The Uncertainty Solution: Challenging Traditional Ideas About Investing

Follow John Jennings on Twitter at: @bigdogtwo and on Linkedin at: https://www.linkedin.com/in/johnmjennings/
and at his website: https://shorturl.at/fHMZ8

In this episode of The Really Simple Investing Podcast, host Floyd Saunders interviews John Jennings, the president of a $15 billion wealth management firm in St. Louis and an adjunct professor at Washington University's Owen Business School. John holds both a finance and a law degree from the University of Missouri. 

Overview

John discusses his book, The Uncertainty Solution, which turns the ideas of investing upside down and challenges the traditional notion of needing certainty in investing. He explains why humans have a quest for certainty and how it relates to investing. The conversation also covers the average retail investor's behavior during a rising market and a market correction, and the alternative approach to investing.

Are you tired of trying to predict the future of the stock market?  John Jennings, author of "The Uncertainty Solution," discusses the human need for certainty in investing and the mental models that can help investors focus on what they can control. 

Jennings challenges the traditional idea that the stock market is the economy and emphasizes the importance of good investment behavior, such as disciplined rebalancing and index investing. 

Jennings uses mental models to create a latticework of wisdom that will help you evaluate investment advice and learn better behavior in the face of uncertainty. To name a few: ignore expert predictions, be wary of stories, and try to invest like a dead person.

Jennings also discussed the importance of having a disciplined approach to rebalancing investments, especially during times of market volatility. He emphasized the benefits of index investing and passive investing, citing Warren Buffett's famous quote that the average retail investor should invest in the S&P 500 index fund.

If you're a starting investor, Jennings recommends focusing on good investment behavior, such as choosing inactivity as the default and rebalancing the portfolio once a year. Investing may be uncertain, but with the right mental models and strategies, you can build a solid financial foundation for your future.

Tune in to learn how to take a more disciplined approach to investing and avoid the pitfalls of trying to predict the future.

You can reach John at  John at jjennings@stlouistrust.com.

Chapter Summary

·       Introduction of John Jennings (0:00:05)
·       Overview of The Uncertainty Solution (0:01:29)
·       Humans' quest for certainty (0:02:50)
·       Short-term thinking and market gyrations (0:04:02)
·       The need for cognitive closure (0:05:14)
·       Seizing and freezing behavior (0:06:01)
·       Example of cognitive closure during COVID-19 (0:07:21)
·       Investing during market uncertainty (0:08:09)
·       Stock market is not the economy (0:10:23)
·       Investment experts' inability to predict the future (0:11:29)
 ·      The stock market foreshadows what's going to happen in the economy (0:11:59)
·       The solution is to accept uncertainty and focus on what can be controlled (0:13:20)
·       Beware of experts and predictions (0:13:58)
·       Mental models for better investing decisions (0:15:18)
·       Choose inactivity over activity (0:18:06)
·       The negative impact of overconfidence on investment

Learn how to make investing simple for anyone and get on a path toward wealth.

Transcript

TRANSCRIPT  John Jennings, Author of The Uncertainty Solution 

0:00:05 - Floyd: Welcome to the really Simple Investing Podcast, where you can learn from others how to be a successful investor. We bring you investors, authors, and experts in investing to help you learn more about how you can invest in some really simple ways. If you want to be a successful investor, join us every week. 

This is the really simple investing podcast. I'm your host, Floyd Saunders and today I'm very excited to have with us as our guest, John Jennings. John is the president of a $15 billion wealth management firm in St. Louis. He's also an adjunct professor at Washington University's Owen Business School.

0:00:48 - Floyd: He has both a finance and a law degree from the University of Missouri and certifications and investment decisions and behavioral finance. So, John, welcome to the show. Great. Thanks for having me.

0:01:00 - John Jennings: Excited to be here.

