50 Years of Evidence-Based Investing (w/ David Booth) | #424

In this episode, we welcome back David Booth, Co-Founder of Dimensional Fund Advisors and author of Stay Calm: Learn to Embrace Uncertainty in Investing and Life. David reflects on his remarkable career at the center of the evidence-based investing revolution, from studying under Eugene Fama at the University of Chicago to helping build investment strategies around decades of financial research.

We explore what the data revealed about markets and professional money management, why implementation matters as much as great ideas, and how investors can make better decisions without trying to predict the unpredictable. David also shares his views on trust, financial advice, public versus private markets, human ingenuity, and the meaning of true wealth. Along the way, he explains why staying calm, having a process, and staying invested can matter far more than finding the next winning forecast.

Key Points From This Episode:

(0:00:04) Introducing David Booth and his new book, Stay Calm: Learn to Embrace Uncertainty in Investing and Life.

(0:01:15) What David learned as a commission-based shoe salesman: Do the right thing and be upfront with people.

(0:03:35) The gift of being an outsider and how financial science changed the investing experience for ordinary investors.

(0:05:38) Why outsiders are often willing to challenge assumptions—and how data changed the debate.

(0:06:53) David's experience arriving at the University of Chicago and studying under Eugene Fama.

(0:07:49) Inside Chicago's rigorous research culture and the lessons David learned from presenting his work.

(0:10:03) The empirical challenge behind efficient markets and why data mattered more than beliefs.

(0:11:41) How Fama and French approach research by trying to prove their own conclusions wrong.

(0:12:05) The two-fish joke and the challenge of understanding the environment we are immersed in.

(0:12:45) How Jim Lorie and Lawrence Fisher helped provide the historical market data that transformed financial research.

(0:14:18) From early mutual fund research to the question that shaped David's career: What should investors do if managers cannot consistently outguess the market?

(0:20:59) Why Dimensional distinguishes between passive investing and indexing.

(0:23:21) The origins of Dimensional's approach to small-cap investing and the importance of execution.

(0:24:45) Why David would rather be an investor today than in 1971.

(0:26:21) Jensen's alpha, risk-adjusted returns, and what Michael Jensen's research revealed about professional money managers.

(0:28:30) Why implementation is everything—and why models are tools for making decisions under uncertainty.

(0:33:47) Why the most important thing about an investment philosophy is having one you can stick with.

(0:35:46) Why David sees education as an antidote to fear and wants investors to feel more optimistic about investing.

(0:36:18) Human ingenuity as the foundation of David's optimism about markets.

(0:37:53) Why trust is the ultimate product in the investment business.

(0:39:40) Why understanding the science alone is not enough—and how advisors can help investors stay invested.

(0:40:23) What David's art collection has taught him about non-monetary returns and true worth.

(0:43:07) Why a good financial plan is a process built around trade-offs, flexibility, and adaptation.

(0:45:22) The problem with fixed goals and why David thinks many goals are inherently fuzzy.

(0:46:34) How David distinguishes between forecasts, wishes, and worries.

(0:49:44) How investors can identify and tune out noise by focusing on how markets work over the long term.

(0:51:30) David's unfiltered perspective on private markets, transparency, price discovery, and liquidity.

(0:52:38) Why true wealth begins with values, family, and the things that matter beyond money.

(0:54:57) What winning means when wealth includes both monetary and non-monetary rewards.

(0:55:39) Why David describes optimism as science-based hope.

(0:57:33) What Stay Calm means to David: Make decisions aligned with your values, build a process, and trust that you can deal with whatever comes your way.

Links From Today's Episode:

Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582.
Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on YouTube — https://www.youtube.com/channel/
Benjamin Felix — https://pwlcapital.com/our-team/

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com)