ETFatlas: Mastering the Craft of Investing

The episode explains why traditional schooling teaches many abstract subjects but almost no practical money skills, even though everyone must manage money for decades. It shows how even “small” inflation, like 3% per year, slowly destroys the value of cash, so doing nothing is actually losing money. Because of this, we are all forced to invest and choose between different assets like stocks, bonds, real estate, and managed futures.We argue that stock picking and trying to “beat the market” usually fails, even for professionals, mainly because markets are very efficient and fees are high. Instead, the proposed solution is simple index investing: buying ETFs that own the whole market and letting the index automatically remove losers and add winners. A “boring” diversified portfolio of global stocks, managed futures, and bonds, rebalanced once a year, has historically delivered strong returns with manageable risk.

The key edge is not being smart, but being disciplined, ignoring the news, and avoiding behavioural mistakes like panic selling, overconfidence, and FOMO.

Agenda
Why traditional education fails to teach practical finance
How inflation forces everyone to invest
Why active stock picking and “being smart” usually do not work
The case for index investing and a simple diversified portfolio
Discipline, behaviour, and the “slow money, big results” mindset

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In this second round with Larry Swedroe, we explore what evidence‑based investing really means in today’s late‑2025, AI‑driven markets. Larry explains why rising skill and technology shrink alpha, turning most active management into a loser’s game and pushing investors toward low‑cost factor strategies rather than stock‑picking “genius”. He discusses value, momentum, private credit and goodwill traps, shows why passive flows have not made it easier for active managers to win, and warns about high‑fee structures in the asset‑management industry. Larry also touches on quantum computing as a tail risk for financial systems and crypto, and argues that investors should stop chasing elusive alpha and instead build disciplined, diversified portfolios of proven factors and low‑correlation alternatives.
Why alpha is shrinking in an AI‑driven, highly skilled market and why active management has become a loser’s game.​
What investors can really learn from Warren Buffett and the value factor, especially in an intangible‑heavy economy.​
Why passive flows haven’t made it easier for active managers to win, despite common claims to the contrary.​
How combining value and momentum, and avoiding goodwill and private‑credit traps, can build more resilient portfolios.​
How quantum computing could threaten financial systems and cryptocurrencies, reinforcing Larry’s skepticism toward crypto.​
Why investors should shift from chasing alpha to building diversified exposure to proven factors and low‑correlation alternatives.​

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In this episode, we sit down with William Bengen, the legendary creator of the “4% Rule” that revolutionized retirement planning worldwide. Bill shares his unique journey from an MIT aerospace engineer to a financial planner, explaining how he used historical data to solve the “how much can I spend” dilemma. He dives deep into the critical concepts of “Sequence of Returns Risk” and explains why inflation is actually a more dangerous enemy to retirees than stock market crashes.

The conversation explores his latest research, which updates the safe withdrawal rate to 4.7% (or higher) by utilizing what he calls the “Four Free Lunches” of investing. Bill also analyzes the current market environment of late 2025, discussing how high Shiller CAPE valuations and moderate inflation impact today’s withdrawal strategies. Beyond the numbers, he touches on the psychological aspects of spending, the validity of the FIRE movement, and his personal “four pillars” for a happy retirement. Finally, Bill shares a moving personal story about finding love again after loss, proving that retirement is about much more than just a spreadsheet.

Agenda
Introduction to William Bengen: From aerospace engineering to the family bottling business and financial planning.
The origin of the 4% Rule: How a lack of industry answers led to groundbreaking historical research.
Sequence of Returns Risk: Why the order of investment returns matters more than the average.
The Inflation Threat: Why permanent price increases are more damaging than temporary bear markets.
Defining “SafeMax”: The philosophy of planning for the worst-case historical scenario.
The “Four Free Lunches”: Diversification, Rebalancing, Asset Class Tilting, and Equity Glide Paths.
Market Analysis 2025: Discussing high Shiller CAPE ratios and their impact on today’s withdrawal rates.
The FIRE Movement: Can early retirees with 50-year horizons rely on the 4% rule?
The “Underspending” Paradox: Why many retirees end up with more money than they started with.
Alternative Strategies: The pros and cons of fixed-percentage withdrawals versus inflation-adjusted spending.
Bengen vs. Morningstar: The difference between historical “SafeMax” data and forward-looking return forecasts.
The Four Pillars of Retirement: Health, Friends/Family, Passions, and Finances.
Personal Journey: Bill’s experience with grief, finding new love, and life as an aspiring novelist.

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This episode explains why consistently beating the stock market is extremely difficult, especially for active managers competing in today’s highly efficient markets. It shows how much of what looks like “alpha” can often be explained by exposure to well-documented risk factors such as value, quality, and low risk. 

