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- [00:00]
Jill Schlesinger
Gang.
- [00:00]
Mark Telercio
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- [00:44]
Jill Schlesinger
Get on with your life.
- [00:45]
Mark Telercio
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- [02:08]
Jill Schlesinger
Welcome to the Jill on Money show.
- [02:10]
Mark Telercio
It's Friday, March 7th and we are here trying to help you understand the.
- [02:15]
Jill Schlesinger
Financial world and all of its mysteries.
- [02:18]
Mark Telercio
And today, boy, do we have a treat for you. I conducted an interview with a legend of the financial services industry. His name is David Booth. He is the chairman and founder of Dimensional Fund Advisors. Now, maybe you've never heard of Dimensional or dfa? That's okay. I'm just going to tell you that this dude, along with a bunch of other wonky math and econ brains from the University of Chicago, essentially changed the world of finance. They helped create one of the world's first index funds. Because this crew was so important to the evolution of modern finance, filmmaker Errol Morris said, wait a minute, here is a documentary for me now. Errol Morris is the Oscar winning filmmaker for the Fog of War. He's also won a bunch of other prizes. He is the author of two New York Times bestsellers. He's just done a ton of stuff. So Morris set out to actually chronicle how this crew came together, what they were able to create. The film is called Tune out the Noise. And so we're gonna start with the trailer for the film and then we'll get right into the interview.
- [03:34]
David Booth
In 1969, none of these professors had received a Nobel, but half a dozen of them or so became Nobel laureates. These are legends and they were just floating around the finance department. Merton Miller explained this notion of efficient markets. I remember sitting there thinking, this makes everything make sense.
- [03:53]
Errol Morris
I remember him saying three things that.
- [03:55]
David Booth
Stuck with me forever. Markets, work, costs, matter, and diversification is your buddy. The real world was challenged by that way of thinking. The enemies of index funds were everywhere. Investment advice in those days was built around fear and greed.
- [04:10]
Errol Morris
And to defeat such a mindset, you show the data.
- [04:14]
David Booth
By 1981, when we started Dimensional, we a lot of people had moved to indexing, but people weren't investing in the stocks of smaller companies. We were the first people to treat small cap stocks as a separate asset category. It worked.
- [04:27]
Errol Morris
Are you surprised?
- [04:28]
David Booth
Of course not.
- [04:30]
Mark Telercio
Data doesn't lie.
- [04:31]
David Booth
What investing is about is dealing with uncertainty. People want to shrink away from uncertainty. And it's uncertainty that really creates opportunity. What we have done is develop a framework. People started framing their portfolio in a much more constructive way. Fundamentally, people want to improve their lot in life. They want to improve the lives of their families. There's a lot of hope. Instead of rolling your hair out and watching financial news all day long, tune out the noise.
- [05:11]
Jill Schlesinger
Let me just start by saying that David Booth, I am an owner of Dimensional Funds, so I want to put that out on the record. I love my Dimensional Funds and I want to bring you in first to start by saying, why did you create this documentary? Oh, and by the way, the documentary is called Tune out the Noise. David, why, why do this movie?
- [05:33]
David Booth
I wish we had a long term plan in mind when we started, but we approached Darrell with the idea of could we work together on something? And Harold can explain his side of it. But my take was he was just fascinated by this whole discovery in finance the revolution in finance. And he ended up wanting to make it his film rather than having it be some sort of marketing production. It can happen.
- [06:00]
Errol Morris
One gets possessive about one's work.
- [06:03]
Jill Schlesinger
I've heard of that. I have resembled that, by the way. I just want to ask a quick question before we go deeper into the world of dfa. Errol, were you interested in investing? Are you an investor in general?
- [06:16]
Errol Morris
Yes, I'm an investor in general, and I'm also an investor in Dimensional funds.
- [06:21]
Jill Schlesinger
Oh, that's great. Was that. Was that prior to the movie or since?
- [06:25]
Errol Morris
It was not. It was subsequent.
- [06:27]
Jill Schlesinger
Oh, wait a second. What did you do before? Were you a big stock picker? I got this feeling that Errol's like, yeah, I know how to pick stocks. I can time the market. What were you doing before?
