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The Top Takeaways From 300 Years of Investment Advice · Merryn Talks Money

0:01
Speaker 1: John, I was away last week and something really exciting happened,
0:04
Speaker 1: something I've been waiting for for years, and it happened
0:07
Speaker 1: when I was on holiday, so I haven't been able
0:08
Speaker 1: to write about it or talk about it, and everything
0:11
Speaker 1: that I wanted to say about it has pretty much
0:13
Speaker 1: been said, which is incredibly frustrating. I want you to
0:16
Speaker 1: guess what that thing is. I feel it was tamed
0:18
Speaker 1: specifically for you being a way just you know, it
0:23
Speaker 1: wasn't really a surprise. Do you think she hates me
0:26
Speaker 1: that much? Well, you are always tweeting up I am
0:31
Speaker 1: she never replies. Okay for listeners who haven't picked it
0:34
Speaker 1: up yet, Nicholas Sturgeon's resignation last week came while I
0:37
Speaker 1: was away at half term and so I missed it.
0:41
Speaker 1: And God, there was a lot I've wanted to say,
0:43
Speaker 1: but it's slightly all being said, or that I was
0:45
Speaker 1: thinking about writing about it today because one of the
0:48
Speaker 1: things I wanted to talk about, which hasn't really come
0:50
Speaker 1: up in the conversation about it, is how the active
0:53
Speaker 1: union happened in the first place. And of course you
0:55
Speaker 1: knew all about this, John, with being actually Scottish, don't you.
1:01
Speaker 1: Well we went bank rocked, didn't we After we tried
1:06
Speaker 1: to set up an own colony. He went so bankrupt.
1:10
Speaker 1: The Darien scheme which was an attempted by attempt by
1:14
Speaker 1: the Scots to set up an empire abroad that would
1:19
Speaker 1: be in some way similar to that that the English
1:21
Speaker 1: were getting going on, and it was a total total disaster.
1:24
Speaker 1: Eighty percent of the settlers were dead in the first year.
1:27
Speaker 1: All the ships ended up in a horrible trouble. I meld.
1:29
Speaker 1: It was an absolute disaster. And there is some argument
1:31
Speaker 1: about exactly how much of Scotland's wealth went into it.
1:34
Speaker 1: By the way, the best book on this is The
1:36
Speaker 1: Price of Scotland, which I think was written by Okay,
1:40
Speaker 1: I'm just going to get your name wrong, Douglas. I
1:42
Speaker 1: think it was Douglas Wad. But if that's not quite
1:44
Speaker 1: right to do, write in and correct me. I'm sure
1:46
Speaker 1: you will. Price of Scotland brilliant book on this. So
1:50
Speaker 1: something in the region of fifteen to forty percent of
1:55
Speaker 1: all the wealth in Scotland went into this that most
1:58
Speaker 1: people settled on a number of around twenty percent of
2:00
Speaker 1: Scotland's money went into this absolutely failed venture. So you know,
2:06
Speaker 1: the Lowland Scotland was left virtually virtually in ruins as
2:10
Speaker 1: a result, and of course the aristocracy had lost a
2:12
Speaker 1: great deal of money as well, so total disaster and
2:15
Speaker 1: it was that that I think, well their arguments about this,
2:18
Speaker 1: of course, but many people believed that it was this
2:20
Speaker 1: that prompted the active union, because of course that well
2:23
Speaker 1: not of course, but as it happened, a lot of
2:26
Speaker 1: people got a lot of money back out of it.
2:28
Speaker 1: So the Scottish shilling was put to parity with the
2:32
Speaker 1: English penny when it had been trading at a significant discount,
2:35
Speaker 1: so that was nice for anyone holding shot Scottish shillings.
2:38
Speaker 1: And then there was a very large sum of money
2:40
Speaker 1: known as the equivalent that was paid to Scotland by England,
2:43
Speaker 1: and we used to compensate quite a lot of people
2:45
Speaker 1: for their massive losses in the Darien scheme. So the
2:48
Speaker 1: point is that the Union was born from catastrophic financial failure,
2:56
Speaker 1: and that has been leading me recently to think about
2:59
Speaker 1: why it is that the SMP believe that continued catastrophic
3:04
Speaker 1: failure will take them out of the Union, whereas in fact,
3:07
Speaker 1: if you look at it the other way around, the
3:08
Speaker 1: best way to leave the union would find a way
3:11
Speaker 1: to separate from the rest of the Union would be
3:14
Speaker 1: you know, success. But this is a strategy the SMP
3:17
Speaker 1: have not yet tried. They've only tried failure. Why is that. Yeah,
3:22
Speaker 1: you would think that the best we to make the
3:25
Speaker 1: case for independence would be for Scotland to be outperforming
3:30
Speaker 1: the rest of the UK, or to be more appealing
3:34
Speaker 1: from an investment point of view, or as somewhere where
3:37
Speaker 1: you pointed to leven work because it relatively lower taxes.
3:43
Speaker 1: I mean, you know, Scotland quite often or so the
3:45
Speaker 1: SMP will quite often talk a smallercoonomies like Ireland being
3:49
Speaker 1: very successful in Ireland is not remotely ashamed of being
3:53
Speaker 1: one of the biggest kind of taxhavings in Europe. Yeah,
3:58
Speaker 1: that's kind of come back to bite them, but we'll
4:00
Speaker 1: leave that aside. What I mean is we Ireland, like
4:02
Speaker 1: there's no sense that you're morally superior if your tax
4:05
Speaker 1: rate is higher. You know, it's got a corporate tax
4:09
Speaker 1: rate which is what I cant was twelve percent, and
4:11
Speaker 1: that's why Apple and lots of other kind of big
4:14
Speaker 1: companies push lots of money through Dublin. Yeah, and I
4:18
Speaker 1: mean it does this statter GDP. How much does it
4:22
Speaker 1: help the economy. I'm not one hundred percent sure, but
4:24
Speaker 1: it certainly shows that low taxes walk, and you could
4:28
Speaker 1: do that in Scotland and does simply get everyone to
4:31
Speaker 1: shift from England to Scotland. We had this conversation before,
4:34
Speaker 1: we I'm not sure that we have. I mean, they certainly,
4:38
Speaker 1: I mean, we might have mentioned it before, but the
4:40
Speaker 1: income tax points, it's not even the I mean, this
4:44
Speaker 1: is the other frustrating thing about what's happened is that
4:48
Speaker 1: they've changed the income tax bands a tiny bit in
4:51
Speaker 1: order to diverge from the rest of the UK, or
4:55
Speaker 1: specifically England. But all's done is add a whole load
4:58
Speaker 1: of complexity to the tax system, and these nothing because
5:04
Speaker 1: there's a tiny percentage points one with a mean Scotland's
5:08
Speaker 1: got like five definitely income tax plans note, which is
5:10
Speaker 1: just nice. Well. It also it also doesn't raise much
5:13
Speaker 1: because it mostly falls on hire income people and they
5:16
Speaker 1: are the very small number of very high income people
5:19
Speaker 1: in Scotland who quind it perfectly easy to shift their
5:21
Speaker 1: income around the place in somewhere with a border quite
5:24
Speaker 1: so poorous. The reason I thought we talked about it
5:27
Speaker 1: before us because I wrote about it a few weeks
5:29
Speaker 1: ago and looked at some research from the US. Absolutely
5:34
Speaker 1: fascinating because you know, there's been this big shifting in
5:36
Speaker 1: people between states in the US. Well you can argue
5:39
Speaker 1: about what's big and more di isn't, but there's definitely
5:41
Speaker 1: been a shift in population from the likes of California
5:43
Speaker 1: in New York to the likes of Texas and Florida.
