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This episode features Josh Brown, CEO of Ritholtz Wealth Management and one of the most influential voices in the world of financial commentary. If you haven’t already, you should definitely check out his new book: You Weren’t Supposed to See That: Secrets Every Investors Should Know.
Josh is uniquely positioned to comment on markets, the economy, and the business of financial advice because of where he sits professionally—blogger and TV market commentator, RIA founder and CEO, former retail stockbroker. It’s a unique combination of experiences and area of expertise that puts him in a position to make connections that others can’t and share those insights with the world.
We discuss his journey, the impact of the financial crisis on how markets are covered, and how Wall Street has adapted to major shifts in investing trends. We also explore Josh’s role as a technical advisor on the hit show Billions and the future of passive investing.
These are my notes from our conversation…
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The Shift from Traditional Media to Blogs and Social Media (1:10)
In the early 2000s, the financial media landscape looked very different from what we see today. Traditional media outlets dominated, and financial advisors and market commentators largely relied on mainstream sources to get their voices heard. However, everything began to change during the financial crisis of 2008. Josh explains that this moment was pivotal, as mainstream media missed the mark in covering the true nature of the crisis. The general public was left hungry for alternative voices, and the financial blogosphere started gaining attention as a critical source of real-time, accurate insights.
Josh details how traditional media outlets were speaking to corporate-trained representatives who were unable—or unwilling—to provide the full truth about the unfolding financial crisis. In contrast, a new wave of independent bloggers stepped in, offering unfiltered insights into the housing bubble, mortgage issues, and the broader economic meltdown. Among these new voices was Barry Ritholtz, a pioneer in blending data-driven analysis with behavioral finance commentary.
Josh reflects on how Barry’s work—along with that of a small group of other influential financial bloggers—helped to predict the crisis and communicate its severity well before traditional media outlets caught on.
Barry’s posts, full of sharp analysis and wit, quickly earned him a reputation as one of the top financial commentators, and his blog became essential reading for anyone trying to understand what was really happening. Josh describes how he was inspired by Barry and others like Bill McBride of Calculated Risk to start his own blog, The Reformed Broker.
Josh goes on to describe how, at the time, blogging was seen as an unconventional way to communicate financial insights, but it allowed for a level of transparency and immediacy that traditional outlets simply couldn’t match. At the same time, Josh saw the massive potential of social media as a platform for market commentary. Platforms like Twitter, which would later become a hotbed for real-time financial discussions, gave commentators like Josh and Barry a direct line to their audience, bypassing the gatekeepers of traditional media.
Josh and I reflect on how the financial blogosphere has grown, with many financial professionals now embracing platforms like blogs, podcasts, and social media to share their knowledge. What was once seen as an experiment has now become a legitimate way to engage with clients and the broader public. The ability to “call it like we see it,” without the constraints of traditional media, has given rise to a more transparent and diverse conversation about markets and the economy.
The Growth of Passive Investing and its Impact on Wall Street (6:10)
Over the last few decades, one of the most profound shifts in the investment world has been the rise of passive investing. What began as a small percentage of the market, primarily dominated by actively managed funds, has transformed into a landscape where index funds and exchange-traded funds (ETFs) now make up roughly 50% of the market. Josh explains that this growth has reshaped not only how people invest but also how Wall Street itself operates. The days of highly compensated fund managers overseeing massive portfolios are fading, replaced by a more cost-effective and efficient approach to investing.
Josh highlights how, for decades, Wall Street thrived on the back of high-fee products, with actively managed mutual funds generating substantial profits for the industry. However, the rise of passive investing has been a game-changer, with investors now realizing they can achieve market returns at a fraction of the cost. Firms like Vanguard and BlackRock have led the charge in promoting low-cost, passive products, and this shift has had a significant impact on the traditional asset management business.
