July 28, 2025 • 59 mins
In this episode of The Blunt Dollar, I sit down with David Stevenson, one of the UK’s most candid financial commentators. David writes the Adventurous Investor column for the Financial Times, runs a popular Substack, and is also the founder of ETF Stream.
From his days as a BBC producer to sitting on multiple investment trust boards, David has a fascinating multi-decade career that straddles journalism, fintech, and asset management.
We cover a ton of ground, including:
📚 How David’s time at the BBC shaped his blunt, evidence-based approach to communicating finance
💰 The problem with alpha, why many asset managers are “lazy,” and how the industry is becoming increasingly ossified
📈 The rise of thematic ETFs and why European defence stocks have quietly outperformed everything in 2025
🪙 Emotional assets, from wine to old coins and Chinese stamps, and why he’s cautious despite collecting them himself
🤖 A sceptical take on AI in investing and why personal relationships still matter more than ever
If you’re into ETFs, the future of asset management, and raw takes on financial media, this one’s for you.
Oh, and if you haven't already... subscribe to The Blunt Dollar for more raw and honest finance conversations.
New episodes drop every other week! Available on Spotify, Apple Podcasts, and wherever you get your podcasts.
And last, but not least, don't forget to follow me on LinkedIn: https://www.linkedin.com/in/ignacio-ramirez-moreno-cfa/
Enjoy the episode!
Disclaimer: This podcast is for informational and educational purposes only. It does not constitute financial, investment, or legal advice. Listeners should consult a qualified financial professional before making any financial decisions.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
It's a tougho business, but it's a great
opportunity.
That is what fund managementshould be about Hard graft,
getting the diamonds there inamongst all the rubbish.
Speaker 2 (00:08):
Hello everyone and welcome to a new episode of the
Blunt Dollar.
Today's guest is DavidStevenson, one of the UK's most
insightful and candid financialcommentator.
David writes the AdventurousInvestor column for the
Financial Times, contributes toCityWire and MoneyWeek and has
been at the forefront of makingcomplex investment topics clear
(00:28):
and compelling for privateinvestors.
Speaker 1 (00:30):
What that teaches you is that these kind of trendy
things, that where you thinkthere's lots of devil in the
detail, is where I put it.
What that tells you to do isfocus on the dynamics of the
business, because just becauseit's in a sexy area really is no
guarantee it will make anymoney.
The future is very bright forpeople working in financial
advice.
There'll be more older people,wealthier, with more money, who
(00:51):
don't understand what they'redoing with their money, who want
some advice.
Speaker 2 (00:54):
What's the connective tissue that runs through all
your career choices?
Single, most important thing is.
(01:18):
This is the Blonde Dollar withIgnacio Ramírez, or legal advice
.
This content is forinformational and educational
purposes only and should not berelied upon as a substitute for
professional advice.
Always do your own research andconsult a qualified advisor
before making any financialdecisions.
All investments involve risk,including the potential loss of
capital.
And now let's get started withthe episode.
Hello everyone, and welcome toa new episode of the Blunt
(01:42):
Dollar.
Today's guest is David Stevenson, one of the UK's most
insightful and candid financialcommentator.
David writes the AdventurousInvestor column for the
Financial Times, contributes toCity Wire and Money Week and has
been at the forefront of makingcomplex investment topics clear
and compelling for privateinvestors.
He's also the founder anddirector of ETF Stream and AdFi
(02:05):
and more recently launchedFuture Food Finance, showing his
knack for spotting bothstructural shifts and niche
opportunities in finance.
Before journalism, david was asenior BBC producer and ran a
corporate comms firm.
He's also a seasonednon-executive director sitting
on the boards of funds likeAurora, grissom House, energy
Storage and the Secured IncomeFund.
(02:27):
In today's episode, we'll talkabout David's career, innovation
in asset management and therole of journalism in the
finance industry, amongst others.
This chart is going to be bluntand thoughtful.
I'm incredibly excited about itand David welcome to the show.
Speaker 1 (02:44):
Yeah, welcome.
Thank you very much forinviting me on.
I'm not sure I quite live up tomy billing, but I'll try my
best Long introduction.
Speaker 2 (02:52):
You're quite the legend within the world of.
I would say that that's much tothe point of view.
So I suggest we get started byhearing from you.
What is it that you're doingexactly today?
Speaker 1 (03:07):
What am I doing today ?
I do a newsletter which iscalled the Adventurous Investor,
ironically, which is onSubstack, so Substack for those
of you who don't know about it.
It's a very interesting socialmedia platform for people who
want to talk about interestingyou know, interesting stuff with
financial investment in longform.
(03:27):
So we're trying to move I thinkit's part of a move away from
short form kind of 248characters, whatever it is kind
of way of thinking to long form.
So that's what I've been doing,by putting together my
newsletter and doing somethingobscure and it was all about.
What was it Something called?
I just got to get the notes forit's cool.
Um, uh, what was it called now?
(03:49):
Uh, core capital deferredshares that will send everybody
to sleep.
Speaker 2 (03:54):
Um, I like I, like I, I.
I know you like to take on,like uh, relatively complex
topics and try to PCTS to you.
Speaker 1 (04:07):
I've got no idea roughly what they.
I do know what they are, butanyway.
So that's what I've been doingtoday, sorry, very boring and
investment-related.
Speaker 2 (04:14):
Amazing.
So I want to start talking alittle bit about that, about
your sub-stack, but more broadlyyour career, because you've
worked in journalism, in fintech, in comms.
You're sitting in investmenttrust boards.
You know, at first glance itlooks like a zigzag, but surely
there's like a through linethere in how you think and what
(04:36):
you're seeking out.
So what's the connective tissuethat runs through all your
career choices?
And have you consciouslyfollowed a thread or did it all
just happen?
Speaker 1 (04:48):
randomly.
Oh no, it just all happened umspontaneously.
So I mean, I trained, I trainedin in economics and and social
sciences really, and uh, and Ithen went on various trainee
schemes at places like um goshcompany called Haymarket a long,
long time ago, a big publishingcompany, and then the BBC, and
so I've always been a businessand finance journalist or a
(05:10):
business and investmentjournalist.
So even when I was working many, many decades ago on a program
which none of your listeners orviewers will have heard of,
called the Money Program, whichpeople of a certain age know
about in the UK and not your age, Don't underestimate our
audience.
Speaker 2 (05:26):
Be careful.
Speaker 1 (05:28):
Well, they're going to be pretty old to remember the
money program, anyway.
So I've always been a businessand finance journalist or
business investment journalist.
So that's the common linkingtheme.
And the other common linkingtheme is I've not really ever
been a corporate type.
I mean, I did many, many yearsmaybe a couple of decades I
think at the BBC and I decidedthat that wasn't for me.
(05:51):
I'm not corporate, I just can'tlive in that world.
So I've always been quiteentrepreneurial.
And if you're entrepreneurial,there's really only two modes of
being entrepreneurial.
Mode one is the kind of Isuppose what you call the kind
of portfolio entrepreneurialmode.
One is the kind of um, Isuppose what you call the kind
of portfolio mode, which is youdiversify the things you do and
make sure that most of them workmost of the time.
And then there's the other modewith the super motivated
(06:14):
entrepreneurs who just do onething for the next 30 years and
make billions.
And I've never beenparticularly good at that
because I've got a butterflymind.
So I've always gone down theportfolio approach.
And the portfolio approachmeans I'm good at starting
businesses.
I'm probably not very good atrunning them.
Speaker 2 (06:29):
Wow, that's very interesting.
It reminded me a little bit ofsomething we talked about with
another guest, Eric Seam, andthe way he was thinking about
careers.
He was thinking about it as aMcDonald's menu where you have
like, the burger, the fries andthe Coke and, uh, the burger is
like your core competencies, andthen the fries is like the
things you do, you like, youenjoy but not necessarily make
(06:53):
money with, and then the Coke islike the moonshots.
And I see some connections inthe way you're thinking and the
way he's thinking Um, but you'reyou're the first person that
has, uh, come to the show thatever worked for the BBC.
So I want to ask you about that, because you know from abroad,
obviously it's an institutionthat has quite a good reputation
(07:14):
.
And then I was wondering whatdid your time at the BBC teach
you and how did it shape the wayyou communicate about finance
today?
Speaker 1 (07:23):
Well, what it taught me not to stay at the bbc?
Um so, um.
So that's the first lesson tolearn.
Um, no, I love the bbc greatly.
I mean, it's a brilliantinstitution.
Then again, I'm a member of theliberal middle class media
elite, so I probably would saythat, um, but um, so I.
What it taught me was that theBBC, I think, is a very high
(07:47):
standard or high bar for itseditorial policy and the way it
does stuff, and because I workedin current affairs and in
actually science and features,there's a very strong
evidence-based approach.
So you do everything based upondetailed and thorough research
and you have to know your stuff.
Basically, and I did quite alot of investigative stuff at
(08:08):
the BBC, mainly in business andfinance, but not only Actually,
just generally in currentaffairs.
So you know, and therefore I'venever been worried about detail
or spreadsheets or numbers,which is a rare thing for most
BBC journalists, because they'renot terribly good at when it
comes to things like numbers.
By and large they'restorytellers.
(08:30):
So you put a spreadsheet infront of many of them they'll go
, ah.
And most BBC journalists aren'tterribly good at their own
finances or investment, becausethere isn't a lot of investment
content on the BBC.
It's not really an investment.
It's not like Bloomberg,bloomberg's an investment
channel.
The BBC isn't really.
The living heart of the BBC isreally current affairs.
(08:52):
That's really what it's about,and there's always been that
instinctive, slight suspicion ofeverything to do with
investment.
Anyway, so in terms ofcommunicating, because if you do
TV like I did for many, manyyears, you have to realize you
have to communicate in the mostsimple fashion possible because
you can only communicate alimited number of ideas in a
(09:13):
limited number of times.
So if you do a half-hourdocumentary, you fundamentally
are a half-hour current affairsprogram.
You really can't do.
I mean, you know, in blockterms, you can't really
introduce more than five or sixthoughts, if that makes sense,
because by the time you'veexplained it, shown it, given a
bit more background, see wherethat bit moves on to the next
(09:35):
bit, you're about five or sixminutes in.
So you have to communicate verysimply and you also have to
assume that most of youraudience hasn't got the faintest
idea what you're talking about.
Um, so you, you know.
So I worked on another program,which again you're much too
young to know about, which iscalled tomorrow as well, which
was the big science featuresseries on on the bbc and we'd
(09:58):
have to communicate lots ofcomplicated science stuff.
You know, um, and we, and thattaught you through brutal
exposure that most people havezero idea of what you're talking
about most of the time.
So you have to really explainit.
And and then you have toexplain it visually.
Um, because most people,increasingly more people we live
(10:19):
in a more visual world wherepeople like having things
explained to them.
I was astonished by the factthat I was looking at numbers on
tiktok, that if you, if you didsomething on tiktok, which is
obviously a very visual medium,and then put the words on it at
the bottom, yeah, the audiencegoes up by about 50 because
people are largely consuming itvisually.
(10:39):
Yeah, that's up.
There is good old-fashioned methinking people consume things
by listening or reading.
But that combination of readingtext and visual and that's
feels very familiar to anybodywho works in TV, because you're
used to that, you know.
Speaker 2 (10:54):
Yeah.
Speaker 1 (10:54):
And if nothing else, we're used to watching on
subtitles of foreign languagemovies.
Speaker 2 (10:58):
Yeah, I mean wow.
Tons of things are coming to mymind from what you said.
First of all, I like the ideaof four or five blocks when
you're trying to communicate animportant message.
I fully agree with that.
I work in private banking andone of the rules number one
rules that I have as a fixedincome advisor is that you've
(11:21):
got to respect your clients'time right.
So you've got to go straight tothe point, you've got to make
things simple.
And yeah, regarding visuals,100% also I agree with you.
I feel a lot of people,particularly younger generations
, have shorter attention spans.
I think it's interesting whatyou were saying about text and
(11:41):
images, the combo, and gettingmore traction.
It made me think about mr beast?
Speaker 1 (11:49):
uh, I see some youtubey thing, isn't it?
Speaker 2 (11:51):
yeah, but uh, interestingly, some of the best
performing posts he had are theones where he's not talking and
and where there's no text,because, uh, he says that when
he, whenever he does that, he'slimiting himself to an
English-speaking audiencebecause he's English.
Whilst, if he doesn't talk andhe just does something, he gets
(12:13):
a lot more views because peoplenot speaking in English actually
can consume.
Speaker 1 (12:16):
Anyway, Well, just on that theme, everything starts
in comedy.
So comedy is the first form ofdramatic pathos.
Starts in comedy, yep, so, um,comedy is the first form of
dramatic pathos.
Yeah, and um it, the singlemost successful comedians were
worldwide are people who dothings visually.
So, mr bean, um, benny hill,for some countries you know,
visual jokes, pranks, satirewhere things physically go wrong
(12:40):
.
Buster keaton, way, way back,yeah, that that tells you
everything you sort of need toknow, which is that the
universal language of, ofmovement, numbers charts, yeah,
that kind of stuff, that that'sthe universal language.
Speaker 2 (12:53):
Anyway, getting a bit too philosophical here, mr bean
, quite the legend in the uk,huh well, I think quite a legend
quite elsewhere as well.
Yeah, I remember watching MrBean growing up and I was
thinking is everyone in the UKlike this?
This must be a very interestingcountry.
Speaker 1 (13:13):
There is a certain crowd of people who are a bit
like him.
Yes, classic comedian, butanyway, yes, anyway.
So we've gone downphilosophical foxhole.
Speaker 2 (13:22):
Yeah, so a couple more questions regarding this
transition from the world ofmedia to money management.
What was the biggest mentalshift you had to make when
moving from this industry intoasset management and your role
in boards, and so on and soforth?
