investing Podcast
Bogleheads On Investing Podcast
bogleheads
Episode 029: Frazer Rice, host Rick Ferri
Frazer Rice is the author of “Wealth, Actually: Intelligent Decision-Making for the 1%”, host of the “Wealth, Actually” podcast, creator of the "Wealth, Actually" blog, and a Northeast Regional Director for Pendleton Square Trust Company. Frazer is an attorney and experienced trust officer. His wealth management career has included serving for over 15 years as a Managing Director at Wilmington Trust Company. We cover a lot of ground in this episode including estate planning, reasons for using trusts, selecting trustees, family dynamics, investing for 1%'ers, and much more! This podcast is hosted by Rick Ferri, CFA, a long-time Boglehead and investment adviser. The Bogleheads are a group of like-minded individual investors who follow the general investment and business beliefs of John C. Bogle, founder and former CEO of the Vanguard Group. It is a conflict-free community where individual investors reach out and provide education, assistance, and relevant information to other investors of all experience levels at no cost. The organization supports a free website at Bogleheads.org, and the wiki site is Bogleheads® wiki. Since 2000, the Bogleheads' have held national conferences in major cities around the country. There are also many Local Chapters in the US and even a few Foreign Chapters that meet regularly. New Chapters are being added on a regular basis. All Bogleheads activities are coordinated by volunteers who contribute their time and talent. This podcast is supported by the John C. Bogle Center for Financial Literacy, a non-profit organization approved by the IRS as a 501(c)(3) public charity on February 6, 2012. Your tax-deductible donation to the Bogle Center is appreciated.
1 hr
Sound Investing
Sound Investing
Paul Merriman
How do you invest in retirement when interest rates are so low? And 7 other important questions.
Paul introduces Don McDonald, Co-Founder of  Vestory Investment Advisory and co-host of "Talking Real Money" podcast, who will be producing “money minutes” for most of our podcasts. Don also produced the soon-to-be-released audio version for our latest book, We’re Talking Millions!. Paul discusses the upcoming Retiremeet America 2021 free online conference on Feb. 20, 8:00 a.m.-1:00 p.m. PT. See the list of speakers, topics, speaking times and registration form at https://retiremeet.com  Paul and David Booth, Co-Founder of Dimensional Fund Advisors, are keynoting the conference. Before addressing the Q&A's Paul discusses an article, “Deep Risk in the United States of America,” by Ben Carlson. Ben is on Paul’s list of Truth Tellers and highly recommends Ben's articles and podcasts at https://awealthofcommonsense.com/. * Larry motivates Paul to discuss the question: What changes should a pre-retiree make to their portfolio when they have saved enough to retire, even though they are planning to work longer? 19:00 * What asset allocation should I have when I reach retirement but don’t need the money to live on? 23:40 * How would you suggest someone who is currently in cash get back into the market? 31:22 Don McDonald’s “Talking Real Money” — The risks in owning bonds * With bond yields so low do you expect retirement returns to be significantly lower than in your tables?  38:57 * In a recent newsletter we mentioned a presentation by Barry Schwartz, author of The Paradox of Choice. The focus of the presentation was what happens when people are offered too many choices. We linked to a college presentation that got into other topics not of interest to us.  Here is a shorter presentation and very popular TED Talk with over 15 million views: https://www.ted.com/talks/barry_schwartz_the_paradox_of_choice?language=en   45:10 * In your 2012 book, First Time Investor, you were not in favor of target date funds. What has changed that you now recommend them? 60:40 * Do you really think the S&P is going to beat Berkshire Hathaway over the next 10 years? 57:45 * I know an investment advisor who made 29% a year over the last 2 years and he has all of his own money in the portfolio he wants me to use —individual stocks, not index funds. Is this investment philosophy a fool's errand and am I falling for a siren’s song? 1:06:35
1 hr 21 min
Money For the Rest of Us
Money For the Rest of Us
J. David Stein
Is Student Loan Forgiveness A Good Idea?
