Unfeasibly Tanned for This Time of Year: A Mailbag Episode
Money Stuff: The Podcast
Deep Dive
What is GiveWell, and how does it ensure the impact of donations?
GiveWell is a nonprofit that researches and recommends high-impact giving opportunities. It ensures the impact of donations by having its own researchers spend months identifying flaws in past work and publishing these findings, including mistakes, for donors to review. Over 17 years, GiveWell has directed funding to a few high-impact opportunities, with over 125,000 donors contributing more than $2 billion, saving over 200,000 lives.
How did Matt Levine get introduced to the world of finance?
Matt Levine was introduced to finance through a combination of academic and professional experiences. He was a classics major in college, taught high school Latin, and then went to law school, where he discovered an interest in contracts. This led him to work as an M&A lawyer and later as an investment banker. He also mentioned being influenced by books like 'Liar's Poker' and 'Barbarians at the Gate' during his youth.
Why doesn't the government engage in insider trading to raise revenue?
The government doesn't engage in insider trading because it would undermine the capital markets and act as an unfair tax on retirement savers and other market participants. Instead of raising revenue through market manipulation, the government can impose taxes in a more neutral and structured way, which is less harmful to the financial system.
Why is it difficult for small retail investors to get diversified exposure to real estate?
Small retail investors face challenges in getting diversified exposure to real estate because most real estate investment trusts (REITs) focus on commercial properties rather than single-family homes. While there are efforts to create ETFs for private assets, including residential properties, the complexity of pooling owner-occupied homes and the lack of interest from homeowners make it difficult to create such products.
Do short sellers use body language to evaluate companies?
While body language is often cited as a factor in evaluating companies, it is more of a euphemism for subtle information shared during meetings. Short sellers may meet with management to gain insights, but the idea of relying solely on body language is overrated. Most useful information comes from substantive discussions that don't rise to the level of material non-public information.
Is there a limit to the number of ETFs that can be created?
There is no logical limit to the number of ETFs, but there is a practical limit due to the four-character ticker system used in U.S. exchanges. With approximately 450,000 possible ticker combinations, the current system could face constraints, especially with the growing popularity of leveraged single-stock ETFs. However, exchanges are not yet concerned about a ticker shortage.
Was Martha Stewart convicted of insider trading?
Martha Stewart was not convicted of insider trading. She was convicted of lying to investigators about her stock sale, which was unrelated to insider trading. Her broker had received an insider tip, but Stewart claimed she sold the stock due to a stop-loss order, which was false. This led to her conviction for obstruction of justice, not insider trading.
- Matt's indirect path to finance involved a classics major and teaching Latin.
- Katie's direct path started with journalism and an internship at Bloomberg.
- Both value writing and communication skills in their careers.
Shownotes Transcript