Shadowing Practice: Dimensional Founder David Booth | Investing, Market Uncertainty & True Wealth - Learn English Speaking with Video

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We had an advisor once tell me, he said, look, I don't have clients with investment problems.

I've got investments with client problems because investing is complex and uncertain.

So a kind of a theme we've been pursuing, and you pick it up in the book, is, well, guess what?

So is life.

It's complex and uncertain.

And so you've learned how to deal with uncertainty as you've grown.

And so in some sense, you know more about investing than you think you know.

So it's about managing uncertainty in the sense that we start off with it's uncertainty that creates opportunity.

If there were no uncertainty, you couldn't have progressed.

I would be a wheat farmer or something.

And same in investing.

If there were no uncertainty, then there would be no risk.

And all investments would have the same return, the riskless return.

It's not about eliminating uncertainty.

It's about managing uncertainty.

Hi, I'm Peter Malouk.

Welcome to this episode of Icons and Ideas.

I've been looking forward to this one because it is with David Booth, the founder of Dimensional Fund Advisors.

And I've known David longer than he's known me.

And welcome to the show, David.

Well, thanks for having me.

And we're here in your Austin headquarters.

And that brings me to my first story.

So Creative Planning, the firm that I'm the CEO of, we had maybe, I don't know, seven employees at the time.

And it was maybe 17 years ago.

And we were managing like maybe $300 million.

and I had this prospective client

and we were talking to him about how part of the portfolio we wanted to have it in dimensional funds

and he said well I just I have to visit this place

and so I said okay and we flew to Austin we met a couple managers

and he understood everything and someone must have prompted you to come in and say hello

and you come in you say hello the guy asks you a question and 90 minutes later

90 minutes later he agreed it was a good idea to invest in dimensional funds

and I remember leaving that day

and I mean obviously my lesson really wasn't about investing

but was more about leadership i mean you were in the middle of it

and in the thick of it you still are i mean it's it's truly um remarkable where does

that come from look if you're not interested in meeting with clients

and explaining me helping them understand what you do then you it's time to quit

but direct answer your question is i learned

so much um from my experience of you won't believe this

but selling shoes that's how i put myself through school as an undergrad we were commission driven.

And so you had a big incentive to work really hard to make a sale.

But what I learned about myself, because I think I made a couple of mistakes early on

and kind of pushed things I maybe shouldn't have and really made me feel horrible.

So I realized that when I went home at night, I wanted to feel good about myself, you know, to heck with the commission.

And that carries over into, you know, the interdimensional.

I mean, we sometimes you just don't have what that people are looking for, and that's okay.

You know, just, but try to be as helpful as you can.

This is an incredible business.

First off, it's an indoor job, you know, that's pretty cool.

But the people that we've come across in our industry, it's just very exciting.

Yeah, you still have the drive is what everyone around you still says.

So I've read bits and pieces and heard about the Inception story a few times, But tell me like the moment,

you're sitting in class and is there a moment when you say, I can turn this, what I'm learning here today into something or how did that evolve?

Well, I was in the PhD program and the first day at Chicago, I took his class from Gene Fama,

you know, the 2013 Nobel laureate, right?

And he explained his view of markets and how they work.

I go, it makes sense to me.

And so the second year, then, I worked for him as a research assistant.

And I was working crazy hours because in those days you still had punch cards.

Right.

And you had very limited turnaround time on when you turned your program in to get it back.

And so frequently you're up working all night down at the computer center.

So, and then all of a sudden, I went home for Christmas one day.

I went to Christmas the second year and down to my paternal grandparents' house, which is a small town in southeast Kansas.

And it was a house that didn't have indoor plumbing and so had an outhouse in it.

So, and my relatives were there, my aunts and uncles and cousins.

And most of them were farmers.

And they were all having a great time.

And I go, I'm wound up tighter than a, you know, I was totally stressed out doing all this work.

And what I realized was that wasn't me.

The world is.. better served if Gene Fama does the research, and I try to figure out how to apply the ideas.

So you have this great science, but people weren't implementing it.

So that was the excitement.

And so I walked into Fama's office one day, and I said, look, I don't think I'm cut out to be a— And how old are you here?

I'm 24.

24, okay.

And Fama's 31.

I thought he was an old man. So, yeah.

And he talks to me.

He thought I would be a good professor.

So I said, well, you know, I've had this guy, Mac McQuown, out of San Francisco, who always wanted one of my students.

I'll give him a call for you.

So he did, and Mac called me, and we hit it off, and he came to have dinner with me in Chicago

and then offered me a job with him out in San Francisco at Wells Fargo.

And this was an incredible point in time.

By the way, as I'm telling these stories, what you'll observe is I've had this great opportunity over 50,

well, 57 years ago, I went to Chicago to observe the changes in the industry.

Starting with, at that time when I was in school,

the real buzz was that Michael Jensen had done the study and shown that active managers just weren't worth the cost.