Should the U.S. cancel $10,000 or more of student loan debt per borrower? What would be the economic and financial impact? Why the student loan system is broken and how to fix it. Topics covered include: * How large and what is the growth rate of U.S. student loan balances * What are the projections for student loan losses * What are the pros and cons of forgiving student loans * What would be the impact on federal finances of canceling student loans * Why the U.S. government is already technically insolvent * How student loan programs should be restructured Thanks to LinkedIn and Policygenius for sponsoring the episode. Show Notes Student Loans Owned and Securitized, Outstanding—Federal Reserve Bank of St. Louise Senate majority gives Biden path to student loan forgiveness by Sylvan Lane—The Hill Schumer pressures Biden to bypass Congress to cancel $50,000 in student debt per borrower by Annie Nova—CNBC Biden will call on Congress to forgive $10,000 in student debt for all borrowers by Annie Nova—CNBC Outreach From Borrowers Could Overwhelm Student Loan System When Pandemic Pauses End by: Sarah Sattelmeyer and Lexi West—PEW Financial Report of the United States Government FY 2019 Warren makes case to Fed chair for canceling student loan debt by Naomi Jagoda—The Hill Student Loan Losses Seen Costing U.S. More Than $400 Billion by Josh Mitchell—The Wall Street Journal Final Monthly Treasury Statement Receipts and Outlays of the United States Government For Fiscal Year 2020 Through September 30, 2020, and Other Periods—U.S. Department of the Treasury Average Student Loan Debt at Graduation by Mark Kantrowitz—Savingforcollege.com Profile Of The Labor Force By Educational Attainment by Vernon Brundage, Jr.—U.S. Bureau of Labor Statistics Millennial life: How young adulthood today compares with prior generations by Kristen Bialkin and Richard Fry—PEW Research Center Forgiving Student Debt Isn’t a Great Stimulus Plan by Noah Smith—Bloomberg Average annual salary of bachelor's degree recipients employed full time 1 year after graduation, by field of study: Selected years, 1976 through 2001—National Center for Education Statistics NACE Salary Survey Winter 2020—National Associations of Colleges and Employers Australia’s student loan problem is a teachable moment for the U.S. by Jason Delisle and Alex Usher—Brookings
24 min
The Acquirers Podcast
The Acquirers Podcast
Tobias Carlisle
Small Value 2: Eric Cinnamond returns for more small value with Tobias on The Acquirers Podcast
Eric Cinnamond, CFA is a partner at Palm Valley Capital Management and a portfolio manager at the Palm Valley Capital Fund (PVCMX). Eric focuses on absolute return small cap value (less than $10 billion) investing.   Eric's firm: https://www.palmvalleycapital.com/ Eric's blog: https://www.palmvalleycapital.com/commentary ABOUT THE PODCAST Hi, I'm Tobias Carlisle. I've launched a new podcast called The Acquirers Podcast. The podcast is about finding undervalued stocks, deep value investing, hedge funds, activism, buyouts, and special situations. We uncover the tactics and strategies for finding good investments, managing risk, dealing with bad luck, and maximizing success. SEE LATEST EPISODES https://acquirersmultiple.com/podcast/ SEE OUR FREE DEEP VALUE STOCK SCREENER https://acquirersmultiple.com/screener/ FOLLOW TOBIAS Firm: https://acquirersfunds.com/ Website: https://acquirersmultiple.com/ Twitter: https://twitter.com/Greenbackd LinkedIn: https://www.linkedin.com/in/tobycarlisle Facebook: https://www.facebook.com/tobiascarlisle Instagram: https://www.instagram.com/tobias_carlisle ABOUT TOBIAS CARLISLE Tobias Carlisle is the founder of The Acquirer’s Multiple®, and Acquirers Funds®. He is best known as the author of the #1 new release in Amazon’s Business and Finance The Acquirer’s Multiple: How the Billionaire Contrarians of Deep Value Beat the Market, the Amazon best-sellers Deep Value: Why Activists Investors and Other Contrarians Battle for Control of Losing Corporations (2014) (https://amzn.to/2VwvAGF), Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors (2012) (https://amzn.to/2SDDxrN), and Concentrated Investing: Strategies of the World’s Greatest Concentrated Value Investors (2016) (https://amzn.to/2SEEjVn). He has extensive experience in investment management, business valuation, public comp
55 min
The Razor's Edge
The Razor's Edge
Shortman Studios
E-Commerce, Chat Commerce, and What's Here To Stay Post-Covid
E-commerce has risen to the point where just about everybody is an e-commerce company, and that goes even beyond retailers of goods. To understand that trend and to see how far it might stretch, we talk about the adoption of chat and social commerce in emerging markets with Ramy Assaf, Ceo of Zbooni, a Dubai-based fintech/commerce startup. He tells us how he came to build Zbooni, what it's like working with Facebook, why Square and Shopify are model companies for his firm, and how consumer behavior is changing amidst everything that's happened in the last year.Topics Covered * 2:30 minute mark - Ramy’s background * 5:30 – The Zbooni origin story and the new way of selling * 12:00 – Working with Facebook * 14:30 - Going from point product to product suite, with Shopify and Square as examples * 18:30 – Facebook’s role in e-commerce * 22:00 – Facebook integration * 30:30 - Chatcommerce vs. e-commerce and the e-commerce myth * 34:00 – The breadth of ‘e-commerce’ in 2020 * 37:00 - COVID environment and the role of cash * 44:30 - COVID reaction and SMB vs. enterprise * 49:30 - COVID reaction and the user behavior * 57:30 - Services vs. goods and changing behavior for services businesses * 1:04:30 – Amazon’s enduring example * 1:14:00 - The post-covid world * 1:20:30 - Fundraising in Covid * 1:24:00 - Customer perspective on pre-paying * 1:34:00 - What’s next for Zbooni
1 hr 36 min
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