5:46
Speaker 1: And obviously, you know, intuitively we would say, well, that's
5:49
Speaker 1: because they're lower tax states, right, you know, who wouldn't
5:51
Speaker 1: move for low taxes? But the difference is very small,
5:53
Speaker 1: and you're talking about two and a half percentage points
5:55
Speaker 1: of income tax local income tax, because you've got federal
5:58
Speaker 1: tacome tax and you've got local income tax. Is enough
6:00
Speaker 1: to make people think themselves, now, do you know what,
6:02
Speaker 1: I'll get that U whole trailer out and maybe move.
6:06
Speaker 1: And given that the differential at the top end in
6:09
Speaker 1: Scotland is already two percentage points, so you know, I
6:12
Speaker 1: don't know. Maybe something will happen, maybe I won't, But
6:15
Speaker 1: we'll see who the next first Minister is and whether
6:17
Speaker 1: they have a slightly more rational approach to politics and economics.
6:20
Speaker 1: On art I think that's a really good point. The
6:24
Speaker 1: other reason I think driving the move to Florida and
6:28
Speaker 1: things like that is partly because obviously Covid has put
6:32
Speaker 1: the idea of working remotely even more fiercely into people's heads.
6:37
Speaker 1: But also I get the impression in any American listeners
6:40
Speaker 1: can you know, write and then correct me on this,
6:43
Speaker 1: but I get the impression that the big tech areas,
6:46
Speaker 1: in particular like San Francisco have become very unpleasant to
6:49
Speaker 1: live in in terms of the quality of life, deterior rain,
6:53
Speaker 1: or they kind of the public spee of deterior rain.
6:58
Speaker 1: And I mean I could see something similar happening in
7:02
Speaker 1: Scotland as well. I mean, I have spent some time
7:06
Speaker 1: in Glasgow. Have you tell me tell me something else?
7:13
Speaker 1: I don't know about you, John, After all these years,
7:16
Speaker 1: it's I mean, I know I've lost the accent obviously,
7:19
Speaker 1: but was it well, yeah know, I was out there
7:21
Speaker 1: kind of last year. Then I've got it was quite
7:25
Speaker 1: shocked by the how run down the city center has become,
7:29
Speaker 1: John Covid. And it's not just me. I've heard this
7:32
Speaker 1: from quite a few people. Um, and it's partly apparently
7:36
Speaker 1: driven by people staying in their little suburbs of Glasgow
7:41
Speaker 1: now when they go out rather than heading into the
7:42
Speaker 1: city center. But it's just it's that kind of thing
7:46
Speaker 1: that's going to drive people out as much as the
7:50
Speaker 1: additional tax buding. Yeah, and I suppose no one moved
7:53
Speaker 1: to Glasgow for the weather, do they? And they moved
7:55
Speaker 1: to Florida for the weather? Maybe? Oh yeah, you moved
7:58
Speaker 1: to Florida for the weather. I mean Glasgow. Oh yeah,
8:05
Speaker 1: that's all he can say. We're going to move on
8:08
Speaker 1: from Glasgow. Um, this sander Edinburgh looking pretty ropey by
8:12
Speaker 1: the way as well, So it's not just Glasgow firm
8:14
Speaker 1: makes you feel any better job interestingly, and there's this,
8:16
Speaker 1: there's another reside. And we're not going to talk about
8:18
Speaker 1: house prices, I absolutely promise listeners this is not a
8:20
Speaker 1: shift into talking about house prices again. But someone reminded
8:24
Speaker 1: me that I wrote an article back in Gosh two
8:26
Speaker 1: thousand and nine, thousand and ten saying that I was
8:28
Speaker 1: buying a house in Edinburgh and it was probably the
8:30
Speaker 1: worst financial decision I would ever have made. And they
8:34
Speaker 1: emailed me to say, well, you were so wrong. That
8:35
Speaker 1: was a ridiculous and blah blah la and you know,
8:37
Speaker 1: your house probably worthfortune, et cetera. And it is worth
8:39
Speaker 1: in nominal terms slightly more than it was when I
8:41
Speaker 1: when I bought it. But I looked up it's value
8:45
Speaker 1: relative to inflation, and you know, absolutely bizarrely a house
8:48
Speaker 1: in Edinburgh has underperformed inflation over the last decade. How
8:52
Speaker 1: about that? Seriously since twoyeen. So we had how it's
8:57
Speaker 1: beaten in inflation, well most of it, and I thought
9:02
Speaker 1: I'd really surprising but Edin, But I thought Edin, But
9:04
Speaker 1: I was basically sort of like Southeast Tape to Jaketally
9:08
Speaker 1: that's surprised me as well. But of course I'm only
9:10
Speaker 1: guessing at the value of the value of that, so
9:12
Speaker 1: it could be wrong. Anyway, moving on, all this is
9:14
Speaker 1: vaguely relevant to Edinburgh. In the podcast this week, I
9:18
Speaker 1: interview two of the academics from that book I was
9:21
Speaker 1: raving about the other day invested remember that, Yeah, the
9:25
Speaker 1: ones who think that earl job is alwayst the time,
9:28
Speaker 1: those are the ones. Those are the ones that were
9:29
Speaker 1: very polite on the podcast. But I thought I felt
9:31
Speaker 1: that I could feel that they were thinking. I tried
9:34
Speaker 1: to guide them into being, you know and saying Mary
9:36
Speaker 1: and everyone else is useless, but you offer huge value
9:38
Speaker 1: to the market. But they were not taking that bait anyway.
9:42
Speaker 1: We talked a little at the end of the podcast
9:44
Speaker 1: about what lessons they might draw from the book and
9:47
Speaker 1: what things there might be for investors over the long term,
9:50
Speaker 1: things that you could you could do that might actually
9:52
Speaker 1: mean that you could, if not beat the market, at
9:53
Speaker 1: least hang around the edge of the market. And their answer,
9:57
Speaker 1: because you know the terrible old cynics academics you know
10:00
Speaker 1: about some things anyway, was that you were much better
10:02
Speaker 1: off writing a book about money rather than rather than
10:05
Speaker 1: attempting to invest money, and that would make you rich
10:07
Speaker 1: or quicker. And I didn't want to burst the bubble
10:09
Speaker 1: by explaining that both you and I have written books
10:12
Speaker 1: about investment fat a lot of good that did us
10:14
Speaker 1: financial id you write books these days as a charitable
10:17
Speaker 1: service more than anything else, don't you? Well? What the
10:20
Speaker 1: academics get paid for the other books? That's what I
10:22
Speaker 1: want to God, I didn't ask that you should. You
10:25
Speaker 1: should do the Q and a bit of the podcast
10:27
Speaker 1: much more aggressive than me. Now, I didn't ask them
10:29
Speaker 1: what they make, but yeah, but it's expensive. At sixty quid.
10:31
Speaker 1: You know, of course a lot more than your book
10:33
Speaker 1: or my book. Right, that's where the money is anyway.