Speaker 1 (13:42):
There's not that big a shift.
I mean, bear in mind, most ofwhat I do is informed by
communications, ideas and models.
So ETF Stream, for instancevery successful website that's
very much driven bycommunication and simple
messaging.
So that wasn't a big shift.
And bear in mind I was always abusiness journalist anyway, so
(14:04):
there's not't a big shift andbear in mind I was always a
business journalist anyway, soit's not been a bigger
transition.
I think the single mostimportant thing is skin in the
game, yeah, which is, uh, I, Iinvest.
Yeah, I invest a lot.
I've always invested for ever,since I was 16 years old, um,
and therefore I write about whatI do and, and I think that
that's terrifically importantand that's why a lot of
(14:25):
journalists don't really likewriting about investment.
A, because they don't get paidvery well.
So, b, they can't afford tosave very much.
And if they have got any money,they can't afford to invest.
And a lot of journalists don'treally like investing.
It's not really what they do.
They'd probably much rather bea sports journalist or a foreign
correspondent, whereas I thinkyou've got to have skin in the
game, which is probably true forfund management as well, which
(14:48):
is it's all good and well,you're doing the talk, but what
do you do yourself?
And I think it was way, way,way back when I started having
to save for myself and build apension and all the boring stuff
that you and I both talk aboutall the time, that I realized
that you have to get real andyou have to talk about stuff
that actually, where people cansee what it is that you do and
(15:09):
understand why you do it, andthat's always motivated.
Everything I've written about,even made TV programs about,
it's usually stuff that I'minvolved with skin in the game.
So you're a big Nassim Taleb'sfan?
Speaker 2 (15:21):
I guess yes.
Speaker 1 (15:23):
I am, yeah, yes, a nascent talibs fan, I guess.
Speaker 2 (15:28):
Yes, I am yeah, yes, I I sometimes prefer gray rhinos
over black swans, but anyway,and so yeah, now, fully agree,
by the way, with what you'resaying about skinning game.
It's funny how, the moment youput some money and you know, uh,
in the equation, even if it'slike a small amount, yeah you
take things completely different.
Even if it's like, you know,like five bucks or something
like that, yeah, it's, uh, it'sit's I don't know, it's uh, it's
(15:50):
very, very interesting what'sgoing on there and that refers
back to setting up businesses aswell.
Speaker 1 (15:56):
You know you get skin in the game that way.
That's one of the few ways youyou play it.
You have to do it.
You have to, you have to put,you know, your own money, time
and hard, hard sweat into it.
Speaker 2 (16:05):
So, talking about selling businesses, I mean, I
have the feeling again likeyou've done plenty of stuff and
and I guess what I findinteresting about your profile
is that in a world full ofspecialists and credentialing,
you stand out as someone thathas done the opposite.
So you've done regulation,product communication, strategy.
(16:27):
Do you see yourself as ageneralist or not at all?
And and what has been theupside or downside of having
this kind of profile that youknow does so many different
things in an industry likefinance that usually narrows
like being super specific?
Speaker 1 (16:45):
yeah, yeah, um, I suppose it goes back to that
point about the entrepreneurs.
There's two types ofentrepreneurs.
There's one, the ones who aregood at starting things and then
moving on to the next thing,and the other ones who are super
specialists.
Like what they do.
They do five versions of thesame business, they keep
rebooting it and I'm much morein the first category.
I suppose I'm more of ageneralist, though I have
(17:07):
specialist skills.
So I do know my way aroundinvestment and I do know my way
around markets and I do know myway around things like ETFs and
investment trusts and FinTech,and I probably know just as much
as many people in the industrydo because I've covered it.
So by nature I'm more of ageneralist, so I am a bit of a
(17:28):
polymath like that.
I like lots of things, but I dohave things that I really know
a lot about.
So I am very focused on thingslike asset allocation, you know
efficient markets, private assetmarkets, that kind of stuff.
I know more around that, andalso retail investing as well,
which I spend a lot of timewriting for.
So I don't again quite fit themodel of the generalist versus
(17:53):
the specialist, because thereare things that I do know a lot
about, but there are a lot ofthings that I know quite a bit
about.
Speaker 2 (18:01):
Yeah, if you haven't checked David's blog on the FT,
the Adventurous Investor, checkit out because he writes a lot
of stuff.
Some of the latest posts aboutprivate assets are very
interesting.
Definitely worth the read.
By the way, I just noticed wehaven't talked about ETF stream.
I mean, the reason we'retalking today is because one of
your colleagues at some pointreached out and one thing led to
(18:22):
another.
So tell us a bit about ETFstream.
What is it that you folks aredoing over there?
Speaker 1 (18:27):
Well, first of all, if you're involved in ETFs in
Europe, you absolutely must goto ETFstreamcom etfstreamcom.
Secondly, if you are a investorprofessional investor and you
use etfs, um, or even if youdon't use etfs, then etf stream
is the place for you, because wetalk to two distinct audiences.
We talk to what we call the etfecosystem audience, which are
(18:50):
issuers you know, all the peopleinvolved in the issuance,
fiduciaries, all those kind ofstuff and then we also speak to
um and, to a lesser degree,within that category, you've got
traders who do stuff likeauthorized participants, that
kind of stuff.
And then you also speak to theinvestment community.
So it's my experience that inyour world, in things like
private banking, wealthmanagement, that kind of space
(19:14):
ETFs were not really used verymuch about 20 years ago when I
first started really writingabout this space um.
So I wrote the first book forthe ft on etfs way back now, I
think in about 2012, and it wasquite a minority pursuit amongst
most wealth advisors privatebankers, now I'd say most most
(19:34):
use them to some degree.
So we're very good on that kindof both the practicalities and
technicalities of ETFs and howthey get used by advisors.
So that's what, and we're thebiggest website around ETFs in
Europe by a country mile.
Speaker 2 (19:50):
So you provide, I guess, like information about
the actual instruments, but alsoeducational content updates,
anything that touches to ETFsAbsolutely, and great events as
well.
Speaker 1 (20:04):
So we've been holding events in Switzerland, Germany,
Italy I think we've even gotevents coming.
We've had events in Spain,We've got an event coming up in
France and the events are great.
You've just missed our bigannual event called the ETF
Ecosystem Uncovered and we hadabout 1,000 people come.
Great event, by the way.
Speaker 2 (20:21):
Congrats, amazing.
It's funny because just thismorning I saw on social media a
new ad from I believe it wasBlackRock their iShares products
and how they now seem to bemore interested in retail
investors.
Yes, yeah, that shift ishappening.
Yeah, it's happening right.
(20:41):
Have you seen the big playersreally trying to focus more on
retail investors instead of theinstitutional ones?
The blunt dollar, theunfiltered, takes the stories
and the laughs.
The easiest way to support theshow is by tapping that
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(21:03):
here's my promise If you do,I'll keep bringing you honest
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finance talk that's engaging,insightful and worth your time.
Thanks so much for being hereand let's keep these great
finance conversations going time.
Thanks so much for being hereand let's keep these great
finance conversations going yesand no.
Speaker 1 (21:21):
So, yes, they would like to.
Yeah, and I think they willincreasingly do so.
No, because the regulationshave not allowed them much until
now.
So it's quite difficult for thebig issuers to advertise
directly to retail investors.
That's partly a regulatoryfunction.
The regulators have beennervous about the direct
(21:43):
advertising of ETFs to retailinvestors.
It's also partly a function ofplatforms.
Most people access ETFs via bigretail platforms, online
platforms.
So whatever country you're in,you'll have your big platforms,
and those platforms, to varyingdegrees, have been accepting
ETFs.
Most of them now do.
It's probably their bread andbutter, the main thing they do.
(22:06):
But that's really only been arecent phenomenon in the last
five or 10 years.
So traditionally, traditionalmutual funds were the much more
dominant way which most peopleaccessed funds on that basis.
On that basis and in the ukwe've also had what we call
listed investment trusts orlisted investment funds, which
have been on the stock market,which were active funds.
(22:26):
So, um, so, yes, they areincreasingly interested and the
regulations are changing andwe'll see an awful lot more
direct advertising to privateinvestors, as is the case in
america.
So in america, if you go,you'll see billboards lot more
direct advertising to privateinvestors, as is the case in
America.
So in America you'll seebillboards for iShares and State
Street and Vanguard.
Speaker 2 (22:49):
And in America it's a very mainstream
retail-dominated phenomenon.
And what are you most excitedabout in the ETF space?
Is it like the rise of activeETFs or something completely
different?
Speaker 1 (22:56):
Well, no, active ETFs are interesting.
I mean, it's quite exciting forus as a business ETF stream.
Personally, I'm slightly lessexcited about them because we in
the UK particularly, have hadwhat are basically active ETFs,
which are called investmenttrusts, which are very similar.
I mean they are a listedinvestment fund.
They're not quite the same,have a different engineered
(23:17):
structure, but they're verysimilar.
Um.
Well, what I personally excitesme about etfs is that we're
starting to see etfs on manymore interesting niche areas and
in new ideas, um.
So you're seeing, you know, um.
You're seeing, for instancealthough I say this with some
trepidation and fear you'reseeing kind of private assets
(23:38):
re-bundled up as ETFs, which I'mnot entirely sure is a good
idea.
And you're seeing alsodifferent interesting new
geographies, new styles, so youcan pick whatever factor premium
you like and you can turn thatinto an ETF, and that's
genuinely really compelling.
And we're sort of seeing moreinteresting thematic etfs.
(23:59):
So that that's reallyinteresting and not all thematic
etfs are a good idea.
Some are rubbish and terrible,um, but some are a really good
idea.
And I think, going back to thetechnology point, we're seeing
lots of interesting technologyon etfs emerging as well around
ai and all that kind of stuff,so that those are kind of that,
that's that.
So that's the reallyinteresting stuff.
I mean, active ETS are reallyinteresting, I think, if you're
(24:21):
an advisor or a professional,because you can basically access
interesting strategies within asecurities format.
It's just probably from aprivate investor's perspective,
it's a little less interesting.
Speaker 2 (24:45):
I like hearing you talk about this.
I can definitely see thesparkle in your eyes,
particularly because it goes abit against some of the other
things I've heard you talk aboutin previous interviews and
podcasts and so on, becauseyou've said quite bluntly in the
past that the asset managementindustry looks a bit tired,
especially in the UK, thatinnovation has slowed and that
investors are sensing it.
So first question related tothis why do you think this is
(25:07):
happening?
Why is the asset managementindustry became so stagnant,
according to you?
Speaker 1 (25:12):
Well, two or three things.
One is evidence of active alphais thin on the ground in
reality.
As I said, I've been writingabout active funds, as in
investment trusts, for decadesnow and most of them have
underperformed and I'm deeplysuspicious of alpha as a
(25:32):
persistent phenomena over time.
I absolutely believe that alphaI, active management, can
produce results in limitedtimeframes in certain areas.
I'm highly dubious that you cando it consistently over a long
period of time, and there aresome exceptional individuals who
can do it, but by and large itdoesn't work.
(25:54):
So that's fatal flaw number onewithin the active sorry, within
the asset management industry,which is still largely based on
active, because active is wherethe money is um.
So one alpha doesn't workparticularly well.
Two, most sorry no many fundmanagers, I think, are basically
lazy.
They, just they.
(26:14):
They spend the first year orthree months or six months
desperately running aroundtrying to raise money and then
they spend the next three orfour years sitting on the money
and explaining why they've hadperiods of underperformance and
shouting very loudly when theyhave periods of overperformance
or outperformance.
And I just think they're a bitlazy.
They don't bother reallycommunicating and I think the
(26:35):
job of a fund manager is to getout there and communicate on a
very regular basis in a simplefashion and an intelligible
fashion, with your investors.
And a lot of fund managers liketo sit around in darkened
corners and just try and avoidany contact, any human eye
contact, and I think that youknow and, by the way, get paid a
(26:56):
lot of money for it.
And then the third reason iswe've seen a bifurcation in the
industry, which is we've gotever bigger giants, huge
hunter-gatherer asset managerswith massive portfolios.
You know, blackrock is a hugebusiness, state Street's a huge
business, vanguard's a hugebusiness, and then a lot of the
(27:16):
fund managers in the middle havebeen squeezed, and effectively,
and some of them are reallyinteresting outfits.
But this can't compete.
Um, and the good thing isyou've seen boutiques emerge,
but the problem with boutiquesis that boutiques do very, very
well and then they get takenover by a very large fund
managers and then most of thepeople the alpha fund managers
that they recruited then buggeroff and set their own businesses
up.
Managers that they recruitedthen bugger off and set their
(27:37):
own businesses up.
So the industry is a bitossified Big companies, very big
companies, who are just usingscale.
You've got a middle groundthat's vanishing fast, and then
you've got the boutiques who areconstantly changing and
metamorphosizing and moving inand out and within that you've
got a framework of poor alphaand, frankly, I think, rather
(27:57):
lazy ability to go out andcommunicate with investors.
Speaker 2 (28:01):
Do you think AI is going to change things and is
going to allow a lot of thesesmaller boutiques like really
stand out and be able to resistwithout being acquired by the
big players?
Speaker 1 (28:11):
I hope so.
I mean I'm a bit suspiciousabout some of the claims of AI,
but I mean I'm not entirely sureit will make much difference in
fund management.
If I'm honest, a colleague ofmine, andrew Lapthorne, at
Societe Generale, the big Frenchinvestment bank, I mean he's
been running.
He's a very famous quantstrategist and he's been running
(28:31):
AI programs on stock pickingfor a couple of years now and
they do pretty well.
You know they do pretty well.
They don't knock the lights outbecause of course what they do
is they modulate risk, becauseAI basically takes into account
all the knowledge it'sencountered, builds it into a
model and algorithm and thenworks backwards.
