We Study Billionaires - The Investor’s Podcast Network TIP300: Current Market Conditions w/ Preston and Stig (Business Podcast)
Jun 7, 2020
Preston and Stig dive into the current financial landscape, discussing the troubling implications of the Fed's corporate debt purchases. They explore the disconnect between asset inflation and consumer prices while analyzing home bias in investing. The duo also debates the complexities of market valuations amid inflation and the pitfalls of relying on historical data. They shine a light on investment opportunities in European markets while emphasizing the importance of adapting to modern valuation methods and emphasizing security in today's investing world.
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Corporate Debt and the Fed
- The Fed's corporate debt purchases distort capitalism by removing market discipline.
- Companies become reliant on the Fed, not market signals, hindering efficient resource allocation.
True Inflation vs. CPI
- The Fed's aggressive money printing inflates asset prices like stocks and bonds.
- These assets are excluded from CPI calculations, masking true inflation.
International Diversification Strategies
- Diversify internationally, considering valuations and not just past performance.
- Use market-cap weighted ETFs for broad diversification, or target specific undervalued markets if you're knowledgeable.