What is the difference between risk and uncertainty and how our decision making approach should differ under each scenario. Why pandemics are highly uncertain and should be treated as such.Topics covered include:How the coronavirus pandemic is far worse than other pandemics this century.How humans have a difficult time accepting that things won't return to normal.What is the difference between risk and uncertainty.How we make decisions should differ if something is uncertain versus risky.What is the minimax regret approach to making decisions under uncertainty.How stories help us deal with uncertainty.How the story driving financial markets has changed.What is the duration and severity of bear markets during a recession and how large have bear market stock rallies been.What will it take for the pandemic to end and to be more confident about the future.Thanks to Mint Mobile and Grammarly for sponsoring the episode.For show notes and more information on this episode click here.
What central banks such as the Federal Reserve and federal governments are doing to counteract the negative impact of the pandemic related economic shutdown. What are the risks of this massive monetary and fiscal stimulus and how to mitigate those risks.Topics covered include:How central banks have the capacity to create an infinite amount of money.How the Federal Reserve is using its money-printing ability to stabilize the financial system and reduce the negative impact of the pandemic related economic shutdown.What are the mechanics of quantitative easing.What are examples of stimulus programs during the Great Depression that didn't work because they were too focused on social engineering. How massive central bank and government stimulus could lead to inflation or deflation.How inflation-indexed bonds such as Treasury Inflation Protection Securities can help reduce inflation risk, and why owning individual TIPs is particularly attractive right now.Why it's okay for investors with a long time horizon to ride out the current market turmoil without reducing risk.What are current and leading economic indicators suggesting about the severity of the economic shutdown and the potential for recovery.Thanks to LinkedIn Learning and Rad Power Bikes for sponsoring the episode.For show notes and more information on this episode click here.
How to avoid ruin and help others avoid ruin as the economy shuts down to slow the spread of the coronavirus.Topics covered include:What is the precautionary principle and how can it help us make important decisions with regards to the coronavirus pandemic.How many people could be infected with Covid-19 in the next 30 to 60 days at the current daily growth rate.Why investment managers are selling assets to reduce their market exposure.Should individual investors be increasing or reducing their exposure to the stock market in the current market environment.How recent actions by the Federal Reserve suggest they think a U.S. recession is imminent.What can individuals locked down at home do to survive mentally and emotionally.What we can do to help businesses avoid ruin during the pandemic crisis. Thanks to Netsuite and Rad Power Bikes for sponsoring the episode. Text the word RAD to the number 64-000 to get a free accessory with the purchase of a bike.For show notes and more information on this episode click here.
Why closed-end funds are David's favorite investment vehicle, particularly during market panics. What are the unique characteristics of these funds and what are successful strategies for investing them.Topics covered include:How closed-end funds differ from open-end mutual funds and ETFs.Why most closed-end funds are bond funds and use leverage.Why closed-end funds can sell at large discounts and premiums.What are managed distribution programs.How to evaluate and select closed-end funds.What is the Income Factory approach to closed-end fund investing.Thanks to LinkedIn and The HPScast for sponsoring the episode.For show notes and more information on this episode click here.