(28:52):
So it takes the general stateof knowledge, and the general
state of knowledge is a riskaversion out there.
So you can't blame the ai forbeing a little bit risk averse,
whereas we all know that thereally well, the few really
successful alpha fund managersquite often just take phenomenal
risk, yeah, and then they canget phenomenal reward.
That's fine, as long as youknow what you're getting
yourself in for.
And I'm not quite, quiteconvinced that ai has quite got
(29:15):
there yet for that.
I think it will certainly helpwith things like marketing.
Um, so that communicationspoint.
Definitely, yeah, it willdefinitely help, um, but I'm not
sure it will really impactquite yet.
Speaker 2 (29:26):
Investment so let me let me play devil's advocate
here for a second regarding yourclaims of lack of innovation
and so on, because I mean wehave seen a lot of cool stuff
happen in the finance industryover the last year.
We had, for example,democratization of finance with
(29:46):
this whole stockfractionalization trend.
We're now seeing shortersettlement periods.
We're even talking about T pluszero now for things that took
one, two or or three days to besettled.
Speaker 1 (29:59):
They're not asset managers, they're being run by.
They're largely being done by,by platforms or yeah.
Speaker 2 (30:06):
Yeah, I'm talking about finance in general, so
your claims are more relatedjust to asset managers.
Speaker 1 (30:11):
Then absolutely, yeah , I think the rest of the
finance industry is is much moreinnovative, and I'm talking
about your classic assetmanagement.
Speaker 2 (30:20):
Yeah, okay.
So you've said in the past thatthere's a difference between
genuine innovation and what youcall innovation theater, so
maybe can you give us an examplewhere you thought in asset
management okay, this actuallymoves the ball forward.
I like this innovation.
When was the last time you sawsomething like that?
Speaker 1 (30:41):
Oh, I see that regularly.
So I think that the way inwhich a lot of the investment
platforms now are playing aroundwith new products I think is
brilliant.
So here in the UK we've got oneof the big bugbears for a lot
of private investors for manyyears has been uninvested cash
interest rates.
That's an example.
Most investors have a lot ofcash sitting around in their
(31:04):
account, some a lot more, a bitwhatever and traditionally
that's been incredibly poorlyrewarded.
Yeah, and that really makes adifference.
So if you're carrying 20 ofyour portfolio in cash which is
not unreasonable, probably a bithigher for most people, but
it's not uniquely high, maybe inthese markets and you'll lose
and you get no return on thatcash, that's a really big drag,
(31:24):
yeah, and actually because ofcompetition innovation, we've
seen phenomenal changes in there.
So you've got big platformslike Trading212 here in the UK
and actually quite a few othersas well, who come up and start
doing virtually market,virtually market well, qmmf, you
know, qualifying money, marketfund rates, um, and then, not
far off, what you can get in thebank.
(31:44):
Well, actually they're a lotbetter than you can get in a
bank, um, so, um, that's afantastic innovation which
actually makes a real differenceto ordinary people.
Yeah, um so um, whereas I thinkwhat we're talking about kind
of innovation, theater or juststuff that, frankly, is a bit
kind of um is um, whereas Ithink what we're talking about
kind of innovation, theater orjust stuff that, frankly, is a
bit kind of um is um and if youdidn't watch it, I'm rolling my
eyes.
(32:04):
When I said that um is that, uh, it's, I think.
A lot of things liketokenization and crypto.
I'm not a massive crypto fan.
There's lots of very cleverinnovations going on at the
moment, things like tokenize.
I've heard of people tokenizing, for instance, money market
funds and yeah, I could see thevalue of that for the, for
crypto investors.
(32:24):
I'm sure that's probably quitea good idea actually, but a lot
of it's kind of like you justsit there and go.
I mean that's not really goingto make a hell of a lot of
difference.
Speaker 2 (32:33):
So I'm a big fan of you, so I'm a big fan of you
know stuff that really helpsordinary investors, you know,
become wealthier Anotheropportunity, in my view, is
young investors.
I mean, we've seen, like youknow, plenty of platforms
focusing on young investors,like free trade, and obviously
there's TikTok with all theinfluencers, and I think this
(32:54):
shows I mean, their growth,shows that there's been real
appetite from this audience.
But I also have the feelingthat the industry hasn't really
figured out how to serve thisspecific demographic.
So my question for you is whatdo you think young investors are
actually looking for in assetmanagement and what is missing
(33:17):
today?
Speaker 1 (33:18):
for them?
Well, first of all, they'relooking for building their
wealth and making money, so theywant to be able to make money,
which is what we all do, becausethat's what we invest for.
Secondly, I do think that theyhook onto a narrative, so they
like a story, and actuallythat's not just true for younger
investors, that's true for mostinvestors, in truth.
(33:38):
But you have to construct stuffaround narratives and
storylines, which is why AI isso compelling.
You know it's easy to constructa narrative.
None of us have to workterribly hard.
We all know what it is.
So they like storylines, andwhat works best in storylines
are big themes and trends.
They really understand it.
(34:00):
So I think that you need a goodnarrative.
But also, I think youngerinvestors are very focused on
cost quite rightly, and I thinkthey're absolutely right to be
and they're quite focused onaccessibility.
What they can't be dealing withis stuff that just takes a long
time to to transact or, youknow, it's complicated.
(34:20):
They want to be able to getstuff there and then on their
phone, which is obviously whythe investment but sorry, the
internet-based investmentplatforms have done terrifically
well.
Um, yeah, but interestinglyenough, I think that they, those
platforms haven't done a reallygood job of providing that
information about how to buyshares, even the good ones, like
the trading 212s and the freetrades ones.
We both mentioned, actually,that the way that they present
(34:44):
information, I find is actuallyfrankly a bit um, you know,
they're very good at doing thetransactional stuff, you know
the e-commerce bit, but when itcomes to presenting financial
information, yeah, um, they'reall bit.
So I I use interactive broker alot, for instance, big american
platform ibk, which is belovedby hedge funds and that kind of
(35:06):
stuff and um, ibk is absolutelyfantastic, it's a great resource
, it's great, it's a fantasticbroker broker.
But even there and they've gottools coming out of every
orifice, um, and they're afantastic platform, but their
presentation is just dreadful.
I mean, sometimes trying towork through stuff, trying to
get to it, is quite complicated,and that, by the way, I mean
(35:27):
it's a fantastic platform, it'svery good.
So I think the way in which alot of the platforms have
presented financial informationleaves much to be desired.
Speaker 2 (35:35):
Yeah, I feel there's always like that tension between
UI and then depth and it's hardto find the right balance
between the two.
Speaker 1 (35:47):
Yeah, particularly if you've got to stick it on a
little device that's that big,exactly.
But hey-ho, that's a challengefor the technologists out there,
isn't it?
I'm sure they can work it out.
Speaker 2 (35:58):
Yeah, we'll get there .
So, talking about storytelling,you mentioned it as one of the
pillars that younger generationsare interested by.
You know a thing or two aboutstorytelling.
You've had a column on DFT thathas been running correct me if
I'm wrong but over a decade now.
Speaker 1 (36:16):
Many decades actually .
2007 we started Gosh.
Yeah, wow, almost two decades,that's impressive.
Speaker 2 (36:21):
2007 we started Gosh, yeah, wow, almost two decades.
That's impressive.
So how has writing regularlythis?
Speaker 1 (36:38):
column shaped the way you think about the world and
about investing and risk.
How has it helped you over theyears?
Well, I mean, the clue is inthe title.
I've got a title called theAdventurous Investor, which is
for the FT and for my newsletter, and the clue is in the title,
really, which is that I'vealways liked being a bit
adventurous and digging around.
So I mentioned that I washaving a look at CCDS, which I'm
shocked that you're not anexpert in these core capital
(36:59):
deferred shares.
But all joking aside, the reasonI was mentioning that is
because I think some of the mostinteresting stuff is where it's
complicated and a bit difficultand a bit adventurous and
you've got to really dig aroundand understand it.
And you know, everybody canhave a view about nvidia being
cheap or expensive.
I mean, you know, take yourpick, um.
But sometimes the mostinteresting stuff in narrative
(37:23):
terms is the stuff where youhave to work a bit harder
because you've got to go andlook at it and research it.
And um, so I I started off myinvestment career many, many,
many moons ago, um, doing stockscreening.
You know I was a bit of a geekyquant type, so I I loved stock
screening.
I'd get these big stock screensout and I'd run them through
the markets and see what sharescame out of the bottom of them.
(37:45):
And what that always taught meis that you have to dig around
to find the interesting stories,and it's usually the
interesting stories that are themost compelling investment
opportunities.
Because, let's be honest, if youlook at what hedge funds make
their money out of, they maketheir money out of two things.
One, they make their money outof.
They make their money out oftwo things.
One, they make their money outof obviously using leverage and
(38:05):
incredible ai and lots of dataand that kind of stuff.
But the other thing they a lotof the really good hedge funds.
They make their money out ofreally quite esoteric stuff,
yeah, quite detailed stuff.
They have a particular angle ortwo.
They look at it, theyunderstand it, they really
master it and they focus in onit, and then they they make
money out of it, usually byleveraging at returns, um and
that, that, that there's noreason why individual investors
(38:28):
can't do that yeah, I alwaysfelt like every opportunity has
already been spotted by someoneelse at some point.
Speaker 2 (38:39):
I guess that the secret is to get in before a
large amount of other peoplestart noticing the same thing,
and and and get on board, butfinding something completely
you'll never be alone I yeah,yeah, absolutely, but, uh, but,
yeah, it's, it's interesting.
Are you also into like allthese new type of um asset
(39:04):
classes that are being madeaccessible to retail investors,
such as investing in Legos,investing in music royalties
investing?
Speaker 1 (39:12):
in wine.
Emotional assets.
I've once heard them describedas Sorry Emotional assets.
Speaker 2 (39:17):
I've heard them described as yeah, do you also
look at all of?
Speaker 1 (39:21):
that, yeah, I do.
I am a big investor in them.
So, for full disclosure, I'mvery sad that I invest in old
coins, so 17th century EnglishCommonwealth coins that's pretty
cool.
Yeah, and I also invest instamps.
My dad was a stamp collectorand my granddad was a stamp
(39:43):
collector and I collectironically, considering my
capitalist inclinations best instamps.
Um, I, my dad was a stampcollector, my granddad was a
stamp collector and I I collectironically, considering my
capitalist inclinations um, Icollect chinese stamps.
Speaker 2 (39:50):
Um, don't ask me why, anyway, um, so so specific
david oh my god, exactly soyou're telling me that you have
one of the largest chinesestamps.
Speaker 1 (40:00):
Private collections in the world.
Well, I don't know about world.
I mean, there's a lot ofChinese stamp collectors out
there.
Speaker 2 (40:04):
They've got massive stuff In your neighborhood, for
sure.
Speaker 1 (40:07):
Certainly, probably in the south of England anyway,
and so, yeah, so I entirelyunderstand it.
I am nevertheless cagey aboutit and wary and I'll tell you
via a story, which is wine.
So probably one of the mostliquid assets in the emotional
(40:28):
world of investing orcollectibles if you want to call
it, that is wine.
Wine's been around for a very,very long time.
A lot of very, very successfulinvestors collect wine and
there's a guy I know very, verywell, I regularly have lunch
with him and he's got like athree million pound collection
of wine and he's a verysuccessful private equity and
he's really into wine and I likewine.
(40:49):
I like wine to drink.
I'm not sure I like wine tocollect and invest in, but
anyway, and he does like wine toinvest in.
And his point was that you knowwhat the problem with a lot of
these emotional assets, wine isprobably, as I said, one of the
most liquid, one of the broadest.
It's got a very wide catchmentarea of investors.
(41:09):
It's been a really difficultinvestment class and asset class
.
It's returns are down, classicimprimatur.
Bordeaux's not done terriblywell, partly because a lot of
the going back to the Chinese.
A lot of chinese investors havepulled their money out the
market, um, and it'sstructurally quite challenged
and there's also loads of peoplebasically trying to sell lots
(41:31):
of platforms and brokers tryingto sell rubbish stuff basically
and trying to take advantage ofinvestors.
Um, so I'm a little cagey abouta lot of these, as I call call
them emotional or collectibleassets, and I think it's great
if you really like them.
I mean, I said I'm a saddo, soI like kind of you know,
(41:58):
Cromwellian and Commonwealthcoins, 1640s and 50s, or Chinese
communist stamps, but I likethem anyway and they'll be fine.
Speaker 2 (42:09):
I think the basic principle and it's my friend who
says about wine you know hecollects wine, which if all else
, all else fails, he can drinkbecause he likes the wine.
Um, three millions of of ofwine is going to be a lot of
wine to drink.
Speaker 1 (42:14):
I'm telling, I'm telling you that well, it
depends how much you spent onhis wife, did it?
Um, if he's spending 50 000,could a bottle maybe not anyway,
um, so I I am a bit carefulabout it and I do worry about
the tokenization of that.
Um, and lots of people aretokenizing that.
I never realized you could, Ididn't realize that luxury
(42:35):
handbags were collectible, andso there was a platform which I
think a swiss platform that doesit called it was a splint or
something I'm going to call nowum and um.
I mean you could collect luxuryhandbags, I mean you could
collect everything, um, I'm nottoo sure about its provenance as
an, as an investment class, andthat's my point about wine.
Wine is pretty close as youcould get to a quality, a
(42:58):
collectible asset class,probably along with modern art.
Really, wine and modern art arecompeting and wine has been a
very difficult market.
And even modern art, whichyou've got people like
Masterworks doingfractionalization of art.
It's a difficult market becauseit's kind of like it's a
quality market.
(43:18):
If you can spend five millionquid on the painting, maybe
you'll do brilliantly, yeah, butif you're basically just
hanging around 20,000 quidpaintings and not sure how much
they've been doing, yeah, Idefinitely need to get at some
point someone on the show totalk about wine investing and
someone from Masterworks or fromthat world.