- [06:35]
Errol Morris
I was a stock picker. Yes. Maybe I still am a little bit, but a lot less.
- [06:43]
Jill Schlesinger
Okay, fair enough. Errol, you've done. You've got an Oscar and a million different awards and genius grants and. And why did you want to do this project?
- [06:53]
Errol Morris
It worried me, and at the same time, it really interested me.
- [06:57]
Jill Schlesinger
Why did it worry you?
- [06:59]
Errol Morris
It worried me because I didn't particularly. I've done many, many, many commercials over the years. Close to a thousand of them. I didn't really want it to be a commercial for Dimensional. As I started to investigate the movie, it became clear to me that this was a much bigger story than just a story about Dimensional itself or a story about David Booth himself. But it was a story about, as you described it, a revolution in modern finance of which this company was major part.
- [07:36]
Jill Schlesinger
It actually does not feel like a, you know, a puff piece created by, you know, oh, it's the Morgan family doing a J.P. morgan history. No, it felt like much different. So, David, can you bring us back to a bit of the origin story where you attended the University of Chicago, and there were some other folks there who were influential to you. For those listening, if anyone wants to get their kid into the University of Chicago, I have great news for you. David's the namesake of the. Of the School of Business, so you can just write him and ask him if to write to. No, I'm just kidding. So what is it about? What is it about the University of Chicago that was able to bring people there? And then the people who were there, your little group of misfits, what did you guys see that was going on that excited you?
- [08:26]
David Booth
We've observed that most people feel like outsiders when it comes to investing, that somehow the insiders make all the decisions make all the money and make it hard on outsiders. Well, a couple things happened. One was all of a sudden data became available, and that's. Harold makes a big point of that in the movie. And people could test for the first time a lot of the hypotheses that money managers who are claiming, you know, we can do 15% a year regardless of markets and so forth. You could test that sort of thing out at the same time. The University of Chicago, part of it was luck and part of it was systematic. But, you know, we start with people like Markowitz and Merton Miller. And he brings in Merton Miller, kind of mentors, Gene Fama, both of those. All three of these people are Nobel laureates. Well, the next thing you know, we have this incredibly exciting environment. This was even before Nobel Prize was awarded in economics, but it was just a hotbed of creative thinking. Every week there was a new paper out.
- [09:32]
Jill Schlesinger
I thought there was something that Mac said in the movie that was fascinating to me. I think it was him who said that he went to Harvard Business School and He said from 1959 to 1961, there was not a single computer at Harvard. That blew my mind.
- [09:49]
David Booth
Well, that just shows you how much things have changed, right? I mean, and even they, even if they had a computer, they didn't have the data to do much analysis. So I mean, it took both things coming together.
- [10:00]
Jill Schlesinger
So, Errol, I'm just wondering, as you were going through and sort of the, the creative part around this film, how did you want to bring this to life? You have your characters, right? But I also know that you intersperse other elements to kind of. It's for the. Every person who's watching it, which I think was very helpful, like whether it was a quote or a funny cartoon. So when do you know to sort of go from the character to like, oh, the people watching this need like a little bit more help than what the character's saying.
- [10:31]
Errol Morris
When I started making this movie, I knew that there would be interviews involved. I did not know how fabulous most of these characters were going to turn out to be. How absolutely interesting. I mean, one of the odd things about this whole story, I guess it's a story of serendipity, is that yes, there was a revolution going on in finance, but the revolution was started by this revolution in computation. Surprised that Harvard didn't have all of these computers.
- [11:03]
David Booth
No one did.
- [11:05]
Errol Morris
My brother who was at MIT in the 60s, was one of the first people really to work extensively with computers. It was this combination of computers, computation, access to data. You could not make these assumptions about passive investment, about just leaving your money alone instead of micromanaging it. You couldn't have made these kinds of assessments without data, without the knowledge of looking at. They didn't have any knowledge about how the Dow performed or any real index. And as that data started to appear, people started to look at it.
- [11:52]
Jill Schlesinger
You say that everything is chaotic, but the market is a big information processing machine. What do you mean by that?
