YouSaid · the spoken record

Meir Statman

lines on the record: 92
first: 2017-04-27
most recent: 2017-04-27
sittings or episodes: 1
sources: podcast

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“Is really too much to give up to know that I don't know that I would have wanted 25 years ago or 30 years ago to know exactly where my life is going to take me. I think that it is a nice thing when you discover things along the way and you explore things and you enjoy them.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Need to look out ahead a little bit. You might need the navigation, I certainly do, but I think that not for the metaphor, the joy of discovery.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know, my answer might surprise you, but the answer is nothing. That is, I really enjoyed the journey as much as I enjoy the destination. And I continue on that journey. And so all I need is kind of like when you drive a car and you don't really need the headlights to show you any more than a distance that is out there. And as you move, the lights move with you and you see the next part of the road.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know, I coordinate internships of finance majors. And what I tell them, I use the word serendipity that is fined by accident. You have to And you do that by kind of keeping your eyes open and keeping to this idea of serendipity. Figure out, you know, ask yourself, would you want a job along the lines of this internship or is that definitely one that you would not want? And so continue on in that way. And so I tell them, you want to go into finance and to behavioral finance if you want to go to the academic side, ask yourself whether you delight in new ideas. If you don't and willing to work, of course. If you don't delight in new ideas, you know, you may as well go to engineering.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, no, no, no. I think that it's actually good. It's a politeness, it is civility. And so before I tell you my political take, I try to probe what yours is to see. And if it is very different from mine, I just terminate the discussion and move on to talk about sports.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Country is long enough. Culture is very different. That is one of the things that struck me when I came to the United States. In Israel, if people agree with you, they are quiet. But if they disagree, you will hear them. In the United States, it's the opposite. You will know that they disagree with you if they are quiet rather than telling you that they agree. And so they are very Americans. We are very debate argument averse. Land of conference.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, you know, I have equipment, a treadmill, and a bike and one of those, whatever that helps. Of the equivalent of lifting weights And what else do I do mentally, of course, my work and politics and the like, of course, keep me alive. But, you know, around the house, it is odd. I kind of take the light in doing projects like building an enclosure for storage. And so on.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That was published in 2010 And we developed a mental accounting portfolio theory where people keep their money in separate pockets, separate goals. For example, retirement and college education and bequest. And they optimize each of them By the rules of mean variance and then put it together. And so we show some interesting theoretical results. But the most interesting part really is to say, yeah, normal people think this way. They don't think about money as being kind of generic. They think about it money that I need for this goal or that goal”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, that's an interesting barrel. But he understands that you have to begin with people's goals. So you have this kind of goal-based planning. And so he and I and two of our colleagues wrote a paper together. Marco.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, but more than that, you know, that is one of the central things about mean variance portfolio theory is that you have to look at your portfolio as a whole.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think that it is about creating a structure for behavioral finance, really central to my second book, is to dispel the notion that behavioral finance is kind of a set of interesting stories about people who behave in ways that are not entirely rational and so on. But people say, where is your portfolio theory? Where is your asset pricing theory? Where is your market efficiency theory? And my answer is that we have all of that. And that is what I tried to show. You have rational people, we have normal people, you have a standard mean variance. Portfolio theory, we have a behavioral portfolio theory and so on. And just to add, Harry Markowitz is modern portfolio theory. Modern portfolio theory is also a great fan of behavioral portfolio theory. Harry Marcois really knows investors and he knows behavior.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“In part, yeah, he did that is really nice to sort of struggle against something. If something is fully accepted, it is no longer fun. Too easy. That's exactly it.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Not at all. There's really no exciting work informative, but you don't really have the kind of struggle that we had at the time in the early 80s.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, in finance, I think that it's not just because I'm biased towards behavioral finance, but one of the things that has changed really is the reception of not just behavioral finance, but generally looking at individuals, looking at people and asking how is it that they behave. Hirsch, Sheffron, and I, in fact, Wrote the very first paper that was published in a top academic journal of financial economics, and it was published in 1984. And it has to do with this issue of dividends. There was almost a riot there at Rochester and people, and we heard later that people said that they will never ever send another paper to this journal if they published this one. And Merton Miller, two years later, wrote a paper essentially attacking our paper. Well, that's great.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I'm beginning to read a book in Hebrew again that relates to kind of the political situation, the sort of back and forth between Israelis and Palestinians that goes nowhere. And it kind of makes a story of that about how Palestinians arranged for a demonstration. Israelis have a rule book as how to disperse a demonstration and so on. And so it kind of goes one step here and one step there, wasting time and energy and lives. No problem and getting exactly. What's the name of the book?”