Speaker 2 (43:40):
My wife is an art advisor so I've always also been
very interesting in that areaand, yeah, the whole
fractionalization of those assetclasses is fascinating to me
yeah, um not without risk, I'dsay, but anyway 100 yeah um.
So at the beginning of the ofthe conversation you were
talking about your sub stack.
I have the feeling thateveryone's got a Substack now,
(44:02):
or very hot takes on X orLinkedIn, but very few people
are actually really, really goodor managed to cut through.
In your view, what separatesthe useful financial opinions
and the good newsletters fromjust the noise?
Hey there, quick ad break.
Do you work in the financeindustry and have a genuinely
(44:26):
interesting story to share?
I'm always on the hunt forgreat guests who bring raw,
unfiltered insights to the table.
Or maybe you know someone witha story worth telling?
Please put us in touch.
You can reach out to medirectly via LinkedIn.
I'd love to hear from you.
And now back to the show.
Directly via LinkedIn.
I'd love to hear from you.
And now back to the show.
Noise, and you know, yeah,useless kind of content.
Speaker 1 (44:55):
Yeah, well, I mean assuming that I have some value
which is in the eye of thebeholder.
Speaker 2 (44:59):
I'll put you in the top-notch category.
Speaker 1 (45:01):
Well, that's very nice of you.
I don't know if that's entirelytrue, but I think really what
you've got goes back to my pointabout what your narrative and
your length is.
The substack works terrificallywell for longer reads and also
it's reads where you really getunder the skin of something.
Yeah, and you really understandit of something.
(45:24):
Yeah, and you really understandit.
That all the, all the substacksI read I read loads um are done
by people who's who I trust,yeah, I respect, and I think are
good at what they do.
They're experts, they're domainexperts and they write at
length, not too long, but longenough because we don't.
We hot takes are great butfrankly, I gave up on x or
twitter years ago and I'mprobably one of the few
(45:44):
journalists who ditched Twitterway back five or six years ago,
so I'm quite cagey about X andall that kind of stuff.
Speaker 2 (45:55):
LinkedIn is the place to be now.
David Forget X.
Speaker 1 (45:59):
LinkedIn is the place to be yeah, linkedin is the
place to be.
Yeah, LinkedIn is it?
Yeah.
Again, I'm a bit rubbish onLinkedIn as well, because I'm
probably.
I find LinkedIn quite good ifyou're corporate yeah,
linkedin's very good if you'rein a big corporate setting.
I'm not so sure it's good ifyou're a slightly more
iconoclastic person like me.
Speaker 2 (46:19):
I'm sure you would nail it if you got more serious
about it?
Speaker 1 (46:23):
Yeah, probably do.
That's what people say to me,but I'm probably not serious
enough about it um, yeah, no,it's.
Speaker 2 (46:31):
Uh.
I guess there's a mix of back,a mix back there.
Like I, I find incrediblyuseful content on social media
in general, not just soft stackor x or linkedin, but um across
all platforms and then some verybad information.
But you know what?
It's the same thing fortraditional financial media.
Quite frankly.
Sometimes, you know, I findvery useful information,
(46:54):
sometimes not so much and.
I also feel like financial mediashapes a big role in shaping
investor sentiment.
Sometimes they write veryresponsibly, sometimes very
recklessly, so let's talk maybea bit about that, about
traditional financial media likethe FT and Bloomberg and all of
these big companies.
What's your view on them?
(47:16):
Do you think they consistentlymiss or misrepresent information
or talk wrong about some partsof the market, or you think
they're doing generally a goodjob?
Speaker 1 (47:26):
they're doing generally a good job.
I find very little in thebloomberg and the ft's of the
world and the economist which II think is blatantly
misrepresenting stuff, um, uh,so I think you know it's
completely, it's completelybrand specific.
Really, look, what you have toaccept is that each of them has
their biases.
Yeah, so you know, the FTprobably represents a kind of
(47:51):
well, a bit like the Economist,but the FT represents a slightly
more liberal view of the world,I mean, consistent with its
outlook.
The Economist has a particularview of the world which is very
much.
Actually, all three of them arequite liberal in their
attitudes, probably quite freemarket, which you'd expect.
Yeah, the financial times isprobably, by nature, a little
(48:12):
bit more center lefttraditionally.
Um, the economist has alwaysbeen a bit more center right
traditionally.
So if you, as long as youunderstand their, their
cognitive biases, um, so youknow, the ft won't be a big fan
of Trump won't come as asurprise, nor will the Economist
and nor will Bloomberg.
But the Wall Street Journal,which I also think is a bloody
(48:33):
good paper.
I like the Wall Street Journalas well as the FT, you know, I
think you know the Wall StreetJournal is more centre-right.
You know it has its cognitivebiases.
So I think as long as you couldgo in with your eyes wide open
and understand their cognitivebiases, um, and those biases are
simply a function of partlytheir audience, um, and partly a
(48:55):
function of the people who workthere.
You know most journalists thatwould drift to the left or
liberal left, um, not all, butmost probably most financial
journalists, probably a bit morecentrist, so that that kind of
political thing you just have tobe aware of what you're getting
yourself in for.
That's less of an issue in thetrade press.
So you know, um, ets, stream,city, while that kind of stuff,
(49:19):
that bias doesn't really doesn'treally manifest itself.
Um, and you have to bear in mindthat all journalists,
regardless of whateverpublication they're writing for,
their primary mission in lifeis to get the story out first.
And sometimes, when you want toget the story out first, that
means you probably get itslightly wrong or not quite
right, and that's part of theway business is done really.
(49:42):
I come from a slightlydifferent world in tv where I
mean there's tv news, get stuffout first, but current affairs
and docs we wait, we stand backand we let stuff happen and then
we do a program about it.
So we don't really have thatbias.
So much, um.
But uh, yeah, bear in mind,journalists by and large want to
get the stories out first, butthey don't.
(50:02):
That doesn't mean they alwayswant to get it out exactly right
, because they don't have acompliance officer sitting next
door to them.
I mean, they do.
We have editorial standards,people, but we don't have
compliance officers canliterally tell you I'm going to
fire you because you haven'tfollowed the rules.
It's a different kind of, it'sa different way of, it's a
different power structure.
Speaker 2 (50:21):
Yeah, no, I agree with you.
I think, um, you know, thesemedia outlets are generally
doing a a fantastic job.
Personally, I I'm I read onlydft and bloomberg.
Uh, I had a subscription to theeconomies but I didn't have
time to go through all of it,and with my kids, my son
particularly I say get, say, getthe Economist.
Speaker 1 (50:42):
Every time I think the Economist is still
absolutely fantastic, it'sreally, really good.
Speaker 2 (50:47):
But then you have this problem of the famous pile
of economies in your living room, because the content is so good
that you feel bad aboutthrowing them, but you don't
have time to read it becausenext week there's another issue
coming out.
And then it's just there and atsome point your, your wife
comes and and starts yelling atyou and says what the hell is
this?
Speaker 1 (51:08):
and that's probably.
I don't, I suppose I've I'mI've got a carnivorous attitude
towards information, so I canprobably whiz through a copy of
the economist in an evening.
So uh, but I, I hear what yousay, but, um, but you know,
information is king and the moreinformation you have, the
bigger the king you are I shouldget it back at some point.
Speaker 2 (51:26):
I also talking about DFT, I also find I mean the
reason why I was asking you thisI wanted to get your take is
that some of the mostinteresting and coolest things
about DFT a lot of people don'tknow this, but below each
article there's a commentsection and, as opposed to what
a lot of people think, it'ssuper active.
Like every single article hashundreds, if not thousands, of
(51:50):
comments and I don't know why,but the authors get a lot of
beef on DFT.
Like there's a lot of peoplecriticizing and I was wondering
how do you take criticism foryour pieces?
Do you go through?
You know?
Speaker 1 (52:06):
uh, feedback, or you just completely ignore it I've
virtually completely ignored itand it's partly because you know
there are that I'd say forevery one really interesting
comment.
Yeah, um, and there's somereally great comment
commentators on there.
There's about five or sixtrolls, yeah, yeah, and you know
there's loads of people justjust saying stupid stuff on
(52:28):
there.
There's about five or sixtrolls, yeah, and you know
there's loads of people justsaying stupid stuff on there and
I just sort of roll my eyes atsome of it.
And in fact you know that's thecase because actually on
stories usually involving Russia, ukraine, they turn the
comments off.
Yeah, so you're right, it'shuge, and you know you quite
often have to keep pressing thatbutton that says read further
comments, read further comments,read further comments.
(52:49):
Um, but I, I personally don'ttake a lot of notice of it.
Okay, that's good, good foryour ego.
Well, I mean, it's good forjust good for your
self-confidence otherwise,because otherwise you read it
all and they probably call you acomplete dipstick.
Speaker 2 (53:03):
but anyway, there we are yeah, and I guess you have
to take it, obviously, with apinch of salt.
It's very easy to criticizewhen you're standing behind your
screen and have zero stakes.
Um but, um but no, but I I findit interesting.
Sometimes, as you say, you findlike the diamond in the rough.
They're like a very goodcomment that makes you think
about something.
Um, I wanted to ask you about,um investing specifically.
(53:34):
Um, you said that you have alot of skin in the game.
Could you maybe share with us astory of, of one investment
that you got wrong over yourlifetime as an investor, and and
what was your main takeawayfrom that experience?
Speaker 1 (53:44):
your lifetime as an investor and and what was your
main takeaway from thatexperience?
Loads of them, um, I mean, youknow, I mean I mean so many I
can't even don't know where tobegin.
Um, well, I mean the mostrecent was I invested in a, in a
fund, um, which was a digitalinfrastructure company, which I
thought was fascinating and metthe management and thought they
were great, and then it didn'tgo terribly well let's put that
(54:05):
way around here.
So, and and that theinteresting lesson to learn
there, um is actually, eventhough something looks really
interesting and exciting and andin of its time, yeah, and
digital infrastructure certainlyis data centers, all that kind
of stuff and it had a brilliantinvestment.
Brilliant investment in um uh,nordic or icelandic data centers
, all that kind of stuff, and ithad a brilliant investment.
(54:26):
Brilliant investment in um uh,nordic or icelandic data centers
uh, I went to visit them andthey're brilliant.
It was a great investment.
Unfortunately, the fund itselfwasn't a great investment, um
and um.
What that teaches you is thatthese kind of trendy things,
that where you think surely youcan make money out of that,
doesn't always work out that way.
Um, there's lots of, lots oflots of devil in the detail is
(54:46):
where I put it um so, great area, very sexy data centers,
digital infrastructure, digitalbroadcasting, all that kind of
stuff, um, fiber optic cables,you know.
I mean what could possibly gowrong?
Um, and there's actuallynothing, nothing wrong with the
businesses per se.
Yeah, it's the fund itself sortof blew up though issues to do
(55:08):
with, um, debt and issues to dowith cash flows, all that kind
of stuff.
So what that tells you to do isfocus on the dynamics of the
business.
Yeah, because just because it'sin a sexy area really is no
guarantee it will make any money.
Good one good one.
Speaker 2 (55:24):
We're getting close to the end of the conversation,
so I need to be super carefulwith my last question or two.
Um, I have to ask you about ai.
I mean, obviously, you know, inevery episode at some point we
we talk about this.
You said that you're skepticalabout some of the claims, uh,
that, um, everyone is makingabout ai and the impact on the
finance industry.
(55:44):
So, in a couple of sentences,do you think we are all going to
lose our jobs as financialadvisors or not?
Speaker 1 (55:52):
No, god, no, no.
You're not going to lose yourjob as a financial advisor,
because no one is going to wantto talk about the wealth they've
accumulated to a robot or to an.
AI program.
You want to talk to a humanbeing?
Yeah.
So all of that personalinteraction stuff, great, no
risk with that.
And I even think, within thesecurity selection side as I
(56:14):
said, I'm not convinced it willdo that.
Well, I think AI is probablyquite good for hedge funds and I
think it already is because itallows them to spot patterns and
behaviors in the numbers.
I think probably works for them.
Yeah, um, but I think I thinkany industry which which
involves an awful lot ofpersonal interaction, you're
(56:34):
safe you heard, david, we'resafe guys, thank god.
Speaker 2 (56:39):
Um.
Last question um for anyoneentering the industry today,
what would your advice be forhaving a successful career in
finance?
Speaker 1 (57:05):
what you want to get into.
But I have to say two things.
Either one, go into somethingwhich is going incredibly um,
it's got this incrediblemomentum behind it and it's very
sexy and everybody lovestalking about it, because
there's always going to be moneypumped into it and that means
jobs, yeah.
So, no surprise, cryptoeverybody loves crypto.
Loads of money flooding into it.
Those jobs.
Etfs everybody loves etfs.
Loads of money flooding into it.
You always need lots of peoplein etfs.
(57:27):
So either one, go just go to thesexy end, work out how to work
out how it works, but learn thebasic business skills and then
probably get out before thewhole thing implodes, um.
Or number two I actually think,as advice I give to my own son,
it's just going to somethingwhich has got strong personal
relationships, where you have towork with people and you have
(57:49):
to deal with clients, because,although clients can be a pain
in the derriere, they are thevery core of the business and
you can build a business off theback of really good personal
relationships.
So I actually think the futureis very bright for people
working in financial advice um,because there'll be there'll be
(58:09):
more older people, wealthier,with more money, who don't
understand what they're doingwith their money.
Who want some advice?
Yeah, and I think that's just aperpetual growth market in the
west, until until, of course, wemanage to bankrupt ourselves.
Speaker 2 (58:22):
That's an excellent note to end.
The conversation on.
My job is safe.
I'm going to sleep very, verywell tonight.
David, thank you so much forall those insights.
I didn't see the time pass.