- [12:00]
David Booth
You know, all this research and stuff was really done on big data before big data even became a term. So you have on two sides of every trade, you have a buyer and a seller and you have these enormously sophisticated institutional investors coming in the market trying to get the slightest of edges. And on each trade you have somebody on the buy side and somebody on the sell side. And they don't trade unless each side thinks they got a good deal. So in essence then you know, all of the available information out there with as long as you have enough transparency, you know, the view is, you know, all the available information is being processed and helping institutions arrive at a price.
- [12:45]
Jill Schlesinger
And as you go ahead and the, the world of sort of more modern finance develops, there is data, there's analysis. What you said that like really stuck out to me, which was amazing. I love this quote you said, presuming someone can beat the market is a faulty assumption about how markets work. It's so naive, I just can't stand it. So are you telling me that all these people who go on CNBC and talk about the stocks to buy that they know better, are, are you telling me that all of that is just a big lie?
- [13:21]
David Booth
It's not necessarily a big lie, but it's. And there can be people out there that beat the market. I mean, the trouble is we don't know how to identify them. And if we could, I don't know why they'd want to do it for a small management fee. So you're best off behaving as though markets are efficient? I believe that strongly and people will have different opinion about that.
- [13:44]
Errol Morris
Could you explain efficiency because it's a term. I don't think most people are familiar.
- [13:49]
David Booth
With all this science of investing. There are a couple times, a couple of ways people use efficiency. One is in the overall capital markets, are they operating efficiently, you know, issuing stocks and bonds in a very cost effective way? And the answer is the US has got by far the best capital market in the world. Second notion of efficiency is this whole pricing mechanism that we're talking about, does it lead to socially desirable outcomes. And the answer is yes. I mean it looks like people are getting a fair deal. Investors are not going to come into the market if they don't think you're going to get a fair return. And that's the process of public markets, of setting prices, has got to set prices at levels that will attract people to invest. So all you need to do is look at the trading volumes. You understand there are a lot of people out there that think they're getting a fair deal as part of the democratization of investing.
- [14:48]
Jill Schlesinger
And I wonder if you think about the idea of the research that was conducted and the idea of efficient markets and take that to the next level and can you talk a little bit David, about as you left the world of academia and going to Wells Fargo and what happens as the group dis like basically dissolves, like the band breaks up. But you are all there together at Chicago. You go in different directions. Walk us through what's going on. You know, 1971, what's happening in that moment?
- [15:26]
David Booth
Well, first off, it's much better to be an investor today than in 1971 when I started in the business. And and because a lot of these ideas are developed in the 60s and 70s have been applied in the real world. I mean that's one of the great things about the movie that Errol did, that you've got three of the most influential people in the 20th century in finance. You have Bob Merton who develops a theoretical model for saying that you can beat the market without trying to out guess it. There are systematic factors, different dimensions of returns. Not only am I not going to explain it, even Fama said it took him three or four years to understand. I mean we're talking heavy duty theory there. And Bob's in them and I think in the movie he's really kind of. He shows his personality which is really terrific. And then you have Fama in French and they developed the empirical model based on the theory of Merton. So those so our understanding of markets and how they work. You take the work of those three people, that explains a lot. And then you have Myron Scholes, who along with Fisher Black, Bob Merton developed the Black Scholes Merton option pricing model. And that development is really important because it says flexibility has value. The reason I bring it up is early on people said well look, if people can't seem to beat the market, what are you supposed to do? I mean, so several ideas sprang up, one of them being an index fund that took off like a rocket eventually and is now half of the money roughly, give or take a bit and is invested in index funds. That's fine, except indexing is totally basically inflexible. Think of it as being an inflexible way to invest. And you have all this evidence that flexibility can add value. And so that led to the creation of dimensional to say, look, we'll take the kind of the principles of indexing in the sense that we're not going to try to outguess the market but we'll structure portfolios to bias towards the higher expected returns parts of the market. That's the Merton Fama French theory. And then we'll apply them in a very sensible, thoughtful, flexible way. That's the option pricing theory. So it's. Even though everybody split up and stuff, these ideas that were developed way back when turned out to be incredibly useful and they've lasted because they worked. I mean that's. And it's also useful that everybody can buy a market index fund. So it's not like you're going to be in, you have to be an outsider, you know, right.
