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MiB: A Random Walk with Burton Malkiel

This week on our Masters in Business podcast, we speak with Burton Malkiel, chairman’s professor of economics at Princeton University, and is a two-time chairman of the economics department. Professor Malkiel served as a member of the Council of Economic Advisers (1975–1977), president of the American Finance Association (1978), and Dean of the Yale School of Management (1981–1988). He was a director for the Vanguard Group for 28 years. He is best known for A Random Walk Down Wall Street, now in its 11th edition, with over 1.5 million copies sold. Malkiel is Chief Investment Officer to software-based financial advisor Wealthfront. Our conversation range far and wide, and Malkiel discussed everything from how he urged the creation of index funds to why “a blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by the experts.” Its not that investors are stupid – it’s the opposite! Markets have become so filled with very smart, hard-working and insightful managers with a vast wealth of technology at their fingertips, he says, that Alpha is almost immediately arbitraged away. You can stream the full podcast below, or download it on iTunes, Soundcloud or Bloomberg. All of our earlier podcasts are at iTunes, Soundcloud and Bloomberg. Next week we speak with Steven Pinker, Professor of cognitive psychology at Harvard, and author of How the Mind Works.

#This week on our Masters in Business podcast we speak with Burton Malkiel chairman’s professor of economics at Princeton University and is a

MiB: Robert H. Frank

This week on our Masters in Business podcast, we speak with Robert H. Frank, Henrietta Johnson Louis Professor of Management + Professor of Economics at Cornell’s Johnson Graduate School of Management.* Frank has written numerous books, most recently, Success and Luck: Good Fortune and the Myth of Meritocracy. He co-authored a best-selling economics textbook with with former Fed Chairman Ben Bernanke titled Principles of Economics. He is perhaps best known for his 1995 book, The Winner-Take-All Society (co-authored with Philip Cook). It won the Critic’s Choice Award, was named Notable Book of the Year by The New York Times, and was on Business Week’s list of ten best books of the year. Professor Frank was one of the earliest economists analyzing the impact of income and wealth inequality from an economic perspective. His latest book discusses the tendency of people to underestimate the impact of chance – and over-estimate their own skill sets – in terms of financial outcomes. The implications for investors are many and broad. Frank has been studying the subject of income inequality from an economic perspective for several decades — long before its recent popularization by economists such as Thomas Piketty and Emmanuel Saez. We discussed some of the more fascinating statistics Frank analyzed from the 1990s – and they sound almost as if they were written yesterday: “The incomes of the top 1 percent more than doubled in real terms between 1979 and 1989, a period during which the median income was roughly stable and in which the bottom 20 percent of earners saw their incomes actually fall by 10 percent.” Frank also describes how many of the factors which are currently driving inequality – automation, globalization, and tax code changes – are longstanding parts of a changing economic dynamic; The key difference is that their impacts have increased dramatically in the post-crisis years. You can stream the full podcast below, or download it on Apple iTunes,Bloomberg, or SoundCloud. All of our earlier podcasts are at iTunes, Soundcloud and Bloomberg. ~~~ Next week we speak with, Jeff DeGraaf, CFA/CMT, Chairman and Head Technical Analyst at Renaissance Macro.

________ * where he has won numerous teaching awards Johnson School’s Stephen Russell Distinguished teaching award (2004, 2010 + 2012) and Apple Distinguished Teaching Award in 2005. In he was awarded the 2004 Leontief Prize for Advancing the Frontiers of Economic Thought Books discussed during the podcast: • Micromotives and Macrobehavior by Thomas C. Schelling • Everything Is Obvious: How Common Sense Fails Us by Duncan J. Watts • How We Know What Isn't So: The Fallibility of Human Reason in Everyday Life by Thomas Gilovich • Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics by Thomas Gilovich