10:36
Speaker 1: So moving on from talking about what the individual investor
10:40
Speaker 1: could do with the arts as being fairly obvious, you know,
10:42
Speaker 1: don't have a trade, look for value, don't get taken
10:45
Speaker 1: in by stories or all these kinds of things. It
10:48
Speaker 1: then moved me on thinking about, well, you know, we've
10:50
Speaker 1: written quite a lot recently and I about whether one
10:52
Speaker 1: should be in in passive funds or active funds. And
10:54
Speaker 1: it looks like passive funds about outperformed forever, so being
10:58
Speaker 1: inactive just means sort of paying for faith leer and
11:00
Speaker 1: paying rather too much for failure. Well, there is a
11:02
Speaker 1: growing view, and our colleagu John Authors has written about
11:04
Speaker 1: this as well, that we may have reached peak passive
11:06
Speaker 1: to a degree, because of course passive investing is really
11:09
Speaker 1: nothing but momentum investing, and there comes a point in
11:12
Speaker 1: the cycle when you don't want to be a momentum
11:13
Speaker 1: investor anymore. You want to be a value investor. Right,
11:17
Speaker 1: he's looking confused. He agreeably, trust me, everyone here goes
11:19
Speaker 1: I agree. I do agree. At something points, you don't
11:23
Speaker 1: want to be in the things that are popular for
11:25
Speaker 1: the last ten years because they're not going to be
11:27
Speaker 1: popular if you're holding an index and it's market weighted
11:31
Speaker 1: as opposed to equal weighted. And this is something else
11:33
Speaker 1: you can do, by the way, to mitigate the effect
11:35
Speaker 1: of this effect of this momentum trade is you can
11:37
Speaker 1: have an equal weighted passive fund, but mostly their market
11:40
Speaker 1: cap weighted, right, so you tend to hold many more
11:44
Speaker 1: of the shares in the companies that have been the
11:46
Speaker 1: winners over the last decade as opposed to the winners
11:49
Speaker 1: of the future. And if you want to hold the
11:50
Speaker 1: winners of the future when a market is turning or
11:53
Speaker 1: a point in the cycle, then maybe you don't want
11:55
Speaker 1: to be passive, if you want to be active, And
11:57
Speaker 1: so that leads us on to okay, so maybe you
12:00
Speaker 1: want to have some money and active funds rather than
12:02
Speaker 1: just im passive funds. At the moment, How on earth
12:05
Speaker 1: do you choose an active fund? That's the that's the
12:07
Speaker 1: only fundamental problem. But how do you choose an active fund?
12:11
Speaker 1: Just choosing the active fund, because it's that thing about
12:15
Speaker 1: you're right, that's kind of tone in point. You don't
12:19
Speaker 1: really want to be in the endex because the endex
12:21
Speaker 1: is going to go down because it is full of
12:23
Speaker 1: the stuff that was popular. But then it's kind of like, well,
12:26
Speaker 1: how do we find the ones that aren't just part
12:30
Speaker 1: cannot which you call them closet trackles and all that stuff.
12:33
Speaker 1: So I will let you tell us. Okay, I like
12:36
Speaker 1: the bit way he just lets me talk, interrupting me
12:38
Speaker 1: all the time the answer as you turns out to me.
12:43
Speaker 1: I mean, the nice thing about this is there is
12:45
Speaker 1: so much research on it. There is so much respects.
12:47
Speaker 1: Everyone wants tougestify their position one way or another, and
12:50
Speaker 1: you can. You can prove that active funds regularly underform,
12:52
Speaker 1: you can prove their regularly outperform. But if you take
12:56
Speaker 1: out closet trackers, im funds that more or last track
13:00
Speaker 1: the index, which by the way is most of them
13:02
Speaker 1: these days, because in order to outperform or even meet
13:05
Speaker 1: the performance of the index, you have to hold the
13:09
Speaker 1: previous winners, right, So there's a lot of closet tracker
13:12
Speaker 1: still knocking around the market. If you take those out,
13:15
Speaker 1: there's quite a lot of evidence that an actual active fund,
13:20
Speaker 1: as supposed to a pretend active fund, can and even
13:23
Speaker 1: does regularly beat the index. So the very first thing
13:26
Speaker 1: to do is to look at it and say, is
13:27
Speaker 1: this a closet tracker? Is it actually an active fund?
13:30
Speaker 1: And that's quite easy to do because there's a very
13:32
Speaker 1: straightforward number called active share, which shows you how much
13:35
Speaker 1: the holding is going to fund differentiate from a market
13:38
Speaker 1: very far from perfect by the way I've written about this,
13:40
Speaker 1: very far from perfect, but it gives you a general clue.
13:42
Speaker 1: So if it's got an active share of I think
13:46
Speaker 1: that the number we mostly use is under sixty fens
13:48
Speaker 1: simply didn't bother because you've got a closet tracker. If
13:50
Speaker 1: it's up at nineteen, then you've got a fund run
13:53
Speaker 1: by someone who's pretty dedicated to their craft and has
13:55
Speaker 1: some conviction and a proper stock picker. So you know
13:58
Speaker 1: that kind of stuff is relatively easy. So I wonder,
14:04
Speaker 1: and now we've we've got to this point where we
14:06
Speaker 1: look at passive and saying there coming to an end,
14:09
Speaker 1: and we look at active and say, well, maybe it's
14:11
Speaker 1: time to move into that. I don't know, what do
14:14
Speaker 1: you think, John, do you think that this is time
14:16
Speaker 1: for a shift. I've always found this division been between
14:20
Speaker 1: passive and active a little bit artificial anyway. I just
14:24
Speaker 1: think look for the get your overall as allocation, and
14:30
Speaker 1: then look at what is the cheapest, most effective way
14:34
Speaker 1: to execute on that trade. Basically, so, for example, if
14:41
Speaker 1: you've decided that we're at a ton end point and
14:44
Speaker 1: the big growth stocks are the ones that are going
14:46
Speaker 1: to crash now, then you should buy various active funds,
14:53
Speaker 1: small caps, value, et cetera, et cetera. On the other hand,
14:57
Speaker 1: if you want to step with passive, you could probably
14:59
Speaker 1: just buy a foots one hundred tracker and get exposure
15:02
Speaker 1: to an awful lot of the same sort of stuff. Well,
15:04
Speaker 1: that would work because then you're you're you're buying exactly
15:06
Speaker 1: that you're bund stuff that hasn't had momentum behind it
15:08
Speaker 1: in the past. But I suppose then also you've departed
15:11
Speaker 1: from the global benchmark. So in the way you I
15:16
Speaker 1: mean that is an active decision to put your money
15:19
Speaker 1: somewhere different from where everyone else is putting them money.
15:23
Speaker 1: So you'll get You're getting to this point that we
15:25
Speaker 1: were discussing the other day, which is that there is
15:27
Speaker 1: actually no such thing as passive investing because every choice
15:31
Speaker 1: you make is a choice. You know, if you choose
15:33
Speaker 1: even if you choose a global passive fund of some kind.
15:37
Speaker 1: You are still tracking past when it's if you decide,
15:39
Speaker 1: well I'm not going to do that, and you're by
15:40
Speaker 1: a different kind of passive fund, you're still making massive
15:42
Speaker 1: acid allocation decisions. Yeah. And also I'm slightly irritated with
15:47
Speaker 1: the kind of semi religious tone some of the coverage.