Agenda
Why beating the market is so hard today
What academic research really says about alpha and active managers
How factor investing explains legendary track records like Warren Buffett’s
Practical principles of evidence-based, low-cost, diversified investing
How to apply these ideas when building your own long-term portfolio

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In this compelling episode we welcome Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence and author of the bestselling book "The Bogle Effect: How John Bogle and Vanguard Turned Wall Street Inside Out and Saved Investors Trillions". Eric is one of the most recognized voices in the world of exchange-traded funds, combining deep financial expertise with an exceptional ability to communicate complex concepts in an accessible way.
During our conversation, we explore the revolution that Jack Bogle sparked on Wall Street—a story about how one man created the first index fund and built one of the most important financial institutions of recent decades, Vanguard. Eric shares fascinating behind-the-scenes details from writing his book, including insights from three interviews he conducted with Bogle before his passing. As it turns out, Bogle didn't even know about the Efficient Market Hypothesis when he created the first index fund—his idea was born out of necessity and a serendipitous encounter with an article by Paul Samuelson.
We also discuss the unique ownership structure of Vanguard – a mutual corporation that is the only organization in the world allowing investors to be owners of the firm managing their assets. This distinctive structure enabled systematic fee reductions over decades – from 60 basis points down to nearly zero costs today – and became a "delayed-action bomb" within the financial industry itself.
Eric explains the complicated relationship between Bogle and ETFs. Although Bogle himself was skeptical of exchange-traded funds—fearing they would encourage excessive trading among investors—today Vanguard's ETFs, such as VTIand VOO, have become the world's largest funds and have effectively democratized the philosophy of cheap, passive investing on a scale that Bogle himself could never have imagined.
We also discuss the future of active management, emerging categories of ETF products—ranging from "hot sauce" (thematic and speculative ETFs) to "boomer candy" (buffered funds designed to protect investors from losses)—as well as the revolution brought by spot Bitcoin ETFs. Eric calls the SEC's approval of these funds in January 2024 the "moon landing moment" for crypto, which kicked off an era of "suit coiners"—the institutional adoption of Bitcoin by the traditional finance world.
Finally, Eric reveals details about his upcoming book, "Both Sides of the Coin" which aims to show how Bitcoin ETFs have transformed the investment landscape and why investors should take a fresh look at cryptocurrencies—even if they were skeptical about them before.

Agenda
Introduction – Who is Eric Balchunas and how he became an ETF analyst at Bloomberg
The Genesis of "The Bogle Effect" – Why Eric decided to write about Jack Bogle
Bogle's Underestimated Impact – Why he was the father not only of passive investing, but also of low costs
The Critical Role of Funds – How funds stand between investors and the value created by companies
Was Indexing Inevitable? Why the world would look different without Bogle
The Genius of Vanguard's Ownership Structure – How mutual ownership transformed the industry
Bogle and the Efficient Market Hypothesis – How he arrived at the idea of an index fund
The Cost Matters Hypothesis – A simple message that reached millions of Americans
Bogle and ETFs – A Complicated Relationship with the Product That Most Effectively Spread His Philosophy
Passive vs. Active – Is Passive Investing Really Passive?
The End of Active Management? How the industry is evolving in the era of cheap index funds
Hot Sauce and Boomer Candy – New Categories of ETF Products for Different Generations of Investors
Bitcoin ETFs as a Moon Landing Moment – Why the Approval of Spot Bitcoin ETFs Was a Breakthrough
What Would Bogle Have Thought About Bitcoin? A Hypothetical Fourth Conversation with a Legend
Tokenization vs. ETFs – Which Technology Will Win in the Future?
The New Book "Both Sides of the Coin" – What Eric Wants to Convey to Readers About the Crypto Revolution
Key People Mentioned in This Episode
Jack Bogle – Founder of Vanguard and creator of the first index fund. The central figure of Eric's book "The Bogle Effect" Bogle revolutionized investing by introducing the mutual ownership structure and championing low-cost index funds.
Paul Samuelson – Nobel Prize-winning economist whose article in a finance journal inspired Bogle to create the first index fund. Samuelson called for someone to launch an index fund to provide a benchmark against active managers.
Nate Most – Creator of the first ETF (SPY). He approached Bogle in the early 1990s asking to create an ETF based on Vanguard's index fund, but Bogle declined, fearing it would encourage excessive trading.
Warren Buffett – Legendary investor and Berkshire Hathaway CEO. One of over 50 people Eric interviewed for "The Bogle Effect." Like Bogle, Buffett shares skepticism toward assets without cash flows and intrinsic value.
Larry Fink – CEO of BlackRock. His company's filing for a spot Bitcoin ETF in 2023 marked a turning point for crypto legitimacy. BlackRock's involvement brought institutional credibility to Bitcoin investing.
Michael Saylor – CEO of MicroStrategy, mentioned as an example of how the S&P 500 index committee has discretion to exclude companies that meet technical requirements.
Zohran Mamdani – NYC Democratic mayoral candidate and socialist politician. Eric mentions him in the context of how currency debasement and housing affordability issues—similar to Bitcoin's appeal—influence election outcomes.

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