Efficient Market Hypothesis, Day Trading, Leverage, & Renaissance Technologies w/ Ben Felix (MI077)

On today’s show, I bring back Ben Felix to talk about many different popular investing topics from day trading to Renaissance Technologies to IPOs to Warren Buffett and Dave Ramsey. Ben Felix is a Portfolio Manager at PWL Capital, Inc. and host of the Common Sense Investing YouTube channel and the Rational Reminder podcast. 

IN THIS EPISODE YOU’LL LEARN:
0:00:00 - Intro
0:02:42 - What day trading is, and why are millennials attracted to it 
0:09:26 - What are the downfalls of day trading 
0:23:12 - What it means to invest with leverage 
0:30:26 - How should millennials approach IPOs 
0:35:59 - What is Renaissance Technologies and who is Jim Simons
0:39:15 - What is a quantitative investing strategy 
0:45:47 - How this all plays into the Efficient Market Hypothesis 
0:51:20 - What is QE and what does it mean when the Fed prints money
1:12:33 - Why it is important to understand the difference between the stock market and the economy

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DISCLAIMER: This show is for entertainment purposes only. Before making any decisions consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.

[TheInvestorsPodcastNetwork]

Hey guys, what are your key takeaways from this episode?

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[parthkaria]

I don't know anyone more rational than ben when it comes to finance.

[tontowtoronto]

I live in Toronto.. I'm going to find Ben Felix.. and I want to have a conversation about everything. The guy is a mother loving genius

[MJABER]

I love you Ben. I hold an MSc in Finance & Investment and I still learn a lot every time you open your mouth

[a.j.]

Note that the described use of leverage that some academics espouse involves buying and *long-term holding*, so that leverage lets you have more time in the market. "Day" or (short-term) trading is about timing the market, not time in the market.

[ogp]

I like what Ben says, agree with his monetary system analysis! I hope he looks at Mike Green's research on passive investing and changes his mind on that too

[red]

I just had a day trading ad before this video started 😂😂

[jakel]

The discussion on leverage really sounds insane... imagine a complete wipe out of all your savings and still being committed to leverage once it gets back up. It's just mad

[jakel]

Got an Etoro ad on this (UK trading app)

[GhettoFabulousLorch]

Dave Ramsey's investment advice is actually even better than that. He recommends "Growth, Growth and Income, and Aggressive Growth" mutual funds.

[bradynields]

To me, bitcoins price is that of gold if we could remove the power of belief from its molecular structure. The price discovery will confuse many investors only because they lack the belief.

[thao]

Are the two thumb downs from Dave Ramsey and Warren Buffet?

[bradynields]

Not sure if I'd describe bitcoin as any asset. We've never had an asset like this before. It's among a new class of assets that have been developing over the past few years. Bonds were invented at the end of the 1600's and now for another class of assets.

I agree with Dave Ramsey when he says fees don’t matter. It’s not that they don’t matter for your returns, it’s just that his target demographic is people with fear of investing, he just wants them to start investing in something.

[wildreams]

Ben Felix is the guy that will not pick up a $100 bill because of Efficient Market Hypothesis.

[flyffreak]

What about ark invest? They are doing better than market.

[jonathankr]

But wsb shows loss porn. So, it's not true that wsb only shows gains only

[MrReconjon]

An unknown amount between 45 and 90 percent of the markets are driven by passive flows. Passive flows by nature only buy and sell at market based on those flows. They do not actively make prices. That means much of the market is priced only by adding capital according to the cumulative weight of the individual stocks in passive funds as those funds are bought. By that very nature the markets are not priced efficiently. They are weighted on some function of ( efficiently + premium of their total claim of passive flows. )
Seriously, can you really make the fundamental case for market caps on Apple at $2.28T, Microsoft at $2.04T and Facebook at $1T while commodity producers with clean balance sheets trade at 3x free cash flow on any logic? If you can then I'd love to hear because by my account this market is illogical, I'd even say inefficient.

[sommi]

🧡💛💚💙 The Bitcoin Halvening would like to have a word with these "efficient market information" hypothesis crowd

[goldnutter]

Bitcoin = the opposite of fiat money.

Way back a researcher looked up fiat currencies of history starting with the letter A and half of the ones starting with B and there was over 600, ALL OF THEM WENT TO 0 !