As I mentioned last time, I have been teaching Behavioral Finance to Master’s students at UCI this summer. Behavioral Finance is the intersection of investing and psychology—your personal psychology as an investor, and the psychology of markets as their own beings, if we were to anthropomorphize them.

Last week, the students and I were talking about some of the most extreme market action out there recently—the type of price movements that make it hard to say, “Yes, that’s totally normal.”

Like what’s been happening to SK Hynix (a South Korean memory chip maker that’s been around for a long while).

For a long stretch after the 2000s tech bubble, SK Hynix was not exactly the kind of stock people wrote breathless essays about. Which, to be clear, is a perfectly honorable thing for a stock to be.

Until recently.

Check out this price chart.

But wait, that’s not all.

I’ll spare you the academic “limits to arbitrage” bit, but let’s just say that SK Hynix took advantage of the extraordinary rise in its stock price in Seoul to issue brand-new shares on U.S. exchanges.

For odd plumbing reasons (the “limits to arbitrage” mentioned above), the U.S. shares have been trading at a meaningful premium to the Korean shares—which is exactly the kind of thing that should not happen in healthy markets.

Those shares are claims on the same profits from the same company, and one share type traded for as much as 50% more than the other.

In plain English: investors in one market were paying dramatically more for an economically similar claim than investors in another market.

How do you feel about paying 50% more for the same thing?

As we were going through this, a student said, “So, we can talk about it now?”

I said, “What are you talking about?”

She said, “The bubble.”

Then she paused.

“I thought bubbles were like Fight Club. The first rule is you can’t talk about them.”

Well played.

I don’t know what happens next, but if you’re wondering what’s been feeling a little strange in markets lately, I hope this gives you a place to start thinking.

In the meantime, I’ve been a student of this type of thing going back to when I was at UCLA, working with the one and only Earl A. Thompson in the early 2000s.

If you’re curious about the academic version, go here.

Otherwise, I encourage you to listen to my conversation with Jack Farley on Forward Guidance a couple of years ago. It’ll give you the “political economy” version of this, as the old-timers would call it.

Earlier this summer, we put out two absolutely fabulous episodes of the podcast.

Conscious Leadership, Curiosity, and Culture by Design with Kaley Klemp.
Kaley and I talk about the stuff that quietly runs the show: culture, decision rights, defensiveness, curiosity, and what happens when you let money define you instead of the other way around.

The Economics of Private Equity with Ludovic Phalippou.
Ludovic has spent 25 years reading the fine print on private equity. We talk leverage, fees, IRR, incentives, and why the story gets a lot less magical when you actually write out the math. And yes, we also talk about what he “really likes” about private equity.

We are taking a short beat. People are busy enjoying summer. Nobody wants to be the person forcing them to talk to you through a camera and microphone. And this is an opportunity for us to refine the podcast experience, merge it with Wealth, Empowered, and give you even more insights about the mechanics of markets, the psychology of money, the purpose of it all when we come back. Anyway, just a quick update for those of you who’ve been wondering.

In the meantime, we’ve had some incredible conversation over the last 18 months.

Here are some “fan favorites,” which I think are worth going back to.

Economics That Matters: From Academic Theory to Real-World Solutions with Larry Kotlikoff.
Larry was my dissertation chair at BU. We talk about deficits, Social Security, and why economics matters for real households.

Passive Investing's Endgame and America's Hidden Precarity Crisis with Mike Green.
Market plumbing and passive flows—and why markets can’t be the institution of last resort for everything. Plus Mike’s controversial take on where the poverty line really is.

Tax Alpha, Mechanics over Magic with Brent Sullivan.
A mechanics-first tour of tax-aware investing—what actually drives after-tax outcomes, where the landmines are, and why “tax alpha” comes after expected risk and returns.

Incentives, Investor Behavior, and AI with Devin Shanthikumar.
Markets don’t “process information,” people do—and incentives influence people, just ask Charlie Munger. A careful look at analysts, markets, and what AI will (and won’t) change.

Fear, Not Risk: Rethinking the Equity Premium with Rob Arnott and Ed McQuarrie.
A sweeping conversation about fear, FOMO, and two centuries of market history—and why the story behind the equity premium may be less about “risk” than what investors are afraid of missing. My favorite: the “fear of looking stupid” is a real thing…

If this was useful, you can find more at treussard.com: insights on markets, money, behavior, and the mechanics behind it all—from past writing and podcast episodes to academic work and everything in between.