I had like three times morequestions that I wanted to ask
you, but I guess I'll have tocontinue reading your newsletter
.
Hopefully I'll get some of theanswers over there.
Thank you so much for coming.
(58:43):
Best of luck with ETF Stream,all your ventures and the
Adventurers Investor, of course.
And yeah, thank you so much forcoming to the show.
Thank you very much, Lovelytalking to you, Thank you.
The Blunt Dollar is written,produced, hosted and edited by
me, Ignacio Ramirez.
Everything you hear concept,script, sound, design and
(59:08):
production comes straight frommy desk and occasionally, my
kitchen table.
Thank you so much for listening, and join me in the next
episode of the Blunt Dollar formore raw, honest finance
conversations.
It's a tougho business, but it's a great
opportunity.
That is what fund managementshould be about Hard graft,
getting the diamonds there inamongst all the rubbish.
Speaker 2 (00:08):
Hello everyone and welcome to a new episode of the
Blunt Dollar.
Today's guest is DavidStevenson, one of the UK's most
insightful and candid financialcommentator.
David writes the AdventurousInvestor column for the
Financial Times, contributes toCityWire and MoneyWeek and has
been at the forefront of makingcomplex investment topics clear
(00:28):
and compelling for privateinvestors.
Speaker 1 (00:30):
What that teaches you is that these kind of trendy
things, that where you thinkthere's lots of devil in the
detail, is where I put it.
What that tells you to do isfocus on the dynamics of the
business, because just becauseit's in a sexy area really is no
guarantee it will make anymoney.
The future is very bright forpeople working in financial
advice.
There'll be more older people,wealthier, with more money, who
(00:51):
don't understand what they'redoing with their money, who want
some advice.
Speaker 2 (00:54):
What's the connective tissue that runs through all
your career choices?
Single, most important thing is.
(01:18):
This is the Blonde Dollar withIgnacio Ramírez, or legal advice
.
This content is forinformational and educational
purposes only and should not berelied upon as a substitute for
professional advice.
Always do your own research andconsult a qualified advisor
before making any financialdecisions.
All investments involve risk,including the potential loss of
capital.
And now let's get started withthe episode.
Hello everyone, and welcome toa new episode of the Blunt
(01:42):
Dollar.
Today's guest is David Stevenson, one of the UK's most
insightful and candid financialcommentator.
David writes the AdventurousInvestor column for the
Financial Times, contributes toCity Wire and Money Week and has
been at the forefront of makingcomplex investment topics clear
and compelling for privateinvestors.
He's also the founder anddirector of ETF Stream and AdFi
(02:05):
and more recently launchedFuture Food Finance, showing his
knack for spotting bothstructural shifts and niche
opportunities in finance.
Before journalism, david was asenior BBC producer and ran a
corporate comms firm.
He's also a seasonednon-executive director sitting
on the boards of funds likeAurora, grissom House, energy
Storage and the Secured IncomeFund.
(02:27):
In today's episode, we'll talkabout David's career, innovation
in asset management and therole of journalism in the
finance industry, amongst others.
This chart is going to be bluntand thoughtful.
I'm incredibly excited about itand David welcome to the show.
Speaker 1 (02:44):
Yeah, welcome.
Thank you very much forinviting me on.
I'm not sure I quite live up tomy billing, but I'll try my
best Long introduction.
Speaker 2 (02:52):
You're quite the legend within the world of.
I would say that that's much tothe point of view.
So I suggest we get started byhearing from you.
What is it that you're doingexactly today?
Speaker 1 (03:07):
What am I doing today ?
I do a newsletter which iscalled the Adventurous Investor,
ironically, which is onSubstack, so Substack for those
of you who don't know about it.
It's a very interesting socialmedia platform for people who
want to talk about interestingyou know, interesting stuff with
financial investment in longform.
(03:27):
So we're trying to move I thinkit's part of a move away from
short form kind of 248characters, whatever it is kind
of way of thinking to long form.
So that's what I've been doing,by putting together my
newsletter and doing somethingobscure and it was all about.
What was it Something called?
I just got to get the notes forit's cool.
Um, uh, what was it called now?
(03:49):
Uh, core capital deferredshares that will send everybody
to sleep.
Speaker 2 (03:54):
Um, I like I, like I, I.
I know you like to take on,like uh, relatively complex
topics and try to PCTS to you.
Speaker 1 (04:07):
I've got no idea roughly what they.
I do know what they are, butanyway.
So that's what I've been doingtoday, sorry, very boring and
investment-related.
Speaker 2 (04:14):
Amazing.
So I want to start talking alittle bit about that, about
your sub-stack, but more broadlyyour career, because you've
worked in journalism, in fintech, in comms.
You're sitting in investmenttrust boards.
You know, at first glance itlooks like a zigzag, but surely
there's like a through linethere in how you think and what
(04:36):
you're seeking out.
So what's the connective tissuethat runs through all your
career choices?
And have you consciouslyfollowed a thread or did it all
just happen?
Speaker 1 (04:48):
randomly.
Oh no, it just all happened umspontaneously.
So I mean, I trained, I trainedin in economics and and social
sciences really, and uh, and Ithen went on various trainee
schemes at places like um goshcompany called Haymarket a long,
long time ago, a big publishingcompany, and then the BBC, and
so I've always been a businessand finance journalist or a
(05:10):
business and investmentjournalist.
So even when I was working many, many decades ago on a program
which none of your listeners orviewers will have heard of,
called the Money Program, whichpeople of a certain age know
about in the UK and not your age, Don't underestimate our
audience.
Speaker 2 (05:26):
Be careful.
Speaker 1 (05:28):
Well, they're going to be pretty old to remember the
money program, anyway.
So I've always been a businessand finance journalist or
business investment journalist.
So that's the common linkingtheme.
And the other common linkingtheme is I've not really ever
been a corporate type.
I mean, I did many, many yearsmaybe a couple of decades I
think at the BBC and I decidedthat that wasn't for me.
(05:51):
I'm not corporate, I just can'tlive in that world.
So I've always been quiteentrepreneurial.
And if you're entrepreneurial,there's really only two modes of
being entrepreneurial.
Mode one is the kind of Isuppose what you call the kind
of portfolio entrepreneurialmode.
One is the kind of um, Isuppose what you call the kind
of portfolio mode, which is youdiversify the things you do and
make sure that most of them workmost of the time.
And then there's the other modewith the super motivated
(06:14):
entrepreneurs who just do onething for the next 30 years and
make billions.
And I've never beenparticularly good at that
because I've got a butterflymind.
So I've always gone down theportfolio approach.
And the portfolio approachmeans I'm good at starting
businesses.
I'm probably not very good atrunning them.
Speaker 2 (06:29):
Wow, that's very interesting.
It reminded me a little bit ofsomething we talked about with
another guest, Eric Seam, andthe way he was thinking about
careers.
He was thinking about it as aMcDonald's menu where you have
like, the burger, the fries andthe Coke and, uh, the burger is
like your core competencies, andthen the fries is like the
things you do, you like, youenjoy but not necessarily make
(06:53):
money with, and then the Coke islike the moonshots.
And I see some connections inthe way you're thinking and the
way he's thinking Um, but you'reyou're the first person that
has, uh, come to the show thatever worked for the BBC.
So I want to ask you about that, because you know from abroad,
obviously it's an institutionthat has quite a good reputation
(07:14):
.
And then I was wondering whatdid your time at the BBC teach
you and how did it shape the wayyou communicate about finance
today?
Speaker 1 (07:23):
Well, what it taught me not to stay at the bbc?
Um so, um.
So that's the first lesson tolearn.
Um, no, I love the bbc greatly.
I mean, it's a brilliantinstitution.
Then again, I'm a member of theliberal middle class media
elite, so I probably would saythat, um, but um, so I.
What it taught me was that theBBC, I think, is a very high
(07:47):
standard or high bar for itseditorial policy and the way it
does stuff, and because I workedin current affairs and in
actually science and features,there's a very strong
evidence-based approach.
So you do everything based upondetailed and thorough research
and you have to know your stuff.
Basically, and I did quite alot of investigative stuff at
(08:08):
the BBC, mainly in business andfinance, but not only Actually,
just generally in currentaffairs.
So you know, and therefore I'venever been worried about detail
or spreadsheets or numbers,which is a rare thing for most
BBC journalists, because they'renot terribly good at when it
comes to things like numbers.
By and large they'restorytellers.
(08:30):
So you put a spreadsheet infront of many of them they'll go
, ah.
And most BBC journalists aren'tterribly good at their own
finances or investment, becausethere isn't a lot of investment
content on the BBC.
It's not really an investment.
It's not like Bloomberg,bloomberg's an investment
channel.
The BBC isn't really.
The living heart of the BBC isreally current affairs.
(08:52):
That's really what it's about,and there's always been that
instinctive, slight suspicion ofeverything to do with
investment.
Anyway, so in terms ofcommunicating, because if you do
TV like I did for many, manyyears, you have to realize you
have to communicate in the mostsimple fashion possible because
you can only communicate alimited number of ideas in a
(09:13):
limited number of times.
So if you do a half-hourdocumentary, you fundamentally
are a half-hour current affairsprogram.
You really can't do.
I mean, you know, in blockterms, you can't really
introduce more than five or sixthoughts, if that makes sense,
because by the time you'veexplained it, shown it, given a
bit more background, see wherethat bit moves on to the next
(09:35):
bit, you're about five or sixminutes in.
So you have to communicate verysimply and you also have to
assume that most of youraudience hasn't got the faintest
idea what you're talking about.
Um, so you, you know.
So I worked on another program,which again you're much too
young to know about, which iscalled tomorrow as well, which
was the big science featuresseries on on the bbc and we'd
(09:58):
have to communicate lots ofcomplicated science stuff.
You know, um, and we, and thattaught you through brutal
exposure that most people havezero idea of what you're talking
about most of the time.
So you have to really explainit.
And and then you have toexplain it visually.
Um, because most people,increasingly more people we live
(10:19):
in a more visual world wherepeople like having things
explained to them.
I was astonished by the factthat I was looking at numbers on
tiktok, that if you, if you didsomething on tiktok, which is
obviously a very visual medium,and then put the words on it at
the bottom, yeah, the audiencegoes up by about 50 because
people are largely consuming itvisually.
(10:39):
Yeah, that's up.
There is good old-fashioned methinking people consume things
by listening or reading.
But that combination of readingtext and visual and that's
feels very familiar to anybodywho works in TV, because you're
used to that, you know.
Speaker 2 (10:54):
Yeah.
Speaker 1 (10:54):
And if nothing else, we're used to watching on
subtitles of foreign languagemovies.
Speaker 2 (10:58):
Yeah, I mean wow.
Tons of things are coming to mymind from what you said.
First of all, I like the ideaof four or five blocks when
you're trying to communicate animportant message.
I fully agree with that.
I work in private banking andone of the rules number one
rules that I have as a fixedincome advisor is that you've
(11:21):
got to respect your clients'time right.
So you've got to go straight tothe point, you've got to make
things simple.
And yeah, regarding visuals,100% also I agree with you.
I feel a lot of people,particularly younger generations
, have shorter attention spans.
I think it's interesting whatyou were saying about text and
(11:41):
images, the combo, and gettingmore traction.
It made me think about mr beast?
Speaker 1 (11:49):
uh, I see some youtubey thing, isn't it?
Speaker 2 (11:51):
yeah, but uh, interestingly, some of the best
performing posts he had are theones where he's not talking and
and where there's no text,because, uh, he says that when
he, whenever he does that, he'slimiting himself to an
English-speaking audiencebecause he's English.
Whilst, if he doesn't talk andhe just does something, he gets
(12:13):
a lot more views because peoplenot speaking in English actually
can consume.
Speaker 1 (12:16):
Anyway, Well, just on that theme, everything starts
in comedy.
So comedy is the first form ofdramatic pathos.
Starts in comedy, yep, so, um,comedy is the first form of
dramatic pathos.
Yeah, and um it, the singlemost successful comedians were
worldwide are people who dothings visually.
So, mr bean, um, benny hill,for some countries you know,
visual jokes, pranks, satirewhere things physically go wrong
(12:40):
.
Buster keaton, way, way back,yeah, that that tells you
everything you sort of need toknow, which is that the
universal language of, ofmovement, numbers charts, yeah,
that kind of stuff, that that'sthe universal language.
Speaker 2 (12:53):
Anyway, getting a bit too philosophical here, mr bean
, quite the legend in the uk,huh well, I think quite a legend
quite elsewhere as well.
Yeah, I remember watching MrBean growing up and I was
thinking is everyone in the UKlike this?
This must be a very interestingcountry.
Speaker 1 (13:13):
There is a certain crowd of people who are a bit
like him.
Yes, classic comedian, butanyway, yes, anyway.
So we've gone downphilosophical foxhole.
Speaker 2 (13:22):
Yeah, so a couple more questions regarding this
transition from the world ofmedia to money management.
What was the biggest mentalshift you had to make when
moving from this industry intoasset management and your role
in boards, and so on and soforth?
Speaker 1 (13:42):
There's not that big a shift.
I mean, bear in mind, most ofwhat I do is informed by
communications, ideas and models.
So ETF Stream, for instancevery successful website that's
very much driven bycommunication and simple
messaging.
So that wasn't a big shift.
And bear in mind I was always abusiness journalist anyway, so
(14:04):
there's not't a big shift andbear in mind I was always a
business journalist anyway, soit's not been a bigger
transition.
I think the single mostimportant thing is skin in the
game, yeah, which is, uh, I, Iinvest.
Yeah, I invest a lot.
I've always invested for ever,since I was 16 years old, um,
and therefore I write about whatI do and, and I think that
that's terrifically importantand that's why a lot of
(14:25):
journalists don't really likewriting about investment.
A, because they don't get paidvery well.
