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Charley Ellis

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102

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2018-07-30

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2018-07-30

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1

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1. “That's easy It is all about people, whatever it is. It's all about people, and people of great character never lose it. And people do not have great character never get it And if you could just take that one lesson and stay with it, it will help you enormously in your family life, in your social life, in your business life, in your professional life, and in your personal, just inside yourself life. And anything you could do to drift closer and closer to good character will pay off many times over.”

   2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

2. “If they couldn't get more promotions, and so they collectively promoted the group of seven as the Canadian artists who were capturing the essence of Canada, and now today their art is all over the place and wonderfully admired because they taught each other some skills and techniques that made them more or less comparable, but the concept of an all Canadian art really took off. So you learn something that way. That's me.”

   2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

3. “Well, And you learn a lot by reading about artists. First of all, like investing. It's not easy. And very few artists are really successful financially. And fame comes and goes. If you look who were the great absolute, sure, greatest artists in the 1920s, most of them nobody has ever heard of. You go back earlier and say, yeah, that's right. The impressionists did not sell well, did they? No, they did not sell well, but there have been very popular since fashion is a very important. So that helps you with the investing. And then connectivity. People, and it turns out that artists who were successful, usually knew artists who were successful and they learned a lot from each other in their art, but they also helped each other get sales. And in Canada, the group of seven organized themselves to”

   2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

4. “For somebody my age for investing, he said. That's easy. Berkshire. I said, You mean Warren Buffett's outfit? He said, yeah, Berkshire Hathaway. Tell me all about it for the next 40 minutes. Sandy Goddysman, who was chairman of Berkshire Hathaway, told me one after another there's different factors that caused him to believe that one really was a superb investor. So I went back to my partner, Saunch Associates, and we had a reserve fund that I said, you know, the market's way down. It can't go down a lot more than this, and that happened to be true in the early 70s. This is a safe, insane investment. I think we would be smart to invest this money in the safe insane Berkshire Hathaway. So as a defensive move, we bought some Berkshire Hathaway. And candidly, it's worked out beautifully. But what I wish has gone up 300 times from where we bought it. What I wish, obviously, is we bought more. That's probably the biggest mistake I've ever made.”

   2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

5. “And Sandy happens to be a beautiful lesson in gentleman class act. He said to me, Charlie, it's very nice to see you. As you told us last year, we've agreed with you. We shouldn't be using your services. But I wanted to tell you personally, because I always think that's the right way to tell somebody you're not going to use their service. Now that I've said what I had to say, it's kind of silly, but you're here for lunch, and I'd like to have lunch too, and I know you're a good guy. So why don't we go up and have lunch? And we'll talk about anything you want to talk about. So in the elevator going up, I thought to me, what in the world do I ask Sandy God to spend about? And finally, we sat down to lunch. He said, well, what do you want to talk about? I said, Sandy, you're probably as good an investor as I will ever know. Do me a favor. I'm a young guy. Teach me some lessons about investing. What would you recommend?”

   2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

6. “And his assistant had said, Mr. Goddam would like to see you and he'd like to have lunch with you. And I was kind of surprised because the year before there had been clients of Greenwich Associates and I'd been able to show, I thought pretty clearly, that they really shouldn't be in the securities business because they didn't want to put up capital for block trading and they didn't organize their research by industry. They organized it around really creative ideas and institutions weren't really ready to pick up that. They liked what they were doing, but they couldn't understand how to work with it themselves. And they were really good at investment management, but they were missing the market that we were covering. We were covering large corporate pension funds, largest, and they were going for the second or third thousand largest. And I had told, I don't think we've got anything to offer you. I think you ought to not use our services. He called us out I'd like to see, or assistant did, so I went in.”

   2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

7. “I knew a very bright guy. In college and I knew he was exceptionally bright, not a particularly agreeable person, but he was deeply involved in some venture investment and I thought being able to invest with him might be a terrific opportunity and in small proportions. And he said, you know, I'd really like to work with you. You've got a good managerial background. You could go on the board of a couple of these companies and really help us a lot. And so I bought into it and Fortune didn't put up a lot of money, but enough so that I that was a mistake. So I guess that would be one. The second is back in the early mid-70s, I had a wonderful conversation over lunch with a terrific investor named Sandy Goddessman. Sandy ran a firm called First Manhattan.”