So then the big question came in, well, if you can't outguess the market, what are you supposed to do?

Because everybody growing up thinks investing is about analyzing financial statements and finding out market mistakes and capitalizing on that,

which is, of course, all the evidence is that's hooey.

But these were new ideas.

So basically the idea was, well, you want a portfolio with lots of stocks in it and low turnover, pay attention to fees and taxes.

That's about it, which is a good idea.

And the group I worked on at Wells, we had two outside consultants

that we used primarily to help us figure out how can we beat the market without guessing the market.

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Eventually, that's the basis for Dimensional.

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So, and our two consultants that we used primarily were Fisher Black and Myron Scholes.

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So, a sidebar on that is, while they were working together on this project, they developed the Black -Scholes option pricing model, arguably the biggest event in finance in the 20th century.

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Our group eventually was disbanded, and we, 10 years later, then formed Dimensional, but with the same premise.

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How can we use the science to do better than straight indexing?

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And while I was at Wells Fargo, though, the trust department said, instead of doing these kind of crazy ideas that we were thinking of,

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why don't we just create an S &P 500 index fund?

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And so that's what they did.

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And eventually that took off.

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And that group was sold a couple of times and is now the cornerstone for BlackRock.

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Maybe the iShares and all that came from that.

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The antecedent is this trust department at Wells when I was there.

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So that kind of really is kind of the history of the development of finance, really.

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S &P 500 took off.

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Now we've had 45 years.

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And even though we have a trillion dollars under management, it pales in comparison to the amount of money in index funds.

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I tell our people, you have it easy now.

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We've demonstrated we can beat index funds.

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You know what I mean?

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In the old days, it was just an idea.

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We were selling a concept.

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Was there a key client or a turning point where you went from like, hey, this is an idea in my, you were literally in your garage.

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Is that correct?

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No, it was in my apartment.

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Oh, okay.

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You're in your apartment and you're doing this.

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Like what was the, maybe I've got an actual enterprise here moment.

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At Wells, what my experience there was, we came up with all these great ideas, but nobody ever did a market test.

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Does anybody find these ideas appealing?

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So I've done a consulting project for AT &T,

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which at that time was the largest pension fund in the world before the split up into all these different companies.

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They had 110 managers picking stocks.

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I go, I don't know what you got here, but you've got some contorted index fund because anybody that's any good on the street, you've hired them.

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So if anybody's buying something, they're buying it from one of your other managers that's selling it.

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So, and guess what?

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None of them are holding the stocks of smaller companies.

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So if you, I was helping them set up an index fund.

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I said, if you want to index something, why don't you index the smaller companies?

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So that was the idea.

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And I kind of, at my company, we had kind of show and tell, you know, I just go, here's a project I worked on.

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And people go, wow, that is so cool.

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If you think it's a good idea, let's go out and see if.. clients would be interested in

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that so we did a little market test

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and it got a lot of positive feedback and then

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so i said we decided we want to start i was

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working closely with a guy named larry klotz he was one of my colleagues

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and uh we decided we want to start this firm so we

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proposed it to our company and they go they weren't interested

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so he said okay well we're going to go out

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and try it on our own i said fine but if you can stay a few months that would be great.

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So during that time period, we went back to those same people we talked to earlier.

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So look, now we had great feedback on this idea of small cap.

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We called it an index fund at the time.

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We're going to start a firm.

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So how interested are you?

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And that week we got four people to commit on the spot to give us money to start our fund.

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So it was early indication that you were going to, this was going to resonate.

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So now the idea would go, holy cow, this is a killer idea.

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So I called up Fama and said, look, I think we've got an idea or we want to start and

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I'd like to have you participate with us as a founder, he said, and kind of head up the research.

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He goes, okay, that'd be great.

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He had no idea what that would mean for him, I'm sure.

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No, we didn't either.

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He goes, by the way, we just had a student here,

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a PhD dissertation on exactly what it is you're talking about i think uh it was ralph bonds

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and he had what ralph had done is he had gone down taken the new york stock exchange stocks

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and broke them into five quintiles of by market cap

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and the smallest quintile outperformed you know it was actually monotonic

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the first quartile had lower returns in the second lower returns the third fourth and the fifth was

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So I'm only bringing that up because we'd sold people on the idea of a small cap fund, and we didn't tell them really what we meant by small cap. And they committed anyway.

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It shows you how good an idea it was.

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It all sounds too easy now.

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But so we thought we had a great idea.

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Now, in those days, it was hard to hold a portfolio with hundreds of stocks, which is what we were going to do in small cap.

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So we decided we wanted to do a mutual fund, which is – So our first clients were all big institutions, corporate pension funds, software and wealth funds, so forth.

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But we decided we wanted to co -mingle because of administrative difficulty of having all these separate accounts.

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That shows you how much the business has changed.

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A lot, yeah.

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Right?

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So I didn't know anything about running a mutual fund.

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So I went down to Vanguard, talked to Jack Bogle and said, hey, Jack, why don't you do the back office?

