The Butler Financial Podcast: Recent Episodes
Mikyo Butler
Welcome to the Butler Financial Podcast. This is a series of conversations in which we (Mark Butler and Mikyo Butler) discuss the human intuitions that can make it vexingly difficult to be good investors or handle our money optimally. As well, we explore the intense emotions that can work for us, as rich sources of intelligence, or against us, as catalysts of a reactive state in which we compound previous errors. We are consistently fascinated and humbled by this subject matter, since even experts and professionals are not exempt from these challenges! However, if we understand our biases, unconscious assumptions, and underlying emotions, we can work skillfully with ourselves and our advisors to craft sound strategies and implement them with steadiness and equanimity. We hope you find these discussions interesting, if not personally illuminating.
Please note: we are not forecasting the direction or performance of equities or any other asset class. None of the views in this podcast should be interpreted as a “market call”, nor should they be used as the sole basis for making portfolio allocation or investment decisions.
Cognitive dissonance is your friend. With a highly uncertain (if not bleak) macroeconomic outlook, and broadly elevated valuations, it’s tempting for even the seasoned investor to ditch the complex questions involved in crafting a long-term investment strategy for the much simpler question that appears easy to answer: "Will stocks likely go up or down?" In this episode, we argue for staying on the train of complexity rather than getting off at a stop that appears to offer comforting certainty.
This first episode of The Butler Financial Podcast is a conversation between Mark and Mikyo that examines a prevalent narrative among investors today: after a long bull market capped off by a powerful run-up in 2019, how much higher can stocks really go? To many folks it feels like a recession is right around the corner. If so, what to do? On this very understandable line of questioning, we think this is the perfect moment to bring some history and analytics to bear. Indeed, a recession is one of several plausible short-term scenarios. However, those investors who feel it is highly probable (to the exclusion of other scenarios) may expose themselves to more risk than they realize by dramatically reducing their allocation to growth/risk assets. In this podcast, Mark and Mikyo discuss the biases that cause investors to underestimate the significance of late-cycle equity returns, and Mikyo quantifies the potential cost of this by digging into the market data of the last 70 years. We hope you enjoy!
*Please note:* we are not forecasting the direction or performance of equities or any other asset class. None of the views in this podcast should be interpreted as a “market call”, nor should they be used as the sole basis for making portfolio allocation or investment decisions.