Professor Antoinette Schoar: Consumer Finance, Crypto and Private Equity | Rational Reminder 310

Meet with PWL Capital: calendly.com/d/cpws-jyp-znp
There is a huge range of factors that can impact our investment decisions, whether we realize it or not, from our level of financial literacy to our political affiliations. This is borne out in research conducted by today’s guest Professor Antoinette Schoar, the Stewart C. Myers-Horn Family Professor of Finance at MIT Sloan. Today, Antoinette joins us to share her insights and challenge conventional wisdom on various topics from target date funds to cryptocurrencies. Tuning in, you’ll learn about the transformative impact of target date funds on investment behaviours and asset allocation, before delving into the subject of financial literacy and financial advisors. Antoinette also sheds light on the unique dynamics of crypto trading and breaks down why retail investors' strategies in crypto differ significantly from those in traditional markets. We also discuss the complexities of private equity and venture capital, focusing on why these asset classes might not be suitable for retail investors due to high barriers and risks. Our conversation also covers the critical role of regulation in maintaining market stability and protecting investors. Join us for a thought-provoking discussion that promises to deepen your understanding of financial markets and enhance your investment decisions!
Timestamps:
0:00:00 Intro
0:04:49 How important target date funds have become to the American retirement system
0:08:38 How target date funds affected the trading behavior of retail investors
0:14:07 How target date funds affected individual stock prices
0:17:50 The effect target date funds have on market efficiency
0:21:38 How individual beliefs affect how one changes their portfolio in response to new information
0:28:24 How much variation there is across households in the risk perception of housing as an investment
0:31:09 How individual perceptions of house price risk affects the rent vs. buy decision for housing
0:35:36 How people can use this information to make better housing decisions
0:38:38 How well financial advisors de-biased their prospective clients in Antoinette's study
0:49:03 How reveicing advice affects investors' beliefs
0:53:49 How advisor compensation affects how their advice is perceived by the consumer
1:00:44 What got Antoinette interested in cryptocurrencies
1:07:13 How the trading behavior of retail investors in crypto differs from their trading in other asset classes
1:13:57 What caused the Terra Luna collapse
1:19:53 What the outcome suggests about the role of regulation in financial system stability
1:32:24 Antoinette defines success in her life
Links From Today’s Episode:
Rational Reminder on iTunes - itunes.apple.com/ca/podcast/t....
Rational Reminder Website - rationalreminder.ca/
Rational Reminder on Instagram - / rationalreminder
Rational Reminder on X - x.com/RationalRemind
Rational Reminder on KZbin - / channel
Rational Reminder Email - [e-mail]
Benjamin Felix - www.pwlcapital.com/author/ben...
Benjamin on X - x.com/benjaminwfelix
Benjamin on LinkedIn - / benjaminwfelix
Cameron Passmore - www.pwlcapital.com/profile/ca...
Cameron on X - x.com/CameronPassmore
Cameron on LinkedIn - / cameronpassmore
Antoinette Schoar - mitsloan.mit.edu/faculty/dire...
Monika Piazzesi - economics.stanford.edu/people...
Papers From Today’s Episode:
‘Belief Disagreement and Portfolio Choice’ - www.nber.org/papers/w25108
‘Credit Supply and House Prices: Evidence from Mortgage Market Segmentation’ - www.nber.org/papers/w17832
‘Retail Investors’ Contrarian Behavior Around News, Attention, and the Momentum Effect’ - papers.ssrn.com/sol3/papers.c...
‘Anatomy of a Run: The Terra Luna Crash’ - www.nber.org/papers/w31160

[@danielsimkins290]

You didn't exagerate in the opening, that was a fantastic conversation

[@owlegrad]

A video so good I get to watch it twice

[@toddliveringhouse5808]

I did not expect an episode as fantastic as this. 👍

[@thomas6502]

Great conversation. Thank you!

[@HjemCombs]

Great podcast. Lots of interesting info, including Prof Schoar's views on Private Equity for retail investors : There is a huge variety in the quality of the different PE funds and as a retail investor you simply cannot access the good funds.

[@WhiteCloud746]

Superb.

[@jevgeniigennadiev7774]

@The Rational Reminder Podcast, can you cover active ETFs? There's not much coverage about them on the internet. Active ETFs seem to replicate passive ETFs with small adjustments to the weightings. They also have much lower fees compared to traditional funds and are more comparable for Europeans (with a 5-15 basis point difference between an active ETF and its benchmark ETF). At least some of JPMorgan's active ETFs have performed well over the last 5 years. I know this could all be noise, but active ETFs have only been around for 5 years.

[@kerri648]

no chapters ?

[@mathiasfischler4227]

there are now

[@TheChinaPlay]

I question whether there actually exist a "fiduciary" advisor in investment management. That's the equivalent of an unbiased journalist. That's not saying certain professionals aren't worth their fees, it's more about the alignment of interest in my opinion than the appearance of a standard of ethics as ethics is highly subjective.

[@Money-Easy-Plan]

*"If you are not willing to risk the usual you will have to settle for the ordinary."* --Jim Rohn

[@tripham8817]

First for once