As the expression goes, another day, another dollar. Today’s episode is a roundup of news and analysis with deeper dives into behavioural and risk-based market explanations, active management, and endowment investing models. We open with a book review of Essentialism: The Disciplined Pursuit of Less by Greg McKeown, a book that’s getting a lot of attention at the moment. Another topic that’s getting a lot of attention, we discuss how Tesla’s huge market cap growth makes it feel like it’s 1999. We also offer our opinions on why Tesla has been so highly valued despite increasing competition in the electric car market. Answering a listener question, we explore how Robinhood makes money through ‘payment for order flow’ and the debate about if this is in the retail client’s best interest. Following another listener question, we answer if the podcast suffers from confirmation bias and how you can never know the ‘why’ behind stock returns. We talk about risk versus behaviour market explanations and use sound clips from previous episodes to present views on this subject. We then discuss Yale and David Swensen’s endowment investment model, focusing on his strategy of finding uncorrelated asset classes and then hiring active managers to meet target allocations. We look at the model’s benefits and its similarities to Canada’s CPP before examining how Norway invests based on oppositional ideas of the marketplace. Near the end of the episode, we continue our conversation on spousal loans by listing more family income splitting strategies. Tune in to hear more from the financial world. Key Points From This Episode: 0:00 Introduction; A quick book review of Essentialism: The Discipline Pursuit of Less by Greg McKeown. 7:32 Why Tesla surpassing General Motors’ market cap makes it feel like it’s 1999. 12:15 How Robinhood makes money if they don’t charge any trade fees. 1 7:30 Answering the question; “does the podcast suffer from confirmation bias?”; How the podcast’s stance on behavioural versus risk-based explanations have softened. 23:10 Examining a paper arguing that active management can create value for investors. 27:30 Deep dive into our portfolio topic; Yale and the endowment investment model. 45:40 How Norway operates the biggest wealth fund in the world. 52:00 Family income splitting opportunities in Canada that attract less tax. 1:00:05 Why you should seek legal counsel when setting up family trusts and using family income splitting strategies. 1:06:15 Hear the crazy, bad financial advice of the week; Ponzi schemes are still selling. Books From Today’s Episode: Essentialism: The Disciplined Pursuit of Less — https://amzn.to/3fsJILA Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/podcast/107 MayFly Audio Systems - http://www.mayflyaudio.com/main.html Invest Like the Best Essentialism Episode — http://investorfieldguide.com/brad-gerstner-public-and-private-investing-invest-like-the-best-ep-179/ ‘Robinwho? A Long Term Investor’s Guide to Order-Flow Selling’ — https://www.etftrends.com/robinwho-long-term-investors-guide-to-order-flow-selling/ ‘Challenging the Conventional Wisdom on Active Management: A Review of the Past 20 Years of Academic Literature on Actively Managed Mutual Funds’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3247356 Masters in Business Bill Miller Episode — https://ritholtz.com/2020/07/mib-bill-miller/ ‘David is Great for Yale. Is He Horrible for Investing?’ — https://www.institutionalinvestor.com/article/b1gj523tmfl2tt/David-Swensen-Is-Great-for-Yale-Is-He-Horrible-for-Investing ‘Ponzi scheme’ created by cop ensnares dozens of OPP and municipal workers’ — https://www.thestar.com/news/canada/2020/06/26/ponzi-scheme-created-by-a-cop-ensnares-dozens-of-opp-and-municipal-officers The Rational Reminder is presented as an educational resource and should not be construed as individualized investment advice, nor as a recommendation to buy or sell specific securities. The funds and portfolios discussed are examples only and may not be appropriate for your individual circumstances.