Episode 424: 50 Years of Evidence-Based Investing with David Booth

(0:00:04) Introducing David Booth and his new book, Stay Calm: Learn to Embrace Uncertainty in Investing and Life.

(0:01:15) What David learned as a commission-based shoe salesman: Do the right thing and be upfront with people.

(0:03:35) The gift of being an outsider and how financial science changed the investing experience for ordinary investors.

(0:05:38) Why outsiders are often willing to challenge assumptions—and how data changed the debate.

(0:06:53) David’s experience arriving at the University of Chicago and studying under Eugene Fama.

(0:07:49) Inside Chicago’s rigorous research culture and the lessons David learned from presenting his work.

(0:10:03) The empirical challenge behind efficient markets and why data mattered more than beliefs.

(0:11:41) How Fama and French approach research by trying to prove their own conclusions wrong.

(0:12:05) The two-fish joke and the challenge of understanding the environment we are immersed in.

(0:12:45) How Jim Lorie and Lawrence Fisher helped provide the historical market data that transformed financial research.

(0:14:18) From early mutual fund research to the question that shaped David’s career: What should investors do if managers cannot consistently outguess the market?

(0:20:59) Why Dimensional distinguishes between passive investing and indexing.

(0:23:21) The origins of Dimensional’s approach to small-cap investing and the importance of execution.

(0:24:45) Why David would rather be an investor today than in 1971.

(0:26:21) Jensen’s alpha, risk-adjusted returns, and what Michael Jensen’s research revealed about professional money managers.

(0:28:30) Why implementation is everything—and why models are tools for making decisions under uncertainty.

(0:33:47) Why the most important thing about an investment philosophy is having one you can stick with.

(0:35:46) Why David sees education as an antidote to fear and wants investors to feel more optimistic about investing.

(0:36:18) Human ingenuity as the foundation of David’s optimism about markets.

(0:37:53) Why trust is the ultimate product in the investment business.

(0:39:40) Why understanding the science alone is not enough—and how advisors can help investors stay invested.

(0:40:23) What David’s art collection has taught him about non-monetary returns and true worth.

(0:43:07) Why a good financial plan is a process built around trade-offs, flexibility, and adaptation.

(0:45:22) The problem with fixed goals and why David thinks many goals are inherently fuzzy.

(0:46:34) How David distinguishes between forecasts, wishes, and worries.

(0:49:44) How investors can identify and tune out noise by focusing on how markets work over the long term.

(0:51:30) David’s unfiltered perspective on private markets, transparency, price discovery, and liquidity.

(0:52:38) Why true wealth begins with values, family, and the things that matter beyond money.

(0:54:57) What winning means when wealth includes both monetary and non-monetary rewards.

(0:55:39) Why David describes optimism as science-based hope.

(0:57:33) What Stay Calm means to David: Make decisions aligned with your values, build a process, and trust that you can deal with whatever comes your way.