So, b, they can't afford tosave very much.
And if they have got any money,they can't afford to invest.
And a lot of journalists don'treally like investing.
It's not really what they do.
They'd probably much rather bea sports journalist or a foreign
correspondent, whereas I thinkyou've got to have skin in the
game, which is probably true forfund management as well, which
(14:48):
is it's all good and well,you're doing the talk, but what
do you do yourself?
And I think it was way, way,way back when I started having
to save for myself and build apension and all the boring stuff
that you and I both talk aboutall the time, that I realized
that you have to get real andyou have to talk about stuff
that actually, where people cansee what it is that you do and
(15:09):
understand why you do it, andthat's always motivated.
Everything I've written about,even made TV programs about,
it's usually stuff that I'minvolved with skin in the game.
So you're a big Nassim Taleb'sfan?
Speaker 2 (15:21):
I guess yes.
Speaker 1 (15:23):
I am, yeah, yes, a nascent talibs fan, I guess.
Speaker 2 (15:28):
Yes, I am yeah, yes, I I sometimes prefer gray rhinos
over black swans, but anyway,and so yeah, now, fully agree,
by the way, with what you'resaying about skinning game.
It's funny how, the moment youput some money and you know, uh,
in the equation, even if it'slike a small amount, yeah you
take things completely different.
Even if it's like, you know,like five bucks or something
like that, yeah, it's, uh, it'sit's I don't know, it's uh, it's
(15:50):
very, very interesting what'sgoing on there and that refers
back to setting up businesses aswell.
Speaker 1 (15:56):
You know you get skin in the game that way.
That's one of the few ways youyou play it.
You have to do it.
You have to, you have to put,you know, your own money, time
and hard, hard sweat into it.
Speaker 2 (16:05):
So, talking about selling businesses, I mean, I
have the feeling again likeyou've done plenty of stuff and
and I guess what I findinteresting about your profile
is that in a world full ofspecialists and credentialing,
you stand out as someone thathas done the opposite.
So you've done regulation,product communication, strategy.
(16:27):
Do you see yourself as ageneralist or not at all?
And and what has been theupside or downside of having
this kind of profile that youknow does so many different
things in an industry likefinance that usually narrows
like being super specific?
Speaker 1 (16:45):
yeah, yeah, um, I suppose it goes back to that
point about the entrepreneurs.
There's two types ofentrepreneurs.
There's one, the ones who aregood at starting things and then
moving on to the next thing,and the other ones who are super
specialists.
Like what they do.
They do five versions of thesame business, they keep
rebooting it and I'm much morein the first category.
I suppose I'm more of ageneralist, though I have
(17:07):
specialist skills.
So I do know my way aroundinvestment and I do know my way
around markets and I do know myway around things like ETFs and
investment trusts and FinTech,and I probably know just as much
as many people in the industrydo because I've covered it.
So by nature I'm more of ageneralist, so I am a bit of a
(17:28):
polymath like that.
I like lots of things, but I dohave things that I really know
a lot about.
So I am very focused on thingslike asset allocation, you know
efficient markets, private assetmarkets, that kind of stuff.
I know more around that, andalso retail investing as well,
which I spend a lot of timewriting for.
So I don't again quite fit themodel of the generalist versus
(17:53):
the specialist, because thereare things that I do know a lot
about, but there are a lot ofthings that I know quite a bit
about.
Speaker 2 (18:01):
Yeah, if you haven't checked David's blog on the FT,
the Adventurous Investor, checkit out because he writes a lot
of stuff.
Some of the latest posts aboutprivate assets are very
interesting.
Definitely worth the read.
By the way, I just noticed wehaven't talked about ETF stream.
I mean, the reason we'retalking today is because one of
your colleagues at some pointreached out and one thing led to
(18:22):
another.
So tell us a bit about ETFstream.
What is it that you folks aredoing over there?
Speaker 1 (18:27):
Well, first of all, if you're involved in ETFs in
Europe, you absolutely must goto ETFstreamcom etfstreamcom.
Secondly, if you are a investorprofessional investor and you
use etfs, um, or even if youdon't use etfs, then etf stream
is the place for you, because wetalk to two distinct audiences.
We talk to what we call the etfecosystem audience, which are
(18:50):
issuers you know, all the peopleinvolved in the issuance,
fiduciaries, all those kind ofstuff and then we also speak to
um and, to a lesser degree,within that category, you've got
traders who do stuff likeauthorized participants, that
kind of stuff.
And then you also speak to theinvestment community.
So it's my experience that inyour world, in things like
private banking, wealthmanagement, that kind of space
(19:14):
ETFs were not really used verymuch about 20 years ago when I
first started really writingabout this space um.
So I wrote the first book forthe ft on etfs way back now, I
think in about 2012, and it wasquite a minority pursuit amongst
most wealth advisors privatebankers, now I'd say most most
(19:34):
use them to some degree.
So we're very good on that kindof both the practicalities and
technicalities of ETFs and howthey get used by advisors.
So that's what, and we're thebiggest website around ETFs in
Europe by a country mile.
Speaker 2 (19:50):
So you provide, I guess, like information about
the actual instruments, but alsoeducational content updates,
anything that touches to ETFsAbsolutely, and great events as
well.
Speaker 1 (20:04):
So we've been holding events in Switzerland, Germany,
Italy I think we've even gotevents coming.
We've had events in Spain,We've got an event coming up in
France and the events are great.
You've just missed our bigannual event called the ETF
Ecosystem Uncovered and we hadabout 1,000 people come.
Great event, by the way.
Speaker 2 (20:21):
Congrats, amazing.
It's funny because just thismorning I saw on social media a
new ad from I believe it wasBlackRock their iShares products
and how they now seem to bemore interested in retail
investors.
Yes, yeah, that shift ishappening.
Yeah, it's happening right.
(20:41):
Have you seen the big playersreally trying to focus more on
retail investors instead of theinstitutional ones?
The blunt dollar, theunfiltered, takes the stories
and the laughs.
The easiest way to support theshow is by tapping that
subscribe button right now,while you're listening and
(21:03):
here's my promise If you do,I'll keep bringing you honest
conversations, freshperspectives and the kind of
finance talk that's engaging,insightful and worth your time.
Thanks so much for being hereand let's keep these great
finance conversations going time.
Thanks so much for being hereand let's keep these great
finance conversations going yesand no.
Speaker 1 (21:21):
So, yes, they would like to.
Yeah, and I think they willincreasingly do so.
No, because the regulationshave not allowed them much until
now.
So it's quite difficult for thebig issuers to advertise
directly to retail investors.
That's partly a regulatoryfunction.
The regulators have beennervous about the direct
(21:43):
advertising of ETFs to retailinvestors.
It's also partly a function ofplatforms.
Most people access ETFs via bigretail platforms, online
platforms.
So whatever country you're in,you'll have your big platforms,
and those platforms, to varyingdegrees, have been accepting
ETFs.
Most of them now do.
It's probably their bread andbutter, the main thing they do.
(22:06):
But that's really only been arecent phenomenon in the last
five or 10 years.
So traditionally, traditionalmutual funds were the much more
dominant way which most peopleaccessed funds on that basis.
On that basis and in the ukwe've also had what we call
listed investment trusts orlisted investment funds, which
have been on the stock market,which were active funds.
(22:26):
So, um, so, yes, they areincreasingly interested and the
regulations are changing andwe'll see an awful lot more
direct advertising to privateinvestors, as is the case in
america.
So in america, if you go,you'll see billboards lot more
direct advertising to privateinvestors, as is the case in
America.
So in America you'll seebillboards for iShares and State
Street and Vanguard.
Speaker 2 (22:49):
And in America it's a very mainstream
retail-dominated phenomenon.
And what are you most excitedabout in the ETF space?
Is it like the rise of activeETFs or something completely
different?
Speaker 1 (22:56):
Well, no, active ETFs are interesting.
I mean, it's quite exciting forus as a business ETF stream.
Personally, I'm slightly lessexcited about them because we in
the UK particularly, have hadwhat are basically active ETFs,
which are called investmenttrusts, which are very similar.
I mean they are a listedinvestment fund.
They're not quite the same,have a different engineered
(23:17):
structure, but they're verysimilar.
Um.
Well, what I personally excitesme about etfs is that we're
starting to see etfs on manymore interesting niche areas and
in new ideas, um.
So you're seeing, you know, um.
You're seeing, for instancealthough I say this with some
trepidation and fear you'reseeing kind of private assets
(23:38):
re-bundled up as ETFs, which I'mnot entirely sure is a good
idea.
And you're seeing alsodifferent interesting new
geographies, new styles, so youcan pick whatever factor premium
you like and you can turn thatinto an ETF, and that's
genuinely really compelling.
And we're sort of seeing moreinteresting thematic etfs.
(23:59):
So that that's reallyinteresting and not all thematic
etfs are a good idea.
Some are rubbish and terrible,um, but some are a really good
idea.
And I think, going back to thetechnology point, we're seeing
lots of interesting technologyon etfs emerging as well around
ai and all that kind of stuff,so that those are kind of that,
that's that.
So that's the reallyinteresting stuff.
I mean, active ETS are reallyinteresting, I think, if you're
(24:21):
an advisor or a professional,because you can basically access
interesting strategies within asecurities format.
It's just probably from aprivate investor's perspective,
it's a little less interesting.
Speaker 2 (24:45):
I like hearing you talk about this.
I can definitely see thesparkle in your eyes,
particularly because it goes abit against some of the other
things I've heard you talk aboutin previous interviews and
podcasts and so on, becauseyou've said quite bluntly in the
past that the asset managementindustry looks a bit tired,
especially in the UK, thatinnovation has slowed and that
investors are sensing it.
So first question related tothis why do you think this is
(25:07):
happening?
Why is the asset managementindustry became so stagnant,
according to you?
Speaker 1 (25:12):
Well, two or three things.
One is evidence of active alphais thin on the ground in
reality.
As I said, I've been writingabout active funds, as in
investment trusts, for decadesnow and most of them have
underperformed and I'm deeplysuspicious of alpha as a
(25:32):
persistent phenomena over time.
I absolutely believe that alphaI, active management, can
produce results in limitedtimeframes in certain areas.
I'm highly dubious that you cando it consistently over a long
period of time, and there aresome exceptional individuals who
can do it, but by and large itdoesn't work.
(25:54):
So that's fatal flaw number onewithin the active sorry, within
the asset management industry,which is still largely based on
active, because active is wherethe money is um.
So one alpha doesn't workparticularly well.
Two, most sorry no many fundmanagers, I think, are basically
lazy.
They, just they.
(26:14):
They spend the first year orthree months or six months
desperately running aroundtrying to raise money and then
they spend the next three orfour years sitting on the money
and explaining why they've hadperiods of underperformance and
shouting very loudly when theyhave periods of overperformance
or outperformance.
And I just think they're a bitlazy.
They don't bother reallycommunicating and I think the
(26:35):
job of a fund manager is to getout there and communicate on a
very regular basis in a simplefashion and an intelligible
fashion, with your investors.
And a lot of fund managers liketo sit around in darkened
corners and just try and avoidany contact, any human eye
contact, and I think that youknow and, by the way, get paid a
(26:56):
lot of money for it.
And then the third reason iswe've seen a bifurcation in the
industry, which is we've gotever bigger giants, huge
hunter-gatherer asset managerswith massive portfolios.
You know, blackrock is a hugebusiness, state Street's a huge
business, vanguard's a hugebusiness, and then a lot of the
(27:16):
fund managers in the middle havebeen squeezed, and effectively,
and some of them are reallyinteresting outfits.
But this can't compete.
Um, and the good thing isyou've seen boutiques emerge,
but the problem with boutiquesis that boutiques do very, very
well and then they get takenover by a very large fund
managers and then most of thepeople the alpha fund managers
that they recruited then buggeroff and set their own businesses
up.
Managers that they recruitedthen bugger off and set their
(27:37):
own businesses up.
So the industry is a bitossified Big companies, very big
companies, who are just usingscale.
You've got a middle groundthat's vanishing fast, and then
you've got the boutiques who areconstantly changing and
metamorphosizing and moving inand out and within that you've
got a framework of poor alphaand, frankly, I think, rather
(27:57):
lazy ability to go out andcommunicate with investors.
Speaker 2 (28:01):
Do you think AI is going to change things and is
going to allow a lot of thesesmaller boutiques like really
stand out and be able to resistwithout being acquired by the
big players?
Speaker 1 (28:11):
I hope so.
I mean I'm a bit suspiciousabout some of the claims of AI,
but I mean I'm not entirely sureit will make much difference in
fund management.
If I'm honest, a colleague ofmine, andrew Lapthorne, at
Societe Generale, the big Frenchinvestment bank, I mean he's
been running.
He's a very famous quantstrategist and he's been running
(28:31):
AI programs on stock pickingfor a couple of years now and
they do pretty well.
You know they do pretty well.
They don't knock the lights outbecause of course what they do
is they modulate risk, becauseAI basically takes into account
all the knowledge it'sencountered, builds it into a
model and algorithm and thenworks backwards.
(28:52):
So it takes the general stateof knowledge, and the general
state of knowledge is a riskaversion out there.
So you can't blame the ai forbeing a little bit risk averse,
whereas we all know that thereally well, the few really
successful alpha fund managersquite often just take phenomenal
risk, yeah, and then they canget phenomenal reward.
That's fine, as long as youknow what you're getting
yourself in for.
And I'm not quite, quiteconvinced that ai has quite got
(29:15):
there yet for that.
I think it will certainly helpwith things like marketing.
Um, so that communicationspoint.
Definitely, yeah, it willdefinitely help, um, but I'm not
sure it will really impactquite yet.
Speaker 2 (29:26):
Investment so let me let me play devil's advocate
here for a second regarding yourclaims of lack of innovation
and so on, because I mean wehave seen a lot of cool stuff
happen in the finance industryover the last year.