15:51
Speaker 1: You know. I mean, well, you and I were talking
15:55
Speaker 1: about ETFs passive funds for like, or at least fifteen
16:01
Speaker 1: years or so, and I remember talking about this stuff
16:04
Speaker 1: and talking about how active funds were too expensive and
16:08
Speaker 1: really you know, buying the drum for the passive side
16:12
Speaker 1: for years and years before anyone else was talking about it.
16:16
Speaker 1: Now you sort of turning and say, well, maybe active
16:19
Speaker 1: funds are going to have their time in the sun,
16:22
Speaker 1: because everything's got you know, it's it's sell by day,
16:25
Speaker 1: everything's got as fads and you get really radical angry people. Yeah,
16:33
Speaker 1: kind of like talking about the same talking points that
16:35
Speaker 1: we've were making, you know, twelve years ago, whenever it
16:39
Speaker 1: really was a rip off industry. So you know, I
16:42
Speaker 1: just get fed up getting lectured by Johnny Come Lately's Yeah,
16:46
Speaker 1: look at us, we have the only flexible mindset in
16:48
Speaker 1: the market. But look, I'm one of the big differences
16:52
Speaker 1: in our cares has been the full off and charges, right.
16:54
Speaker 1: So you know, it used to be that it was
16:56
Speaker 1: absolutely inevitable that any active fund was going to underperform
16:59
Speaker 1: the charges were so huge. But charges have come down
17:02
Speaker 1: and down and down and down, And if you look
17:04
Speaker 1: back at the research over the last couple of decades,
17:06
Speaker 1: you can find endless bits of research showing that after charges,
17:11
Speaker 1: the average active fund is outperformed over very lengthy periods.
17:14
Speaker 1: But of course there's no point in looking and stuff
17:16
Speaker 1: after charges because we all pay them rights, it doesn't matter.
17:19
Speaker 1: But it does show you that that investment skill is there.
17:21
Speaker 1: You know that the active manager does have a skill,
17:25
Speaker 1: it's just that we pay too much for it. So
17:27
Speaker 1: as costs come down and down and down, all of
17:29
Speaker 1: you know, overall charges come down and down and down
17:31
Speaker 1: as they have, the odds of the active fund manager
17:34
Speaker 1: out performing have gone up commercial clear right. So this
17:37
Speaker 1: works as a concept that the lower charges get, the
17:41
Speaker 1: more likely you are to outperform. So if you're looking
17:43
Speaker 1: for a fun I'm going going back to key points.
17:46
Speaker 1: You want it to be probably active so or high
17:48
Speaker 1: actually share you should be able to find out the
17:49
Speaker 1: fact sheet. You want it to be low cost. The
17:52
Speaker 1: lower the cost, the better, and included in looking at
17:54
Speaker 1: low costs, you want to be sure that it's relatively
17:56
Speaker 1: low turnover because that's a big impact on on your end,
18:00
Speaker 1: and of course we've got very high turnover. Suddenly you
18:02
Speaker 1: might think to yourself, while I'm looking at a guy
18:04
Speaker 1: not who has conviction, but who has rather too many convictions,
18:07
Speaker 1: and that could be different, right, So we don't want that,
18:09
Speaker 1: and we want someone with a set style and possibly
18:12
Speaker 1: with it probably right now, with a bias to value.
18:14
Speaker 1: So it doesn't really sound that hard, does it. Should
18:17
Speaker 1: we set up a fund? Hey, Genia said idea? I'm
18:21
Speaker 1: should We'll get seed funding from from Bloomberg. Oh, I'm
18:26
Speaker 1: sure we will. Anyway, I think we better leave it
18:28
Speaker 1: there because we're in danger of turning into the people
18:31
Speaker 1: written about invested and doing too much talking about how
18:35
Speaker 1: things should be without actually doing stuff. So onwards, Thanks John,
18:39
Speaker 1: Thanks Mel. Welcome to Marin Talks Money, the podcast in
18:48
Speaker 1: which people who know the markets explain the markets. I'm
18:50
Speaker 1: Mary in Sunset Web. This week a closer look at
18:53
Speaker 1: the book that John and I have just been talking
18:54
Speaker 1: about and I have been talking about relentlessly recently. I
18:57
Speaker 1: think everyone has had a conversation with me in the
18:58
Speaker 1: last three weeks. There's been fut and buy a copy.
19:01
Speaker 1: It's the best book on investing, well on writing about
19:04
Speaker 1: investing that I have read in a long time. Invested
19:07
Speaker 1: have three centuries of stock market advice. We shaped our money,
19:10
Speaker 1: markets and minds. So I managed to persuade two of
19:13
Speaker 1: the five authors to join me in conversation, Peter Knight
19:16
Speaker 1: and Helen Paul. And I started by asking Peter what
19:20
Speaker 1: an earth board for these five interesting academics together to
19:24
Speaker 1: write about what is really a pretty niche subject, not
19:26
Speaker 1: to me and John but to everybody else, I think,
19:28
Speaker 1: a pretty niche subject. So I'd already been looking in
19:33
Speaker 1: a previous book at investment of ice manuals that were
19:37
Speaker 1: written in the late nineteenth century, around the time of
19:40
Speaker 1: the bucket shops in America. But I was interested in
19:44
Speaker 1: the question of, well, how far back does this genre
19:47
Speaker 1: this kind of written financial stock market advice go. So
19:52
Speaker 1: we brought together a couple of people, a couple of
19:55
Speaker 1: friends of mine who are also from literature and cultural
19:58
Speaker 1: studies departments, and then we brought into economic historians Helen
20:05
Speaker 1: Here and James Taylor at Lancaster to bring the story
20:08
Speaker 1: right from the eighteenth century through to the present. Okay,
20:11
Speaker 1: so how far back does it go? What the What's
20:14
Speaker 1: the first written in English investment advice manual? It's probably
20:22
Speaker 1: Thomas Mortimer's every Man His Own Broker, which comes about
20:27
Speaker 1: in the middle of the eighteenth century. But this emerges
20:30
Speaker 1: out of earlier things that might be conscrewed as some
20:35
Speaker 1: sort of advice. It's the first real dedicated stock market
20:39
Speaker 1: investment manual for non investors, for people who are complete
20:44
Speaker 1: newcomers to the market. Okay, but before that there were
20:48
Speaker 1: various advice books on how to make money keep money.
20:51
Speaker 1: I'm one of the ones you mentioned in the book
20:53
Speaker 1: that was much earlier, sixteen eighty four, is it No. One?
20:57
Speaker 1: The Pleasant Art of Money Catching Newly and fully Discovered.
21:01
Speaker 1: That's one of my favorite titles in the whole book.
21:03
Speaker 1: I mean that's a bit earlier, right. It's full of
21:05
Speaker 1: things like, you know, how to how to pay your
21:07
Speaker 1: debts without money? How do you get a greater state
21:09
Speaker 1: in a little time? I really like that. That's what
21:12
Speaker 1: I'd like to do. So these came before actual stock
21:15
Speaker 1: market advice. Right, So there was already a genre of
21:18
Speaker 1: let me help you get rich quick, that's right, but
21:21
Speaker 1: it's not specifically about how to go and get into
21:25
Speaker 1: a coffeehouse and where you should go on which particular day.
