Rates and Lottery Tickets

Published on
June 20th, 2018
24 minutes

Rates and Lottery Tickets

The Knock-On Effect ·
Featuring Alex Rosenberg, Justine Underhill, Roger Hirst

Published on: June 20th, 2018 • Duration: 24 minutes

Why will a higher fed funds rates lead to a decline in the number of Americans who play the lottery? Alex, Justine and Roger discuss. Plus, an interesting story about Volkswagen sheds some light on a Tesla mystery. Filmed on June 18, 2018.


  • BT
    Brian T.
    26 June 2018 @ 12:57
    Interesting connect..... thanks guys!
  • DG
    David G.
    24 June 2018 @ 18:08
    Ironically, people making critical comments about 'Knock-on' get thumbs up when people agree with how bad it is, skewing the rating score to appear more positive than it actually is. I'm an enthusiastic RV subscriber and have received immense value from this platform, and Adventures in Finance was my go-to podcast ... however since morphing into this new format and after listening in complete anguish I had to quit and dump the podcast. My 02/cents: The depth of knowledge and skill-set required to conduct an interview is very different than what is required to be the subject of an interview. I've heard Alex and Justine conduct interviews with highly-experienced investors and the shows where quite good, but when talking/interviewing each other and working through complex concepts out loud it's painfully obvious they are woefully ill-equipped to hold a serious investors attention and are simply way out of their depth. There may be a small cadre of folks who actually enjoy their schtick and gets some value from it but antidotal evidence (reviewer comments) would suggest the vast majority of your subscribers consider this show a total bomb.
  • SS
    S S.
    21 June 2018 @ 12:43
    If this was 5-10minutes it would be much better. No need for Justine to 'guess' what the Knock On Effect is and for Roger to Grade her answer. Please, just go straight to the point. On another note, Alex was a lot better this week. Really appreciate cutting out most of the 'goofyness'
    • DK
      Dali K.
      21 June 2018 @ 19:19
      I disagree - I think this was a perfect length. Not knocking on you Kulbir, just sharing dual perspective. These are super fun if you ask me. The technical trades I agree should never go over 10 minutes and your range is perfect.
    • RK
      Robert K.
      21 June 2018 @ 23:19
      agree. the fellow tribesman could be a bit more humble. good show!
    • JL
      Jacob L.
      22 June 2018 @ 10:20
      To the naysayers of this show: There are a ton of very thorough and serious well thought out pieces that come out almost daily at a very affordable price. The Knock-On Effect segment is a creative take on the investment process in my opinion. Take a recent event and examine the underlying knock-on effect. For that creativity is required and who says you can't have a bit of fun with that? Personally, I don't see this as a show that is supposed to be listened to in your most productive hours of the day. I listen to it when cooling down in the later stages of a day when walking with the dog :) And I find the jokes and the quick-witted hosts hilarious! A serious show with a touch of entertainment. What's wrong with that?
    • CW
      C W.
      24 June 2018 @ 14:51
      Like Jacob, I too find that a light hearted stab at thinking out of the box is a welcome addition to the rest of the more serious stuff. Who knows, some of these seeming whacky lines of thought may lead to real investment opportunities, after following up with more rigorous analyses of course.
  • MB
    Matthias B.
    22 June 2018 @ 10:35
    I only watched the part of the Volkswagen / Tesla analogy but I reckon that Alex and Roger are mistaken there in their take, and by quite a bit. To start with, I find it adventurous to differentiate between creating economic value by going long and only be a speculator by going short. Long only investors often simply speculate as well as they reckon that the odds are in their favor by going with the crowd (and the newbies since the GFC don't know different since CBs have been propping up the markets in only one direction => eg. David Rosenberg estimates that CBs account for roughly 1000 points of the S&P rally since 3/09). A short seller not only has the crowd against him/her but also needs to fight against the corporate obstacles (case in point: MDXG) and other headwinds. I do not deny that some short seller at times simply jump on the train to speculate along others on a further leg down in prices. But the original short seller enters such a position only after careful consideration (eg David Einhorn on his Lehman short). The comparison to Volkswagen is comparing pears to apples. Why do I say so: I was present at the time when it happened and I had a long/short book and was involved in situation (I luckily only shorted the spike at around 850/900) as we had a fantastic analyst intimately familiar with the German car makers and many well paying HedgeFund clients which were very involved in this, so VOW/VOW3 PAH/PAH3 was a daily topic. The value proposition in the Volkswagen short was totally different from today's Tesla and Alex' suggestion is superficial at best, but rather very naive. There was a time before GFC when price discovery counted for something and that will occur once more, just don't know when exactly.
  • SS
    Steven S.
    21 June 2018 @ 23:46
    Reminiscent of a financial version of James Burke’s ‘Connections”
  • PD
    Philip D.
    21 June 2018 @ 22:32
    Ok...so here is how I watch this show & it's a wonderful way to stretch my grey matter & not complain! I play along with the hosts...so they give their clues, I do my thinking (pause the video if necessary) & see if I can figure out their rationale. For example: in this case my rationale (which was wrong...or who knows) was; increasing interest rates would result in higher repayments for people with all sort of loans resulting in lesser savings...so they would have lesser spare cash to spend on lotteries. Play along people!!
  • HH
    Hugh H.
    21 June 2018 @ 21:30
    The show is getting better and funny. Good job guys!
  • lb
    larry b.
    21 June 2018 @ 17:57