Alternative Adversities

Talking Real Money - Investing Talk

Don shares a deeply personal tale from 2007 when, as an HOA treasurer, he dodged a financial landmine involving auction-rate securities—just before the 2008 crisis froze their liquidity. That real-life scare flows into a fierce takedown of today’s institutional obsession with illiquid assets like private equity, especially in university endowments. Harvard’s high-risk strategies, retirement plans promoting alternatives, and the seductive myths of market outperformance get picked apart. Don and Tom warn investors not to chase complexity or “exclusive” returns, especially when liquidity disappears. Plus: a pension tax trap, Opportunity Zone hype, and the nerdy joys of CD ladders.

0:04 Don’s HOA horror story: auction-rate securities before the 2008 collapse

2:06 Liquidity vanishes when you need it most—Wall Street Journal echoes the warning

3:51 Harvard’s endowment crash: elite returns turn embarrassing

4:34 Private equity’s scary recipe: micro-cap risk + debt + 3–4% fees

5:44 Why these complex products often spark crises

6:42 “Works until it doesn’t”: the fatal flaw of illiquid alternatives

8:10 Illiquidity explained with the real estate analogy

10:13 State pension investing: lessons from Washington’s shift to index funds

11:32 Why elite endowment managers must pretend to be smarter than markets

12:10 Microsoft vs. Mac: the cost of complexity, again

13:15 Secret formulas, snake oil, and the myth of exclusive financial wisdom

14:36 Listener Q1: Can Alaska pension income go into a Roth?

16:25 Listener Q2: Qualified Opportunity Zones—worth it or tax dodge trap?

19:05 Tax deferral vs. sound investing: when kicking the can isn’t smart

20:27 Listener Q3: Fidelity’s CD ladder tool and emergency funds

21:40 How CD ladders smooth yields—and a shortcut with bond funds

23:27 Volatility = reward: why risk is the reason stocks outperform

24:10 Why indexed annuities kill returns—and the fake comfort they sell

25:30 Tech support rants, Gen Z lifelines, and the “is it plugged in?” curse

Learn more about your ad choices. Visit megaphone.fm/adchoices