   2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

8. “have an economic system that works really, really well or large scale. We have a large number of harbors, which turns out to be great, seaborne traffic, large number of rivers turns out to be great, a large number of really good agricultural soil turns out to be great. We've been very lucky people, and all we have to do is stay lucky.”

   2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

9. “I think probably an affection for America in the long run. Would be the biggest one They had grown up. In college and then went right into the depression. And then the Second World War, and then the Cold War, and they really believed in America. And so do I. And I'm awfully glad I do. You know, I've had enormous privilege of travel all over the place. And there is no place that I would rather live or have my family live or my great-grandchildren live than in America. I think we're going through a miserable moment right now, but it won't last forever, and we've gone through terrible times. Joseph McCarthy did exist, and he was right here in America, and Father Cauflin did exist, and he was right here in America. And we've had some truly dreadful here and there in another place. But the long run, the goodness of the American people and the goodness of the values we ascribe to keep coming back and we're lucky.”

   2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

10. “Watching that plane and watching my two beloved sons, I knew they were safe because when you skydive first time you were wired with a cable to the guy who's an expert. You can't have any trouble, but it still gave me the hebi jeebies. When I went up, I also had hebijebis, but nowhere near as intensive. And then when I landed and realized, I just landed on my feet. Hey, this was kind of fun. Let's go again. And my two sons are running. Dad, can we go again? Can we go again? I realized, okay. It was just an emotional reaction.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

11. “I think that's got to be skydiving. Not that I was at risk, but I was at risk to be skydiving with two sons who were early mid-teens. And they went first because there wasn't enough space on the plane. And I will have to tell you.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

12. “I don't like passive as a term. Passive investing, you think about it. Where did passive investing as a term come from? Easy. Guys who put together the concept were all electrical engineers. So a plug with three prongs or two prongs is the active part. And the passive part is the plug that's got two or three holes. And so active and passive, neither one has a pejorative connotation. But can you imagine anybody saying, I'd like you to meet Ted, he's passive. How you would feel about it? Or if you heard people rumoring, you know, Ted, I think he's kind of passive. You wouldn't like that. Then you wouldn't want to vote for somebody who was identified as passive. Passive is a negative word. We're all taught to be active. Take charge. Do something. And it's a shame. That nominal terminology has put an enormous negative.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

13. “Would be a good idea if you would go ahead and index because you'll be better off doing that. That's probably most profound concern is obviously retirement security. It is a dreadful, dreadful problem, particularly for democracy. If we don't deal with it fairly soon, it's going to be very hard to deal with it. If we get behind the curve on that one, we're really...”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

14. “About investment management as a profession and business is that it's too much of a business, not enough of a profession, and that means people are not going to tell the real straightforward story that active investment management no longer earns the fees and costs it incurs, and that we should be telling everybody.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

15. “I won't give you the right answer. I give you a different answer maybe. Personally, I know what I would do is I would look for mid-sized groups 100 to 500 people where I could provide a quality of leadership that they would find really, really exciting, positive, affirming, and what I'd call servant leadership, where you're helping the organization get better and better and better at what it's doing. And that's the kind of work I've done with investment committees, and that's the kind of work I've done in my philanthropic work. And candidly, that's the kind of work I did at Gren's Associates. And that's me. And I love doing that kind of work. And it's fairly portable and it's profoundly enjoyable. But it's a little bit like parenting. You have to be at it for the long term because moment to moment, it can be kind of frustrating. But if you're in it for the long term, deeply satisfying.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

16. “It's been an absolutely glorious place to be. I am so grateful that the world was organized in such a way that that's where I happen to be. And I recognize it was all good luck, just a truly wonderful, wonderful time. And it's not protective or jealousy of other people having a wonderful time too. Just be careful.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

17. “Well, I think the obvious answer is think about it very carefully. If you're doing it because you love it. Personally, I think there's some real merit to that as a way of making a decision of what you want to be doing. When young people say, I want to go with my passion, bothers me because passion to me is an irrational, powerful emotion. And I'm not sure passion is the right thing to guide somebody. But if you said, no, I really enjoy the nature of the work, and I really, really attracted to it, then I think you'd probably be able to find ways of making a decent living and would enjoy it. But if you're, and you have to be candid with yourself, are you going to it because you think it pays so very well? Be prepared. It's not going to pay so well. If you think you're going to it because it's fun. Everybody's having a great good time. Candidly, be careful because the party may be closing down and maybe the punch bowl is going to be disappearing and maybe all the most fun people will have decided they might go home a little on the early side.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

