In episode 138, we welcome Yariv Haim. Yariv begins with his backstory. He had been working for a family running marketing and business development. He was asked to get involved with the investment management needs of the family, and through a path of his own, had gained enough knowledge to crystallize an approach he now follows at Sparrows Capital.
Yariv discusses how he focused on evidence from impartial academic institutions and research, and refers to the strategies derived from them as evidence-based investing strategies. After doing his research, he saw an informational gap in the industry, and it still exists today.
Yariv then gets into 6 core principles 1) return is primarily a function of risk, 2) certain risks attract persistent premium, 3) Diversification works, 4) stock picking and market timing seldom add value, 5) remain invested across the full cycle, 6) costs matter (although it isn’t the only prism to evaluate investment opportunities).
Next, Meb asks about factors and smart beta. Yariv discusses his opinion that Wall Street is a marketing machine, and the term “smart beta,” while it sounds sexy, ends up becoming an umbrella for all things. When asked about factors and when it’s time to stop using them, Yariv responds by discussing resources available, and the importance of doing the homework, and not to invest until you fully understand what you are investing in. As far as favorite factors go, Yariv talked about not having one, and expanded by saying he sees factor timing as a problem. He recommends a blend of factors to clients, starting with the most diversified portfolio, and building tilts.
The conversation then shifts to a discussion of behavioral investing. Yariv talks about how investors are all human beings, human beings are filled with biases and emotions, and feelings of optimism and pessimism can affect the way we make decisions. He finishes his comment by saying he feels that for people who wish to invest on their own, that it is always helpful to have someone by your side who is potentially slightly less emotional about the way your portfolio behaves in the short term.
As the conversation winds down, Meb and Yariv get into socially responsible investing and environmental and social governance themes. Yariv believes it is a trend that nobody can ignore today. He discusses some research conclusions the efficiency of markets and how higher returns investors have earned on vice companies is compensated for the additional risk they bear for owning them. He makes the point that there is more to investing than purely outcome in the form of returns, and that if an investor’s ethical compass steers them in the SRI/ESG direction, it is sensible to invest that way.
The pair then conclude with how Yariv puts all of these ideas together to form investment portfolios.
This and more in episode 138.
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Mohnish Pabrai on Cloning & Compounding | #495
Stephanie Pomboy on the Corporate Credit Crunch | #494
Michael Batnick & Ben Carlson – What’s Your Favorite Diversifier? PLUS: Future Proof! | #493
Anthony Zhang, Vinovest - From Barrel to Bank: How to Invest in Whiskey | #492
JD Gardner - Bridging the Behavior Gap | #491
Bill Bernstein on Financial History, Star Managers & The 4 Pillars of Investing | #490
Steve Klinsky, New Mountain Capital – Private Equity Titan | #489
Blake Street – Financial Advisor to New Media: From Tik Tok to E-Sports & OnlyFans | #488
Dr. Gio Valiante on Peak Performance: From Tiger Woods to Steve Cohen | #487
Ben Inker & Tom Hancock, GMO – The Value and Quality Opportunity | #486
Dan Niles on Big Tech Stocks and the AI Revolution | #485
Rodrigo Gordillo & Corey Hoffstein - Instagram Frauds, Inflation Volatility, Tech Crisis, & Return Stacking | #484
Burton Malkiel - Applying 'A Random Walk' to the World Today | #483
Meketa's Steve McCourt & Primark's Michael Bell - Democratizing Private Equity | #482
Sarah Stanley Fallaw - The Psychology of the Millionaire Next Door | #481
Craig Wichner, Farmland LP - Cultivating Wealth with Sustainable Farmland Investing | #480
Jim Chanos & Bethany McLean on Lessons from Enron, Financial Fraud Throughout History, and the Fall of FTX, SVB & Wirecard | #479
Sam Zell - The Grave Dancer on Private REITs, the Macro Landscape, & Timeless Investing Wisdom | #478
Richard Thaler & Cade Massey on the NFL Draft, Misbehaving GM's, & Exploiting Inefficiencies | #477
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