What is a currency? This turns out to be one of those questions we just kind of skip over because we don't have clear answers to it (and because economists often like to skip over these foundational things). This special episode of the Odd Lots podcast was recorded as part of Princeton University's “How to Write the Biography of a Currency” event, hosted by the Princeton Economic History Workshop and the Julis-Rabinowitz Center for Public Policy & Finance. In this discussion, we talk about how we should define a currency and how that definition has changed (or not) over time. Our panelists were Iñaki Aldasoro, an economist at the Bank for International Settlements, Indiana University Bloomington Professor Rebecca Spang, and Stefan Ingves, the former head of the Sveriges Riksbank, the central bank of Sweden, from 2006 to 2022.

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We're told over and over again that the one "free lunch" in investing is diversification, and that you can improve your returns over time simply by investing in a wider range of assets. This is textbook modern finance. And yet over the past several years this hasn't been the case. An investor would have done great (with the occasional hiccups) just by investing in US stocks. What's more, even within US stocks, investors should have concentrated on big tech stocks. Going long US tech has been identified as the most crowded trade by investors for years, and yet most of the time it has outperformed almost everything else. So what are the lessons from this story? And is now the moment where international diversification is going to work? On this episode, we speak with veteran portfolio manager Krishna Memani, who is now the chief investment officer at Lafayette College. Previously, he was the CIO at OppenheimerFunds, which got bought by Invesco. We talk about portfolio theory, the tragedy of the prudent international investor over recent decades, and whether that realized return we've seen across a range of asset classes should prompt a fundamental rethink of finance theory.

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Michael Cembalest has been an investment analyst for almost 40 years and his research notes have drawn a cult following on Wall Street. He's known for going super deep into a wide range of topics, like energy and healthcare. And lately he's been writing a lot about AI, with a particular interest in figuring out whether all the investment in data centers and compute will translate into actual profits. On this episode, we talk to the chair of market and investment strategy for JPMorgan Asset Management about why AI is the market "bet of the century," why the dominance of US big tech can't be overstated, and why he's pessimistic about the outlook for small modular nuclear reactors.

Odd Lots Live is returning to New York City on June 26. Get your tickets here!

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