While investors benefited from the rise of index funds, the Wall Street machine—long fueled by actively managed mutual funds—saw a significant reduction in revenue. This is particularly true for large investment firms that had historically thrived by managing billions in assets through high-cost strategies.
Despite the incredible bull market during the 2010s, Wall Street struggled to profit in the same way it had in previous bull markets. The glamorous business of running multi-billion-dollar actively managed mutual funds was becoming a thing of the past. Josh notes that this was especially frustrating for many professionals who were used to seeing their bonuses rise alongside market gains, but instead faced job cuts and stagnant compensation.
Josh points out that the issue wasn’t that active fund managers were bad at their jobs; it was that their jobs had become nearly impossible. The S&P 500, with its market-cap weighting, had become an “ultimate momentum machine,” making it increasingly difficult for fund managers to consistently beat the index. Josh explains that because the largest, most successful companies naturally had the highest weightings in the S&P 500, any fund manager who didn’t own those top stocks in at least a market-neutral weighting was bound to underperform.
As investors began to understand the near-futility of trying to beat the market year in and year out, they shifted their assets to low-cost index funds.
Private Equity and Alternative Investments (9:05)
As passive investing surged in popularity and Wall Street saw a decline in revenue from traditional actively managed mutual funds, the industry needed to adapt.
Enter private equity and alternative investments—high-fee, complex products that Wall Street could offer to clients hungry for new opportunities. Josh explains how these investments became the next big moneymaker for Wall Street and why they are so appealing to both firms and investors.
“Wall Street will sell you whatever you will buy. The question isn’t ‘What’s in the best interest of investors?’ It’s ‘What will investors pay money for?’” — Josh Brown
Josh believes private equity, private credit, and other alternative investments are gaining traction because they offer something that can’t easily be replicated by low-cost index funds—so Wall Street loves them. For many high-net-worth individuals, investing in private equity feels like an exclusive opportunity.
For advisors, Josh talks about how they present these products as unique, sophisticated, and a step above what’s available in the public markets. They also can be a way to differentiate themselves from competitors as low-cost, asset allocation driven investing has become more commoditized.
Josh stresses that while some private equity funds may deliver on their promises, the vast majority won’t, and it’s hard for most financial advisors to determine in advance which will be the winners and which will be the losers.
He also warns that many financial advisors and investors alike don’t fully understand the products they’re getting into, and that a large part of the allure is driven by the narrative of exclusivity and the potential for higher returns.
“Wall Street doesn’t care what it sells as long as it makes money. If people won’t pay 1% for a mutual fund anymore, they’ll sell private equity, private credit, or some other alternative that feels unique enough for people to justify the fees.” — Josh Brown
Josh is clear about his stance: while he’s not inherently against private equity or alternative investments, he believes it’s essential for advisors to be honest with their clients about why they’re recommending these products. Rather than overcomplicating portfolios with complex products that promise high returns, Josh advocates for simplicity in investing and transparency with clients.
Advisors’ Role in Navigating Financial Trends (17:45)
As the financial industry evolves, one of the critical roles of a financial advisor is to help clients navigate the ever-changing trends on Wall Street. Josh and I dive deep into this topic, emphasizing how the industry has a tendency to push complex, high-fee products that often appeal to investors’ desires rather than their long-term interests. Josh explains that while some trends are rooted in legitimate opportunities, many are simply recycled ideas repackaged for a new generation of investors.
“Advisors today face the same pressures as they did in the 2000s—selling clients what they want rather than what they need. The key is to focus on simplicity and avoid getting caught up in complex products that don’t deliver long-term results.” — Josh Brown
Josh elaborates on the cyclical nature of financial trends, drawing a comparison between what’s happening today with private equity and what happened in the 2000s with commodities and emerging markets. After the dot-com bubble burst and U.S. stocks entered a “lost decade” of weak returns, many advisors began recommending commodities funds as a way to hedge against underperforming equities. Similarly, after the Great Financial Crisis, managed futures and liquid alternatives were the next big thing.
