Comments by "Magic Beans" (@Magic_beans_) on "The Plain Bagel" channel.

@genghischan69 They all exist in some form, but they take on additional importance when the brokerage can’t rely on commissions. I should also note that brokers pressuring investors to trade so the broker could take a cut, that was highly common in the days of human brokers. If you’ve seen “Boiler Room” and “The Wolf of Wall Street” there’s plenty of truth to that.
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2:30 One thing I’d add here is that this is just an example. You should have an idea of much of your money you want in any one company, but that doesn’t mean that every position has to be equal. For example, let’s say most of Alice’s investments are in household names like Microsoft and Costco, companies that may have a bad year now and then but are unlikely to just evaporate. But she also wants to dabble in something with a higher risk-reward, say a little biotech company that could skyrocket or collapse depending on how their research goes. It would be perfectly reasonable to keep that position smaller.
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This is the same guy who said you can’t live on a paltry $400,000 per year. Bro’s completely detached from reality.
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Meh, it’s like Craigslist: not a scam in and of itself, but a convenient breeding ground for scams because of how they cut out those troublesome standards and overseers.
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@harrisonfreund7845 Exactly. Individuals may choose to invest according to the social-justice criteria many commenters are railing against, but ESG reports from rating agencies are more about managing business risk. What might make the company look bad, drive customers away, or attract lawsuits? Common topics include: Environmental: Is the company meeting industry standards for responsible waste management and responsible marketing? If not, they risk attracting regulatory attention. Back in Ye Olden Days, McDonald's used to package their burgers in styrofoam containers, and it was customer demand that led them to switch to paper. Social: Is the company responsive to shifts in consumer preference? For example Monster Energy's ESG report by MSCI notes that demand for low-sugar options has grown in recent years, and the company hasn't done a whole lot to respond to that. They have over 30 flavors and only about five have a sugar-free option. Governance: Are a sufficient number of the Directors independent from the company and its owners? Do they rotate out regularly, or are their Directors so entrenched they may as well be employees? Companies like Tesla and Meta are structured so the CEO also holds a huge share of the voting power, so if you don't like where the company's headed you can't do anything about it. That being the case, it's important to consider what you personally value as an investor. You can't outsource your ethical decisions to rating agencies. For example, Nestle is constantly catching flak for everything from price fixing to child labor. But they score well enough in other areas like data security and product safety that overall they tend to get pretty solid ESG ratings (AA according to MSCI).
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Another point in favor of buybacks, investors seem to view them as more like special dividends than regular. As our host said, here in the US we have that custom of steady or escalating quarterly dividends. Buybacks have a more distinct beginning and end.
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7:45 Grain of truth to angry 401k bro: if you have debt with a double-digit interest rate, your investment returns wont keep pace with the interest you’re paying on the debt, so the more you contribute the more you fall behind. In that case it may be worth contributing just enough to get the employer match because that’s a 50-100% extra*, but beyond that focus on the debt. And also yes, at some companies the fund options in the 401k stink. When you change jobs, roll it into an IRA so you can invest it how you want. * Maybe. If the matching funds don’t really belong to you (don’t “vest”) until you’ve been there 5 years and you don’t expect to be, then it’s probably not worth planning as if you’ll get that extra. Just work on the debt and maybe drop a bit into an IRA.
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4:10 One thing I’d mention here is that if you want real estate income without having to be personally involved, look into Real Estate Investment Trusts (REITs). It’s basically what it sounds like: you invest in a company that owns mini malls, medical space, bowling alleys, whatever, which they rent out and service, distributing most of their net income as dividends. But yeah, don’t expect overnight wealth. Even in today’s high-rate environment most REITs are paying 5-7% annually. And since they pay out most of their income as dividends (legally they have to) rather than reinvesting in more properties, they grow slowly if at all. [Personally I stick to commercial REITs. I have fewer qualms about being a landlord-by-proxy to businesses than to families.]
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