0:01:01 - Floyd: What I'd really like to dig into is your book, The Uncertainty Solution. I found this book to be extremely fascinating. I've worked in the financial services industry for well over 30 years and read tons of books on investing and tried to figure it out over the years, educating myself, basically because I didn't go get a degree in finance. But your book turns the ideas of investing upside down and shakes the whole world of how people should think about investing.

0:01:29 - Floyd: And it's extremely well written.

0:01:31 - John Jennings: I had some good editors.

0:01:34 - Floyd: Editing always helps, right? But you talk about this idea of the Uncertainty Solution, the idea that there's always a quest for certainty in investing and it just doesn't exist. Talk to me about that idea of needing to be certain about what we're doing in investing and why that creates a problem for so many investors.

0:01:57 - John Jennings: Yeah, so let me start back why humans have this quest for certainty. Like, we hate uncertainty. It's a little bit more complex and nuance than that, but really the entire idea of uncertainty is when we can't spot a pattern. And if you think about it, if you were an early human living a few hundred thousand years ago, your ability to spot patterns allowed you to see into the future, which could give you a survival advantage. Seasonal and weather patterns and patterns of prey or for food, are these berries poisonous or nutritious or all these things gave you a survival advantage. So those of our ancestors that could better spot patterns survive longer. And we are their descendants, right. So what happens is when we can't spot a pattern, we feel worried or anxious or even it triggers our fight or flight response sometimes.

0:02:50 - John Jennings: But when we resolve uncertainty, the opposite happens. Our parasympathetic nervous system kicks in. We calm, relax, and even get ahead of dopamine, which creates pleasure. So certainty feels bad. Resolving uncertainty feels good. So this is known as what's known as one of our primary human motives, meaning that it colors and flavors so many of our emotions and our decisions, most of which is subconscious, we don't even realize it.

0:03:19 - John Jennings: So we want patterns. And when we can't see them, we don't feel good.

0:03:24 - Floyd: The average retail investor, when they start investing and they look at the market and they see it rising, they want to get in because there's a certain level of uncertainty in a rising market. And we've had a strong bull market since the market crash in 2007, all the way up to 2020, and that caused a lot of wealth in America. Right.

0:03:46 - John Jennings: And then is over a 600% return.

0:03:50 - Floyd: Amazing. Yeah. And then the market starts to correct itself, like in the cycle of the COVID pandemic, and people jump out of the market and panic. Why does that happen? And what's the alternative?

0:04:02 - John Jennings: Yeah, I think it happens because we tend to be more short term, right. Our views and our thinking. And again, the uncertainty makes us it feels we have these ancient brains, like, our brains haven't changed much from hundreds of thousands of years ago, but the world has changed dramatically. So we start feeling like we have an existential threat from things like stock market gyrations. We're not really in danger of physical harm, but our bodies react as if we are financial harm.

0:04:37 - Floyd: Yeah.

0:04:38 - John Jennings: So it's hard to set it aside and say, okay, we know rationally that the stock market goes up and down.

0:04:43 - Floyd: Right.

0:04:44 - John Jennings: The story goes is when somebody asked J. P. Morgan, John Pierpont Morgan, back in the 1920s, what are your views? What is the stock market going to do? He said, It will fluctuate, my boy. It will fluctuate.

0:04:57 - Floyd: Right.

0:04:57 - John Jennings: So we know that intellectually, but our bodies are set up differently, and we're really fighting millions of years of evolution when we try to rationally overcome how we feel when faced with uncertainty.

0:05:14 - Floyd: And so you talked about this idea of uncertainty in the beginning of your book, and there's a couple of studies that you referenced there. Talk about the idea of a cognitive closure around some things. Talk to us a little bit more about what that means. Yeah.

0:05:29 - John Jennings: So when we feel uncertain, one of the things we do is we have this need for cognitive closure, as it's called. And what's interesting is individuals vary in how strong of effect this is. Some people have a very high need for cognitive closure, and some, it's not as big, but we all share it to some extent. And what it leads to is something called seizing and freezing. So what it means is when we feel uncertain, we thrash or flail around looking for an explanation that makes sense of what's going on.