We had, for example,democratization of finance with
(29:46):
this whole stockfractionalization trend.
We're now seeing shortersettlement periods.
We're even talking about T pluszero now for things that took
one, two or or three days to besettled.
Speaker 1 (29:59):
They're not asset managers, they're being run by.
They're largely being done by,by platforms or yeah.
Speaker 2 (30:06):
Yeah, I'm talking about finance in general, so
your claims are more relatedjust to asset managers.
Speaker 1 (30:11):
Then absolutely, yeah , I think the rest of the
finance industry is is much moreinnovative, and I'm talking
about your classic assetmanagement.
Speaker 2 (30:20):
Yeah, okay.
So you've said in the past thatthere's a difference between
genuine innovation and what youcall innovation theater, so
maybe can you give us an examplewhere you thought in asset
management okay, this actuallymoves the ball forward.
I like this innovation.
When was the last time you sawsomething like that?
Speaker 1 (30:41):
Oh, I see that regularly.
So I think that the way inwhich a lot of the investment
platforms now are playing aroundwith new products I think is
brilliant.
So here in the UK we've got oneof the big bugbears for a lot
of private investors for manyyears has been uninvested cash
interest rates.
That's an example.
Most investors have a lot ofcash sitting around in their
(31:04):
account, some a lot more, a bitwhatever and traditionally
that's been incredibly poorlyrewarded.
Yeah, and that really makes adifference.
So if you're carrying 20 ofyour portfolio in cash which is
not unreasonable, probably a bithigher for most people, but
it's not uniquely high, maybe inthese markets and you'll lose
and you get no return on thatcash, that's a really big drag,
(31:24):
yeah, and actually because ofcompetition innovation, we've
seen phenomenal changes in there.
So you've got big platformslike Trading212 here in the UK
and actually quite a few othersas well, who come up and start
doing virtually market,virtually market well, qmmf, you
know, qualifying money, marketfund rates, um, and then, not
far off, what you can get in thebank.
(31:44):
Well, actually they're a lotbetter than you can get in a
bank, um, so, um, that's afantastic innovation which
actually makes a real differenceto ordinary people.
Yeah, um so um, whereas I thinkwhat we're talking about kind
of innovation, theater or juststuff that, frankly, is a bit
kind of um is um, whereas Ithink what we're talking about
kind of innovation, theater orjust stuff that, frankly, is a
bit kind of um is um and if youdidn't watch it, I'm rolling my
eyes.
(32:04):
When I said that um is that, uh, it's, I think.
A lot of things liketokenization and crypto.
I'm not a massive crypto fan.
There's lots of very cleverinnovations going on at the
moment, things like tokenize.
I've heard of people tokenizing, for instance, money market
funds and yeah, I could see thevalue of that for the, for
crypto investors.
(32:24):
I'm sure that's probably quitea good idea actually, but a lot
of it's kind of like you justsit there and go.
I mean that's not really goingto make a hell of a lot of
difference.
Speaker 2 (32:33):
So I'm a big fan of you, so I'm a big fan of you
know stuff that really helpsordinary investors, you know,
become wealthier Anotheropportunity, in my view, is
young investors.
I mean, we've seen, like youknow, plenty of platforms
focusing on young investors,like free trade, and obviously
there's TikTok with all theinfluencers, and I think this
(32:54):
shows I mean, their growth,shows that there's been real
appetite from this audience.
But I also have the feelingthat the industry hasn't really
figured out how to serve thisspecific demographic.
So my question for you is whatdo you think young investors are
actually looking for in assetmanagement and what is missing
(33:17):
today?
Speaker 1 (33:18):
for them?
Well, first of all, they'relooking for building their
wealth and making money, so theywant to be able to make money,
which is what we all do, becausethat's what we invest for.
Secondly, I do think that theyhook onto a narrative, so they
like a story, and actuallythat's not just true for younger
investors, that's true for mostinvestors, in truth.
(33:38):
But you have to construct stuffaround narratives and
storylines, which is why AI isso compelling.
You know it's easy to constructa narrative.
None of us have to workterribly hard.
We all know what it is.
So they like storylines, andwhat works best in storylines
are big themes and trends.
They really understand it.
(34:00):
So I think that you need a goodnarrative.
But also, I think youngerinvestors are very focused on
cost quite rightly, and I thinkthey're absolutely right to be
and they're quite focused onaccessibility.
What they can't be dealing withis stuff that just takes a long
time to to transact or, youknow, it's complicated.
(34:20):
They want to be able to getstuff there and then on their
phone, which is obviously whythe investment but sorry, the
internet-based investmentplatforms have done terrifically
well.
Um, yeah, but interestinglyenough, I think that they, those
platforms haven't done a reallygood job of providing that
information about how to buyshares, even the good ones, like
the trading 212s and the freetrades ones.
We both mentioned, actually,that the way that they present
(34:44):
information, I find is actuallyfrankly a bit um, you know,
they're very good at doing thetransactional stuff, you know
the e-commerce bit, but when itcomes to presenting financial
information, yeah, um, they'reall bit.
So I I use interactive broker alot, for instance, big american
platform ibk, which is belovedby hedge funds and that kind of
(35:06):
stuff and um, ibk is absolutelyfantastic, it's a great resource
, it's great, it's a fantasticbroker broker.
But even there and they've gottools coming out of every
orifice, um, and they're afantastic platform, but their
presentation is just dreadful.
I mean, sometimes trying towork through stuff, trying to
get to it, is quite complicated,and that, by the way, I mean
(35:27):
it's a fantastic platform, it'svery good.
So I think the way in which alot of the platforms have
presented financial informationleaves much to be desired.
Speaker 2 (35:35):
Yeah, I feel there's always like that tension between
UI and then depth and it's hardto find the right balance
between the two.
Speaker 1 (35:47):
Yeah, particularly if you've got to stick it on a
little device that's that big,exactly.
But hey-ho, that's a challengefor the technologists out there,
isn't it?
I'm sure they can work it out.
Speaker 2 (35:58):
Yeah, we'll get there .
So, talking about storytelling,you mentioned it as one of the
pillars that younger generationsare interested by.
You know a thing or two aboutstorytelling.
You've had a column on DFT thathas been running correct me if
I'm wrong but over a decade now.
Speaker 1 (36:16):
Many decades actually .
2007 we started Gosh.
Yeah, wow, almost two decades,that's impressive.
Speaker 2 (36:21):
2007 we started Gosh, yeah, wow, almost two decades.
That's impressive.
So how has writing regularlythis?
Speaker 1 (36:38):
column shaped the way you think about the world and
about investing and risk.
How has it helped you over theyears?
Well, I mean, the clue is inthe title.
I've got a title called theAdventurous Investor, which is
for the FT and for my newsletter, and the clue is in the title,
really, which is that I'vealways liked being a bit
adventurous and digging around.
So I mentioned that I washaving a look at CCDS, which I'm
shocked that you're not anexpert in these core capital
(36:59):
deferred shares.
But all joking aside, the reasonI was mentioning that is
because I think some of the mostinteresting stuff is where it's
complicated and a bit difficultand a bit adventurous and
you've got to really dig aroundand understand it.
And you know, everybody canhave a view about nvidia being
cheap or expensive.
I mean, you know, take yourpick, um.
But sometimes the mostinteresting stuff in narrative
(37:23):
terms is the stuff where youhave to work a bit harder
because you've got to go andlook at it and research it.
And um, so I I started off myinvestment career many, many,
many moons ago, um, doing stockscreening.
You know I was a bit of a geekyquant type, so I I loved stock
screening.
I'd get these big stock screensout and I'd run them through
the markets and see what sharescame out of the bottom of them.
(37:45):
And what that always taught meis that you have to dig around
to find the interesting stories,and it's usually the
interesting stories that are themost compelling investment
opportunities.
Because, let's be honest, if youlook at what hedge funds make
their money out of, they maketheir money out of two things.
One, they make their money outof.
They make their money out oftwo things.
One, they make their money outof obviously using leverage and
(38:05):
incredible ai and lots of dataand that kind of stuff.
But the other thing they a lotof the really good hedge funds.
They make their money out ofreally quite esoteric stuff,
yeah, quite detailed stuff.
They have a particular angle ortwo.
They look at it, theyunderstand it, they really
master it and they focus in onit, and then they they make
money out of it, usually byleveraging at returns, um and
that, that, that there's noreason why individual investors
(38:28):
can't do that yeah, I alwaysfelt like every opportunity has
already been spotted by someoneelse at some point.
Speaker 2 (38:39):
I guess that the secret is to get in before a
large amount of other peoplestart noticing the same thing,
and and and get on board, butfinding something completely
you'll never be alone I yeah,yeah, absolutely, but, uh, but,
yeah, it's, it's interesting.
Are you also into like allthese new type of um asset
(39:04):
classes that are being madeaccessible to retail investors,
such as investing in Legos,investing in music royalties
investing?
Speaker 1 (39:12):
in wine.
Emotional assets.
I've once heard them describedas Sorry Emotional assets.
Speaker 2 (39:17):
I've heard them described as yeah, do you also
look at all of?
Speaker 1 (39:21):
that, yeah, I do.
I am a big investor in them.
So, for full disclosure, I'mvery sad that I invest in old
coins, so 17th century EnglishCommonwealth coins that's pretty
cool.
Yeah, and I also invest instamps.
My dad was a stamp collectorand my granddad was a stamp
(39:43):
collector and I collectironically, considering my
capitalist inclinations best instamps.
Um, I, my dad was a stampcollector, my granddad was a
stamp collector and I I collectironically, considering my
capitalist inclinations um, Icollect chinese stamps.
Speaker 2 (39:50):
Um, don't ask me why, anyway, um, so so specific
david oh my god, exactly soyou're telling me that you have
one of the largest chinesestamps.
Speaker 1 (40:00):
Private collections in the world.
Well, I don't know about world.
I mean, there's a lot ofChinese stamp collectors out
there.
Speaker 2 (40:04):
They've got massive stuff In your neighborhood, for
sure.
Speaker 1 (40:07):
Certainly, probably in the south of England anyway,
and so, yeah, so I entirelyunderstand it.
I am nevertheless cagey aboutit and wary and I'll tell you
via a story, which is wine.
So probably one of the mostliquid assets in the emotional
(40:28):
world of investing orcollectibles if you want to call
it, that is wine.
Wine's been around for a very,very long time.
A lot of very, very successfulinvestors collect wine and
there's a guy I know very, verywell, I regularly have lunch
with him and he's got like athree million pound collection
of wine and he's a verysuccessful private equity and
he's really into wine and I likewine.
(40:49):
I like wine to drink.
I'm not sure I like wine tocollect and invest in, but
anyway, and he does like wine toinvest in.
And his point was that you knowwhat the problem with a lot of
these emotional assets, wine isprobably, as I said, one of the
most liquid, one of the broadest.
It's got a very wide catchmentarea of investors.
(41:09):
It's been a really difficultinvestment class and asset class
.
It's returns are down, classicimprimatur.
Bordeaux's not done terriblywell, partly because a lot of
the going back to the Chinese.
A lot of chinese investors havepulled their money out the
market, um, and it'sstructurally quite challenged
and there's also loads of peoplebasically trying to sell lots
(41:31):
of platforms and brokers tryingto sell rubbish stuff basically
and trying to take advantage ofinvestors.
Um, so I'm a little cagey abouta lot of these, as I call call
them emotional or collectibleassets, and I think it's great
if you really like them.
I mean, I said I'm a saddo, soI like kind of you know,
(41:58):
Cromwellian and Commonwealthcoins, 1640s and 50s, or Chinese
communist stamps, but I likethem anyway and they'll be fine.
Speaker 2 (42:09):
I think the basic principle and it's my friend who
says about wine you know hecollects wine, which if all else
, all else fails, he can drinkbecause he likes the wine.
Um, three millions of of ofwine is going to be a lot of
wine to drink.
Speaker 1 (42:14):
I'm telling, I'm telling you that well, it
depends how much you spent onhis wife, did it?
Um, if he's spending 50 000,could a bottle maybe not anyway,
um, so I I am a bit carefulabout it and I do worry about
the tokenization of that.
Um, and lots of people aretokenizing that.
I never realized you could, Ididn't realize that luxury
(42:35):
handbags were collectible, andso there was a platform which I
think a swiss platform that doesit called it was a splint or
something I'm going to call nowum and um.
I mean you could collect luxuryhandbags, I mean you could
collect everything, um, I'm nottoo sure about its provenance as
an, as an investment class, andthat's my point about wine.
Wine is pretty close as youcould get to a quality, a
(42:58):
collectible asset class,probably along with modern art.
Really, wine and modern art arecompeting and wine has been a
very difficult market.
And even modern art, whichyou've got people like
Masterworks doingfractionalization of art.
It's a difficult market becauseit's kind of like it's a
quality market.
(43:18):
If you can spend five millionquid on the painting, maybe
you'll do brilliantly, yeah, butif you're basically just
hanging around 20,000 quidpaintings and not sure how much
they've been doing, yeah, Idefinitely need to get at some
point someone on the show totalk about wine investing and
someone from Masterworks or fromthat world.
Speaker 2 (43:40):
My wife is an art advisor so I've always also been
very interesting in that areaand, yeah, the whole
fractionalization of those assetclasses is fascinating to me
yeah, um not without risk, I'dsay, but anyway 100 yeah um.
So at the beginning of the ofthe conversation you were
talking about your sub stack.
I have the feeling thateveryone's got a Substack now,
(44:02):
or very hot takes on X orLinkedIn, but very few people
are actually really, really goodor managed to cut through.
In your view, what separatesthe useful financial opinions
and the good newsletters fromjust the noise?
Hey there, quick ad break.
Do you work in the financeindustry and have a genuinely
(44:26):
interesting story to share?