18. “That's my own few But if it does happen, give me a call because I'll come out of whatever and say, let's go up our swing and try it again.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

19. “And the combination of the interests of the people who are active managers in not quitting and the behavior of individuals who want to do better than average would make it sound like, boy, that's not going to happen for a long time.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

20. “Probably more than three quarters would have to quit. And my own guess would be somewhere around 80, 85 percent would have to quit just because it doesn't make sense anymore.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

21. “Going into active investing. If they do and you cut back a lot, how much do you have to cut back? And the answer is you have to cut back and cut back and cut back a lot so that you don't have a residual group of people who are really pretty darn good at price determination. And I don't know what it would be, but it's certainly more than half the people would have to quit.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

22. “And it doesn't make an awful lot of difference. But find a way that enough participants in the pricing determination decide, Ted, I've looked at it very carefully and I've decided I'm quitting the business. I'm going into medicine, law, farming, ranching. I mean, what is it that people are going to go into that they think they're going to find a more satisfying than, well, you know, honestly, it's not as good as it was, but it's still the best game in town. So it's going to be very hard to get people to give up on.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

23. “So what you have to do is have enough assets indexed to reduce the trading activity enough so that enough of that million plus people who are making their living is active investors comes down and down and down and down and down to a level where your call, where do you think then the markets start to become less carefully priced and information starts to get a little choppy and Mike Bloomberg's terminals are going to stay out there, but maybe they stop adding to them. And SEC is not going to change its rules, so that's sort of a fixed phenomenon. You might have hedge funds reduce their volume of activity, so maybe some of that. But computers are rising and AI is guaranteed to come as a more and more and more powerful phenomenon.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

24. “Well, let me look at it the way I look at it and see if you find this makes sense. First, if you have 30% of the value of the market indexed, that's not 30% of the trading activity. It's a much smaller fraction.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

25. “About indexing, particularly in the US today, there's this question of Vanguard's growing like crazy, BlackRock, ETFs in addition to the traditional index funds. How big do you think indexing can get before you lose this semblance of price discovery?”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

26. “I would say so. If you really understood what you were doing, had the really right contacts and so on, I think it would be very interesting.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

27. “Let me put myself in the horns of a dilemma. The Chinese market, as anybody who spends any time with it knows, is still dominated by retail investors, prices particularly. So unless you're good at understanding retail investors and how they track past price performance and project future price performance, indexing may not be all that useful and might actually be a mistake because you might find yourself being indexed with foolish.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

28. “The challenges in some of the emerging markets with indexes, or they get highly concentrated in just a few names. In fact, you lose what you're trying to get access to, which is exposure to China, where today if you wanted a Chinese index, you probably only own banks and tech companies. How should somebody think about a less diversified stock market index exposure?”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

29. “We must have won that war because it really is all American and so many wonderfully exciting ways and it's interesting. It used to be that you see every once in a while a bicycle and then every once in a while a motor scooter and then once in a while an automobile now every once in a while you've got motor scooters all over the place and quite a few automobiles and everybody's thought about building in the new Hanoi the wider highways and so on and so on. So the dynamics in the countries that are really dynamic are exciting and if you think gosh you know longer wavelength is this likely to be a big power? The answer is absolutely yes.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

30. “Ideas have been pretty carefully put aside by Deng and others who have said, why don't we release the energies of a dynamic group of people? And that's exactly what's going on. If you look around and say, you know, a lot of these buildings, I don't remember when I was here last. That's right. You don't because they weren't here last, but more are coming are going to be more of them. And there's a certain amount of excitement about, hey, you know, if you work hard, you can do really well. all kinds of the energies that we think of and they say well it's not just China Vietnam is a pretty exciting place they've got 120 million people and they've got a high commitment to education and they've got strong work ethic and they don't borrow money and they live with their parents until they're in their early 30s and then they move to a new place and then they bring their parents in and there's a lot of dynamics you say”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

31. “Loaded up first thing you notice right away is the air is not too bad. Heavy industry has been pushed out of Beijing. The second thing as you hear, they're actually planning to do even more than that. There's a sister city going to be built about 150 kilometers from Beijing in a fair fraction of the people in Beijing are going to be moved there. And it's going to be a dream come true, ideal, high-tech city. And it could be really interesting. Third thing is the middle class or upper middle class in China is larger than the US population. It's worth keeping in mind, 350 million people here, 360 million people there. The number of really, really bright people is about proportionate, maybe a little bit on the higher side in the mix in China. There's a lot of dynamic, a lot of excitement. They happen to have a fairly stable government, and that for many people is a positive factor. The old communist idea”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