0:06:00 - Floyd: Right.

0:06:01 - John Jennings: And we will seize on pretty much the first explanation that fits our worldview. So that's called seizing. So now we feel good because now we feel like we have the world that makes sense. We have an explanation, or we attribute a cause to something, and oftentimes it may be a wrong explanation, maybe we think we've seen a pattern, and it's really just rain of noise, but we seize on it. And then what happens is we freeze, which is we don't want to readdress or have our conclusions or explanations challenged because we don't want to experience that uncertainty again.

0:06:38 - John Jennings: So a great example was in COVID, we all had a huge amount of uncertainty back in February, March, April, May of 2020, and there were all sorts of different viewpoints of what this COVID pandemic spreading the globe meant to us. And some people said, it's just like the flu, and other people were like, it's just like the plague. Right? And others that said, oh, masking is great, others masking horrible. Then when we had vaccines, oh, everybody should get the vaccine, nobody should get the vaccine, et cetera, et cetera. But what was interesting is, as the science changed and the virus changed, and as we learned more, everybody pretty much needed to change their views.

0:07:21 - John Jennings: No matter which side of the political or COVID spectrum you came from, your views needed to change because the facts changed, but so few people wanted to because they gained certainty by grasping on to whatever explanation made sense to them for what was going on. And it's fascinating. It was just textbook for one of the ways that we all react uncertainty.

0:07:43 - Floyd: And in those particular cases, there were so many instances where people clung to facts that were just conspiracy ideas and created so much more confusion in the place as it relates to the market took a sharp correction and then a recovery, why the COVID pandemic was still going on. Can you talk to us a little bit about how you saw that occurring and how that affects those thinking around investing?

0:08:10 - John Jennings: So back in 2008 and 2009, when the market dropped 57% from its high point to its trough, and we had, of course, the great financial crisis, I really didn't know how to advise clients. Like I thought to be a good advisor, I need to know everything that was going on and be able to have some ability to predict what was going to happen.

0:08:28 - Floyd: And you talk about that extensively in your book, right?

0:08:30 - John Jennings: Yeah, I couldn't I couldn't see a way out. I didn't know what was going to happen. I was paralyzed when it came to advising my clients, and it caused me a lot of stress and angst. And really the genesis of this book was, after that, I need to find a better way. And it plays out in the COVID crisis, where you're right. From February 26 to March 23, the S and P 500 dropped almost 35%, and it dropped quicker than any time in history, including in the 1929 crash. It was, as we all remember, it was breathtaking, but the bottom was March 23. And I wrote an article in Forbes on March 26, and it was titled something to the Effect of even Though a Recession is looming.

0:09:13 - John Jennings: It doesn't mean you should sell out of the stock market. And it made the point that you cannot make stock market decisions based on what you think is going on or is going to go on in the economy. And a great example would be is imagine that you and I were sitting around on March 23 or March 26, and we had a crystal ball, and we knew for a fact that we just had our thousandth COVID death reported in the US. But our crystal ball told us what was going to happen.

0:09:40 - John Jennings: We're not going to just shut things down for a few weeks or a few months. It's going to go on for years. The thousand COVID deaths is going to grow into almost 350,000 by the end of the year, nearly 6 million worldwide over the next three years. Pro sports leagues are going to cancel their seasons. We can't travel internationally, even to Canada. GDP is going to drop by almost 9% next quarter. That unemployment is going to spike to 14.7%, by far the worst that we've seen since the Great Depression. If we knew all those things, most people would say, I'm going to move to cash or Treasuries or gold or put money in my backyard and dig a hole. But what happened is March 23 was the bottom, as we know, and the stock market rebounded by 70% just through the rest of 2020.

0:10:23 - Floyd: And that was a very quick rebound, right?

0:10:25 - John Jennings: It was unbelievable. And what it tells you is you cannot use what's going on in the economy or news from the real world to tell you what's going to happen in the stock market. The mental model I talk about in my book called the Stock Market is not the Economy.

