Episode 214 · 2023-10-05 · 55:07 · Original in Finnish
Investing in about 50 minutes | Merja Mähkä, Esa Juntunen | Negotiator 214
Originally published as “Sijoittaminen noin 50 minuutissa | Merja Mähkä Esa Juntunen | Neuvottelija 214”
Merja Mähkä and Esa Juntunen join Sami Miettinen, each with a new book on investing. It is an unusually honest beginner's guide, because both guests also tell you their own mistakes: the dividend trap, a cyclical steelmaker as a first investment during the financial crisis, the pain of selling Kone, and the host's own Russia blunder. The load-bearing claims are time diversification, costs, and Bessenbinder's finding that only a few per cent of stocks produce the index return — from which follows that a thirty-stock diversification theory is not enough. Both guests are promoting books.
Core theses
- Bessenbinder's finding — that a few per cent of stocks produce the index return — is what makes a thirty-stock portfolio insufficient diversification rather than adequate.
- The dividend yield you can see is backward-looking, which is what makes it a trap rather than a signal.
- Both guests volunteer their own mistakes, which is rare in beginner investing content and is what makes the advice checkable.
- Two book promotions, and nothing in the episode is investment advice.
Watch and listen
Key moments
- 00:00 — Merja Mähkä on becoming an investor, and the market falling
- 02:55 — Esa Juntunen on the wise investor, self-sufficiency and behavioural economics
- 04:22 — Time diversification, the lure of a fallen market, and a strategy for exceptional times
- 07:01 — Mähkä's diversification: direct holdings weighted to the US, and a growing share of funds
- 08:30 — Interest rates matter again, and CAPM
- 09:20 — Juntunen's portfolio: employer shares, and Finnish, US and UK equities
- 10:20 — Ray Dalio's alpha portfolio may not work
- 11:40 — Rates normalising, and how it is almost pleasant when the world works again
- 12:10 — The strange mystery of fixed income, and the role of a mortgage
- 13:05 — Replacing a bank account with money market funds
- 14:20 — The dividend illusion: a backward-looking yield is a dangerous trap
- 16:30 — The psychology of dividends
- 18:30 — The pain of selling Kone: you cannot control the market
- 19:20 — A fast-growing economy does not guarantee fast-rising shares
- 20:10 — An active fund can make sense, and the host's Russia blunder
- 22:30 — Growth or value: the winners keep winning
- 23:30 — Tech giants, and Bessenbinder's finding that 4 per cent of stocks make the index return
- 25:20 — Low-cost ETFs as the foundation, and why starting matters most
- 30:00 — Investing for a child is liberating: even a small nest egg helps
- 33:00 — A mortgage is cheap leverage, even in a brutal market
- 35:50 — Book-entry account against equity savings account
- 37:00 — The rising-price illusion: a halved share can halve again
- 39:00 — Qt and Revenio, and momentum investing
- 40:20 — Valuation multiples are company-specific, and enterprise value matters
- 43:10 — A defence of dividend yield for the experienced investor
- 44:20 — The Seadrill case
- 45:30 — Rights issues
- 46:10 — Building a portfolio on a foundation, and the dangers of buy and forget
- 48:10 — You are allowed to lower your risk level, and age matters
- 50:05 — Kahneman's biases: confirmation bias and anchoring
- 54:40 — Inner Circle: the three compare their own service providers
Summary
Merja Mähkä and Esa Juntunen join Sami Miettinen, each with a new book on investing. It is an unusually honest beginner’s guide, because both guests also tell you their own mistakes: the dividend trap, a cyclical steelmaker as a first investment during the financial crisis, the pain of selling Kone, and the host’s own Russia blunder. The load-bearing claims are time diversification, costs, and Bessenbinder’s finding that only a few per cent of stocks produce the index return — from which follows that a thirty-stock diversification theory is not enough. Both guests are promoting books.
Why the diversification advice is unusual
Most beginner guidance says thirty stocks is enough. Bessenbinder’s finding is the reason it is not: only a few per cent of listed stocks produce the index return, so a small hand-picked portfolio is likely to miss them entirely. That single result reframes the whole case for a low-cost index fund.
The honest part
Both guests describe their own mistakes — a cyclical steelmaker bought during the financial crisis, the pain of selling Kone too early, the host’s Russia blunder — and the dividend trap is explained as a trap rather than a strategy: the yield you can see is backward-looking.
Watch
The recording lives on the Neuvottelija channel: Sijoittaminen noin 50 minuutissa | Merja Mähkä Esa Juntunen | Neuvottelija 214. A Finnish edition of this episode is published at www.neuvottelija.fi.
In depth
The Neuvottelija AI editions carry a long-form write-up of this episode: English · suomeksi.
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People and topics
Guests: Merja Mähkä, Esa Juntunen
Topics: Investing & Markets