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We want to do this mutual fund.

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You do all the back office stuff and price the portfolio daily and so forth for a fee.

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I mean, we'll do the trading, and at the end of the day, we'll fax down the trades, and then you take care of the administrative.

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So he said, okay, and so that's how we got started.

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I did not know about the Bogle connection, and I can't believe he said okay.

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Yeah, and he did it for about four years.

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By that time, we were trained, and then he decided he didn't want to do it.

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And one of the cool things there was that about two months before he passed away, I happened to run into him at a conference, and I hadn't seen him for probably 15 years.

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And I said, hey, Jack, let me buy you a cup of coffee.

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So we sat down and I said, Jack, you know, I don't know what we would have done had you not been there.

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We would have figured out something.

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But you made starting this firm a whole lot easier than it could otherwise have been.

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So I just want to say thank you.

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And I was so glad I was able to do that.

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Yeah, that's neat you were able to do that.

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Both of you are real huge pioneers in the industry.

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So you've touched on the investment philosophy a little bit, which started out as small over large, value over growth.

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There's an emphasis on diversification, tax sensitivity, cost, now profitability, and so on.

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But when I think of a dimensional, and I remember when groups would come through for training here, that was half of it and the other half was behavioral, which your new book, Congratulations,

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by the way, Off to a Great Start, Stay Calm, really talks about the behavioral side too.

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Well, absolutely.

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I mean, in fact, we had an advisor once tell me, he said, look, I don't have clients with investment problems.

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I've got investments with client problems because investing is complex and uncertain.

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So a kind of a theme we've been pursuing, and you pick it up in the book, is, well, guess what?

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So is life.

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It's complex and uncertain.

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And so you've learned how to deal with uncertainty as you've grown.

208

And so in some sense, you know more about investing than you think you know.

209

So it's about managing uncertainty in the sense that we start off with it's uncertainty that creates opportunity.

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If there were no uncertainty, you couldn't have progressed.

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You know, I would be a wheat farmer or something.

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And same in investing.

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If there were no uncertainty, then there would be no risk.

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And all investments would have the same return, the riskless return.

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It's not about eliminating uncertainty.

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It's about managing uncertainty.

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And that's kind of the breakthrough.

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that we've had in communication and

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so how do you deal with uncertainty how do you feel

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about you know every time people say this time is different

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right 9 11 tech bubble 809 covid tariffs interest rates

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and it is i mean a set of facts is different

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but how do you address the general concern about well maybe this time the market won't be

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so resilient like right now we've got the national debt discussion

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that gets into the kind of the motivation for you know writing the book

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which is we want people to feel more optimistic about investing and feel more confident that they'll have a good investment experience.

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And the way you do that is by education.

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If people understood better how markets work, they would make better choices.

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They'd be more likely to invest and stay invested.

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So it is kind of a behavioral thing, as you point out.

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You know, people sometimes say, I'm an optimist.

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I mean, we want people to be more optimistic.

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How can you be optimistic with all things going on.

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Well, look, there is a lot of stress right now.

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But, you know, we have about 100 years of research quality data on stocks and bonds.

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I mean, do you think the amount of anxiety now is greater than during the Great Depression?

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Or the 60s.

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Or the 60s, right?

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Or the Great Recession or the pandemic?

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I mean, anxiety is part of the process.

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I mean, because there is uncertainty.

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The uncertainty creates the opportunity.

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Sometimes we even say uncertainty is underrated.

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It's the gift for a great investor, right?

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If there was certainty, stocks would have bond -like returns and all the outperformance would go away.

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So I always tell the people that I'm working with, in a bear market, a bad investor panics and goes to cash or does some mistake.

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A good investor holds, but a great investor leans in.

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I mean, they just see the opportunity.

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Yeah, sometimes I want to give it a talk.

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I say, here's what I want.

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I want to change your language a bit here.

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A typical scenario is bad news comes into the market, like the pandemic.

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People go, oh, God, I have a lot of anxiety.

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And then they look and see that the market's down 20%.

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Now they go, wow, now I really have a lot of anxiety.

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I got to get out.

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Don't couch it that way.

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Bad news comes into the market and that happens.

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And at that time, people were saying, what's going to happen?

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I go, I don't know what's going to happen, but here's what I believe.

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First off, the consensus is this pandemic thing is a two - or three -year kind of thing.

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So the market's down 20%.

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That's about right.

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So the market's doing its job.

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It's lowered returns to where you can have a positive expected return going forward,

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right which is what happened because the market's down 20 so 100 goes to 80.

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for the year the market's up 20

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so the last nine months of the year you go from 80 to 120 uh you're up 50

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which is one of the passions i have is trying to help people stay invested right

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because you don't get a do -over there are no mulligans

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in investing it's a permanent loss a permanent loss that's the one killer thing.

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I wrote a book, Five Mistakes Every Investor Makes, and the number one is that mistake.

