In one sentence: With Phil away, Danielle talks to financial journalist and CFP Bobbi Rebell about growing up around finance, a grandfather who gave her money only if she chose and defended one stock, and some exam trivia on dividends, index weighting and securities law.
Key ideas
- Guest. Bobbi Rebell is a certified financial planner, author of How to Be a Financial Grown-Up and host of the Financial Grownup podcast; she has worked at Reuters, CNN, CNBC and PBS. [00:00–02:30]
- Jargon as a barrier. Both guests grew up with finance parents and still felt shut out by the language; nobody wants to ask the dumb question. [03:00–05:00]
- Learn how things connect. An early mentor had her practise writing about bonds until she understood that bond prices and yields move opposite each other. Understanding the machinery is what lets you simplify accurately. [07:00–10:30]
- The grandfather's rule. He gave grandchildren money each year on one condition: pick one stock they understood and defend the choice to him. Bobbi says she did that with names like Ford and Microsoft, mostly by reading newspapers. [13:00–17:00]
- Phil's method echoed. Danielle says this matches her dad's approach: start with a company you know, read the news, write its story, then defend it. That is the first filter of Rule #1. [17:00–18:00]
- Her view of technical analysis. She took a class and says it never made sense to her; Danielle notes the show spent two months on it and values knowing what it is. [18:00–20:00]
- Conflicts of interest. Journalists and her husband's accounting firms restrict individual stock holdings, so they use index funds and ETFs. She'd like a slice for analysing stocks later. [20:00–23:00]
- Teaching kids. Start with companies they relate to, for example Minecraft's owner Microsoft; take them to see an exchange to make it real. [23:00–28:00]
- Becoming a CFP. Six exam topics including ethics; four months full time; continuing education required. She recommends CFPs partly for the ethics rules. Avoid judging people's money mistakes; context matters. [29:30–37:00]
- Exam trivia.
- To receive a dividend you must buy before the ex-dividend date. The settlement rule may have changed; check the SEC. [39:00–43:30]
- The S&P 500 is value (market-cap) weighted; the Dow is price weighted, which makes swaps among its 30 names matter. [43:30–46:30]
- The Securities Act of 1933 covers new issues, 1934 the secondary market and created the SEC, 1970 SIPC, 1988 insider trading. [46:30–50:00] The details were read off cards, so verify them. [39:00–50:00]
- Go to the source. Read SEC.gov, IRS.gov and federalreserve.gov, and download annual reports instead of relying on summaries. [50:00–53:00]
- Stay current. Read the news; rate changes touch housing, retirees and investing. [53:00–54:00]
How it maps to RuleOne
- The one-stock-and-defend-it rule is the whole workflow of /stock/TICKER/: write why you own it before you buy.
- Going to primary filings is exactly what the filing links on the stock page are for.
- Conflicts of interest are a real constraint on what the owner can hold; check /holdings/ against your own employer's rules.
Buffett, Munger and Graham links
- Buffett's circle of competence: the 1996 letter, and see 001.
- Primary sources over summaries: Buffett's long habit of reading annual reports, described in the Berkshire letters.
- Graham on dividends and price: The Intelligent Investor, chapter 19.
Words to know
- Ex-dividend date: the cutoff; buy before it to get the next dividend.
- Value (cap) weighted index: bigger companies count for more, as in the S&P 500.
- Price weighted index: higher-priced shares count for more, as in the Dow.
- CFP: certified financial planner.
Try this
Choose one company you use. Write three sentences for it: what it does, why it might last, and why you could be wrong. Then open its latest filing from /stock/TICKER/ and check one number you stated.
Check yourself
- What was the grandfather's condition on the money?
Answer
Pick one stock she understood and explain why to him. - How does the Dow weight its companies versus the S&P 500?
Answer
The Dow is price weighted; the S&P 500 is weighted by market value. - Why go to primary sources?
Answer
Summaries and news can misstate a number or a word's nuance; the filing is the record.
Short quotes
"I'm just such a stickler for going to the source." (Bobbi Rebell, ~50:30, auto-transcribed)