21:29
Speaker 1: What there was were things like pocket diaries or pocketbooks
21:35
Speaker 1: that would just tell you a list of days when
21:37
Speaker 1: you could do certain things, which implies that people, a
21:40
Speaker 1: lot of people knew how to do these things. They
21:44
Speaker 1: weren't being specifically told, They were just being given an
21:46
Speaker 1: aid memoir to remind them that something was happening on
21:49
Speaker 1: particular days. So today this office is quite so what
21:52
Speaker 1: did happen on particular days that you could go and
21:54
Speaker 1: do particular days the Bank of England would be closed,
21:57
Speaker 1: so you couldn't go in and do any trends actions,
22:00
Speaker 1: or there'd be a certain day. There's lots of days
22:03
Speaker 1: where a bit like bank holidays, where you needed to
22:06
Speaker 1: know that there was no point going all the way
22:08
Speaker 1: into London if the office was going to be shut.
22:11
Speaker 1: Nobody was going to tell you what to do once
22:13
Speaker 1: you were there. It was assumed that you knew that.
22:16
Speaker 1: So this first book, Motima's first book was about what
22:19
Speaker 1: to do if you didn't know what to do. So
22:20
Speaker 1: it wasn't just a diary. It told you exactly how
22:23
Speaker 1: to trade, how to know what to trade, gave you,
22:27
Speaker 1: gave you what it gave you step to step advice
22:31
Speaker 1: as exactly what to do, where to go, and to
22:34
Speaker 1: speak to, so that in this sense you didn't need
22:38
Speaker 1: a middleman, you didn't need a broker. But it also
22:41
Speaker 1: was several other things as well. It had lots of
22:44
Speaker 1: other bits and bobs in it, like strange stories of
22:49
Speaker 1: brokers in the coffee houses, and imaginary dialogues and kind
22:54
Speaker 1: of humorous interludes and all sorts of things. So it
22:58
Speaker 1: was it was trying to do several different things that once.
23:00
Speaker 1: But in amongst that is some of the more dry
23:03
Speaker 1: and boring detail of do A, then do B, then
23:06
Speaker 1: do C. Is it any good Mortimer's book in terms
23:11
Speaker 1: of it to mind, I mean, if you exactly, if
23:13
Speaker 1: you'd picked up Mortimer's book, you know, a couple of
23:15
Speaker 1: months after publication, read it very carefully, and followed his advice,
23:20
Speaker 1: would it have done you any good? It would if
23:23
Speaker 1: you were highly risk averse. So if you are somebody
23:25
Speaker 1: who just wants to buy and hold strategy in big
23:30
Speaker 1: stocks in really companies that are very close to the state,
23:35
Speaker 1: then that would be fine. That's what it essentially tells
23:38
Speaker 1: you to do. What it doesn't do is tell you
23:40
Speaker 1: kind of get rich quick how to play the markets.
23:44
Speaker 1: So it is actually not one of those sorts of
23:46
Speaker 1: advice manuals that come about quite a lot later, which
23:50
Speaker 1: is about playing the market. He specifically tells you not
23:53
Speaker 1: to play the market. Does he so? Very responsible, nicely written,
23:57
Speaker 1: relatively easy to read, and full of exactly the kind
24:01
Speaker 1: of advice that a responsible writer of an investment but
24:05
Speaker 1: might give today. Indeed, but he does run out of
24:09
Speaker 1: road when there are other types of investment appearing. So
24:14
Speaker 1: the turnpike roads, the canals, they are starting to be
24:19
Speaker 1: classic investments opportunities, and he's not really dealing with them.
24:24
Speaker 1: So he becomes quite old fashioned towards the end of
24:26
Speaker 1: his reign. But when he is in his pomp he
24:31
Speaker 1: is the only writer around. He's just churning out endless
24:35
Speaker 1: editions of the same thing. Eventually, towards the end of
24:38
Speaker 1: the century, other people start to compete with him. And
24:42
Speaker 1: who do we think his readers were, Well, just about
24:46
Speaker 1: anybody who was interested in learning about the stock market.
24:49
Speaker 1: I mean, most people in the earlier phase of the
24:52
Speaker 1: market would have been introduced by friends or friends of
24:56
Speaker 1: friends or relatives, and they would have learned through doing basically,
25:00
Speaker 1: or they've got someone else to do it for them.
25:02
Speaker 1: So as the population expands, as the Industrial Revolution gets underway,
25:09
Speaker 1: you start getting people who aren't particularly well connected to anybody,
25:13
Speaker 1: and it's probably those people who need helping hand through
25:17
Speaker 1: the market. So what happened next, Peter, We've got this
25:20
Speaker 1: book out there, it goes through addition after edition, and
25:23
Speaker 1: then the markets begin to change and there's a new
25:26
Speaker 1: group of writers come in with different styles of advice. Yeah,
25:29
Speaker 1: at the beginning of the nineteenth century, you get some
25:32
Speaker 1: very dry, very dull books which are providing kind of
25:35
Speaker 1: just market data. They're kind of very sober. In some ways,
25:40
Speaker 1: there are a reaction against mortonber because they're basically saying
25:44
Speaker 1: the market is really only for professionals, only for people
25:47
Speaker 1: who can understand this level of detail. But by the
25:50
Speaker 1: time to get to the middle of the nineteenth century,
25:53
Speaker 1: there's a far more kind of racy, democratizing version of
25:58
Speaker 1: advice that gets published in increasing numbers, and that's tapping
26:03
Speaker 1: into the speculation mania around first canals and then obviously railways,
26:10
Speaker 1: and later more generally diversification of stocks. So that's the
26:15
Speaker 1: kind of the real explosion in the second half of
26:18
Speaker 1: the nineteenth century, that suddenly there are far more books
26:22
Speaker 1: being published than could possibly be merited by the amount
26:28
Speaker 1: of actual investment in the stock market. You know, in
26:34
Speaker 1: nineteen hundred only in the US, only one percent of
26:38
Speaker 1: Americans are invested in the stock market. But you would
26:41
Speaker 1: never get that impression if you turned up to a
26:44
Speaker 1: bookshop or read adverts for these investment manuals that were
26:48
Speaker 1: being advertised in the Sunday newspapers. The impression was that
26:53
Speaker 1: everyone should be going down to their local bucket shop
26:57
Speaker 1: and having a on the market. So do we think
27:03
Speaker 1: that people who weren't investing or didn't have the money
27:06
Speaker 1: to invest were still buying these books, or do we
27:10
Speaker 1: think that people who were investing were buying lots of
27:12
Speaker 1: different books. I think it's a bit of both. What
27:16
Speaker 1: we need to remember in the target market for a
27:18
Speaker 1: lot of these books in the nineteenth century was that
27:21
Speaker 1: the young man on the make, the clerk who thought
27:26
Speaker 1: he wanted to be as rich as his boss, but
27:28
Speaker 1: didn't want to go through kind of decades of apprenticeship.
