I listened to it and made a few notes. Here they are, FWIW:
Bill Bernstein Interview 20170705
On the Meb Faber show.
They discuss Bill Bernstein’s free investment advice booklet:
https://www.etf.com/docs/IfYouCan.pdfNotes:
• Stocks are risky. Taking out a mortgage to invest in stocks is “taking a heck of a lot more risk”.
• “…much smarter if you got a mixed portfolio of stocks and bonds and you got a mortgage to just pay off the mortgage with the bonds in the portfolio”.
• Valuation: not terribly worried by USA valuations. We are not in a bubble.
• Expected returns USA: Intermediate bonds 2% nominal, Stocks 6% nominal, expects inflation to be 2% or more.
• Higher expected returns in emerging markets and foreign developed. Advises to sell a little US and buy non-US. Going from 35% to 40% non-US mentioned as an example.
• Recommends “Triumph of the Optimists” at Credit Suisse
https://www.credit-suisse.com/us/en/articles/articles/news-and-expertise/2017/04/en/credit-suisse-yearbook-2017.html• Know yourself, you are your own worst enemy. “You just have to learn the hard way”.
• Dunning–Kruger effect
https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect• Note to self – see also Imposter Syndrome:
https://en.wikipedia.org/wiki/Impostor_syndrome• Simple but not easy. Simple: put 15-20% of salary (more for Mustachian types, obviously) into a target date retirement fund and never look at it.
• Ignore the “financial porn”, i.e. the financial media and stockbrokers.
• Only an income producing investment, such as a stock, bond or working piece of real estate is a true investment.
• A house is not a good investment. Returns generally about 1% over inflation.
• Biggest mistake: “I should have been much more aggressive in my stock purchases and my allocation when I was a much younger man”.
• Book recs: Tetlock “Expert Political Judgement”, Walter Scheidel “The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century”