- [18:09]
Jill Schlesinger
You, that is the democratization and the pricing comes down and down and down. And so Errol, when you heard Fama say I'd compare stock pickers to astrologers, but I don't want to badmouth astrologers. Did that take you by surprise?
- [18:24]
Errol Morris
No, not completely surprised. Fama is really, really smart and also really funny.
- [18:31]
Jill Schlesinger
I think that having like a thesis on investing that has guided you which is, you know, stop trying to find patterns, stop trying to think that you can out beat the market, no, you're not going to be able to time the market, but that we are relying on data and analysis of data and history to come to where we are today and make adjustments in the future. So what I wonder, I guess is David, if someone is listening and they say, you know, am I just okay buying an index fund, like all things being equal, I'm a young investor. Let's just say you're talking to my 25 year old nephew. He's got his first real chunk of money to invest. He's going to do it on his own. What should he do?
- [19:20]
David Booth
Well, the key to investing is save some money. I mean that's principle number one. You know, things like index funds are pretty good. I mean I think the main thing is to get in there and start getting the magic of compounding working for you. That's true in life and in investing. So in fact investing has a lot of similarities to life in general.
- [19:44]
Mark Telercio
Say more about that.
- [19:45]
Jill Schlesinger
Wait a Second, investing is our analogy for life.
- [19:48]
David Booth
You know, investing is complex and uncertain. So is life. Somehow you've gotten to where you are dealing. You've learned how to deal with uncertainty. And sometimes it works out well and sometimes it doesn't. But if you stop back and think about how you've dealt with it, you'll find if we had enough time, I could convince you that that has a lot of similarities to how we approach investing. You know, you make the best decisions based on your circumstance and the information you have. And that's where all this research comes in. Our goal is to develop sensible solutions that you can live with and which has the secondary benefit of, you know, if you can live with it, then you're going to be more relaxed. And when you go home at night, you're more likely spend time with your kids rather than trying to figure out where the market's going so you will be led down to a better path. So what we tell people often is you know more about investing than you think you know, because you've learned a lot about dealing with uncertainty. Now that sets the stage. Now we can apply that to what we do. In some ways, it's a lot like medicine. You know, the science of medicine, give or take a bit, it's out in the public domain. And let's say all doctors study it, some are just better at it than others. And that's, at the end of the day, it's all about execution and taking advantage of this flexibility, that academic theory that flexibility has value.
- [21:12]
Jill Schlesinger
And David, you started when you started know, really we're launching dfa. There was something you notice, and it was about the difference between the way that small companies were valued and large companies were valued. And here we are today in 2025, and we have this period of time in investing where it feels like, you know, there are these seven dominant companies that seem to be driving so much of the attention as well as the attraction of dollars, and that this is what people seem to be talking about. And then you have the poor, unloved, small companies. So can you just try to weigh in on the. The reason why it's important to incorporate small even when no one else seems to care about them or focus on them.
- [22:01]
David Booth
It's a shame, isn't it?
- [22:02]
Jill Schlesinger
I know. The unloved.
- [22:04]
David Booth
Yeah. The unloved. No, we built a firm around. We started just the idea. Look, if you're forming an equity portfolio, you want to have stocks of large companies and small. You should not have all your money just in large. That's kind of the premise of that. I still feel the same way. I don't know if small is going to outperform large over the next few years or the other way around. But I do feel comfortable saying having all your money just in large stocks is pretty extreme position to have, in my view.
- [22:32]
Jill Schlesinger
Let's say you're telling Errol, Errol's got.
- [22:34]
Mark Telercio
A pile of money.
- [22:36]
Jill Schlesinger
He's made all these television commercials. So he is sitting on a lot of money. Obviously, David, you know, he didn't need your money. He had plenty of money. He's picking stocks. So can you talk about how someone like Errol or a wimp like Jill, who really does understand risk, why stocks and other investments like bonds should be part of a diversified portfolio? Can you speak to that also a little bit. Convince Errol that he, he should have some part of his portfolio that's not moving in tandem with even the will share.