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You just got to avoid that mistake.

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Well, as soon as you figure out how to eliminate that argument, let me know.

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That's one of the things I've been working on for 50 years.

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Well, one of the things you write about in your book is that people should be talking to their advisors about, they do talk about performance and fees, but you say there's something else that they should be asking.

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They should figure out their philosophy.

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But let me just back up.

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The darndest thing is people, when they have a serious medical condition, they go to a doctor, understandably.

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Everybody has a serious financial problem.

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And nobody could be an expert on taxes and insurance and investments and estate planning.

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Everybody needs help.

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So people try to self -medicate their financial issues.

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I don't know.

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So part of the book is, in fact, one of the reasons people don't use advisors, I think, is they still know how to get started.

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So the last chapter in the book is about if you're going to talk to an advisor, what are some questions you might ask them?

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And similarly, what are some questions they might ask you?

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So our goal there is we want to get people invested

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so if we can help them find an advisor i tell people

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that finding the right advisor is critical

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because like you don't really judge the treatment

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that you get in medicine the first biggest most important decision is who's this doctor going to be yeah right

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and everything else then emanates from

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that one critical uh decision well no i think that's right

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and of course that you know that's our i don't want to turn this into a sales pitch

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but that's that's what we do is look our big competitors are index funds

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but i don't think scientists uh would be drawn to indexing for the main reason is

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that um constraints indexing has a constraint you give up all

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your degrees of freedom your ability to use judgment to track an index so every s p 500 index fund manager.

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has got to add that to their portfolio at tonight's closing price if they want to have zero tracking.

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So they'll all run around saying, I'll pay anything, but I've got to have tonight's closing price.

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And not surprisingly, the evidence is that that pushes prices up temporarily.

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Our best estimate is that for S &P stocks, it's about a 4%.

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It goes into the index at about a 4 % too higher price.

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Of course, that reverses tomorrow.

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So there are a lot of things just because you can't outguess the market.

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There is ability for professional money managers to working through what we call market mechanisms,

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you know, whether it's trading, securities, lending, so forth.

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There are a lot of little things you can do

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that will cause you to deviate from pure tracking but can make you money.

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Over the long run, it should tilt in your favor.

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I mean, to a casual observer, if you plot our, say, small cap returns versus small cap index, you would say those things track.

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I mean, it's not exactly, but you'd have to have an extremely good statistician to say,

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man, these things don't really track.

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Well, okay, I'm going to shift gears because we have one big thing in common and another big thing in common, which is you're a Lawrence, Kansas guy.

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Totally.

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Born there.

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Both Jayhawks.

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Yeah.

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And both pretty involved in the University of Kansas, but you about the rules of basketball.

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Yeah.

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And, you know, I remember watching this.

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It was on 30 for 30, right?

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This was on.

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I mean, it's a great story.

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Walk me through, like, how you got pulled into this, what was interesting to you about this.

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And obviously, you know, the University of Kansas has done a lot with that since then.

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Well, yeah.

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Yeah, the backdrop was starting in 2003, my sister and brother

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and I have funded an addition onto Allen Fieldhouse called the Hall of Athletics is what they call it.

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So I started getting involved.

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And then one day I got a phone call from a friend of mine who said he just read where

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the rules of basketball are going to be up for auction at Sotheby's in December.

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And the rules of basketball mean these are two typewritten pages.

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the James Smith type together to invent the game.

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It's the only major sport where you know how it was invented.

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I mean, it was a class assignment for him.

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And after graduating, he goes to Kansas and taught there for 40 years.

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He's buried in Lawrence.

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And, of course, basketball is a big deal.

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So when I heard, okay, they're up for sale, I called up KU.

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I said, I assume you're putting a group together to buy these.

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Count me in.

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They go, well, we're not sure they're real.

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We're not sure we can take care of them.

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So you just showed up.

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You volunteered yourself.

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Yeah.

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So I said, okay, well, I hung up.

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I go, well, that saved me some money.

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And then this guy, Josh Swade, who did the movie, calls me up about a month later saying he's putting together a group to buy.

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And so I said, okay.

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He said, I want to talk to you.

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So we were having a conference in Las Vegas, of all places.

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and I talked to him and he said yes, he wanted to put together.

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I said, okay.

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We thought the rules would go for about two million bucks.

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Yeah.

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So I didn't want to waste any more time.

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I said, okay, you can count me in for a million.

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So he said, good.

