Barry Ritholtz on How Not To Invest
Welcome to another episode of Patterns and Stories. Joining us today is Barry Ritholtz, the co-founder, chairman, and chief investment officer of Ritholtz Wealth Management, and author of “Bailout Nation” and “How Not To Invest: The ideas, numbers, and behaviors that destroy wealth - and how to avoid them.” The latter is the focus of today’s conversation.
We are your hosts, Luca Dellanna [https://luca-dellanna.com/] and Ismail Manik [https://www.linkedin.com/in/ismail-manik-8234179].
The AI-generated transcript was lightly edited for grammar and fluency.
Highlights
* “There's a meme on inflation that shows up on social media. Kevin McAllister, from the movie “Home Alone,” went to the supermarket in 1990 and he bought $19 worth of food. Today, that same bag of food would cost you $72. Therefore, the dollar is declining, and inflation is running amok. [This argument] is intellectually dishonest and wrong, and I'll explain why. I was in the supermarket on Sunday and I bought some milk, some yogurt, and some fruit. But when I went to the supermarket in May 2025, I used the dollars I earned in May 2025. I didn't earn a bunch of money in 1990 and then put it in an envelope and said, I'm going to hold this money aside for 35 years. […] It turns out that the dollars that we earn, the median income in the United States, has gone up a little more than the price of food.”
* “If you don't know the person's track record, if you don't know their disposition or temperament, if you don't know their process, [listening to them is] like taking candy from a stranger.”
* “I start the book with the story of Sam Zell, one of the most successful distressed real estate investors of all time. When he forecast recessions, they never came true. When he said we're fine, we actually already were in a recession. But [forecasting recessions] is not how he became a billionaire. He bought really valuable property from over-leveraged owners when they became deeply distressed. If you're buying Class A real estate, 40, 50, 60 % below its market value, you're going to do really well. […] His forecasting is not what made him money. His buying distressed property at a great price and then holding it for years or decades [is] how Sam Zell became a billionaire. So that's the halo effect. We believe things about people who are successful that we shouldn't [believe].”
Links
* Barry’s latest book [https://amzn.to/4ja8RKZ]
* Barry’s website [https://ritholtz.com/]
* Barry’s Twitter [https://x.com/Barry_Ritholtz]
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