27:32
Speaker 1: Instead of the fantasy was go down to the bucket shop,
27:35
Speaker 1: apply a few of these seemingly simple rules, and get
27:39
Speaker 1: rich quick. So that's the kind of client that these
27:46
Speaker 1: books were appealing to. I doubt whether many people were
27:49
Speaker 1: buying lots and lots of different books, but remember most
27:53
Speaker 1: people weren't actually invested in the stock market, so it
27:56
Speaker 1: was a form of fantasy football for them. Yeah. Well,
28:01
Speaker 1: I'm looking as it has been in a bit. The
28:02
Speaker 1: guides encourage investors of modest means to think of themselves
28:05
Speaker 1: as heroically seeing through the smoke screens put up by
28:08
Speaker 1: stock market professionals by cultivating a stance of ruggedly independent
28:11
Speaker 1: thought and feeling. So, you know, the idea being to
28:16
Speaker 1: persuade all these people that through the book you could
28:20
Speaker 1: introduce them to the secrets that the professionals have, that
28:25
Speaker 1: those secrets actually exist. Yes, so that you know, the
28:28
Speaker 1: books are doing two things at least, One is to
28:31
Speaker 1: persuade you that you, as an outsider, can somehow level
28:37
Speaker 1: the playing field with the insiders. But as part of that,
28:41
Speaker 1: the appeal was very much this sense of kind of
28:44
Speaker 1: masculine buccaneering beating the market, and the irony of that,
28:49
Speaker 1: to one of the many ironies is that half the
28:53
Speaker 1: investors by this time we're winning. But the appeal or
28:58
Speaker 1: the way the books are frame is very much in
29:01
Speaker 1: terms of you need to be a risk taking, heroic,
29:06
Speaker 1: lone manly trader who doesn't give in to kind of
29:10
Speaker 1: feminine impulses of weakness. Sometimes we like to be heroic
29:15
Speaker 1: and manly too, don't we, Helen. Yeah, you know, we
29:19
Speaker 1: like that too. But this is interesting. Let's talk about
29:22
Speaker 1: more about this. At this point, half the investors were women.
29:24
Speaker 1: How is that? Is that because it's more difficult for
29:27
Speaker 1: women to possibly to own businesses, to own property, etc.
29:30
Speaker 1: The stock market is the natural place for a woman
29:33
Speaker 1: in the nineteenth century to turn if they have cash.
29:36
Speaker 1: There are there are lots of different types of female investors,
29:39
Speaker 1: so you do get people like that who are shut
29:42
Speaker 1: out of other areas. But you also get people who
29:45
Speaker 1: are just diversifying their portfolio because they've got a business
29:49
Speaker 1: and they've also got something they want to put aside
29:53
Speaker 1: for a rainy day. They've been women in the stock
29:55
Speaker 1: market going all the way back, sometimes being investors, sometimes brokers.
30:01
Speaker 1: They've simply just been invisible to the writers of these manuals,
30:06
Speaker 1: but they've always been there, and I suppose for a
30:08
Speaker 1: lot of women, you get used to the idea of
30:10
Speaker 1: reading things that you know are made from a male audience,
30:13
Speaker 1: but you can interpret them to suit yourself. Were there
30:16
Speaker 1: any books written specifically with women investors in mind, with
30:20
Speaker 1: less of the masculine approach. There were, And certainly you
30:24
Speaker 1: get more of that as you go on, because as
30:27
Speaker 1: the hunt to write something new and have a new
30:31
Speaker 1: book out on the market, as that becomes a more
30:34
Speaker 1: and more crowded market, you start to see different segments
30:38
Speaker 1: of the market being targeted, and of course half the
30:40
Speaker 1: population is a big segment ying. I've written my own
30:43
Speaker 1: book on women and money, so I'm I'm wondering where
30:45
Speaker 1: a moral high ground is here. So we've got here
30:51
Speaker 1: three hundred years worth of these books, and when I
30:57
Speaker 1: read the book, when I read Invested, it slightly feels
31:01
Speaker 1: to me as though in its certainly in the last
31:04
Speaker 1: two hundred years, absolutely nothing has changed. The style of
31:09
Speaker 1: the writing is similar, the advices is very similar. The
31:15
Speaker 1: audience that the books are trying to appeal to seems
31:19
Speaker 1: much the same. You know, the aspirational, the people who
31:22
Speaker 1: want to know the secrets that people who want to
31:24
Speaker 1: get rich slightly faster than you might if you had
31:26
Speaker 1: to earn every penny, etc. So I suppose what anyone
31:31
Speaker 1: listening to this is going to want to know is
31:34
Speaker 1: what are the real investing lessons that can be drawn
31:39
Speaker 1: from these three hundred years worth of books. I mean,
31:41
Speaker 1: I strongly suspect that both of you might say, well,
31:44
Speaker 1: there aren't really any, but they've got to be in
31:47
Speaker 1: their lessons that have held good for two hundred years.
31:53
Speaker 1: Whoa Okay, Helen doesn't buy it? Well, I think the
31:57
Speaker 1: more if you like, the more sensible books that allow
32:01
Speaker 1: you to see yourself as an outsider and make it
32:03
Speaker 1: clear to you that you're not going to necessarily beat
32:06
Speaker 1: the market. Those sorts of books that are maybe the
32:09
Speaker 1: dry and detailed ones are actually more useful. The ones
32:12
Speaker 1: that almost become like horoscopes or positive thinking will make
32:18
Speaker 1: you thin or whatever, the sort of things you get
32:20
Speaker 1: in airports that are going to change your life. Those
32:23
Speaker 1: kind of books rely on a trick that you, the
32:28
Speaker 1: ordinary person, can be extraordinary just by the power of
32:31
Speaker 1: positive thinking. And those sorts of books really don't tell
32:34
Speaker 1: you very much. They actually get you, possibly into more
32:37
Speaker 1: trouble than their worth. So do a degree helen. You
32:41
Speaker 1: think that these financial books dot market advice books, investing
32:46
Speaker 1: books are no different to any other kind of self
32:49
Speaker 1: help book. They're bought more in hope than expectation. Quite
32:53
Speaker 1: a lot of them, not all of them, but certainly
32:55
Speaker 1: quite a lot of them are about changing who you
32:58
Speaker 1: are as a person, work on yourself to become this
33:02
Speaker 1: ideal investor. And there's something weird about being told that
33:06
Speaker 1: you should be aware of what the crowd is doing,
33:10
Speaker 1: but stay separately from them and do the exact opposite
33:13
Speaker 1: and somehow follow your own gut instinct. Well, why would
33:17
Speaker 1: you buy a book that tells you to follow your
33:18
Speaker 1: own gut instincts? They don't give you secrets. They often
33:22
Speaker 1: tell you how to be a different person. But of
33:25
Speaker 1: course then you get the chartist type ones as well,
33:27
Speaker 1: which are a whole other thing. So you're you're not
33:32
Speaker 1: a believer in technical analysis, not particularly. I mean, if
33:35
Speaker 1: there was a pattern emerging that was that simple, then
33:39
Speaker 1: clearly it would have been traded on by insiders, wouldn't it.
33:45
Speaker 1: I mean, thousands, thousands of people have devoted their lives
33:48
Speaker 1: to technical analysis. Well thousands of people who've devoted their
33:52
Speaker 1: lives to all sorts of other things that weren't true either.
