Our allocation to risky assets should vary based on the expected return, volatility, risk aversion, and how much we can earn risk-free. That means we should be taking less risk right now. Listen to learn why.
Topics covered include:
- Why there are so few billionaires
- Why the hedge fund Long Term Capital Management imploded
- Why how much to invest is more important than where to invest
- How the Merton share formula can assist with determining what percent of our wealth to invest in risky assets
- Why are expected outcomes so much greater than the median outcome and why it matters to our investing
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Show Notes
How to avoid a common investment mistake - Buttonwood - The Economist)
The Missing Billionaires: A Guide to Better Financial Decisions by Victor Haghani and James White)
Money For the Rest of Us List of Most Influential Books)
Charles Feeney, Who Made a Fortune and Then Gave It Away, Dies at 92 - New York Times)
Elm Partners Coin Flip Exercise)
Evaluating gambles using dynamics - O. Peters and M. Gell-Mann )
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