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And then it comes up the week of the auction at Sotheby's in New York and the KU calls me

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and talks to my assistant and says they didn't think we should buy the rules incredible

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so uh mark allen um son of grandson of hog allen

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was on his way to a conference he stopped by

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and had dinner with with me and my then wife

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and said oh no you got to buy these

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and then he gets bill self to give me a call

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and bill self i mean i can understand how he can recruit

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so for those not into basketball one of the greatest college

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basketball coaches of all time yeah right in the hall of fame right

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so uh he calls me

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and for every student uh for every alum that's ever been to ku you got to buy these rules

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so it's okay

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if you want to see the video it's uh there's no place like home yes i'm 30 for 30 right

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so um the auction happens and pretty soon

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i'm bidding over the phone and pretty soon it comes down to me

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and one other person who's also bidding on the phone

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and we go on and it drags on and on

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and finally uh i prevail

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and including sotheby's fee it was like 4 .3 million dollars more than double what yeah

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so i get a email so that's an announcement

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and i'm the buyer

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and uh i get an email from david rubenstein he was the guy on the other oh wow

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and he's a friend of mine we sat on the board of the university of chicago together i see

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and he said He sent me an email saying, I may have cost you some money.

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I go, yeah, you cost me money.

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Why was he bidding on it?

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He was bidding for Duke.

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He went to Duke on the ground.

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Oh, thank God you got it.

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That would have been a travesty.

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But, you know, it's one of the best things I've ever done.

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Because in philanthropy, and I'm sure you advise your clients on philanthropy, it's really great when you can have an impact, when you can see an impact.

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That has changed, you know, Allen Fieldhouse for sure.

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But the whole Northeast Kansas, Allen Fieldhouse is now the most visited building in the state, I've heard.

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I think that KU has to be very pleasantly surprised at how incredible that turned out.

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And the people, I know those people aren't here anymore, that advised you not to buy them.

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Wow, what a mistake.

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So it's good you got that Bill Self call.

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Yeah, Bill Self.

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And then Paul DeBruce stepped in and funded the DeBruce Center there.

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I really am an example of, you often hear the cliche, you know, when you give money away, you end up getting more from it than you gave.

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And I really feel that way about my involvement at KU.

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So do you feel with your involvement at KU, I mean, that was like nothing compared to what just happened.

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Last year, you donated what's close to a $300 million lifetime gift to the University of Kansas.

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I mean, just shattering every previous record there.

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I mean, where did that come from?

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Well, it goes back to my parents, great people, and I learned a lot.

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You know, I gave you the example of Christmas going down and having seen my relatives were happy people and I wasn't.

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My parents, I characterize as being wealthy.

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They just didn't have money because it gets into actually go back to the book of what investing is about.

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First off, you have to have a notion of true wealth, what's really important to you.

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To my parents, it was family.

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So then I was able to accumulate some money and first put in the Hall of Athletics in their memory.

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And about 100 % maybe of their entertainment budget for the year was getting two season tickets, basketball tickets, back when they cost.

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Right.

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It's changed.

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I knew how there's not much you can do to bring back their memory.

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I mean, hopefully things like this,

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people will appreciate people like my parents who I get a lot of credit for because I ended up with some money.

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But people like my parents don't get that much credit.

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And that's really what it's about.

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That's right.

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You've also been the largest donor ever to the University of Chicago.

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Yeah.

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Where the school is now, the business school is named after you.

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And tell me about that.

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And that gift just keeps going and going.

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Going, going, going.

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So kind of my sequence was to start the firm, it gets successful, and it gets to be some of the money sticks if you've had that experience.

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And so I provided for my kids.

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So then I still have a little bit left over.

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So I go to the University of Chicago.

435

Now, I told you the story about working for Gene Fama, but it was an incredibly stimulating experience because,

436

in essence, investing was going through a revolution.

437

It was going from being who knows what to a science.

438

You know, for there to be a science, you have to have testable hypotheses.

439

And to have testable hypotheses, you need data.

440

And before 1960, there really wasn't research quality data and computers weren't big enough.

441

That all changed in the 60s.

442

So there I am in the late 60s.

443

And a lot of the University of Chicago just happened to be kind of one of the centers of this revolution.

444

So being in the PhD program, you'd meet regularly, I think almost weekly.

445

And you'd sit around a table and Fama in French, it was a, I ran this workshop,

446

Gene Fama, my mentor, and Merton Miller, the 1990 Nobel laureate.

447

Now this was way back before any of These guys got their Nobel Prizes.

448

They were just in academic circles being superstars but not getting much recognition yet.

449

So you sit around and present papers and you got to know the faculty well.

450

So when we started the firm, as I mentioned, we decided we wanted to do this mutual fund.

451

And Jack Bogle pulls out his card.

452

He says, you know, first thing, you're going to need a good law firm.

453

Now, we're operating out of my brownstone in Brooklyn.

454

Right.

455

So you're not going to get a big name law firm when you're kind of negative net worth.

456

So here's who I use.

457

Call him up.

458

He'll help you.

459

So we met with him, and actually we were meeting in Fama's office on the campus of Chicago.

460

And he says, you know, you need to have an independent board of directors.

461

So Rick Sinkfeld, my partner, and I, we walked across campus into the faculty building.

462

Closest office was Merton Miller.

463

And Merton, we need an independent director.

464

Oh, sure.

465

You know, because he knew we were trying to do things the right way.

466

Walk out of his office.