33:56
Speaker 1: So hell then tell me, having gone through all these books,
34:00
Speaker 1: I'm sure you haven't read all of them. I'm sure
34:02
Speaker 1: you divided it up this up. I really hope you
34:04
Speaker 1: divat this up. Do you have any favorites, any books,
34:07
Speaker 1: particularly from the early bed that you really enjoyed reading
34:11
Speaker 1: and you thought may actually be useful. I'm going to
34:15
Speaker 1: go and stick with Mortimer because I really like the
34:19
Speaker 1: fact that he tells you a lot about the world
34:21
Speaker 1: of exchange Alley as it was then, and it's also
34:25
Speaker 1: the one that I spent the most time on. But
34:28
Speaker 1: I liked some of the crazily named pocketbooks that people
34:31
Speaker 1: had that told you all kinds of weird things like
34:37
Speaker 1: fortune telling almanacs and things like that. There were some
34:40
Speaker 1: peculiar hodgepodges that were very interesting. And then the rest
34:45
Speaker 1: of the team actually devoted themselves to the later books,
34:48
Speaker 1: so I dealt with the eighteenth century. Okay, so you
34:53
Speaker 1: didn't read any of those those later books, not most
34:55
Speaker 1: of them. I mean, certainly, I think you could tell
34:57
Speaker 1: what's in quite a lot of them just by the title. Yeah,
35:00
Speaker 1: I think some of those books are fascinating. And when
35:02
Speaker 1: you got to that bit, that was a bit when
35:04
Speaker 1: it really was possible, if you got it right, which
35:07
Speaker 1: mostly you didn't, really was possible to make proper fortunes
35:10
Speaker 1: and lose them again in a couple of months. So,
35:12
Speaker 1: whether those books had had value or not, they they
35:16
Speaker 1: certainly offered something that could potentially have been very exciting. Well, certainly,
35:21
Speaker 1: if you're going to put a new railway line down,
35:23
Speaker 1: you need to know all about the geography, the type
35:25
Speaker 1: of soil, where are you going to take this railway too?
35:30
Speaker 1: The same for canals. So there was an awful lot
35:31
Speaker 1: of opportunity there to get right into the detail of things.
35:36
Speaker 1: But you start to lose that first time goes on.
35:38
Speaker 1: You get a very generic rules for investment that aren't
35:44
Speaker 1: connected to actually looking at the underlying value of the company. Peter,
35:48
Speaker 1: did you have any favorite? You know, favorite it's an
35:51
Speaker 1: odd word to use. I mean, you've been asking us
35:53
Speaker 1: with her, you know, the still useful advice from these books,
35:57
Speaker 1: and I guess my feeling is maybe you can cherry
36:00
Speaker 1: pick here and there, and there might be some snippets
36:03
Speaker 1: that are still useful. But I think the argument in
36:06
Speaker 1: the book overall is not in terms of individual books,
36:12
Speaker 1: but what has been the cumulative effect that three hundred
36:16
Speaker 1: years of this bound stuff? And our answer is it's
36:20
Speaker 1: not positive. That there's something kind of corrosive. There's something
36:24
Speaker 1: I'd really damaging about this as a genre. Although individual
36:29
Speaker 1: books might have useful things to say, overall, what they're
36:33
Speaker 1: trying to do is persuade you to be a different
36:37
Speaker 1: kind of person. They're trying to persuade you that you
36:40
Speaker 1: can somehow beat the market against everyone else, and particularly
36:46
Speaker 1: in the present, what they're trying to persuade you to
36:48
Speaker 1: do is in effect, counter all of the effects of
36:55
Speaker 1: economic inequality and stagnation of wages and all of these
37:02
Speaker 1: kind of larger structural economic problems by individual investment strategies.
37:08
Speaker 1: And I think that that's ultimately what we think is
37:12
Speaker 1: the state that these books are making is they're trying
37:15
Speaker 1: to provide individual solutions for structural economic problems. Isn't that
37:21
Speaker 1: isn't any solution better than no solution. I mean, if
37:23
Speaker 1: you can take people who, as you say, may be
37:25
Speaker 1: suffering from the wealth inequality that's been driven by low
37:28
Speaker 1: interest rates over the last twenty years and suffering from
37:31
Speaker 1: the low wages that we can arguably a result of
37:34
Speaker 1: long term globalization, etc. If you can attempt to counter
37:37
Speaker 1: some of that by allowing people to build wealth in
37:40
Speaker 1: the stock market, to allocate their capital in such a
37:42
Speaker 1: way that builds long term prosperity for everybody, why is
37:45
Speaker 1: that a bad thing? And it always seems to me
37:47
Speaker 1: that the more people participate in the corporate world, the better,
37:51
Speaker 1: and the more people feel that they have a stake
37:53
Speaker 1: in capitalism, the better. And if books like this at
37:56
Speaker 1: the very least encourage people to think to themselves that
37:59
Speaker 1: there's a way for them to participate, then something good
38:04
Speaker 1: has come from it. I mean certainly that that's how
38:06
Speaker 1: we feel. I think there's a difference, though, between forms
38:10
Speaker 1: of corporate participation. I know your book advocates for shareholder activism,
38:17
Speaker 1: and you know, there's nothing wrong with that, but it
38:21
Speaker 1: still ignores the idea that we've lost forms of collective
38:25
Speaker 1: security and form of decent company pensions or other forms
38:30
Speaker 1: of social security that are slowly being eroded. And so
38:33
Speaker 1: the kind of discourse that you get in a lot
38:35
Speaker 1: of recent books is give up. You know, if you
38:39
Speaker 1: could just give up your will arte or kind of
38:41
Speaker 1: forego your your avocado toast somehow that that will give
38:45
Speaker 1: you enough money to invest that is going to solve
38:49
Speaker 1: those problems. And we know that it's not that you
38:51
Speaker 1: know that. You know, the housing market is so far
38:55
Speaker 1: out of reach for so many people, and so many
38:58
Speaker 1: people don't have this their money to invest in the
39:02
Speaker 1: stock market that is going to then provide them with
39:04
Speaker 1: the levels of security that they need and deserve. Peter's
39:08
Speaker 1: pretty down on financial writers. Can see can you see
39:12
Speaker 1: any good that has come out of encouraging people to
39:15
Speaker 1: invest in store? Make it? As I work in an
39:17
Speaker 1: economics department, yes I can, because there is some sensible
39:21
Speaker 1: bits of advice. So, for example, you want people to
39:24
Speaker 1: diversify a portfolio. You're working in particular company, you're given
39:28
Speaker 1: shares in that company that's not diversified, and so simple
39:33
Speaker 1: things like that could help somebody. It could be also
39:36
Speaker 1: about trying to persuade people not to go and throw
39:40
Speaker 1: all their money at say companies that don't know anything
39:44
Speaker 1: about instead the Warren Buffet type advice that's quite sensible.
39:51
Speaker 1: For example, you could look at that what Peter and
39:55
Speaker 1: other people have a great exception to is the sort
39:59
Speaker 1: of as I say, the airport book advice, where you,
40:04
Speaker 1: by simple the power of your own mind can somehow
40:07
Speaker 1: become heroically different to everyone else and with a single
40:12
Speaker 1: bound leap away from all the economic problems, that kind
40:17
Speaker 1: of thing is almost doomed to fail. And I suppose
40:20
Speaker 1: we've talked about this marine in the past, or your
40:22
Speaker 1: idea about diet books. There is a difference between a
40:26
Speaker 1: sensible plan that's to how to maintain your health through eating,
40:32
Speaker 1: and then the kind of weird crash dieting, celebrity diet nonsense.