MiB: Kelly Coffey, CEO, JPM Private Bank

On this week’s Masters in Business radio podcast, I speak with Kelly Coffey, CEO of the $650B JPM Private Bank. She is one of the most senior women in finance, managing one of the largest investor firms in the world. Coffey tells how how she came out of the JPM training program and was immediately economy. She also ran the Derivatives marketing group, and was a key player in the JPM takeover of Bear Stearns during the financial crisis. She discusses what it takes for women to advance in the world of finance, and what obstacles must be overcome. Download the full podcast at iTunes and SoundCloud and Bloomberg. Earlier podcasts can be found on iTunes, Soundcloud and at Bloombergview. Masters in Business broadcasts on Bloomberg Radio on Friday evening at 9pm, Saturday at 4am, 10am, 6pm, and 11pm, and early Sunday morn at 3am. Next week, we speak with Jeff DeGraaf, Chief Technician and founder at Renaissance Macro.

MiB: AAII's Charles Rotblut

On this week’s Masters in Business radio podcast, I speak with Charles Rotblut of the American Association of Individual Investors. Rotblut describes the methodologies behind several AAII surveys, which have been running since 1987. They have been quite accurate in calling market extremes. Download the full podcast at iTunes and SoundCloud and Bloomberg. Earlier podcasts can be found on iTunes, Soundcloud and at Bloombergview. Masters in Business broadcasts on Bloomberg Radio on Friday evening at 9pm, Saturday at 4am, 10am, 6pm, and 11pm, and early Sunday morn at 3am. Next week, we speak with Jeff DeGraaf, Chief Technician and founder at Renaissance Macro.

MiB: Robert Johnson's Financial Education Advocacy

On this week’s Masters in Business radio podcast, I speak with Dr. Robert Johnson, President of the American College of Financial Services, and previously a senior member of the CFA Institute, where he made the CFA Level 1-3 Exams what they are today. You may not be familiar with this week’s guest, but his work likely influences the world of modern finance tremendously. Johnson has been involved with the accreditation process of various financial participants for many years. He is the author of Strategic Value Investing: Practical Techniques of Leading Value Investors, and Invest with the Fed: Maximizing Portfolio Performance by Following Federal Reserve Policy. Johnson tells how many years ago, Warren Buffett showed up to speak to his class at Creighton University. When the conversation turned to books, Buffett recommended Seth Clarman’s Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor. All of the students in class purchased it. Years later, the book went out of print, and was soon selling for $2000 on eBay. Johnson calculated that if the book was an investment, it would have compounded at 27% annually, noting that even Buffett’s book recommendations are money makers. At the annual Berkshire Hathaway’s shareholder meeting, Buffett always included a list of favorite books, (which of course does bang up business at the only bookstore in town). He added Johnson’s own book Strategic Value Investing, to the list of recommended works for the annual meeting. Download the full podcast at iTunes and SoundCloud and Bloomberg.com. Earlier podcasts can be found on iTunes, Soundcloud and at Bloombergview. You can also listen to Masters in Business on Bloomberg Radio Friday at 9pm, Saturday at 4am, 10am, 6pm, and 11pm, and Sunday at 3am. Next week, we speak with Kelly Coffey, CEO of the $650B JPM Private Bank.

MiB Keith Ross: PDQ Enterprises & Getco Trading

This week on our Masters in Business podcast, we speak with Keith Ross, chairman and CEO PDQ Enterprises, a Dark Pool and ATS firm specializing in a form of unique inverse auctions. Previously, he ran Getco, one of the largest HFT forms (Getco purchased Knight Trading last year for $1.4B). In our conversation, we discuss what High Frequency and Algorithmic trading are, what they mean to for institutional trading, changes in Market Structure over the past 30 years, and what the proper role of the Exchanges should be. We go deep into the weeds on the wonky subject of High Frequency Trading (HFT), whether HFTs are superior to Specialists, and the plusses and minuses of Fragmentation. We also head deeper into wonkville on issues of Co-location, Packet-sniffing, Spoofing, Quote-stuffing and Walking away. I would be remiss if I didn’t bring up front running as well. If you are a student of market structure or institutional execution you will find the conversation illuminating. You can listen to the show on Bloomberg Radio, stream the full podcast or download it on Apple iTunes, Bloomberg, or SoundCloud. All of our earlier podcasts are at iTunes, Soundcloud and Bloomberg.