0:10:39 - Floyd: Right.

0:10:39 - John Jennings: So you can't use what's going on in the economy or news in the real world to inform your stock positions or your strategy. It flips the other way around. Like the economy doesn't predict the stock market. The stock market predicts the economy ish not perfectly. So the stock market moves in advance of things feeling better. And that's what happened in eight, nine. It's happened time and time and time again.

0:11:04 - Floyd: Let me ask you a question about that. The stock market moves in advance of economic changes, and you say that the stock market prices in some of those economic changes ahead of time. But how do the experts in the financial trading industry know what's going to go on in the economy over and above what economic indicators might indicate for the rest of us as consumer investors, retail investors?

0:11:29 - John Jennings: That's a really interesting point because investment experts and economists are horrible at predicting the future.

0:11:36 - Floyd: Yeah.

0:11:36 - John Jennings: So what you'll end up having is this thing where you have economists or investment experts, like they've been doing for the last few quarters, saying, oh, we're about to go into recession. We're about to go into recession. We're about to go in a recession and it doesn't happen. Or you see all these analysts saying the rebound that we've experienced this year and late last year, it's not real. Or people saying it is real. So you have all these people predicting different things and they're horrible.

0:11:59 - John Jennings: They're horrible predicting what's going to happen in the future. The point is that the stock market made up of all of us, including retail investors. It's not like we're predicting what's going to happen in the stock market. The stock market is foreshadowing what's going to happen in the economy and it's not always right. So the Nobel Prize winning economists quip that the stock market has predicted nine of the last five recessions. So it's an ish like it's not perfect, but if there's going to be a turn either from the market going up or from the market bottoming and coming back down, it's going to happen in advance of the economic news.

0:12:35 - Floyd: We saw a market correction in 2022 and that the market the Dow fell, the S and P fell, all of that sort of thing quite a bit. Are we now in a recovery in the stock market? Maybe the economy hasn't really fallen into recession. Is the stock market really in a recovery at this point?

0:12:51 - John Jennings: I don't know. That's a great question. I don't know if I think some the stock market so far the recovery has been very narrow. It's been on the back of a handful of mega cap tech stocks. A lot of the stock market hasn't done nearly as well. And I've read people that have said, oh, it's so narrow it's a mirage. And other people that have done analysis say this often happens, whether it's tech stocks or anything else. You often see narrow recoveries and then the rest of the market follows. So who knows?

0:13:20 - John Jennings: Who knows? Time will tell. A theme in my book is the book is called The Uncertainty Solution. The solution isn't that you read the book and you have more certainty. The solution is to accept the fact that uncertainty is inherent and it's going to be with us and that the future is inherently unknowable. And my book really gives tools. I have 35 what's known as mental models in the book that help investors focus on what they can know and what they can control instead of doing things that aren't as effective, which is for example, listening to experts and their opinions of what's going to happen.

0:13:58 - Floyd: Yeah, you have a whole chapter on bearing experts, beware of experts, burying predictions, right? Yeah. Those experts are the economists that we talk to, the financial analysts that indicate whether or not a particular stock is going to go up and down by producing analyst reports that Warren Buffett basically said are useless. But right now we're going to take a break and we're going to come back and talk with John.

0:14:23 - Floyd: We'll be right back with more great ideas for investing and building your financial security. If you're seriously interested in building your wealth, join us every week on the really Simple Investing podcast and check on our website@reallysimpleinvesting.com. You'll find more great podcasts, our blog on investing, and some great books from Floyd: Saunders books like Investing for Beginners and Find Paths to wealth.

0:14:47 - Floyd: Sign up for our newsletter so you don't miss listening to our guests and learn even more about the simple things you can do to become a successful investor. You're listening to The Real Simple Investing podcast now, more investing ideas as we continue our interview. Our guest today is John Jennings, the author of The Uncertainty Solution, an excellent book that we're going to talk more about now. And we talked a little bit of John about beware of experts that are bearing predictions and that market cycles are hard to predict, that maybe you shouldn't even try to do that.