- [23:12]
David Booth
Well, I think that a lot of it ties in going back to Bob Merton's theory that none of us understand. You look at a. Let's call it the market is half stocks and half bonds. Well, we think stocks have a higher return over long haul than bonds, but we want to have both because there can be a lot of periods of time when that isn't the case. That's why if it were always the case, you wouldn't call it risk. I mean, there wouldn't be any risk. It's that uncertainty that creates the opportunity. What you want to do is find the combination that works best for you. Your younger people starting out probably ought to think about having most of their, if not all their money in the equity market. And people that are my age might want to think about having a heavy dose of lower risk fixed income. You want to integrate what's going on in your personal life with what's going on in your investment life. In fact, we call that life standing for lifetime integrated financial experience.
- [24:09]
Jill Schlesinger
Oh, I like that.
- [24:10]
David Booth
And what's right for you may not be right for your neighbor down the street. Allow me to sound a little academic here.
- [24:16]
Jill Schlesinger
Do it.
- [24:16]
David Booth
What you want to do is find portfolios that have the investment characteristics that work best for you in your life and your situation. Rather than having one size fits all. That's the tough part. People shrink away from uncertainty. That's when you start talking about stocks, they go, ah, but it's the uncertainty that creates the opportunity. If there were no uncertainty, you know, then everything would have the same return. The money market fund return, you know.
- [24:43]
Jill Schlesinger
Right. You'd Be on that merry go round. And also inflation and taxes would probably not really work in your favor. And that as well. Errol, if you're, you know, when you look at, I guess that you, you.
- [24:56]
Mark Telercio
Have been someone who's been invested before.
- [24:59]
Jill Schlesinger
You know, I'm thinking about this from your perspective. You're this creative guy, you tell stories. Isn't it tough to tell the story? Like if you were going to tell the story of DFA quickly, you have to compete with the, the sexiness, the propulsive nature of something like Bitcoin. As a storyteller, even I feel this way when I'm covering this on the news. I notice that younger people are kind of bored when I say words like diversification or spread out your risk. What's the antidote to that? Like if you know you're on the right track and you want people to eat their, their vegetables and their fruits, but they're like, you know what? I totally love my sugar high. Be quiet. How do you break through on that?
- [25:46]
Errol Morris
I think it's communicating to others what excites me. And I found myself really interested and excited by this story. I don't know how better to describe it. I had studied history of science and there was a period of time where all of a sudden there was new data that came into existence. People were assembling data about the motion of planets and stars. As a result of all of this new data, theories about the motion of planets that culminated with Newton's theory of gravity emerged. And we see something so similar in the middle of the 20th century. It's quite remarkable that here you have this relatively small group of people in Uchicago thinking about stuff. You have the development of computers, people assembling data really for the first time. And all of this theory emergence. I find it, I'm sorry, incredibly exciting. I still do. I think it's a fabulous story.
- [26:58]
Jill Schlesinger
I love it as well. And I love that the data does back up the theory. I mean that's the most interesting part to me because I'm a little bit of a math head.
- [27:09]
Errol Morris
The theory emerged from the data.
- [27:11]
Jill Schlesinger
Well, the theory emerged from the data only when you had the right analysis of the data. You have all the data you want, you pump it into something. It's got to work through something, right? So David, what is, what is the pushback that we can like help us with messaging around? People want that gamification. They like to gamble. I mean truly, they like to gamble. And so what is your way to push back? When someone says, you know, David, you just don't get bitcoin. Do you like a bitcoin? Do you like a little bitcoin on the side of your passive investing?
- [27:48]
David Booth
No, you're talking the wrong guy here.
- [27:50]
Jill Schlesinger
That's what I want. I was a setup.
- [27:54]
David Booth
Bitcoin, if it's going to last, has to have some value. I mean, gold for example, has, you know, you make jewelry or whatever. And bitcoin has largely got a. They got to figure out how to use Bitcoin to improve the efficiency of transacting. They're going to have to figure out a way to make things more efficient or it'll disappear, in my view. So ultimately it comes down things have to have value. And I think the value in the stock market the reason you should be optimistic. Well, first off, you have this price setting mechanism where prices get set to induce people to come in. But also once you buy kind of market type portfolios like we have with thousands of stocks in them, you're really betting on an economy and not on individual stock selection. People worry about catastrophes. If you pick an individual stock, it can go to zero. The stock market is not going to zero. Now it may be fluctuate a little too much for your taste. So you don't have all your money in stocks. I understand that it's unrealistic to think that people are going to believe in market efficiency as much as I do. I get that. You know, Errol says he's still a bit of a stock picker. You know, you just can't. That's human behavior. You know, you can't.
