The Dark Side of ETFs – The Truth in ETFs

Featuring Steve Bregman

In part two of our extended interview on the hidden dangers in ETFs with Steve Bregman, Grant Williams digs deeper to look at the scarring effect that 2008 had on investors, as well as the lengths ETF providers go to construct products that work specifically against the best interests of investors. This is something that all investors need to understand. Filmed on June 29, 2017, in New York.

Published on
19 August, 2017
Topic
Liquidity, ETF
Duration
40 minutes
Asset class
Equities
Rating
28

Comments

  • CR

    Cristian R.

    16 5 2018 09:47

    0       0

    Oh good, my under-performance the last couple of years is because I'm clever.

  • CM

    Chris M.

    8 10 2017 20:10

    1       0

    Abelson and Siegfried study on collecting stock prices for last 100 years or so.

  • AW

    Anak W.

    22 9 2017 22:09

    1       0

    wow.

  • NB

    Nils B.

    31 8 2017 12:52

    0       1

    Which study is he citing towards the end? I can't really hear the name. While I agree with the sentiment of his point it almost sounds like he's quoting the highs and the lows, in which case his point wouldn't be quite as strong since looking at the S&P500 over the last 100 years for example, between the high in 1929 and the low in 1982, you'd actually see a negative (geometric) average annualized return. A few years here or there make a huge difference.

  • MC

    M C.

    29 8 2017 19:59

    0       6

    He's conflating global central bank policy - interest rate, asset purchases etc with ETFs. While I'm sure he is a very smart and well intentioned person, when it comes to ETFs he is not well informed on some very basic, fundamental points of who, what, how of ETFs. There is some really good research out there...dont waste your time on this

  • RP

    Roberto P.

    28 8 2017 15:43

    0       0

    House don't generate cash flows, however we have seen time and again prices going up because rates going down. Can we apply this logic to the stock markets ?

  • HJ

    Harry J.

    24 8 2017 02:41

    1       0

    Shit storm comming.
    Cash and gold may loose for a while but not compaired to the losses when this crazy market unwinds.
    Shit storm........

  • MC

    Michael C.

    22 8 2017 02:15

    4       0

    Excellent interviews. It really does feel like we are reaching the limits of how this works. The unwind promises to be interesting...

  • LV

    Liam V.

    21 8 2017 21:48

    7       0

    For those of you who don't follow Horizon Kinetics frequently, their quarterly commentary is on their website for free in a similar manner and always a great read (usually 15-20 pgaes)

  • GF

    George F.

    21 8 2017 03:20

    3       1

    He brings up McDonald's valuation. He also says most of historic returns are from dividends. But these days McDonald's is not valued on the basis of its PE. It is valued on it's dividend of 2.5%, which is thought to be secure and growing. Once you accept the US long bond is 3%, Coca Cola at PE 48 becomes tempting because of the 3.5% yield, which has been growing since 1962 atleast. So these shares make sense atleast to the people who buy them.

  • SS

    Sam S.

    20 8 2017 15:24

    12       0

    Bubble for sure, but very complex. Love this stuff. It's incredible. Going back in time to uncover the real data was awesome. Grant you spent so much time listening and it was fantastic as though you were sitting with us in the audience being blown away.

  • JH

    Jesse H.

    20 8 2017 06:01

    30       0

    Awesome stuff - Bregman has to be one of my all-time favourites so far. Such clarity, but also a completely unassuming way of presenting and distilling the data and conclusions. He has a certain Atticus Finch manner about him of honesty and dignity which I find totally refreshing.

    The selection of historical periods through which to look at returns is quite sobering -- and something that strikes me as the hubris of modern humanity: the hockey-stick charts of 8% CAGR showing how saving money and investing it in the market is "always good" for retirement. Nothing could be farther from the truth -- all it takes is a spreadsheet and some arithmetic to show that where you invest in the cycle hugely impacts your total return over time. Those who don't know / understand history are condemned to repeat it.

  • AE

    Andy E.

    20 8 2017 03:13

    4       0

    Great series of interviews!! Fascinating!!!

  • MR

    Marten R.

    20 8 2017 00:23

    13       1

    oh dear.
    Wall street has done, what Wall street does and turned something like the concept of indexation into a monstrous inversion of itself.
    Like mortgages... indexation was supposed to be relatively lower risk (market risk vs. security risk), low cost and therefore relatively better returns....
    BUT.... now ETF's are rigged. the automatic bid devours the favoured and destroys the illiquid.
    Just like... turning AAA rated paper into stinking piles of excrement.
    This time S&P is the facilitator. Last time, it was the ratings agencies...
    Rhetorical question... what happens when inflows... become outflows.
    I'm tipping a no bid market.
    As Buffett famously said, in response to a rising tide lifts all boats... 'when the tide goes out, you get to see who's been swimming naked...'
    The liquidity tide WILL go out... and then the entire market it seems... will be nude.
    I feel sick.
    MR

  • DR

    Daniel R.

    19 8 2017 23:46

    1       0

    Excellent! This answers and confirms what is really going on in the markets. The macro perspectives and historical context are enlightening and frightening. Now what do we do in this age of investing

  • BF

    Bruce F.

    19 8 2017 23:29

    3       0

    Brilliant. Consider GDXJwhere they recently changed the rules. Note what happened to the shares dropped

  • PB

    Pieter B.

    19 8 2017 20:08

    6       0

    Ok i just finished it: for me this is THE best piece so far on RV.

  • PB

    Pieter B.

    19 8 2017 19:51

    0       0

    One of the best, if not the best piece so far!

  • WM

    Will M.

    19 8 2017 17:36

    14       0

    Ok, i am going to forget about shopping and lunch with the wife ........ and watch the final installment with sardines on toast.

  • BF

    Brad F.

    19 8 2017 12:57

    6       0

    Amazing series, I am completely hooked. Quick question: the annualised stock market returns mentioned at the end of this section. Are they inflation adjusted?