0:15:18 - John Jennings: The book is really about mental models and the concept of mental models was championed by Charlie Munger, of course, Warren Buffett's business partner. And really what he talks about with mental models is within respect to making better business decisions and life decisions. And what I realized and learned through a lot of study and research is great investors have mental models that they fall back on. So the ones in my book are investment focus but also have a lot of applicability outside of the investment realm both in business and in real life. So one we just mentioned is the stock market's, not the economy. And I think that's an important one to know, which really says that you can't use economic news or what's happening in the economy to tell you what to do to invest. And I'll tell you, at first it may seem like that's useless.

0:16:06 - John Jennings: How does that help? And here's how it helps by knowing that you can tell yourself that you're not going to react to news that is coming about the economy or politics or anything else to affect your investments. And just by doing that you'll have better investing behavioral and by having better investing behavior, you'll be a much better investor. Other mental models include, like I talk about correlation and causation and it's so important to understand that difference and also about understanding market cycles. So as an investor, as you build what Charlie Munger calls a lattice work of mental models, it can really help you be a better investor. And the Uncertainty Solution is not be so disturbed or emotional about uncertainty and say, I'm going to focus on what I do know and what I can control.

0:16:58 - Floyd: Average retail investor, the person that would typically listen to this podcast because we're trying to simplify investing. One of the things that I should know about investing, if I'm going to get into investing, one of the things you talk about is you can't time the market. And I'm assuming that also means that you shouldn't be a short term investor, you really should be investing the long term. What are some of the other principles that I should lay onto as a start? I mean, investor, I think there's a.

0:17:26 - John Jennings: Few things, key things in terms of behavior. So again, if you get investment behavior, that's the most important factor in being a successful long term investor. And there's a few things that are key aspects of good behavior. And one is to choose as your default inactivity over activity. Let me talk about a study or two that I'd mentioned in my book. And my favorite is one of my favorite investment studies I've ever read is called Boys Will Be Boys gender Differences in Investing. And these academics, these professors somehow got an unnamed in the study discount brokerage firm to give them ten years of data on 35,000 investment accounts.

0:18:06 - John Jennings: And what they did is they looked at what are the differences in investment returns based on the genders of the account owners. And what they found was is that the top performing accounts belonged to single females, followed by married females, obviously pulled down by their husbands.

0:18:22 - Floyd: Right?

0:18:22 - John Jennings: Then married men pulled up by their wives, and bringing up the rear were the single males. And they dug into why is that? Why are these gender differences? And they found that both genders, regardless of marital status, were equally as bad in making investment moves. In general, every time one of these investors sold something and bought something else, what they bought did worse than what they sold.

0:18:50 - John Jennings: So in other words, every time they traded, on average, they lost money over the long term.

0:18:56 - Floyd: What are the certain don't do anything. Yeah.

0:18:59 - John Jennings: So what they found is the reason why the males underperform the females is because they were more overconfident. The females traded 45% less. So if you're going to lose money on every trade, it makes sense to trade less, to have less activity. And there's other studies that have confirmed this fidelity. It was an internal study that wasn't published, but was reported on the media. They looked over ten years, what are our highest performing accounts? It was that of dead people and locked accounts.

0:19:28 - John Jennings: So they were inactive. There was an amazing study done of pension plan sponsors. So these are pension plans. They have professional staff, they use consultants, they know what they're doing. And they found the same thing where the investment funds that they fired outperform, the ones they hired. So even professionals do this. And I'll tell you, when I read that study, which was published in 2012, what we started doing as a firm is keeping track of our investment decisions. It's like we kept this investment decision journal and we started finding the same thing where moves that we made on average were bad.