Josh makes the point that many financial advisors are quick to sell what worked well in the previous cycle, rather than focusing on what will work going forward.
This pattern is not new, but it can be dangerous if advisors get swept up in the latest trends without fully understanding the risks or the potential for future performance. He emphasizes that while some clients may be eager to invest in the “next big thing,” it’s the advisor’s job to ensure those decisions align with the client’s long-term goals and financial plan.
We both agree that one of the most important roles of an advisor is to simplify clients’ financial lives rather than complicate them with overly complex products. Wall Street has a history of promoting complex, high-fee strategies—often with flashy marketing campaigns—that appeal to clients’ fears or desires for higher returns. However, as Josh points out, many of these products, like hedge funds and liquid alternatives, ultimately fail to deliver on their promises.
As we have to walk a fine line between educating clients on what truly works for their portfolios and resisting the temptation to follow the latest trend. It can be tempting to offer clients something new and exciting, especially when they see advertisements or hear success stories from friends, but a good advisor knows when to steer the conversation back to fundamentals.
“It’s easy to sell clients on a story of why something new and complex will work, but that’s not what we should be doing. Our job is to keep clients focused on their goals and not let them get distracted by the latest trend that Wall Street is pushing.” — Josh Brown
Josh underscores the importance of educating clients on the true value of a financial advisor, which goes beyond simply picking investments.
He points out that while many people still think an advisor’s primary role is to select investments, the reality is that most of the value comes from helping clients avoid mistakes, stay the course, and make decisions that align with their broader financial plan.
The Value of Financial Advisors to DIY Investors (24:50)
In today’s world, many investors are choosing to manage their own portfolios, leveraging the wealth of information available online, from financial blogs to robo-advisors. For these do-it-yourself (DIY) investors, the idea of paying for a financial advisor can seem unnecessary, especially when they feel capable of handling their own investments.
Josh and I dive agree that the do-it-yourself approach is fine, it’s simply a personal preference. But there are many reasons why self-directed investors eventually turn to an advisor.
One of the key reasons is continuity. Many self-directed investors do a fine job managing their portfolios over the years, but as they get older, they start to think about the future—particularly about what would happen to their investments if they were no longer able to manage them.
For both Josh and I, this is one of the most common reasons DIY investors eventually seek out our help: to ensure that their spouse or family will be taken care of if something happens to them.
Typically, these self-directed investors have spent decades successfully managing their portfolios, but now recognize the importance of establishing a relationship with a trusted advisor. They aren’t necessarily looking for someone to outperform the market; rather, they want peace of mind knowing that their family will be financially secure if they are no longer able to handle the day-to-day decisions. It’s a realization that, as we age, life can be unpredictable, and preparing for those possibilities is where an advisor can add value.
Josh emphasizes that it’s not about whether DIY investors are capable of managing their portfolios—they often are. Instead, it’s about recognizing when it makes sense to outsource those responsibilities so that they can focus on what truly matters to them in their later years.
For many, the shift to working with an advisor comes not from a lack of knowledge, but from a desire to reclaim time and simplify their lives.
We also discuss the role financial advisors play in preventing costly mistakes. While DIY investors may have been successful in managing their portfolios during bull markets or periods of relative calm, it’s during market volatility and downturns that the value of an advisor truly shines. Advisors provide more than just investment selection—they offer guidance, discipline, and reassurance when the market takes a dive, helping clients avoid emotional decisions that could hurt their long-term returns.
Josh and I agree that while robo-advisors and automated platforms have democratized access to good financial advice for many, there’s still a significant gap that only human advisors can fill.
Particularly for those approaching retirement or with complex financial situations, the value of a good advisor extends far beyond simply managing investments. Tax planning, estate planning, insurance, and coordinating with other professionals (like accountants and attorneys) are all areas where a knowledgeable advisor can make a big difference.
