Investment adviser Mark Hebner wrote a book on personal finance, but he had a hard time getting people to read it.
So he made a 72-minute documentary on the subject called “Index Funds: The 12-step Recovery Program for Active Investors.”
“I wanted someone to be able to both visually and audibly hear my passion for educating the world about the proper way to invest,” he said. “You cannot accomplish that in text.”
Hebner founded Irvine-based Index Fund Advisors Inc. in 1999, and it now has $3.24 billion in assets under management and 40 employees.
He believes in videos so much that he built his own studio with a full-time video editor and web designer. The company website lists about 370 videos, and more than 100 additional ones are also available on the company YouTube channel.
The videos feature investment topics, such as interviews with Nobel laureate Harry Markowitz, which received 21,000 views on YouTube, and with Dimensional Fund Advisors founder David Booth, which has gotten thousands of views.
15-Minute Breakdown
Hebner spent six months and under $300,000 to make “Index Funds,” completing it last June. Marketing on the DVD package is similar to that for a Hollywood film. He’s placed it on a variety of sites, like Apple and Amazon, where it can be watched for $3.99 or for free with prime membership.
The film is available worldwide, a tricky feat, since regulators in different countries have strict rules on financial products (see related story, page 1). Since the documentary doesn’t mention his firm, it’s not considered an advertisement and thus passes regulatory approval in the U.S. and other countries, Hebner said. He hasn’t carefully tracked viewership, saying the film probably has been rented 1,000 times and that he’ll be happy if it breaks even.
“I think of it as an educational documentary that supports this movement from the active investment strategy to the passive investment strategy,” he said, referring to the recent phenomenon of individual investors seeking passively managed funds with lower fees in order to save more money for retirement. “The film is a combination of text and graphics from my book, with my personality added to the whole mix.”
He also made a 15-minute version that’s available for free on sites like YouTube and on his company’s website.
“I’d like to do another film, but we don’t have anything on the drawing board.”
Side Creation
Between making videos, Hebner built an 8-by-4-foot probability machine that sits in his office opposite Bistango Restaurant in Irvine. The machine, which he calls “Sir Francis” or the “Random Walker,” demonstrates market randomness and the normal distribution of monthly stock market returns. It’s something akin to a Galton Board, showing regression to the mean, a mathematical term popular in investment circles.
His two most popular videos on YouTube are of the Random Walker, which has gotten almost 200,000 views and is the subject of about 100 comments discussing the randomness of the financial markets and life itself.
Hebner uses the Random Walker as a promotional tool and has manufactured 5,000 on a smaller scale, each about the size of a thick paperback. Some are sold on Amazon for $19.99, and about 3,000 are presented to prospective customers in a gift box that includes his book and movie.
The U.S. patent office has issued a design patent for the Random Walker under the title of a “Visual Aid that Demonstrates a Random Walk and Generates a Bell Curve Distribution.”
“I think of all our materials as investor education,” Hebner said. “All I’m doing is documenting what I’ve chosen for a business strategy is to the benefit of investors.”
