Bogleheads On Investing Podcast Episode 64: Victor Haghani and James White, ”The Missing Billionaires”, host Rick Ferri
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Nov 24, 2023 Victor Haghani and James White, co-authors of 'The Missing Billionaires,' discuss investment decision-making, risk-sizing, and making better financial decisions. They emphasize the importance of risk decisions in wealth management. The podcast explores topics such as investment sizing, risk assessment, asset allocation, management fees, taxes as a portfolio cost, and the need for better financial decision-making to preserve and grow wealth.
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Allocation Should Track Risk Premium
- Optimal equity allocation should respond to the expected equity risk premium and changing equity volatility.
- James White notes if risk premium or volatility vary over time, a time‑varying allocation is theoretically preferable to a fixed percent.
Judge Decisions By Process Not Outcomes
- Make allocation decisions based on your best ex‑ante estimates, not outcomes, and reduce size when expected payoff falls.
- Victor Haghani uses the biased coin example (60% → 55%) to show you should bet less on a less favorable edge even if luck temporarily favors you.
Scale Into Markets Over Months Not Years
- Dollar‑cost into a target allocation over a short, fixed horizon if lump sum feels uncomfortable, but avoid indefinite market‑timing waits.
- Victor Haghani suggests scaling in over 3–12 months rather than waiting for large drawdowns.