467

Myron Scholes has come in the other direction, you know, the 97 Nobel laureate.

468

And we go, Myron, we need an independent director.

469

And Myron tells the story the same way.

470

He goes, well, how much are we going to get paid?

471

And I said, well, Myron, we're asking you to be an independent director.

472

It would be unseemly for us to pay you anything.

473

And, by the way, we don't have any money anyway.

474

But if we get the fund off the ground, there will be director's fees if we're successful.

475

Oh, okay.

476

And that's how we got started.

477

That led, eventually, for a long time, we invited other academics, the dean of the business school and

478

so on um uh they were all independent directors were all professors at chicago which is great for

479

great for our uh investors it's tough going sometimes

480

because they don't give you any slack

481

when you're presenting papers in this workshop nobody got any slack

482

if you didn't do things the right way people called you on it right

483

but that's what you want as an independent directors and

484

so years later now i am financially secure so i approached the dean of the business school So, I said, look, not only did I have great training,

485

but my whole starting the firm, there's been so much help.

486

All these professors have helped me.

487

I don't know who had gotten off the ground.

488

I mean, who knows?

489

Because we used their names indiscriminately and making on sales calls, you know.

490

Yeah, Fama, Murray Miller.

491

Right.

492

All these Nobel Prize.

493

Yeah, yeah.

494

And so that helps.

495

So, I want to give you a big chunk of what I have.

496

This was like, well, we ended up announcing it the same month that Obama got elected, November 2008.

497

And it was an income stream from my firm.

498

I mean, they were basically— And during a financial crisis.

499

Yeah.

500

I mean, this was a crazy time.

501

And it was right in the middle of—we had about less than $100 billion in assets under management.

502

Now, we crossed a trillion.

503

So, having that income, that's— Yeah, it's 10x for them.

504

Yeah.

505

They probably can't believe what's happened.

506

Between there, KU, is there something you want students to take away?

507

I mean, obviously there's scholarships and there's buildings and there's the rules and there's research.

508

But is there something you want students to think about or take away from your story?

509

Well, I think at its simplest level, learn it for ourselves.

510

What is the best way to invest?

511

And that, we think, is based on the science of investing.

512

And we got the absolute best people to help us out.

513

Always go for the best.

514

If you can't be the best at something or have a chance of being the best, you probably ought to think about something else.

515

There's probably something there you can be the best at.

516

And it's got to be something you really believe.

517

And as people get out of college, hopefully by that time, they have a well -developed set of values.

518

It's got to be consistent with your set of values.

519

And if you have all of that and you have a little bit of luck, then you're probably going to be okay.

520

I think that's good advice.

521

Find your lane as soon as you can.

522

It's a hard thing to do.

523

It took me a long, long, long, long time to find my lane, but try to find it.

524

But I had the opportunity a few years ago to tour part of your art collection, the outdoor part of your art collection.

525

Unbelievable.

526

While we were walking around, I asked what the common theme was.

527

And you said, Peter, my rule is I only buy happy art.

528

Yeah.

529

Is that really, is that the lens through which you're making your art decisions?

530

Yeah, you won't see paintings of people stabbing each other or anything like that.

531

I mean, there's no political message.

532

But there is kind of a tendency.

533

I get biased towards minimal art, which you can call it, a casual observer can often look simplistic.

534

But as you notice those structures of some of these huge sculptures, there's a lot of engineering in that.

535

So there's a lot of science behind it.

536

And yet there's an art.

537

So sometimes with minimal art, people think, you know, hey, I could have done that.

538

Nah, you couldn't have.

539

Because the structure behind it is really important.

540

It's got to be able to stand up through all kinds of weather.

541

And I liken that to our investment business, you know.

542

You've got to have the science behind you.

543

And yet there's still an art to the science.

544

Going back to your notion of medicine, let's say all doctors study the same textbooks.

545

some of them just turn out to be better than others yes you know that's the art of the science

546

and that's what we try to do with at Dimensional this podcast called icons

547

and ideas and so i wanted to ask you um an idea

548

that really got away from you or one that turned out great now i already know one that turned out great

549

was the investing idea but anything else well the stuff

550

that didn't work out so well let's put in there's a class of investments i've made

551

and i haven't bought any individual stocks uh that publicly traded

552

but um there are uh investment opportunities that come from friends

553

those have all gotten away

554

but part of me goes hey look I remember how the struggle getting started so sometimes I've invested in I've taken flyers

555

without even worrying about whether it made sense

556

or not just to help out to friends I wouldn't call

557

that investing I'd call it something else I would agree that's the lens with

558

which to look at that and you're going to live forever with that attitude

559

not getting worked up about things all right

560

and then icons is there somebody that you've looked up to

561

or that's been a mentor whether you actually knew them

562

or personally or not that's really impacted your way of thinking there are really three people

563

that come to mind first off gene fama yeah my mentor

564

who one of the things you learn from gene is your

565

moral compass better be due north all the time not just most of the time healthy

566

and then mac mcquown who went to work for at Wells Fargo, an amazing guy.