- [29:12]
Jill Schlesinger
Errol, you know what I tell people to do? I said fine, if it doesn't, if it's not gonna sink your financial ship, then fine, you can go there. But also you could take the exact same amount of money and you can go to the casino. You can get free drinks if you do that. I just wanna point that out to you.
- [29:27]
Errol Morris
I asked this question of David and he said, well, fine, if you wanna gamble with a small amount of your money, be my guest. But you should really think of the long term. With most of your money, you should think about your future.
- [29:41]
Jill Schlesinger
David, what do you think of companies that are awarding or have a, have an offering in their 401ks that is the company stock? Good thing or bad thing?
- [29:52]
David Booth
Well, I'll say something that probably irritate a lot of people. I think it's a bad thing. I mean, I think it's double jeopardy myself. I think for example, we have a 401k plan. Here at Dimensional, one of the options is not buying stock in Dimensional.
- [30:08]
Jill Schlesinger
Of course, I wish I were part of Dimensional when I could have bought stock in Dimensional.
- [30:12]
Mark Telercio
That would have been a good bet.
- [30:13]
Jill Schlesinger
And David, also, can you talk a little bit about why it was important to you to, especially when you started? I know recently things have shifted a tiny bit, but that primarily the way to actually purchase a dimensional fund is through working with a fiduciary advisor. Why was that important to you guys?
- [30:34]
David Booth
The investment business, if you look at the cost of money management, the big cost is not in actually managing them, but the big cost is acquiring and keeping clients. So there's a real premium on trying to figure out what is the most efficient way of delivering investment management services. And the traditional way was always commission brokers, you know, load funds. You get people to sell your fund and that was, let's call that product push environment. When we decided to work with advisors, we said, we're not, we don't work with commission based brokers. So we don't have any load funds, we don't have any 12B1 plans. People that invest with us, invest with us because they want to do it rather than we cram it down their throats, you know, so that's kind of a demand pull approach.
- [31:25]
Jill Schlesinger
Errol, when you were conducting all of these interviews over some period of time, was there a moment where you said to yourself, wait, you mean nobody knows the answer? There is no man behind the curtain.
- [31:39]
Mark Telercio
Nobody can tell you exactly when to.
- [31:41]
Jill Schlesinger
Get in, when to get out, that it's just a long term adherence to this strategy.
- [31:47]
Errol Morris
At least my experience, the longer that you've been alive, you start to notice certain things. I know that if I have built up any kind of wealth over the years, it's been a result of holding things and not endlessly trading them. And the one study that of course fascinates me, still fascinates me, is that once they had computers, they started to assess how do money managers do versus passive investment. What if you just leave your money alone rather than have someone constantly jiggling your portfolio? And the answer is leaving it alone is often, if not always, the better strategy.
- [32:32]
Jill Schlesinger
Right. And once you start futzing with it, then you find yourself falling into emotional traps. I think that that's what I felt like when I was working with real clients, right? That was already a hundred years. It was like eight, 17, 18 years ago that I was working with clients. And you know, David, I would find that I didn't know much about behavioral economics back in the 90s, when I was actually dealing with clients in the early 2000s. But, man, that tech boom of 1999 and crash in 2000 was such an instructive lesson. And it was strange because I remember feeling like for the first, first time when I was working with clients, that it did feel like, well, I was a commodities trader again, that people were just piling into things because they were going up and just didn't want to miss it and kept going in and in and in and in and nobody. Like, it was a very unpopular thing for me to say. This seems very dangerous. These are not companies right now. They're just brands. They're not actually making money yet. And it's kind of scary. And I remember in my career, 1999 was actually one of the worst years of my career because it was the year when I had clients fire me because I could not match the return of the NASDAQ and say that we don't really care about financial planning. All I have to do is invest in these stocks and I'll be fine. It was a crushing year. How do you work with advisors to help them explain this to their clients? Like, hey, you bought into the long term, but it's so hard because you're a human being and you see all the headlines otherwise and you don't feel like you're participating. So how do you keep banging that message home to the folks in the Advisor network that are talking to their clients about DFA funds?