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Them up, they ultimately broke them up. And so if you needed some piece of evidence of how important social status is to us, you have that. And it's kind of this part of it, of course, is a sad story. I know just a bit about it, but not much. And that exposed it. And I look at them and I say There are people like me and you. There are normal people. And when one feels that he is treated unfairly and our want of fairness is another thing we want, one responds in ways that really terminate good friendship.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“By Michael Lewis that we just talked about. And one of the things that really struck me there was, one, how Carmen at Firstkew were laughing as they did the work. Constantly. And when I think of my work with her Shefrin, my good friend and colleague, we did the same thing. People really wondered, why is it that we love so much? But that is one. The other thing that struck me is the struggle for status. I mean, I mean, between the...”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, on the just enjoyed or touching a book in Hebrew that just was translated is called Judah, and it's about the story of Judah. Iscariot and it kind of twists the story whereby Judah becomes becomes the hero of the story Jesus, of course. And it is set in Jerusalem, Jerusalem that I know, and so it was very, very touching to me on the non-fiction, of course, I read recently the undoing project. Oh, sure.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Are such that prices deviate from value, but when it comes to individual investors, you say invest in index funds because markets are hard to beat. And so these kinds of insights really stayed with me.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Followed a particular investor. I like the insights of Warren Buffett. Warren Buffett, I think, is very good at recognizing precisely the difference between Markets where price equals value in markets that are hard to beat. And so he says, yes, markets”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or at Columbia, you know, two professors who actually left not long after I came, but helped me even after they left Richard Rippi. And Jerry Schnee have been exceedingly helpful to me at a time when I really needed most. And it was quite a pleasure to send them. My book and add an inscription that really thanks them for their help when I needed it most.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, yeah, as I said, he was a tough mentor, but a very, very good one and a very kind one overall. That is, even when he was tough. And I had many others who were kind to me at Columbia.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“He was editing that at the time. And then I sent him some more and we got into a correspondence and he was always interested in ideas. The last thing that matters to him is status, you know. You're a full professor or assistant. He just thrilled to new ideas. And so, and he was always innovative. And so it was really quite a pleasure and very, very beneficial. So he recommended me for a particular award. He put me on some board of a money management company and so on. And he was a very tough mentor that is sometimes I would get comments on papers that really didn't make me cry. But surely were painful. But of course these were comments that helped me do better.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I sent him, yeah. I sent him a paper very, very early, 1980 probably, a simple paper about betas and so on. And he accepted it for the general portfolio management.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It is spectacular. And I have So, you know how fortunate I am to have as a mentor. And so he opened many doors for me and he encouraged me to do that work. And in between. So you met him just.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I got to know because I sent him some papers. And he took to the ideas of behavioral finance right away. I mean, it was right in him.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I was fortunate to have very many, and I tried to reciprocate now by mentoring my students and my younger colleagues. It goes back, I can think of high school where my English teacher said, I can see you doing a master's degree. Well, you know, when you're in high school, just the sense that the grown-up is saying that you can set your sights high. Is really quite inspiring. Exactly. And I think of Peter Bernstein. Peter Bernstein.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, I had all PhD students. I had some smattering of psychology there. But that's not really where it came from. The experience in New York and the experience of living in the United States, of course, stayed with me. One of the things that I used later in my studies is the time of the energy crisis, 73-74 when Con Edison eliminated its dividends. And the annual meeting was raucous and people wanted to hang the chairman.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it was in economics and statistics. And then I continued on for an MBA immediately after I got my undergraduate degree. And there my focus was on finance.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, undergraduate studies in Israel are different from the United States in that you begin with majors. And so my majors were economics and statistics.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a common refrain. And so, and so when you think about ambition more generally, that is shortfall aversion. That is, I am now in a position where I make $10 an hour. My aspiration is to get a job that pays $30 an hour. I am now in a shortfall position that gives me the ambition to go study, do whatever is necessary to upgrade my skill such that I can get more. And so that really is, so you can have $5 billion, but if your benchmark, if your aspiration is 10, You feel as if you are still a loser and you are trying to reach that aspiration.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is the 100, and so you hate that shortfall. And so you are reluctant to realize the loss because you are still trying to get even. We”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so think about the case where you bought a stock for $100. And now it is trading at 60. Well, the $40 are lost. Economist will tell you the $40 are lost whether you realize the loss or not. Absolutely. But your aspiration, but your reference point.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, not really in daily language when we talk about risk, we really talk about loss. That is, we are not really talking about... Put in $100, you might end up with zero or you might end with $200. And so that is what loss aversion. Actually, the really interesting distinction in my mind is between loss aversion. Shortfall version that is”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Does it leave you anything? That's the general problem with the heart to beat market. That is not that money managers don't beat the market. It is that they don't share it with their investors”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, but more than that, you have to be. Aware of the cost that is the people who promote those smart beta funds and so on, they take big chunks for themselves.