567

And once again, trying to apply these new ideas.

568

He was sitting on a powder keg of new ideas, but always do the right thing.

569

And then the third person would be Senator Bill Bradley, who was kind of my hero growing up.

570

He was just a few years older than I am.

571

He went to Princeton, led Princeton to the Final Four, the only time an Ivy League school I think has done that and then was a Rhodes Scholar.

572

He was College Player of the Year and doesn't go into the pros right away.

573

He studied at Oxford for two years with a Rhodes Scholarship, then comes back and plays for the Knicks for 10 years,

574

was on their last championship team until the spring.

575

And then after that, he becomes a senator from New Jersey and was helpful in writing the 86 tax code.

576

So, and he's helped us.

577

Part of what I do, I have what we call a Tuesday group, which is based on the idea about, I guess, about 12 years ago now,

578

I realized that we do a good job of selling to all the geeks that are out there.

579

No offense.

580

But if you want to change the world, you got to use a language.

581

You got to meet people with their language.

582

That's right.

583

You know, being a senator, you're basically a retail salesman.

584

You got to get votes.

585

Yeah.

586

You know.

587

Got to hit everybody.

588

And here again, his moral compass is really due north.

589

And so having his perspective, and he's not an investment person,

590

so having fresh eyes helping us communicate has been very helpful and has turned into be my passion.

591

So about 10 years ago now, we turned over running the firm really to two co -CEOs, Dave Butler and Gerard O 'Reilly.

592

I still come in every day and try to be helpful but not get in the way.

593

It's an art.

594

It's an art.

595

So I really work on communication, which eventually leads to the book, the movie and the book.

596

Right.

597

And just, you didn't ask this, but I would just add that what I've learned is that what you want to do if you're lucky in life,

598

you can change your job description around to meet where you are at your stage in life.

599

So, you know, my legs aren't as strong as they were.

600

You know, I can't work, you know, 60 -hour weeks anymore.

601

and I've found a format that works for me and I think I can still be helpful.

602

Well, David, I've known you a long time in many capacities from somebody explaining to one of my clients how to invest, you know, our team coming out here to learn,

603

you know, maybe 15 or 20 years ago on charity board

604

or university boards and at basketball games and football games on occasion.

605

And I can say unequivocally, you're the same person in every room you're in.

606

And you can't say that about a lot of people at your level in this industry.

607

And thank you for spending time with me today.

608

Well, thank you for having me along.

609

I've really enjoyed getting to know you.

610

And since we have a lot of common values, and I imagine the people that invest with you share a lot of those values,

611

or they wouldn't hire you.

612

And that's pretty cool.

613

At the end of the day, it's really rewarding when people come up to you and just say thank you for all your help.

614

and you, you know, what you do is incredibly important.

615

A hundred percent.

616

I mean, the most satisfying thing is I didn't understand a certain thing and you helped put me in a better spot.

617

There's nothing more, you know, fulfilling than that.

618

You know, people want to feel safe.

619

Yeah.

620

And by safe, they don't mean nothing bad can ever happen to them.

621

When bad things do happen, you figure out how to deal with them and get back on track.

622

And investing is the same way.

623

If you can give people the confidence that your process that you have in place, long -term process, playing for the long haul,

624

the way you do it over the long haul has got to work.

625

I mean, once people accept that, then they can feel safe in investing as well.

626

So here again, congratulations to you.

627

Thanks, David.

628

Good to see you.

629

Good to see you.

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Vocabulario y notas de pronunciación para esta lección

Esta lección de conversación de nivel C1 se basa en el vídeo “Dimensional Founder David Booth”. Este vídeo tiene 629 frases y 7293 palabras para practicar shadowing. La parte hablada dura 40:26. El hablante habla rápido, unas 180 palabras por minuto, así que espera sonidos enlazados y reducidos. El 85 % de las palabras está entre las 3.000 más comunes del inglés; conviene repasar el resto antes de empezar.

Vocabulario clave de este vídeo

Las 15 palabras más avanzadas del vídeo, con su pronunciación y significado:

Palabra	Pronunciación	Significado
uncertainty sustantivo	/ʌnˈsɜːtənti/	incertidumbre, incerteza
advisor sustantivo	/ædˈvaɪ.zə(ɹ)/	consejero, asesor
investor sustantivo	/ɪnˈvɛs.tə(ɹ)/	inversionista, inversor
uncertain adjetivo	/ʌnˈsɜɹ.tən/	incierto, poco certero
laureate sustantivo	/ˈlɔ.ɹi.ət/	laureado, galardonado
behavioral adjetivo	/bɪˈheɪvjəɹəl/	del comportamiento, conductual
optimistic adjetivo	/ˌɒptɪˈmɪstɪk/	optimista
mentor sustantivo	/ˈmɛn.tɔː/	mentor
philanthropy sustantivo	/fɪˈlæn.θɹə.pi/	filantropía
slack adjetivo	/slæk/	flojo, holgado
compass sustantivo	/ˈkʌmpəs/	brújula, aguja de marear
hypothesis sustantivo	/haɪˈpɒθɪsɪs/	hipótesis, hipótesi
haul verbo	/hɔl/	empujar, tirar fuerte
observer sustantivo	/əbˈzɝvɚ/	observador
wheat sustantivo	/ˈwiːt/	trigo

