{"podcast":{"title":"The Rational Reminder Podcast","slug":"the-rational-reminder-podcast-743537","podcast_index_feed_id":743537,"rss_url":"https://rationalreminder.libsyn.com/rss","website_url":"https://www.pwlcapital.com/author/benjamin-felix/","image_url":"https://static.libsyn.com/p/assets/4/6/0/2/46022375490517e6/logo-Rational-Reminder-Dark.png","author":"Benjamin Felix, Cameron Passmore, and Dan Bortolotti","episode_count":441,"summary":"A weekly reality check on sensible investing and financial decision-making, from three Canadians. Hosted by Benjamin Felix, Cameron Passmore, and Dan Bortolotti, Portfolio Managers at PWL Capital.","last_synced_at":"2026-07-23T20:21:46.826520+00:00","page_url":"https://stenobird.com/podcast/the-rational-reminder-podcast-743537"},"episode":{"title":"Episode 397: Hendrik Bessembinder - Constant Leverage & Measuring Investor Outcomes","slug":"episode-397-hendrik-bessembinder-constant-leverage-measuring-investor-outcomes","published_at":"2026-02-19T10:30:00+00:00","page_url":"https://stenobird.com/podcast/the-rational-reminder-podcast-743537/episode-397-hendrik-bessembinder-constant-leverage-measuring-investor-outcomes","show_page_url":"https://stenobird.com/podcast/the-rational-reminder-podcast-743537","url":"https://rationalreminder.libsyn.com/episode-397-hendrik-bessembinder-constant-leverage-measuring-investor-outcomes","audio_url":"https://dts.podtrac.com/redirect.mp3/traffic.libsyn.com/secure/rationalreminder/RR_-_EP.397_Hank_Bessembinder_-_AUDIO_V1.mp3?dest-id=763774","summary":"In this episode, we welcome back return guest Hank Bessembinder for a deeply analytical conversation spanning leveraged ETFs, volatility, and the future of performance measurement. Hank walks us through his latest research on leveraged single-stock ETFs, clarifying the misunderstood concept of \"volatility decay\" and decomposing returns into rebalancing effects and frictions. The results are striking: meaningful underperformance relative to simple levered benchmarks, driven by both embedded costs and the mechanics of daily resets. In the second half, we shift gears to a more foundational question: What is a return, really? Hank challenges the dominance of arithmetic averages and even geometric means, arguing that neither truly captures the long-term investor experience. He introduces the concept of the sustainable return—a measure based on the cash flows an investment can support without depleting capital—and outlines how it could reshape academic finance and real-world financial planning. Key Points From This Episode: (0:01:03) Welcome back to Hank Bessembinder and overview of his recent research. (0:06:16) What \"volatility decay\" really means—and why the term may be misleading. (0:09:16) Why volatility does not necessarily reduce mean returns in constant leverage ETFs. (0:10:11) Ex-ante decision-making and the wedge between mean and median outcomes. (0:11:26) Single-stock vs. index leveraged ETFs: Similar mechanics, different magnitudes. (0:12:52) Why past research has been so cautionary about long-term use of leveraged ETFs. (0:15:53) How rebalancing costs differ for long and short leveraged products. (0:16:57) The benchmark: Levered buy-and-hold versus constant daily rebalancing. (0:19:46) Empirical results: Long funds underperform by ~0.8% per month; short funds by…","meta_description":"In this episode, we welcome back return guest Hank Bessembinder for a deeply analytical conversation spanning leveraged ETFs, volatility, and the future o…","key_points":[],"chapters":[],"topics":[],"duration_seconds":3956,"processing_state":"not_requested","actions":[{"name":"request_transcript","method":"POST","url":"https://stenobird.com/v1/public/podcasts/the-rational-reminder-podcast-743537/episodes/episode-397-hendrik-bessembinder-constant-leverage-measuring-investor-outcomes/transcription-requests","description":"Idempotently request low-priority transcript generation for this episode."},{"name":"read_markdown","method":"GET","url":"https://stenobird.com/podcast/the-rational-reminder-podcast-743537/episode-397-hendrik-bessembinder-constant-leverage-measuring-investor-outcomes.md","description":"Read the agent-friendly Markdown representation of this episode resource."}]}}