Money For the Rest of Us J. David Stein

How coordinated buying by retail investors has turned the table on Wall Street. Are there signs of a market bubble?

Topic covered include:What are meme stocksWhy GameStop's stock (GME) has soared to over $300 from $17 in less than a monthWhat are short squeezes and gamma squeezes and how they can push up a stock priceHow short-sellers including hedge funds are losing big against individual investors on the wallstreetbets subredditIs coordinated buying of options and stocks by individual investors illegal?How market flows into stocks are taking precedence over fundamental dataIs the stock market in a bubble and how does the current market environment compare to the 1999 Internet bubble and the 2006 housing bubble?


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Show Notes

r/wallstreetbets

FOR POSTERITY—Almost Daily Grants 1.25.21

GameStop can’t stop going up by Jamie Powell—Financial Times

Reddit: bull attack by Jamie Powell and Philip Stafford—Financial Times

How WallStreetBets Pushed GameStop Shares to the Moon by Brandon Kochkodin—Bloomberg

Submit Your Pick for the Next Meme Stock Here posted by u/AssPowers 2/18/20—r/wallstreetbets

17 CFR § 240.10b-5 - Employment of manipulative and deceptive devices.—Legal Information Institute

How'd You Guys Manage to Win so Big it Made These Old Guys Drown in Their Tears? posted by u/bawse 1/24/21—r/wallstreetbets

Five Things You Need to Know to Start Your Day by Cormac Mullen and Tracy Alloway—Bloomberg

Tweet by Paul Kedrosky (@pkedrosky) on 1/25/21

Baupost’s Seth Klarman compares investors to ‘frogs in boiling water’ by Ortenca Aliaj and Eric Platt—Financial Times

US stock rally drives ‘ludicrous index’ towards dotcom era heights by Eric Platt—Financial Times

Most global stock ETFs, funds and indices have only about 5% invested in China even though China has the second-largest economy in the world. What are the pros and cons of increasing your allocation to Chinese stocks.

Topics covered include:Why has China's economy rebounded faster than other countriesWhat are Chinese A-share stocksHow large are China's economy and stock marketWhat are four threats that could derail the performance of Chinese stocksHow individuals can invest in China's stock market including A-shares


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Show Notes

Chinese shares: should you increase the amount in your portfolio? by Sam Dickens—IG Group

China A-Shares Definition by Troy Segal—Investopedia

China’s Economy Powers Ahead While the Rest of the World Reels by Stella Yifan Xie, Eun-Young Jeong and Mike Cherney—The Wall Street Journal

China Still Grew and Fueled Its Rise as Covid-19 Shook the Global Economy by Jonathan Cheng—The Wall Street Journal

With Americans Stuck at Home, Trade With China Roars Back by Ana Swanson—The New York Times

Buffett Indicator: China Stock Market Valuations and Expected Future Returns—GuruFocus.com

MSCI Deletions Trigger Rush to Sell Chinese Telecom Stocks by Jeanny Yu and Sofia Horta e Costa

Executive Order on Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies—The White House

Non-SDN Communist Chinese Military Companies List as of January 08, 2021—U.S. Department of the Treasury

MSCI ACWI Index (USD) December 31, 2020—MSCI

How China Lost Patience With Jack Ma, Its Loudest Billionaire by Lulu Yilun Chen and Coco Liu—Bloomberg

China Clampdown on Big Tech Puts More Billionaires on Notice by Zheping Huang and Coco Liu—Bloomberg

China’s College Graduates Can’t Find Jobs. The Solution: Grad School. by Vivian Wang

Should the U.S. cancel $10,000 or more of student loan debt per borrower? What would be the economic and financial impact? Why the student loan system is broken and how to fix it.

Topics covered include:How large and what is the growth rate of U.S. student loan balancesWhat are the projections for student loan lossesWhat are the pros and cons of forgiving student loansWhat would be the impact on federal finances of canceling student loansWhy the U.S. government is already technically insolventHow student loan programs should be restructured


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Show Notes

Student Loans Owned and Securitized, Outstanding—Federal Reserve Bank of St. Louise

Senate majority gives Biden path to student loan forgiveness by Sylvan Lane—The Hill

Schumer pressures Biden to bypass Congress to cancel $50,000 in student debt per borrower by Annie Nova—CNBC

Biden will call on Congress to forgive $10,000 in student debt for all borrowers by Annie Nova—CNBC

Outreach From Borrowers Could Overwhelm Student Loan System When Pandemic Pauses End by: Sarah Sattelmeyer and Lexi West—PEW

Financial Report of the United States Government FY 2019

Warren makes case to Fed chair for canceling student loan debt by Naomi Jagoda—The Hill

Student Loan Losses Seen Costing U.S. More Than $400 Billion by Josh Mitchell—The Wall Street Journal

Final Monthly Treasury Statement Receipts and Outlays of the United States Government For Fiscal Year 2020 Through September 30, 2020, and Other Periods—U.S. Department of the Treasury

