Episode 168: A Replication Crisis and a Housing Crisis

Today we have a somewhat unique episode for all of our listeners, rounding up the news and information from the world of finance and investment before we welcome Ben Rabidoux back to the show. Ben was a guest on Episode 96, which aired early during the pandemic last year, and we are so happy to have him here for another appearance, to touch in with his real estate expertise, and his thoughts on the current issues facing the Canadian housing market. Ben is the Founder of Edge Realty Analytics and North Cove Advisors and is essentially a real estate analyst, which means he has many clients that are institutional investors and fund managers, who he helps with the real estate side of their portfolios. In this conversation, Ben gives us loads of insight into the current landscape of Canadian real estate, the roots of the contemporary conditions, and what the data can teach us about the high prices that are so prevalent at present. We also hear from Ben about some potential policy solutions, and how the pandemic has affected the rental market. So for all this and a whole lot more in today’s episode, be sure to join us on the Rational Reminder Podcast.

Key Points From This Episode:

• Some of the best media we have encountered recently; podcasts, documentaries, and more. [0:02:01.3]
• News from the community and why we had to ban a user for the first time. [0:03:46.1]
• Quick book reviews of the illuminating DeFi and the Future of Finance and Blockchain Bubble or Revolution. [0:07:05.8]
• Changes in the world of finance and investment; Walgreens’ new bank account and beyond. [0:12:22.3]
• Today’s listener question dealing with research-based investment decisions and frequently cited papers. [0:15:27.5]
• Recent research from Robert Novy-Marx and Fama and French on US value premiums and factors that matter. [0:22:01.3]
• How to view the possibility of a replication crisis in finance. [0:31:10.8]
• Findings on US exceptionalism and the relationship between national economic growth and returns. [0:33:49.6]
• Market crashes and the correlations between different countries. [0:37:12.6]
• Reflecting on Ben’s appearance on the podcast during the early weeks of the pandemic. [0:39:38.3]
• The last few decades of the 20th century and how that explains the current climate. [0:43:50.2]
• The chronic issue of under-supply of housing from the industry. [0:45:30.1]
• Housing policies that would support the current rates of population growth. [0:48:20.4]
• Examples and thoughts on the recent house price increases. [0:48:48.6]
• Statistics of homes bought by investors; surprising numbers and data on purchases. [0:52:58.2]
• News from the rental market and the interesting ways the pandemic affected it. [0:57:05.1]
• Common Canadian perspectives on the potential for housing pricing to decline. [1:00:58.4]
• Ben’s thoughts on possible solutions to the current problems in the housing sector. [1:03:47.6]
• The significant role of the private debt market in Canadian real estate. [1:08:02.2]
• What we can learn from historic data about the current housing prices. [1:12:15.1]
• Ben joins us for a round of questions from our Talking Sense cards about savings, happiness, and flow states! [1:15:27.4]

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