Comments by "JP 72" (@739jep) on "Dave Ramsey's Investing Advice" video.

I don’t believe Buffet was mentioned once in this video? But if you’re referring to the segment surrounding luck vs skill he does say that since outperforming funds are no more likely to continue to outperform than a fund that has underperformed this indicates that many performances are based on luck rather than skill. But he also clarified that it’s not necessarily luck , it could be because they retained exposure to stocks with certain characteristics that are known to outperform the market because they are riskier (such as small cap value stocks). Ben has a seperate video on Buffet where he suggests exactly this , that Buffets performance is explained neither by skill or luck , but by maintaining exposure to riskier stocks over a long period of time. This is also supported by the data.
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Using empirical data (not just performance data too) along side financial theory in order to make informed decisions is very different to using past performance in order to assume future performance. In fact you can use past data to demonstrate why the latter is a bad strategy.
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Dave fired an employee for getting pregnant before marriage. While that has nothing to do with the quality of his advice , he’s built his brand on the back of being ‘righteous’ - and I think a lot of his supporters are unaware of some of the things he’s done.
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There’s nothing wrong with borrowing to invest if it fits your risk tolerance. For many it doenst and they shouldn’t do it , it probably doesn’t fit your risk tolerance level which is why you think it’s crazy , but for people in specific circumstances (all of which discussed in his video on leverage) it is perfectly rational to invest with leverage. It’s fairly pointless to accuse Ben of only selecting studies that agree with him, what matters is the quality of the research and if you have a problem with those papers - please point out what’s wrong with them. The evidence in favour of investing in passive funds over active funds is quite convincing at this stage - there is no bias here that I can see just simple acceptance of what the data is showing us.
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@alankoslowski9473 perhaps it usually isn’t advisable to people , but that doesn’t mean a rational case can’t be made in favour of using leverage. Your usual client may or may not be representative of the investing community at large either, perhaps more people with the sensible risk appetites for leverage exist than you think they do? The video in question I think you’re referring to doesn’t ‘encourage’ using leverage, it discusses its pros and cons against other strategies of increasing exposure to risk. For example it compares it to having a more concentrated portfolio (which is a more conventional way to increase risk) and rightly points out that investing in a diversified portfolio using leverage actually leads to better expected outcomes than investing in a concentrated portfolio. If you disagree then I think your argument is with the data and the conclusions that are, usually uncontroversially, drawn from it - rather than with Ben? This is the kind of information that is useful to investors , it doesn’t mean they’re being encouraged to use leverage. As with anything in investing a decision like this must be made in the context of an individuals circumstances , objectives and appetite for risk as you would be well aware of. I just think the charges you level against Ben in your original post are unwarranted or at least slightly exaggerate what he’s actually saying.
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@alankoslowski9473 yes I absolutely did that - at least with my second reply, my first reply was intended for the original poster. My apologies 👍
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