Lessons in Staying Calm - With David Booth

Ronan Ryan (0:00)

I am Ronan Ryan, IEX co-founder and Chief Operating Officer.

John Ramsay (0:03)

And I am John Ramsay, IEX's Chief Market Policy Officer.

Ronan Ryan (0:06)

And this is Boxes and Lines, the different kind of podcast from a different kind of stock exchange.

John Ramsay (0:12)

Tune in for new episodes every other week, as we give you the straight talk on how the markets really work, as we hold court on everything from market structure to AI and more.

Ronan Ryan (0:21)

JR, your voice is pretty good when you don't act like a clown. You'll never trade the same way again, folks.

Welcome everybody to the latest episode of Boxes and Lines.

John Ramsay (0:31)

Boxes and Lines.

Ronan Ryan (0:32)

Now, we haven't done one of these in a while. We did them all through the summer and we took them. I know.

John Ramsay (0:35)

It really has been a lot, but man, we came back with a bang.

Ronan Ryan (0:38)

We came back with a serious bang. We're very honored, John and I today. Our guest is David Booth. That's right. He's spent more than 50 years around markets and somehow came away from the experience telling people to calm down. At David's study at the University of Chicago under Gene Falmer, the Nobel Prize winning economist and founder of the Efficient Markets Theory, he later helped work on one of the earliest index portfolios and went on to found Dimensional Fund Advisors. Many of our listeners know that from very, very well.

John Ramsay (1:05)

And the Chicago Booth School of Business.

Ronan Ryan (1:07)

Yeah.

They manage over a trillion dollars. I'm going to end this intro soon, David, I promise you. His first book, a New York Times bestseller is Stay Calm, Learn to Embrace Uncertainty Investing in Life. It's part market history, part investment philosophy, investing philosophy, and a reminder that most of us are probably not as good at predicting the future as we think we are. David, welcome. Sorry for that long intro, but you're an impressive person. Normally we go, welcome, David.

David Booth (1:33)

It's great to be here, thanks.

Ronan Ryan (1:35)

Yeah, no, we really, really appreciate it.

John Ramsay (1:37)

Yes.

And I should mention too, not only the impact you've had in the financial world, but also in terms of philanthropy, the amount of generosity that you've given to a lot of places, including, we were talking before we started at MoMA, I have a good friend who works there. Annie Welker is her name, I have to put that out there. But let me start there, because I'm curious to know how a farm kid from Kansas, how did you get interested in the art world to begin with, and what kind of stoked that, and how did that evolve?

David Booth (2:07)

Well, I think probably, I had my grand tour at the end of college and through Europe and went to all the great museums and kind of stoked the interest, I think. But you know, there's two parts to the story. One is to have the interest, the other is to have the resources to buy the art.

John Ramsay (2:25)

Yes.

David Booth (2:26)

I can remember after leaving school, my first job, I got this poster at MoMA. It's a Mondrian art piece wrapped in cellophane.

That was my living room art for several years.

John Ramsay (2:41)

Right.

David Booth (2:42)

Then eventually as I was able to accumulate a little bit more, I could get into better and better art.

John Ramsay (2:48)

Yeah. Then the more that you saw and the bigger your landscape was in terms of the things that you could, the more you got interested and the more discriminating, I suppose, that you become over time.

David Booth (2:59)

Well, the more fun I had over time, that's great.

Ronan Ryan (3:02)

One day, John, one day we can do it.

David Booth (3:03)

Yeah, I know.

John Ramsay (3:03)

There's always, there's always John.

Ronan Ryan (3:05)

I still have the posters.

David Booth (3:06)

Yeah.

John Ramsay (3:06)

In terms of the financial world, I wanted to ask you, I've read a fair amount about your philosophy and kind of your watchwords of Stay Calm as Ronan says, not panicking, paying attention to data and the science of investing and not kind of like emotion or the fads of the moment. But it feels like today, so much of the youngest generation of investors are motivated by investing in stock perps or event contracts or individual futures contracts or zero-day expiration options or any of that stuff, which feels like completely antithetical to your philosophy.