40:35
Speaker 1: So these there are within this different sorts of advice books.
40:42
Speaker 1: But the ones that seem to get a lot of
40:45
Speaker 1: attention a lot of shelf space are the crazy off
40:48
Speaker 1: the wall ones that promise too much. Well, they offer
40:51
Speaker 1: the immediate the hope of immediate change a huge want
40:55
Speaker 1: from their self help book is something that can be
40:57
Speaker 1: completely changed in in three weeks. You know, bikini ready
41:01
Speaker 1: in a month, right exactly. You read some of the
41:05
Speaker 1: books and advice newsletters around cryptocurrencies and around the memestock
41:10
Speaker 1: during the pandemic, and there's a chapter in it called
41:12
Speaker 1: investing through the Pandemic where a whole flood of new
41:15
Speaker 1: investors came into the market. Tell us a little bit
41:17
Speaker 1: about that genre. Yes, some ways, you know, this is
41:20
Speaker 1: obviously a very new responding to emerging, emerging investment possibilities.
41:28
Speaker 1: But in other way, it's, you know, the messages is
41:31
Speaker 1: very old. It's the message of democratization as a message
41:36
Speaker 1: of populism. It's the sense that somehow we shouldn't trust
41:40
Speaker 1: the experts, we shouldn't trust the insiders. In What was
41:44
Speaker 1: animating Game Stop was the same political movement that was
41:49
Speaker 1: behind Trump. A sense that somehow the ordinary person was
41:54
Speaker 1: being shafted by the insiders in Washington, and this this
42:00
Speaker 1: the's a way of getting back at them. And it
42:02
Speaker 1: was an absolute classic of what you were talking about earlier.
42:05
Speaker 1: A generation that has been unable to buy a house,
42:07
Speaker 1: that is unable to imagine their income being able to
42:11
Speaker 1: keep up with the inflation of the physical goods around them. Excuter,
42:13
Speaker 1: you're thinking, well, this is this is our way to
42:15
Speaker 1: stick it to the man. This is our way to
42:17
Speaker 1: have a type of investment that will make our futures
42:21
Speaker 1: in the same way that for example, property made made
42:24
Speaker 1: the boomer's fortunes. Felt like that right. Yeah, but it's some.
42:29
Speaker 1: But it's an even more precarious form of investment than property,
42:33
Speaker 1: you know, where accumulation through property is more long term.
42:39
Speaker 1: At least you feel you still have something in where's
42:42
Speaker 1: cryptocurrency the wealth can just disappear overnight. Yeah, because it
42:48
Speaker 1: is nothing. I mean, I don't know, Helen. I always
42:50
Speaker 1: find one of the most amusing things about bitcoin. Ill though,
42:52
Speaker 1: keeping told I'm not allowed to find bitcoin funny. It's
42:55
Speaker 1: not funny. It's very important, but there are some funny
42:57
Speaker 1: things about it. One of the funny things about is
42:59
Speaker 1: that whenever you need to have a picture illustrating bitcoin,
43:03
Speaker 1: you get a picture of a gold coin. Yeah, you
43:06
Speaker 1: have to have something physical to illustrate the thing that
43:10
Speaker 1: doesn't really exist. Yeah, it's interesting, isn't It's It's funny
43:14
Speaker 1: how the same sorts of people who like gold and
43:17
Speaker 1: the gold standard might also like bitcoin for very similar reasons.
43:22
Speaker 1: The idea of well rugged independence, we don't need globalism,
43:26
Speaker 1: and the government should be kept under control. It's odd
43:32
Speaker 1: that these very disparate views are often held by the
43:36
Speaker 1: same person. But also, obviously, when something goes wrong, you're
43:40
Speaker 1: not backed by the states. There's nothing no central bank
43:43
Speaker 1: is going to help you, basically, brilliant. Is there anything
43:46
Speaker 1: else that either of you has gleaned from this genre
43:50
Speaker 1: of literature that might help investors today? Apart from that?
43:55
Speaker 1: But I don't want either of you to say is
43:57
Speaker 1: stay away from the market, to stay away from the books.
44:00
Speaker 1: Is there anything else that either of you could offer
44:03
Speaker 1: as a positive to people looking to invest today? So
44:07
Speaker 1: the one sure way to make money is to sell
44:11
Speaker 1: investment advice rather than actually following the advice. Okay, So
44:18
Speaker 1: everybody get out there and get writing and then find
44:22
Speaker 1: a way to sell what you write on substack. I
44:24
Speaker 1: would say, get a financial advisor that's a reputable advisor
44:29
Speaker 1: instead of this generic advice that could be to anybody. Okay,
44:32
Speaker 1: So you really think that that individual advice is the
44:35
Speaker 1: key rather than just going out and buying a Knight
44:37
Speaker 1: Van Guard Global passive ETF and leaving it at that.
44:42
Speaker 1: When you've got all kinds of things like tax and
44:44
Speaker 1: inheritance tax and maybe yes, and also you can talk
44:47
Speaker 1: about your your goals to this person and you know
44:51
Speaker 1: the passive fund might be fine. Okay, thank you very much.
44:57
Speaker 1: And in the meantime, everyone should go at and write
44:58
Speaker 1: what the modern equivalent to let me see share of
45:02
Speaker 1: a short Shure guide to railway speculation. That was one
45:05
Speaker 1: of my favorites. I could see myself buying that and thinking, oh,
45:09
Speaker 1: I'm going to be rich in three weeks. But to Mike,
45:12
Speaker 1: go ahead and right one now is shure fire short
45:15
Speaker 1: Shure guide to crypto speculation. I'm off. Thank you both
45:23
Speaker 1: of you very much for joining us. Thank you, thank you,
45:30
Speaker 1: thank you for listening to this week's Marion Talks Money.
45:33
Speaker 1: We will be back next week. In the meantime. If
45:35
Speaker 1: you like our show, which I do, hope you do, rate, review,
45:39
Speaker 1: and subscribe wherever you listen to your podcasts. This episode
45:42
Speaker 1: was hosted by me Mary's Sunset Web. It was produced
45:45
Speaker 1: by Samasadi. Additional editing by Blake Maple's special thanks to
45:49
Speaker 1: Peter Knight, to Helen Pool and of course, as ever
45:52
Speaker 1: to John Steppeck. Finally, my weekly reminder to do please
45:55
Speaker 1: sign up to John's daily newsletter Money Distilled. It's very good,
45:59
Speaker 1: you won't regret and the link is in the show notes.
46:03
Speaker 1: And one more special announcement, I will be doing a
46:05
Speaker 1: live taping of the podcast at the Bloomberg invest event
46:08
Speaker 1: on the twenty second of March. It's called Strategies for
46:11
Speaker 1: Wealth Creation. If you're in London you can join in person.
46:14
Speaker 1: If you're not, you can join online. Please do. Speakers
46:16
Speaker 1: include Luke Ellis, the SEO of Man Group, Joan Solitar,
46:20
Speaker 1: the global head of Private Wealth Solutions at Blackstone, and
46:23
Speaker 1: of course me and I think John you will be
46:25
Speaker 1: there as well, right yep, yep, okay. The link is
46:28
Speaker 1: in the show notes for your registration, so please do
46:30
Speaker 1: you sign up that