- [34:26]
David Booth
Well, first off, you know, one term I don't hear too much these days. That was. You heard a lot in the late 90s, those day traders, you know, you know, the reason you don't hear about it, they're all dead, you know, I mean, they are. They're not dead. They've lost their money. You know, trading actively, you know, is a very expensive way to go through life. You know, it's a very expensive education, doing that sort of thing. Eventually we kind of get them all. You know, at the end, they go, okay, I finally get it. You know, after years of beating their head against the wall and trying to figure things out, you know, that's just human behavior. In most industries, if you're smarter and work harder, you'll do better than people that aren't. That just. That's not true in public markets. And the reason is millions and people. A lot of really bright, talented people with enormous resources and data are out there on both sides of these trades.
- [35:20]
Jill Schlesinger
Well, that. That does remind me that when you said you started, I don't remember which one of your colleagues, I think it was Fama who said that the early days of efficient market theory was like shooting fish in a barrel. Like you could make money very easily when you actually realized, like you had, like, oh, I have the key to investing before anyone else did. Like in this environment where information is processed second by second and markets, maybe they're more efficient than ever or maybe they're not. Does the dimensional approach still work as well as it did in the early days when people were. I don't know what they were doing and how they were picking stocks, like talking to their, their friends who were CEOs and getting tips. I don't even know what they were doing to justify their existence.
- [36:07]
David Booth
Yeah, you know what? No, I think it's, it's, it's, it applies even more. I mean, I think one of the remarkable stories is that back in the dark ages, let's say the 50s and 60s, we didn't have all access to all this stuff, and yet still markets looked like they were efficient. I mean, that people could now guess the market. Now you have unlimited resources, people of all types out there fighting for any, the tiniest piece of undiscounted information. I think it just makes markets increasingly more efficient. Sometimes people bring up AI. The notion of market efficiency says, you know, that prices reflect all available information. Well, no AI can say that. I mean, AI processes enormous amounts of information, but it doesn't process all available information. So I think betting on market efficiency is a good bet for the future.
- [37:01]
Mark Telercio
You can watch the film on YouTube. We'll put a link to that in the show notes. And if you've got any questions about this interview, about index funds or anything else going on in your life, just get in touch with us. Go to jillonmoney.com, click the contact us button, and we will get your note. Don't forget that our sister podcast Money Watch drops on Saturdays and Sundays. You can subscribe to this podcast and Money Watch on the Odysee app or wherever you get your podcasts. Our music is composed by Joel Goodman. Mark Telercio is our executive producer and king of all things web. We are distributed by Odyssey. Don't forget to do something nice for someone else today. Change your work, change your wealth, change your life. Thanks for listening and we'll talk to you next week. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been complex, time consuming and expensive. But imagine if real estate investing was suddenly easyall the benefits of owning real, tangible assets without all the complexity and expenses. That's the power of the Fundrise Flagship Real Estate Fund. Now you can invest in a $1.1 billion portfolio of real estate starting with as little as $10 4700 single family rental homes spread across the booming Sunbelt 3.3 million square feet of highly sought after industrial facilities. Thanks to the e commerce wave, the Flagship Fund is one of the largest of its kind, well diversified and managed by a team of professionals. And now it's available to you. Visit fundrise.com jillonmoney to explore the fund's full portfolio. Check out historical returns and start investing in just minutes. Carefully consider the investment objectives, risks, charges and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the Fund's prospectus@fundrise.com flagship this is a paid advertisement. Robert Half research indicates 9 out of 10 hiring managers are having difficulty hiring. If you have open roles, chances are you're feeling this too. That's why you need Robert Half. Their specialized recruiting professionals engage their skills with their award winning AI to connect businesses of all sizes with highly skilled talent in finance and accounting, technology, marketing and creative, legal and administrative and customer support. At Robert Half they know talent. Visit roberthalft.com today.