Phrasal verbs que vas a escuchar

Palabra	Significado
figure out verbo	averiguar, captar
turn out verbo	resultar
end up verbo	terminar, ir a parar
go out verbo	salir
grow up verbo	crecer
take off verbo	quitarse
back up verbo	retroceder, ciar
come across verbo	pasarse a

Frases que vale la pena repetir

Frases cortas y completas del vídeo que puedes reutilizar en la conversación diaria:

If there were no uncertainty, you couldn't have progressed.
I'll give him a call for you.
How can we use the science to do better than straight indexing?
You know what I mean?
I mean, where did that come from?

Gramática en este vídeo

Las estructuras que más usa el hablante, con las palabras exactas del vídeo:

Estructura	En el vídeo
Present perfect continuous have/has been + -ing — una acción que empezó antes y continúa	we've been pursuing · I've been looking · I've been working
Present perfect have/has + participio pasado — una acción pasada que sigue importando ahora	you've learned · I've known · we've come
Voz pasiva be + participio pasado — importa lo que ocurre, no quién lo hace	was disbanded · was sold · were trained
Oraciones de relativo who / which + oración — información extra sobre una persona o cosa	house, which is · stocks, which is · fund, which is

Pronunciación a tener en cuenta

El hablante usa 168 contracciones y formas reducidas, como don't, you're, I've. Dilas en su forma corta, tal como las oyes.

Los sonidos de “th”: philanthropy /fɪˈlæn.θɹə.pi/, hypothesis /haɪˈpɒθɪsɪs/
Los sonidos de “sh” y “zh”: dimensional /daɪˈmɛn.ʃə.nəl/, indication /ɪndɪˈkeɪʃən/
Palabras largas — cuida el acento: uncertainty /ʌnˈsɜːtənti/, dimensional /daɪˈmɛn.ʃə.nəl/, behavioral /bɪˈheɪvjəɹəl/, optimistic /ˌɒptɪˈmɪstɪk/, philanthropy /fɪˈlæn.θɹə.pi/

Sonidos difíciles para hispanohablantes:

/v/ — no es /b/: los dientes tocan el labio inferior: advisor /ædˈvaɪ.zə(ɹ)/, investor /ɪnˈvɛs.tə(ɹ)/, behavioral /bɪˈheɪvjəɹəl/, observer /əbˈzɝvɚ/, observe /əbˈzɜːv/
/z/ — sonora, no /s/: advisor /ædˈvaɪ.zə(ɹ)/, observer /əbˈzɝvɚ/, observe /əbˈzɜːv/, buzz /bʌz/, surprisingly /səˈpɹaɪzɪŋli/
/h/ — una aspiración suave, no la “j”: behavioral /bɪˈheɪvjəɹəl/, hypothesis /haɪˈpɒθɪsɪs/, haul /hɔl/, heck /hɛk/

Cómo practicar con este vídeo

Escucha el vídeo entero una vez sin hablar y anota las palabras que no conoces.
Empieza a velocidad 0,75×, haz shadowing frase por frase y vuelve a la velocidad normal cuando te resulte fácil.
Grábate y compara con el original, prestando atención a palabras como uncertainty, advisor, investor.

¿Qué es la Técnica de Shadowing?

Shadowing es una técnica de aprendizaje de idiomas respaldada por la ciencia, desarrollada originalmente para la formación de intérpretes profesionales y popularizada por el políglota Dr. Alexander Arguelles. El método es simple pero poderoso: escuchas audio en inglés nativo y lo repites en voz alta de inmediato, como una sombra que sigue al hablante con solo 1-2 segundos de retraso. A diferencia de la escucha pasiva o los ejercicios de gramática, el shadowing obliga a tu cerebro y músculos de la boca a procesar y reproducir simultáneamente patrones de habla reales. Las investigaciones muestran que mejora significativamente la precisión de la pronunciación, la entonación, el ritmo, el habla conectada, la comprensión auditiva y la fluidez al hablar, convirtiéndola en una de las metodologías más efectivas para la preparación del IELTS Speaking y la comunicación en inglés en el mundo real.

Técnica de shadowing: lee la guía completa paso a paso →

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Vocabulario y notas de pronunciación para esta lección

Vocabulario clave de este vídeo

Phrasal verbs que vas a escuchar

Frases que vale la pena repetir

Gramática en este vídeo

Pronunciación a tener en cuenta

Cómo practicar con este vídeo

¿Qué es la Técnica de Shadowing?