0:20:02 - John Jennings: So if we said, oh, we should fire this manager or hire this manager, quit this strategy and do this other strategy, those movements on average were just like pension plans and female versus male investors just inactivity. And it should be your default. Now, there are times you have to take activity like if you are saving money and investing it, you have to put it somewhere. You need to withdraw from your account, you need to pull it out.

0:20:27 - John Jennings: If you have an asset allocation, let's say of 80% stocks and 20% bonds and the stocks get up to 90%, you should sell and bring it back down to 80%. So there are things that you should do, but your default should be inactivity. And when you feel uncertain about the markets or what your portfolio is like in general, don't do anything.

0:20:48 - Floyd: You mentioned rebalancing your portfolio, but how frequently would you recommend doing that? I would suggest once a year. Is that about the right time period?

0:20:56 - John Jennings: Yeah, I think once a year is great. What we do so our clients are extremely wealthy. We generally work in the 100 million dollar and up family sort of range. So we have situations where we very rarely need to rebalance because our clients are either adding money or taking money out. And I think that's true probably of most people. So what you would do is again, if you have this 80 20 allocation and your stocks are at 78%, you're adding money and you add to stocks, or if you're looking to withdraw money and you're at 78 and 22 and your allocation is 80 20, take from bonds mostly. You can keep it pretty tight just by additions and withdrawals.

0:21:33 - John Jennings: Really where we see we need to do rebalancing is only when things like March of 2020 or 2008, 2009, when things really get out of whack because usually you can keep it closer. And I think the most important thing is to have a discipline about it. So like your 401K plan, like my 401K plan at Vanguard rebalances twice a year and because there's no tax consequence, it takes it back. Exactly. For our taxable accounts, we look at it quarterly, but we have a range, so only we only rebalance when we get back out of range. So the most important thing is to have a discipline. We've looked at a lot of studies, we've run some ourselves on the best rebalancing and procedure, a versus B versus C.

0:22:15 - John Jennings: They're all about the same, very little difference between them from what we've seen.

0:22:21 - Floyd: Warren Buffett is familiar, as we quoted as saying, that the average retail investor should invest in the S and P 500 index fund for their lifetime and his favorite holding period is forever. So this kind of goes consistent with what you're saying about investing. Do you agree with what Warren Buffett is saying, or is there more to it?

0:22:42 - John Jennings: No, I absolutely do.

0:22:44 - Floyd: It's interesting.

0:22:45 - John Jennings: Another reason I wrote this book is because we work with the wealthiest of the wealthy. And we get to see what all sorts of huge investment firms Goldman Sachs and Merrill Lynch and Morgan Stanley and Northern Trust and on and all these top investment managers we get to see not just what they say they do, but what they actually do. And it's fascinating, I'll tell you that. There's no secret sauce. There's nobody out there that's just killing it. And mostly they're doing it's kind of like this adage if you see a duck and they look very calm on the surface, but underneath their little paddling and going crazy, there's a lot of just complexity and activity that a lot of investment advisors do that add up to underperformance and higher fees and higher taxes. And we see that over and over.

0:23:29 - John Jennings: So even for our clients that are super wealthy and can meet the very high minimums and get into the fancy investment managers, when it comes to stocks and bonds, we do a lot of indexing in things like the S and P 500 and the Russell 2000 and the and the Aqui and things like that. And sometimes we do index funds that aren't capitalization weighted. I talk about that a bit in my book. That can be fun for some people. But, yeah, we do a lot of passive investing. We use a handful of active managers, but it's really for people that can handle that sort of volatility because a great active manager is going to hugely underperform for long periods of time. You got to be able to stomach that. And then, of course, with the wealth of our clients, we do invest in private equity, venture capital, private real estate. But on the stock side, we mainly index. Absolutely.

0:24:15 - Floyd: You talk about? The trend is not your friend. That's one of the titles, one of the chapters in your book. And basically what you're saying here is that you don't really get much advantage by following trends. Just invest in the entire market is basically what you're saying is that, yeah, for the average investor, the genesis of.