Market Corrections and Investor Behavior (28:00)
Market corrections—those times when stock prices drop by 10% or more—can be unsettling for many investors, but they’re a normal part of the investing cycle. In this segment, Josh and I explore how investor behavior has evolved in the face of these corrections, particularly thanks to technological advances and the automation of investments.
While fear and greed may still drive short-term market movements, the way investors handle market downturns has improved significantly over the years. A major shift is the rise of automated investing platforms such as Betterment, Wealthfront, Schwab Intelligent Portfolios, etc as well as the widespread use of 401(k) plans.
These systems are designed to keep investors on track through good times and bad, often automatically rebalancing portfolios and continuing to add money to falling asset classes during market downturns. This automation, Josh notes, helps investors avoid the emotional pitfalls that come with trying to time the market.
“We’ve got trillions of dollars in 401(k) money in this country. That money is price-insensitive—it’s coming in no matter what. And it’s being invested in a disciplined, systematic way.” — Josh Brown
Josh points out that one of the reasons investors are handling corrections better than in the past is because their investments are often being managed through systems that don’t allow for panic-driven decisions. Whether it’s a robo-advisor automatically rebalancing a portfolio or a 401(k) plan set on autopilot, these mechanisms reduce the likelihood of investors making emotional decisions during times of market stress.
These platforms are designed to take emotion out of the equation, ensuring that portfolios are regularly adjusted to maintain a proper asset allocation, even during market downturns. This automation helps reduce volatility and shortens market cycles, as money continues to flow into stocks and bonds, regardless of short-term price movements.
While investor behavior has improved, it doesn’t mean market corrections will disappear entirely. Corrections are still an inevitable part of investing, and there will always be moments of fear and uncertainty. But the combination of technology and better investor education has made it easier for people to weather these storms without making rash decisions that could derail their financial goals.
We also touch on the role of financial advisors during corrections, and how these moments provide a critical opportunity for advisors to add value.
While automated systems are helpful, there’s still no replacement for the personalized advice and reassurance that a good advisor can provide during periods of market volatility. It’s during these times that advisors can remind clients of their long-term plan, help them avoid emotional mistakes, and ensure they stay on track toward their financial goals.
Josh Brown’s Work on Billions (39:50)
Josh had the opportunity to work as a technical advisor on the hit Showtime series Billions, which has become a favorite show among finance professionals for its authentic portrayal of the hedge fund and Wall Street world.
In this segment, Josh shares behind-the-scenes details of how he got involved with the show, what his role entailed, and what made the experience one of the most exciting parts of his career.
Josh explains that Billions—while full of dramatic twists and occasionally implausible storylines—became beloved by people in the finance industry largely because of its attention to detail. The showrunners knew that for the show to resonate with its core audience, the trading floor scenes and dialogue between hedge fund professionals had to feel authentic. That’s where Josh came in. As a technical advisor, his job was to read through the scripts and ensure that the language, conversations, and banter among the Wall Street characters rang true to real-life scenarios.
Josh worked closely with the show’s writers to tweak and refine the dialogue, ensuring that the language used in trading floor scenes reflected how actual traders and hedge fund managers speak. He also got the chance to appear on the show in a cameo role—, playing a version of himself and interacting with some of the characters in a few key scenes.
Josh reflects on how working on *Billions* allowed him to blend his two worlds—finance and media—in a way he never anticipated when he started his career. The experience gave him a chance to contribute to a show that so many people in his industry love and respect for its authenticity.
For Josh, this project wasn’t just about making television—it was about helping to craft something that accurately represented the world he knows so well.
Resources:
- Visit Downtown Josh Brown
- Purchase Josh Brown’s book: You Weren’t Supposed To See That: Secrets Every Investor Should Know
- Visit Barry Ritholtz’s site
- Check out Calculated Risk
- Learn more about Billions
The Long Term Investor audio is edited by the team at The Podcast Consultant
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