Math Over Models Talking Real Money - Investing Talk podcast

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Math Over Models

2d ago 45:50

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Don and Tom dive into the human obsession with prediction—especially in finance—and why models fail us more than they help. They dissect the CAPE ratio, Fama vs. Shiller, and why “knowing” the market is a fool’s errand. Listeners also get lessons on ETF pricing myths, market cap misunderstandings, SEP Roth IRAs (spoiler: they’re basically unicorns), and whether dad deserves a gift or just more responsibilities.

0:04 We crave certainty—even though our money brains are terrible at prediction.

1:01 Wall Street’s models exist to soothe our fear of the unknown.

1:34 “All models are wrong, but some are useful” — CAPE ratio vs. the real world.

2:39 Shiller vs. Fama: You can’t time the market, even with a Nobel.

4:51 Why diversification, risk-based equity premiums, and low fees beat predictions.

5:24 Models work… until they don’t (hello, Phillips Curve).

7:02 Why the inflation-unemployment link broke after 2000: China changed the game.

8:26 Let’s admit it: You cannot accurately and consistently predict the future.

9:14 Call from Catherine: Why Schwab ETF prices are “low” (spoiler: stock splits).

11:31 Price per share means nothing. Market cap is what matters.

13:04 Berkshire never split its stock—why it’s $731K a share.

14:24 Apple vs. Berkshire vs. Microsoft: Market cap is the real metric.

16:32 Why the Dow is dumb (and would be even dumber with Berkshire in it).

17:49 Listener Q: Where to park $450K before a home purchase? (Hint: not bonds.)

18:29 High-yield savings accounts are still the best move.

19:53 Father’s Day preview: Don rants about dumb gifts and ungrateful kids.

21:19 Kiplinger’s list: 5 ways dads can teach money lessons (cue sarcasm).

24:06 Allowances, budgeting, and tax talks with kids—realistic or fantasy?

25:28 Roth IRAs and investing lessons for teens: what actually works.

27:45 Why teaching kids to pick stocks is a dangerous myth.

29:38 “Graduation fund” idea: simple global ETFs like AVGE or DFAW.

30:43 Yes, your kids might move back in. Yes, it’s happening again.

32:13 Listener Q: Can you open a Roth SEP IRA? (Short answer: not really yet.)

33:54 One firm offers it… but it’ll cost you $500/year and it’s shady.

35:20 Final caller: Are there any annuities we do like? (Answer: the shortest show ever.)

36:34 Program note: Tom gone for 2 weeks, Don wants your calls (or sympathy).

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Math Over Models

Talking Real Money - Investing Talk

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published 2d ago