0:24:32 - John Jennings: This chapter is in response to really our firm just turned 21 years old, but it's really over the last two decades where clients will see a trend and they'll say, I want to invest in that trend. And really us digging in and researching that, whether it's been the rise of cybersecurity stocks, right, they'd rightfully say, the cybersecurity issue is only going to get worse. I want to invest in cybersecurity stocks or robotics or genomics, especially after mapping the genome and the rise of CRISPR technology.

0:25:00 - John Jennings: Now we're seeing AI. We've seen electric vehicles, et cetera, et cetera, and really looking at some mental models to use when evaluating trends. And our point isn't that you never should invest in trends, but just to know the challenges. And the primary challenges are, number one, it's hard to spot a trend early, and if you're spotting it, probably everybody else is too. So I talk about that and some mental models. The second is if you do spot a trend, it seems like it's going to persist. Sometimes it changes and changes quickly and it doesn't work out as you imagine. And then the third and most interestingly is that even if you spot a trend early enough and it persists. So you're right.

0:25:37 - John Jennings: What do you invest in? And I think an interesting fact to remember is that Google was the 21st search engine that is rarely the market. Pioneers that go on to be the long term success have a huge amount of failure and typically have less than 10% market share over the long run, because what happens is when there is a trend and there's going to be profitable. Think about the early automobile industry. You have all these startups that come into the industry and established firms that are trying to make money. And so, like the early car industry, in the first two decades of the 20th century, 775 automobile firms went into business in the US. And during the same time period, 600 went out of business.

0:26:20 - John Jennings: So which even if you spotted the automobiles, this great trend which wasn't in, which was not obvious in the first decade of the 20th century, which car company do you invest in of the 775? It's incredibly hard to do. So it's not like you should never invest in trends, but just realize if you're going to pick an individual stock, the ODS are against you. It's better to think if I'm broadly diversified in index. Take AI, for example.

0:26:47 - John Jennings: If you own the S and P 500, you own Microsoft, which is a big shareholder of OpenAI, which is the firm behind Chat GPT. Or you own Google Alphabet which has their AI of Bard. And you have all these other companies that are doing AI that are just in the S and P 500. And then you have companies that aren't doing AI but want to do AI and likely will buy some of the private companies that are doing AI, right, because they want to be competitive.

0:27:18 - John Jennings: Or you could invest with an expert manager and if you have enough money, a venture capital firm, but to try to do it yourself and say, I'm going to pick AI stocks, maybe you picked Navidea, right? But probably if you've owned it for a while, it was because maybe it was the rise of video games and the promise of the metaverse, right, because that was all the rage and the video was doing that, but all of a sudden it's, no, they're great chips for AI, so it's really difficult to do.

0:27:47 - John Jennings: And again, I don't mean to just throw like a wet blanket and everything and say everybody should just index all the time and the future is completely unknowable. That's not the point. The point is having useful mental models to help you evaluate decisions you're going to make and have better behavior. Or if you use a financial advisor to be able to evaluate their advice and.

0:28:08 - Floyd: You have several mental models in your book that we have not had a chance to talk about yet. I would love to have you come back on the show a second time and talk more about those mental models. This has been a tremendous introduction to some of the ideas that's in your book, and I really appreciate you taking the time to talk to us about these today. This has really just skimmed the surface of what this book is about.

0:28:32 - Floyd: So I think everybody should read this book. That would be my recommendation. I'd really enjoyed talking with TV John. Thanks so much. Thanks.

0:28:40 - John Jennings: I've enjoyed it as well.

0:28:41 - Floyd: Thank you for joining us for the really Simple Investment podcast. Every week we bring you fresh ideas for investing and really simple ways to best and build for your financial. Be sure and hit the like button. Subscribe Follow Social Media Channels tell Your Friends if you'd like to be a guest on Civil Investing, just go to the contact page on our website and send us an inquiry. Thanks. We appreciate our audience so much.