32. “Got a cash balance that we can't use yet. We're competing with other guys with a lot of money too, so the entry price for private equity has been going up and up and up. The exit price can't keep going up a lot if the stock market's on the relatively high side ought to recognize that that's probably as good as we can anticipate. It's getting harder and harder to get those returns. And we go in two different directions. Some people say, so we're not going to raise more money. We're going to stay as small as we can. We're going to specialize in our particular niche. And we're not going to take new accounts. So that takes them out of the equation. And as another group say, well, you know, if everybody wants us, we'll have to be opening up more capacity and we'll just take the money. We'll see if we can't find a way to invest it as we go along. But it might be difficult, but we're going to try. And it's always worked so far. Well, you could have a huge flood of”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

33. “private equity Great. So why don't we put not ten percent but 20 or 30 percent don't go to 40% that's a little high but let's say 33% into private equity and we'll do it in a very imaginative way we'll have a couple of specialists who will work on selecting the private equity funds employed by us candidate we can't pay very high salaries because our fund structure doesn't allow us to do that, but we'll do the best we can. And we're going to be a major commitment to private equity. Fine. So you do, and I do, and they do, and they do, and the others do, and so does everybody else make a major commitment to private equity. Jump over to talking to private equity firms today. What would they say? We've got more money than we really would like to have.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

34. “Those who are skilled at being good customers and understand that the real competition today is not by the investment managers to get your investment money, it's by the people who've got money to get access to the best investment managers. And that's been true for the last decade in venture capital. It's now clearly true in private equity. And that's a really important differentiation. Most of the guys grow up thinking they're competing for the girls in the fence. It turns out that the girls were paying attention to who were the guys and actually the big competition might be the other way around. So it's worth keeping in mind that there's a big change. The other thing that's really important is I don't think there's any very large pool of capital that has not addressed the following question Ted We have a commitment to a higher rate of return than we're now getting. What can we do to increase our rate?”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

35. “Competition, and they're doing fine on average over the long term. Okay, so that's the reality. Okay, so what are you talking about? I'm talking about if you are really an exception in the way you invest, you don't have to index. You can do something that's really different, but you have to be really good at your. Exceptional way of doing things, and you have to be not very widely followed or copied because you're going to be almost alone at doing it. Good for you, go for it.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

36. “As really good analysts who are specialists in their industries and the industries fit together fairly well, so you got half a dozen more stellar analysts. They've got their own money in, a couple of principals got their money in, and they're taking in a few outside investors as well, a couple billion dollars to help cover costs. That would be a very attractive opportunity. What else? Find a group of, let's say, 100 mathematicians who are unbelievably proficient at working with data, and they are doing things that none of the rest of us understand. And if you saw their performance compared to the performance of others, it makes no sense to me at all. They're up when other guys are down. They're down when other guys are up. It's all over the place. And they go, huge ups, and then not so much. I don't think I could have the stomach to live through that. Fine. But that's what they're doing nobody else is doing. They have no real...”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

37. “Usually invest with people at day one or before day one that they get into business. If you look at a list of their investment managers, you'd say, geez, I don't recognize most of those names. That's right. Nobody else does either. It's a very unusual kind of investing. Guts ball, intellectually proficient, and they do slightly better on asset mix. Half a 1% maybe, and slightly better on manager selection, half a 1%, maybe. I got a team of 30 guys who are working to be sure they keep it up, and they got a network of friends and admirers all over the world feeding any kind of tip that they possibly can. Who gets first call? They do. Who gets the best call they do? All kinds of advantage. So there are organizations like that. And there are not very many of them, but there are. Okay, who else? Well, find a small investment management organization.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

38. “I'm grateful to what he's done for me and other investors, and I'm very, very comfortable. I know they haven't done as well as indexed in the last couple of years, but that doesn't bother me. I'm very comfortable staying with that investment. Why don't I go do some of the clever things that can be done? Easy answer I'm not good enough. I don't know enough. There are some ways that you could do it. Let's be candid. You and I both have tremendous admiration for David Swenson at you. Should David be indexing at Yale? No. Why, he's got all kinds of competitive advantages. Everybody loves David Swenson. Everybody loves the idea of working for Yale. He's got the best team on his side picking working with managers anybody ever had. If you have a relationship with Yale, you know it's going to be a long-term relationship. Average tenure of their manager relationship, some like 14 years. That's the average, even though they...”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