I'm always on the hunt forgreat guests who bring raw,
unfiltered insights to the table.
Or maybe you know someone witha story worth telling?
Please put us in touch.
You can reach out to medirectly via LinkedIn.
I'd love to hear from you.
And now back to the show.
Directly via LinkedIn.
I'd love to hear from you.
And now back to the show.
Noise, and you know, yeah,useless kind of content.
Speaker 1 (44:55):
Yeah, well, I mean assuming that I have some value
which is in the eye of thebeholder.
Speaker 2 (44:59):
I'll put you in the top-notch category.
Speaker 1 (45:01):
Well, that's very nice of you.
I don't know if that's entirelytrue, but I think really what
you've got goes back to my pointabout what your narrative and
your length is.
The substack works terrificallywell for longer reads and also
it's reads where you really getunder the skin of something.
Yeah, and you really understandit of something.
(45:24):
Yeah, and you really understandit.
That all the, all the substacksI read I read loads um are done
by people who's who I trust,yeah, I respect, and I think are
good at what they do.
They're experts, they're domainexperts and they write at
length, not too long, but longenough because we don't.
We hot takes are great butfrankly, I gave up on x or
twitter years ago and I'mprobably one of the few
(45:44):
journalists who ditched Twitterway back five or six years ago,
so I'm quite cagey about X andall that kind of stuff.
Speaker 2 (45:55):
LinkedIn is the place to be now.
David Forget X.
Speaker 1 (45:59):
LinkedIn is the place to be yeah, linkedin is the
place to be.
Yeah, LinkedIn is it?
Yeah.
Again, I'm a bit rubbish onLinkedIn as well, because I'm
probably.
I find LinkedIn quite good ifyou're corporate yeah,
linkedin's very good if you'rein a big corporate setting.
I'm not so sure it's good ifyou're a slightly more
iconoclastic person like me.
Speaker 2 (46:19):
I'm sure you would nail it if you got more serious
about it?
Speaker 1 (46:23):
Yeah, probably do.
That's what people say to me,but I'm probably not serious
enough about it um, yeah, no,it's.
Speaker 2 (46:31):
Uh.
I guess there's a mix of back,a mix back there.
Like I, I find incrediblyuseful content on social media
in general, not just soft stackor x or linkedin, but um across
all platforms and then some verybad information.
But you know what?
It's the same thing fortraditional financial media.
Quite frankly.
Sometimes, you know, I findvery useful information,
(46:54):
sometimes not so much and.
I also feel like financial mediashapes a big role in shaping
investor sentiment.
Sometimes they write veryresponsibly, sometimes very
recklessly, so let's talk maybea bit about that, about
traditional financial media likethe FT and Bloomberg and all of
these big companies.
What's your view on them?
(47:16):
Do you think they consistentlymiss or misrepresent information
or talk wrong about some partsof the market, or you think
they're doing generally a goodjob?
Speaker 1 (47:26):
they're doing generally a good job.
I find very little in thebloomberg and the ft's of the
world and the economist which II think is blatantly
misrepresenting stuff, um, uh,so I think you know it's
completely, it's completelybrand specific.
Really, look, what you have toaccept is that each of them has
their biases.
Yeah, so you know, the FTprobably represents a kind of
(47:51):
well, a bit like the Economist,but the FT represents a slightly
more liberal view of the world,I mean, consistent with its
outlook.
The Economist has a particularview of the world which is very
much.
Actually, all three of them arequite liberal in their
attitudes, probably quite freemarket, which you'd expect.
Yeah, the financial times isprobably, by nature, a little
(48:12):
bit more center lefttraditionally.
Um, the economist has alwaysbeen a bit more center right
traditionally.
So if you, as long as youunderstand their, their
cognitive biases, um, so youknow, the ft won't be a big fan
of Trump won't come as asurprise, nor will the Economist
and nor will Bloomberg.
But the Wall Street Journal,which I also think is a bloody
(48:33):
good paper.
I like the Wall Street Journalas well as the FT, you know, I
think you know the Wall StreetJournal is more centre-right.
You know it has its cognitivebiases.
So I think as long as you couldgo in with your eyes wide open
and understand their cognitivebiases, um, and those biases are
simply a function of partlytheir audience, um, and partly a
(48:55):
function of the people who workthere.
You know most journalists thatwould drift to the left or
liberal left, um, not all, butmost probably most financial
journalists, probably a bit morecentrist, so that that kind of
political thing you just have tobe aware of what you're getting
yourself in for.
That's less of an issue in thetrade press.
So you know, um, ets, stream,city, while that kind of stuff,
(49:19):
that bias doesn't really doesn'treally manifest itself.
Um, and you have to bear in mindthat all journalists,
regardless of whateverpublication they're writing for,
their primary mission in lifeis to get the story out first.
And sometimes, when you want toget the story out first, that
means you probably get itslightly wrong or not quite
right, and that's part of theway business is done really.
(49:42):
I come from a slightlydifferent world in tv where I
mean there's tv news, get stuffout first, but current affairs
and docs we wait, we stand backand we let stuff happen and then
we do a program about it.
So we don't really have thatbias.
So much, um.
But uh, yeah, bear in mind,journalists by and large want to
get the stories out first, butthey don't.
(50:02):
That doesn't mean they alwayswant to get it out exactly right
, because they don't have acompliance officer sitting next
door to them.
I mean, they do.
We have editorial standards,people, but we don't have
compliance officers canliterally tell you I'm going to
fire you because you haven'tfollowed the rules.
It's a different kind of, it'sa different way of, it's a
different power structure.
Speaker 2 (50:21):
Yeah, no, I agree with you.
I think, um, you know, thesemedia outlets are generally
doing a a fantastic job.
Personally, I I'm I read onlydft and bloomberg.
Uh, I had a subscription to theeconomies but I didn't have
time to go through all of it,and with my kids, my son
particularly I say get, say, getthe Economist.
Speaker 1 (50:42):
Every time I think the Economist is still
absolutely fantastic, it'sreally, really good.
Speaker 2 (50:47):
But then you have this problem of the famous pile
of economies in your living room, because the content is so good
that you feel bad aboutthrowing them, but you don't
have time to read it becausenext week there's another issue
coming out.
And then it's just there and atsome point your, your wife
comes and and starts yelling atyou and says what the hell is
this?
Speaker 1 (51:08):
and that's probably.
I don't, I suppose I've I'mI've got a carnivorous attitude
towards information, so I canprobably whiz through a copy of
the economist in an evening.
So uh, but I, I hear what yousay, but, um, but you know,
information is king and the moreinformation you have, the
bigger the king you are I shouldget it back at some point.
Speaker 2 (51:26):
I also talking about DFT, I also find I mean the
reason why I was asking you thisI wanted to get your take is
that some of the mostinteresting and coolest things
about DFT a lot of people don'tknow this, but below each
article there's a commentsection and, as opposed to what
a lot of people think, it'ssuper active.
Like every single article hashundreds, if not thousands, of
(51:50):
comments and I don't know why,but the authors get a lot of
beef on DFT.
Like there's a lot of peoplecriticizing and I was wondering
how do you take criticism foryour pieces?
Do you go through?
You know?
Speaker 1 (52:06):
uh, feedback, or you just completely ignore it I've
virtually completely ignored itand it's partly because you know
there are that I'd say forevery one really interesting
comment.
Yeah, um, and there's somereally great comment
commentators on there.
There's about five or sixtrolls, yeah, yeah, and you know
there's loads of people justjust saying stupid stuff on
(52:28):
there.
There's about five or sixtrolls, yeah, and you know
there's loads of people justsaying stupid stuff on there and
I just sort of roll my eyes atsome of it.
And in fact you know that's thecase because actually on
stories usually involving Russia, ukraine, they turn the
comments off.
Yeah, so you're right, it'shuge, and you know you quite
often have to keep pressing thatbutton that says read further
comments, read further comments,read further comments.
(52:49):
Um, but I, I personally don'ttake a lot of notice of it.
Okay, that's good, good foryour ego.
Well, I mean, it's good forjust good for your
self-confidence otherwise,because otherwise you read it
all and they probably call you acomplete dipstick.
Speaker 2 (53:03):
but anyway, there we are yeah, and I guess you have
to take it, obviously, with apinch of salt.
It's very easy to criticizewhen you're standing behind your
screen and have zero stakes.
Um but, um but no, but I I findit interesting.
Sometimes, as you say, you findlike the diamond in the rough.
They're like a very goodcomment that makes you think
about something.
Um, I wanted to ask you about,um investing specifically.
(53:34):
Um, you said that you have alot of skin in the game.
Could you maybe share with us astory of, of one investment
that you got wrong over yourlifetime as an investor, and and
what was your main takeawayfrom that experience?
Speaker 1 (53:44):
your lifetime as an investor and and what was your
main takeaway from thatexperience?
Loads of them, um, I mean, youknow, I mean I mean so many I
can't even don't know where tobegin.
Um, well, I mean the mostrecent was I invested in a, in a
fund, um, which was a digitalinfrastructure company, which I
thought was fascinating and metthe management and thought they
were great, and then it didn'tgo terribly well let's put that
(54:05):
way around here.
So, and and that theinteresting lesson to learn
there, um is actually, eventhough something looks really
interesting and exciting and andin of its time, yeah, and
digital infrastructure certainlyis data centers, all that kind
of stuff and it had a brilliantinvestment.
Brilliant investment in um uh,nordic or icelandic data centers
, all that kind of stuff, and ithad a brilliant investment.
(54:26):
Brilliant investment in um uh,nordic or icelandic data centers
uh, I went to visit them andthey're brilliant.
It was a great investment.
Unfortunately, the fund itselfwasn't a great investment, um
and um.
What that teaches you is thatthese kind of trendy things,
that where you think surely youcan make money out of that,
doesn't always work out that way.
Um, there's lots of, lots oflots of devil in the detail is
(54:46):
where I put it um so, great area, very sexy data centers,
digital infrastructure, digitalbroadcasting, all that kind of
stuff, um, fiber optic cables,you know.
I mean what could possibly gowrong?
Um, and there's actuallynothing, nothing wrong with the
businesses per se.
Yeah, it's the fund itself sortof blew up though issues to do
(55:08):
with, um, debt and issues to dowith cash flows, all that kind
of stuff.
So what that tells you to do isfocus on the dynamics of the
business.
Yeah, because just because it'sin a sexy area really is no
guarantee it will make any money.
Good one good one.
Speaker 2 (55:24):
We're getting close to the end of the conversation,
so I need to be super carefulwith my last question or two.
Um, I have to ask you about ai.
I mean, obviously, you know, inevery episode at some point we
we talk about this.
You said that you're skepticalabout some of the claims, uh,
that, um, everyone is makingabout ai and the impact on the
finance industry.
(55:44):
So, in a couple of sentences,do you think we are all going to
lose our jobs as financialadvisors or not?
Speaker 1 (55:52):
No, god, no, no.
You're not going to lose yourjob as a financial advisor,
because no one is going to wantto talk about the wealth they've
accumulated to a robot or to an.
AI program.
You want to talk to a humanbeing?
Yeah.
So all of that personalinteraction stuff, great, no
risk with that.
And I even think, within thesecurity selection side as I
(56:14):
said, I'm not convinced it willdo that.
Well, I think AI is probablyquite good for hedge funds and I
think it already is because itallows them to spot patterns and
behaviors in the numbers.
I think probably works for them.
Yeah, um, but I think I thinkany industry which which
involves an awful lot ofpersonal interaction, you're
(56:34):
safe you heard, david, we'resafe guys, thank god.
Speaker 2 (56:39):
Um.
Last question um for anyoneentering the industry today,
what would your advice be forhaving a successful career in
finance?
Speaker 1 (57:05):
what you want to get into.
But I have to say two things.
Either one, go into somethingwhich is going incredibly um,
it's got this incrediblemomentum behind it and it's very
sexy and everybody lovestalking about it, because
there's always going to be moneypumped into it and that means
jobs, yeah.
So, no surprise, cryptoeverybody loves crypto.
Loads of money flooding into it.
Those jobs.
Etfs everybody loves etfs.
Loads of money flooding into it.
You always need lots of peoplein etfs.
(57:27):
So either one, go just go to thesexy end, work out how to work
out how it works, but learn thebasic business skills and then
probably get out before thewhole thing implodes, um.
Or number two I actually think,as advice I give to my own son,
it's just going to somethingwhich has got strong personal
relationships, where you have towork with people and you have
(57:49):
to deal with clients, because,although clients can be a pain
in the derriere, they are thevery core of the business and
you can build a business off theback of really good personal
relationships.
So I actually think the futureis very bright for people
working in financial advice um,because there'll be there'll be
(58:09):
more older people, wealthier,with more money, who don't
understand what they're doingwith their money.
Who want some advice?
Yeah, and I think that's just aperpetual growth market in the
west, until until, of course, wemanage to bankrupt ourselves.
Speaker 2 (58:22):
That's an excellent note to end.
The conversation on.
My job is safe.
I'm going to sleep very, verywell tonight.
David, thank you so much forall those insights.
I didn't see the time pass.
I had like three times morequestions that I wanted to ask
you, but I guess I'll have tocontinue reading your newsletter
.
Hopefully I'll get some of theanswers over there.
Thank you so much for coming.
(58:43):
Best of luck with ETF Stream,all your ventures and the
Adventurers Investor, of course.
And yeah, thank you so much forcoming to the show.
Thank you very much, Lovelytalking to you, Thank you.
The Blunt Dollar is written,produced, hosted and edited by
me, Ignacio Ramirez.
Everything you hear concept,script, sound, design and
(59:08):
production comes straight frommy desk and occasionally, my
kitchen table.
Thank you so much for listening, and join me in the next
episode of the Blunt Dollar formore raw, honest finance
conversations.
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