Average Student Loan Debt at Graduation by Mark Kantrowitz—Savingforcollege.com

Profile Of The Labor Force By Educational Attainment by Vernon Brundage, Jr.—U.S. Bureau of Labor Statistics

Millennial life: How young adulthood today compares with prior generations by Kristen Bialkin and Richard Fry—PEW Research Center

Forgiving Student Debt Isn’t a Great Stimulus Plan by Noah Smith—Bloomberg

Average annual salary of bachelor's degree recipients employed full time 1 year after graduation, by field of study: Selected years, 1976 through 2001—National Center for Education Statistics

NACE Salary Survey Winter 2020—National Associations of Colleges and Employers

Australia’s student loan problem is a teachable moment for the U.S. by Jason Delisle and Alex Usher—Brookings

How should individuals invest and spend in retirement with interest rates so low, stock valuations high, and inflation uncertain. Why retirement managed payout funds and income replacement funds failed.

Topics covered include:How managed payout and income replacement funds compare to immediate annuitiesWhy Vanguard and Fidelity changed the objective of their retiree focused income replacement and managed payout fundsHow fixed annuities workHow retirees should combine annuities with multi-asset class portfolios to ensure a successful retirementWhy the 4% retirement spending rule is not appropriate for all investors all of the time.Why inflation is the biggest determinant of how much retirees can spendWhy is there so much controversy over the current and future inflation rate


Thanks to Mint Mobile and Truebill for sponsoring the episode.

Show Note Links

Vanguard Throws in the Towel on Its Managed Payout Fund by Daren Fonda—Barron's

Generating Retirement Income Isn’t Easy, Even for Vanguard by Reshma Kapadia—Barron's

Today's Best Multi-Year Guaranteed Annuities (MYGAs)—ImmediateAnnuities.com

Opinion: The inventor of the ‘4% rule’ just changed it Brett Arends—MarketWatch

The Price of Tomorrow: Why Deflation is the Key to an Abundant Future by Jeff Booth

Alternate Inflation Charts—John Williams' Shadow Government Statistics

Americans Are Richer Than We Think by By Phil Gramm and John F. Early—The Wall Street Journal

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How convertible bonds work, why they gained 50% in 2020 and outperformed stocks over the past five years. Why Vanguard shut down their convertible bond mutual funds.

Topics discussed include:How big is the convertible bond marketWhy companies issue convertible bondsHow convertible bonds work and how to analyze themWhy convertible bonds have performed so wellWhat is a reasonable expected return for convertible bonds and what are the risksWhat are ways to invest in convertible bonds


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Show Notes

A Plunge and a Recovery Drives a Top-Performing Year in Convertibles by Andrew Bary—Barron's

Convertible Bond Indices: An Overview by SPDR EMEA ETF Strategy Team—State Street Global Advisors

CONVERTIBLE SECURITIES: Structures, Valuation, Market Environment, and Asset Allocation by John P. Calamos, Sr with contributions from Eli Pars—Calamos Investments

Tesla, Inc. 2.00% Convertible Senior Notes due 2024 (the “Convertible Notes Offering”) Issuer Free Writing Prospectus—U.S. Securities and Exchange Commission

Risk and Return in Convertible Arbitrage: Evidence from the Convertible Bond Market by Vikas Agarwal, William Fung, Yee Cheng Loon, and Narayan Y. Naik

The Fluctuating Maturities of Convertible Bonds by Patrick Verwijmeren, and Antti Yang

Convertible Bond Arbitrage by George Long—Eureka Hedge

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A review of how the pandemic, financial markets, and government policy evolved in 2020 to make for an unforgettable year.

Topics covered include:Why the Covid-19 pandemic ranks as the second worst in modern historyWhat is the difference between risk and uncertainty and how our investing should be different when dealing with uncertaintyWhat portfolio changes did David make in 2020 and how should he have invested if he had perfect foresightWhy speculative assets such as gold and cryptocurrencies have performed so well in 2020Why high savings rate and pent up demand provides a tailwind for the economyHow to invest and live when the future is unknowable


Thanks to Policygenius and LinkedIn for sponsoring the episode.

Show Notes

286: Coronavirus and the Financial Impact of Pandemics

291: How To Survive the Coronavirus (COVID-19) Shutdown

Madame Vivelda—Saturday Night Live

What Is Risk vs Uncertainty?—Money For the Rest of Us Guide

299: Has the Pandemic Changed You?

Personal Saving Rate—Federal Reserve Bank of St. Louis

302: Investing is Not Knowing

310: Why the Stock Market and Economy Are Rebounding So Quickly

How 700 Epidemiologists Are Living Now, and What They Think Is Next by Margot Sanger-Katz, Claire Cain Miller, and Quoctrung Bui—The New York Times

Paul McCartney Is Still Trying to Figure Out Love by David Marchese—New York Times Magazine

For more information on this episode click here.

Also, go here to learn more about Money For the Rest of Us Plus membership.