39. “Huge. And I know because of service on a whole bunch of different philanthropic investment committees, I happen to know an awful lot of guys who are really talented at picking talented people, and I meet with them on a regular basis. So you think, hey, Charlie, you're probably as good a position as anybody to be able to pick and choose terrific, active managers. What do you do with your own investing? Two kinds of investment. One is index funds, which I'm so happy with, just really comfortable with. And the second is an index fund equivalent in many ways, Berkshire Hathaway. Why do you own Berkshire Hathaway? Because I bought into it in the early mid-70s. I know Warren is a person. I don't want ever to meet him in a hallway. And he says, hey, Charlie, I hear you sold out.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

40. “You shouldn't be talking that way. I've used myself as an example. I have probably as good a network of friends in the investments world as anybody.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

41. “So let's talk a little bit about what some of the sophisticated institutions have done. in public equities or bonds. Now I get that not everybody can do that, but for those who can, what's your take on, yes, indexing is important in those markets where you can index, but the more interesting opportunities over the next stretch might be in private equity or venture capital or direct real estate or real assets, not financial assets.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

42. “You're going to give me a break. Where could you disagree with what I've said? I haven't said anything about opinions. Well, I'm not going to disagree.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

43. “Yeah, so I want to bring these two together. So we have this retirement issue, and particularly true in underfunded pensions as well for the old defined benefit plans. And we have this strong belief you have in indexing. And I mostly agree with you about indexing. I think the story is right. I get in the weeds, I've been exposed to certain people that I like pretty much everybody else feels like maybe they're an exception, but that's okay. That's my own fault.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

44. “And I left. You know, I'm now just past 80 years of age, and I'm having a wonderful time working. I'm lucky. I'm in a line of work that I enjoy and love. I'm not a coal miner and I'm not a ditch digger. It's not tedious and boring. It's interesting, but it does keep you alive and well to keep going.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

45. “Nobody's paying attention to it's too late. It's the big problem. The second is Congress is not doing it because why? Well, they've got all the other things that they're dealing with, and those are politically urgent issues that they've got to be prepared to run on, and nobody's thinking about, hey, you know, it'd be really good for America if we all agreed to move retirement age from 63 or 4 up to 70, and companies should have to adjust and individuals would have to adjust, but that would make a huge positive difference. And if we encourage people not to take their Social Security until they're 70 and a half, and if we encourage people to keep working, it's the best thing people could do.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

46. “So, does that change things? Well, let's see, your Social Security goes up by 76%. I love that because it's the spirit of 76 in this country and your 401k goes up by. Maybe more and put those together, and your chances of being in serious financial trouble in retirement go from awful to not too bad. So if we act soon, we could make a big, big difference in what could otherwise be one of the worst problems our society has ever faced.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

47. “Benefits, social security, if you wait. Why? Because the trade off, if you wait, you have fewer years of retirement, so they're willing to give you a larger amount. But what could you do with those call it eight years? Nine years. You could during the same time period, if you got a 401k, your 60s are the easiest years to save money. So you could ramp up your savings, dump it into the 401k as fast as you could. The second thing is you'd be invested in the 401k, and that's pretty good. And the third thing is you're not taking money out of your 401k. Take those three factors, not taking money out, putting more money in, rate of return. You easily double your 401k, maybe triple it.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

48. “Most people don't know. They say, Charlie, I'll bet it's a lot bigger. If you wait that long, I'll bet it's at least 25% more. Well, yeah, it's certainly at least 25%. It's actually 76% higher. Every day, for the rest of your life, inflation protected.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

49. “Instead of people claiming Social Security when they could, which is 62. Most people don't know that there's a big difference between claiming Social Security 62 and 70.5 when you have to. Do you know?”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source

50. “And all kinds of trauma that goes with that. Cheapers. Assisted living is expensive and dementia is a serious problem. And all those kinds of difficulties. So we're going to have a real problem with old age retirement security. And we could deal with it in a couple of ways. If you don't mind, it take just one more minute. Yeah, cool.”

    2018-07-30 · Capital Allocators · Charley Ellis - Indexing and Its Alternatives (EP.62) · IDENTIFIED FROM THE TRANSCRIPT · source