MiB: Tom Dorsey on Point-and-Figure Charting

This week on our Masters in Business podcast, we speak with Tom Dorsey, co-founder of Dorsey Wright & Associates, a firm specializing in technical analysis that was bought last year by Nasdaq for about $225 million. Perhaps best known for popularizing the point-and-figure form of technical analysis, which is designed to indicate when to enter or exit the stock market, Dorsey is also highly regarded for his work on relative strength and momentum. Those two factors are the underlying strategies for numerous investment models. Among other things, we discussed smart beta and the many ways equity indexes can be constructed. Dorsey, who started his career as a stock broker in the depths of the bear market in 1974 at Merrill Lynch Pierce Fenner & Smith, is the author of "Point and Figure Charting: The Essential Application for Forecasting and Tracking Market Prices." You can stream the full podcast or download it on Apple iTunes, Bloomberg, or SoundCloud. All of our earlier podcasts are at iTunes, Soundcloud and Bloomberg.

Helaine Olen on the Dark Side of Personal Finance

In our special Good Friday edition of Masters in Business podcast, we speak with Helene Olen, personal finance columnist for Slate, and Inc. magazine. Olen was named “one of the 50 Women Who Are Changing the World.” She is a graduate of Smith College, and author of Pound Foolish: Exposing the Dark Side of the Personal Finance Industry, as well as The Index Card: Why Personal Finance Doesn’t Have to be so Complicated (w/Harold Pollack). She tells the history of how she accidentally began writing about personal finance – she lived near the Beverly Center in Los Angeles, and when a reporter called in sick, she took a freelance assignment that became a career. You may be surprised to learn that the personal finance industry has its roots in the Depression era 1930s, and was an outgrowth of the Self-Help industry. We discuss this history as well as many problematic issue of the industry today. As an example, Olen calls financial literacy a failure, with deep ramifications for a future retirement crises. We discuss her distaste for the “gurus, pundits, self-anointed experts, crackpots, cranks, and outright frauds who populate the backwaters and slipstreams of American finance.” You definitely want to hear what she has to say about personal finance gurus such as Suze Orman, Dave Ramsey, and Robert Kiyosaki. You can stream the full podcast, or download it on Apple iTunes, Bloomberg, or SoundCloud. All of our earlier podcasts are at iTunes, Soundcloud and Bloomberg.

MiB Bethany McLean

In our latest Masters in Business podcast, we speak with Bethany McLean, Vanity Fair contributing editor, and author of numerous books, most famously The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron. The documentary film based on her book was nominated for an Academy Award in 2006. In addition to her book on Enron, McLean is also author of Shaky Ground: The Strange Saga of the U.S. Mortgage Giants and All the Devils Are Here: The Hidden History of the Financial Crisis. A graduate from Williams College with a double major in math and English, McLean discussed the brutal competition she witnessed as an M&A investment banking analyst at Goldman Sachs. McLean gave up banking for reporting, joining Fortune Magazine in 1995. We discuss her frustrations with the media’s role in “Wall Street promotion machine.” This led her to seek out more voices for her reporting, including short sellers. She eventually penned a now infamous March 5, 2001 column titled Is Enron Overpriced? It marked the beginning of the end for the energy trading giant; by the end of the year, Enron filed what was then the largest corporate bankruptcy in American history, caused by “institutionalized, systematic, and creatively planned accounting fraud.” You can stream the full podcast, or download it on Apple iTunes, Bloomberg, or SoundCloud. All of our earlier podcasts are at iTunes, Soundcloud and Bloomberg.

