earnings can grow faster than GDP coming out of a recession, right? Coming out of 2020 when we shut down the economy, we laid off all these employees and then we gave everybody money. So earnings were exacerbated back to the upside because you had these big profit margin gaps. You had no employees to pay because we let them all off, but you had this big influx of demand. But it can't do it over a long period of time because ultimately earnings are derived from the economy. The thing about they did a survey in the late 90s. I was probably 98, 97, 98. Nobody predicted a 13 year period of zero rates of return.
IN THIS EPISODE, YOU’LL LEARN:
09:18 - Understanding the basics of valuations and how to interpret price multiples.
17:00 - What the Shiller P/E (CAPE) ratio is, and why it is telling us future returns are expected to be low going forward.
25:46 - What Lance thinks are some catalysts that could cause the market to mean revert to historically normal valuation levels.
31:35 - Why the Buffett Indicator is a valuable valuation tool and why it is saying markets are overvalued today.
38:05 - The relationship between earnings and GDP and why EPS cannot grow faster than GDP in the long run.
49:50 - Why Lance thinks bonds are the best investment right now and what investment strategy he recommends.
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
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