Our guest this episode is Ted Cadsby — former President and CEO of CIBC Securities, bestselling author and one of Canada's earliest champions of index investing. Ted brought index funds to CIBC in the late 1990s, wrote "The Power of Index Funds" to make the case to everyday Canadians and has since turned his attention to how people think, with books including "Closing the Mind Gap" and "Hard to Be Human."
In this episode, Dave and Ted dive into the case for index funds and the uphill battle Ted fought to bring them to the bank, including the clash with Wood Gundy brokers who saw indexing as a threat to their business. They break down why individual stocks are so hard to get right, how unknowable variables drive stock prices, whether "play money" accounts make sense and how Ted weights his own personal portfolio.
The conversation also explores how to evaluate active money managers, how to separate luck from skill in investment performance and what to make of private equity pitches (plus Dave's due diligence approach from his Dragon's Den days). Along the way, Ted shares insights from his work on the psychology of decision making: the dangers of oversimplification and overconfidence, why active managers stay so sure of themselves and how financial biases can quietly affect our happiness.
Whether you're a committed indexer or still wondering if you can beat the market, this episode offers a clear-eyed look at investing from someone who has seen both sides of the industry.
Show Notes
(00:00) Intro & Disclaimer
(00:55) Intro to Ted Cadsby
(02:16) A Disastrous Wealthy Barber Date
(03:22) Bringing Index Funds to CIBC
(05:52) The Clash With Wood Gundy Brokers
(09:15) Individual Stocks vs. Index Funds
(11:55) "Play Money" Accounts
(12:55) The Impact of Unknowable Variables on Individual Stocks
(15:34) Ted's Personal Portfolio Weights
(17:28) How to Evaluate Active Money Managers
(20:00) Luck vs. Skill in Investment Performance
(21:26) Private Equity Pitches
(24:36) Dave's Due Diligence Strategy on Dragon's Den
(27:23) The Psychology of Decision Making
(30:13) The Dangers of Oversimplification & Overconfidence
(35:03) Why Active Managers Stay Overconfident
(39:33) How Financial Biases Affect Happiness
(40:40) Money Should Be a Means to an End
(43:42) Conclusion