MiB: Jack Bogle, Vanguard Group founder

In our latest Masters in Business podcast, we speak with Jack Bogle, founder of the $3.5 trillion dollar Vanguard Group, creator of the index fund, and all around investing legend. Bogle tells the fascinating story of Vanguard’s origins. At the time, he was Chairman of the Wellington Funds, and due to a disastrous merger, was fired from that role. He found a niche within the asset management group running Wellington’s what he describes as unmanaged funds. This was the first equity index fund — Bogle later created the first bond index fund as well — and he named the new management company company for the HMS Vanguard, flying Rear Admiral Sir Horatio Nelson’s flag. Bogle discusses Wall Street’s initial response to index funds, explains why no one ever really decided to compete with Vanguard, and holds a master class on the proper way to invest. In our MiB interviews, we usually come prepared with 5 broad topic areas and over 50 questions I use to guide the conversation. Bogle, however, is a force of nature, and after gamely trying to say on script for about 12 minutes, I quickly gave up, satisfied to merely have an amazing conversation with one of the most legendary personalities in all of finance. You can stream the full podcast below, or download it on Apple iTunes, Bloomberg, or SoundCloud. All earlier podcasts are at iTunes, Soundcloud and Bloomberg.

Next week, we speak with Bethany McClean, financial journalist, and author of The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron.

MiB: Emanuel Derman, Physicist in Finance

In our latest Masters in Business podcast, we speak with former Goldman Sachs quant and financial engineer Emanuel Derman. He is currently Director of the graduate program in Financial Engineering at Columbia University. One of the first high-energy particle physicists to migrate to finance, he spent 17 years on Wall Street, eventually becoming head of the renowned Quantitative Strategies group at Goldman, Sachs. At GS he co-developed the Black-Derman-Toy interest rate model and the Derman-Kani local volatility model (both now widely used industry standards). Derman was the recipient of IAFE/Sungard Financial Engineer of the Year (FEOY) award in 2000. He is the author: of My Life as a Quant: Reflections on Physics and Finance and Models.Behaving.Badly. Anyone interested in financial modeling, quantitative analysis and the rise of mathematics on Wall Street will likely find this a fascinating discussion. You can stream the full podcast below, or download it on Apple iTunes, Bloomberg, or SoundCloud. All of our earlier podcasts are available iTunes, Soundcloud and Bloomberg.

MiB: Saru Jayaraman on How We Eat Today

In our latest Masters in Business podcast, we speak with Saru Jayaraman. She is the Director of the Food Labor Research Center at University of California, Berkeley, and Co-Director of the Restaurant Opportunities Centers United (ROC-United). She is a recipient of the James Beard Foundation Leadership Awards, and was named to Crain’s “40 Under 40” list for 2015. Jayaraman is the author of Forked: A New Standard for American Dining as well as Behind the Kitchen Door. The conversation covered the changes in the dining and restaurant industry, from shift sin the minimum wage issues to the latest trend in dining out, a new “No Tipping” policies as some restaurants. Jayaraman attended UCLA, for her undergraduate school work, graduating with a B.A. International Development Studies and Political Science, in 1995. She earned her Masters in Public Policy at Harvard University, John F. Kennedy School of Government in 1998, and then received a J.D. from Yale Law School, 2000. You can stream the full podcast below, or download it on Apple iTunes, Bloomberg, or SoundCloud. All of our earlier podcasts are available iTunes, Soundcloud and Bloomberg.

MiB: Mohamed El-Erian on the Global Economy

In our latest Masters in Business podcast, we speak with Mohamed El-Erian, chief economic adviser at Allianz (he is also the former chief executive officer and co-chief investment officer of Pacific Investment Management Co., owned by Allianz). El-Erian spent 15 years at the International Monetary Fund in Washington, where he served as deputy director. He is chairman of the president’s Global Development Council; Foreign Policy named him to its Top 100 Global Thinkers list and called him one of the 500 most powerful people on the planet. His book, "When Markets Collide: Investment Strategies for the Age of Global Economic Change," was a New York Times and Wall Street Journal bestseller, and won the Financial Times and Goldman Sachs Business Book of the Year Award in 2008. His new book is titled "The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse." El-Erian also is a fellow Bloomberg View columnist and publishes regular commentary at the FT. You will find our conversation on the state of the global economy to be fascinating and enlightening -- my only criticism is that it was too brief. You can stream the full podcast or download it on Apple iTunes, Bloomberg, or SoundCloud. All of our earlier podcasts are available on iTunes, Soundcloud and Bloomberg.