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Momentum quality. If you tilt your portfolio towards value towards small, perhaps low beta and so on, you get essentially your money's worth. You're not beating the market and does it really work? Does it really add as much? Is it really stable? I don't know. I mean, I tilt my portfolio towards value and small, but I don't really go. Much beyond that.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so, if you have, for example, that returns are higher for value stocks, a small cap stocks, it is not necessarily risk. It might be other preferences. But”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, here is an academic answer, unfortunately. The question really is, what does that exert that you get with a smart beta represent? Representing beating the market, or is it representing just a fair return on your money?”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That is also true, and you really is an image that you have. Your own eyes and in the eyes of others. And so, yeah, I would be perceived as a braggart if I drove one of these.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That is right. We develop habits. Are we developing image of ourselves? I mean, you know, seeing myself in a Lamborghini. I can buy a Lamborghini, but I'm going to feel ridiculous.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Buffet as well. And then you can see people who create those generations skipping trusts and so on and keep the money. As if they can take it with them to the next world.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Money is in billions, it matters whether you have two or three. It matters whether the fellow who was below you with one and a half now exceeds you with three because now your relative status goes down. And so one of the things that we want, and we have to recognize it, is social status. And social status is relative, which makes it really, really hard. It means that we are competitive to the end. And so if you can just step back and say, hey, you don't have as much as Warren Buffett, but you have more than you need.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. But then you see many people, and not just the very wealthy, Who have way, way more than they need, say, for retirement or even for their family and the next generation who still strive for more? And the answer is status because Because $2 billion is a lot of money, but $3 billion is more. And if you are in this company of people for whom”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, one aspect of it of more than enough, for some people, of course, there's never enough. And if you ask yourself really, why is it that somebody who has $2 billion strives so much to get $3 billion?”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we need to know ourselves and sometimes the way you see yourself when you shave is to use a mirror. And the way you see yourself. In terms of investment is sometimes to read, to speak with people who are knowledgeable in the field, knowledgeable, I mean knowledgeable in, say, those cognitive errors, identifying ones. And this way you kind of change your way of thinking. And so you learn rules that, in fact, useful. Again, you learn to step away from your emotions, for example, whether fear. You're afraid. But then you say, Well, what can possibly happen? And you can put it in perspective, anger, a hope. You know, it is, again, something where you cannot just go by hope and buy lottery ticket with abandon.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And so there's really a need to recognize that framing and frame it correctly as one pot of money and you have to find ways to dip into it in a responsible fashion. But don't get confused as no, I cannot really dip into capital because it's a different color money.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, of course, I've learned about markets and I've learned about myself. And I find that even today when I begin an investments class and I ask people, What it is that they expect to know by the time this course is done, somebody is going to say, I want to know how to pick the best stocks. And so I have to go and explain why that is not likely to be a good idea to try to do that unless they are going to be investment professionals. And so it is still hard for people to get. By the time they're done with the course and by the time they read not just my writings, but of course this is now widespread. Jack Bogle and Warren Buffett and so on have said it. People are getting Point, and people in fact invest in index fund. And sometimes I hear from students who took my class many years ago and write to say thank you.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, that's the difference between rational people and normal ones. Rational people say money is money. Call it capital, call it dividends. If I don't get dividends, I can simply sell a few shares and get the equivalent of that. That is what Miller Modigliani showed us. But again, for normal people, there's problem of self-control creates a need to have rules that will prevent you from spending too much And one of those rules is spend dividends, but don't dip into capital. And that is very helpful during your working years. But then when you retire and you need to actually dip into capital, people find it really, really difficult. And they go in foolish ways to generate income where in fact they should find a way themselves with an advisor to dip into capital because after all people don't live forever sorry to break the news.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the distinction people make between income and capital is a very basic one. And it is usually very helpful when you are saving, it is very helpful because it means this portion of the cake you can eat. The problem with it is that people are trying to get yield. People are trying to get income. Because interest rates are low and dividend rates are low, and they get themselves into dividend capture funds, for example, that waste their money. They create something they can call income by getting more dividends, or they get into junk bonds. Because they have more higher interest rate, but they are oblivious to the kind of risk that taking when they do that and they're oblivious that those high rates that are promised are not realistic because, of course, this zooms that none of those companies will go bankrupt.”
2017-04-27 · Masters in Business · Interview With Meir Statman: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source