MiB: Ethan Harris on Rates and Monetary Policy

In our latest Masters in Business podcast, we speak with Bank of America Merrill Lynch’s co-head of global economic research, Ethan Harris. Harris is a history buff, as well as an expert on interest rates and monetary policy. He began his career as a researcher at the NY Fed, eventually rising to chief economist at Lehman Brothers. He has a Ph.D. in economics from Columbia University, where he also serves as a university fellow. Harris is also the authorof "Ben Bernanke’s Fed: The Federal Reserve After Greenspan." Our jargon-free conversation on the state of the global economy was very accessible to non-economists. His fascinating description of the final days at Lehman Brothers was compelling. You can stream the full podcast below, or download it on Apple iTunes, Bloomberg, or SoundCloud. All of our earlier podcasts are (yay!) available on iTunes, Soundcloud and Bloomberg.

MiB: Jonathan Miller, Go-To Appraiser

In our latest Masters in Business podcast, we speak with real estate expert Jonathan Miller, co-founder of appraisal firm Miller Samuel. Miller is an expert on real estate appraisals and the data analysis underlying residential real estate transactions. His firm has moved away from doing rank and file appraisals,specializing in ultra high end valuations and appraisals. Miller Samuel has created a variety of real estate data analytics both in NY, the Hamptons and dozens of other regions. He is also sought after as the “go to” appraiser for the many of the most expensive penthouses in Manhattan. In our conversation, we discuss the state of real estate in 2016. Miller explains both the ultra luxe market, as well as the latest trends in micro-apartments. We also look at the new rules governing money laundering, and the 6 month test case in Miami ($1m) and Manhattan ($3m). You can stream the full podcast below, or download it on Apple iTunes, Bloomberg, SoundCloud. All of our earlier podcasts are available on iTunes, Soundcloud and Bloomberg.

Masters in Business: Dan Biederman of Bryant Park Corp

On this week’s Masters in Business radio podcast, I speak with public/private space expert Dan Biederman. You may not have heard of this week’s guest, but his work likely influences more people – who have no idea who he is – than any other guest we have had. He re-invented public spaces with private funding by developing a brand new model to optimally “program a park.” Back in the 1970s and 80s, Bryant Park was a dangerous and drug-infested; Biederman tells the story of how Mrs. Astor, accosted by “ruffians” in the park, subsequently bumped into fellow NY Pubic Library board member David Rockefeller, saying “We must do something about this terrible park.” Biederman said it was serendipitous that he was tapped for the (non-paying) job. After the success of Bryant Park, he took the model elsewhere in the city, the state, and nationally. More recently he has consulted for cities in Canada and Asia. Download the full podcast at iTunes and SoundCloud and Bloomberg.com. Earlier podcasts can be found on iTunes and at Bloombergview.com. You can also listen to Masters in Business on Bloomberg Radio Friday at 9pm, Saturday at 4am, 10am, 6pm, and 11pm, and Sunday at 3am.

Masters in Business: Ron Rhoades

On this week’s Masters in Business radio podcast, I speak with Attorney and Professor Ron Rhoades of Western Kentucky University. Rhoades is an expert on regulations of asset management firms. Our discussion ranged from basics of what the Fiduciary standard is to the ethics of how asset management firms should be run. Its a little inside baseball, but if you work in the asset management side of finance, its must listen. Rhoades has been a zealous advocate for the Fiduciary Standard, frequently testifying in front of Congress, the SEC, and the Department of Labor. He has also been a gadfly to FINRA, challenging many of their policies as anti-investor. He helped to turn back FINRA’s attempt to become the SRO for Registered Investment Advisors, and has been highly critical of their arbitration process. Download the full podcast at iTunes and SoundCloud and Bloomberg.com. Earlier podcasts can be found on iTunes and at Bloombergview.com.

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