Millennial Investing - The Investor’s Podcast Network

MI369: The Anatomy of The Bear: Digging Through Financial History w/ Shawn O'Malley

Sep 16, 2024

01:08:42

Snipd AI

In this discussion, Shawn O'Malley, an expert in financial history and bear markets, analyzes historic stock market downturns. He reveals the significance of studying past markets, especially the differences between the bear markets of 1921 and 1932. The podcast highlights how these events shaped today's financial practices and the role of the Federal Reserve. O'Malley discusses the causes behind the 1929 crash, the evolution of the stock market, and why investors should see bear markets as opportunities to uncover undervalued stocks.

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Episode notes

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Quick takeaways

Understanding historical bear markets allows investors to make informed decisions and avoid repeating past financial mistakes.

The 1921 market bottom exemplifies severe undervaluation despite economic growth, emphasizing how irrational market behavior can create buying opportunities.

The financial crisis from 1929 to 1932 underscores the dangers of speculation and the importance of recognizing underlying economic fundamentals.

Deep dives

Understanding Bear Markets

Bear markets and recessions are fundamental elements of the economic cycle, often lasting for years rather than being mere blips on a chart. Investors are encouraged to focus on the companies within their portfolios rather than solely worrying about macroeconomic trends, although ignoring broader trends altogether is unwise. Historical patterns show that past market bottoms were not due to a lack of capability among today's investors, signaling a cautionary inheritance of past mistakes. Understanding these patterns can equip modern investors to make informed decisions to avoid repeating the financial errors of previous generations.

Intro

2min

Lessons from Bear Markets

10min

From Railroads to Real Estate

12min

Economic Turmoil Post-WWI: Investor Sentiment and Market Trends

16min

Understanding the 1921 Market Bottom and Investor Insights

5min

The 1932 Financial Crisis and Its Legacy

14min

Exploring the Dynamics of Historical Bear Markets

7min

In today’s episode, Shawn O’Malley (@Shawn_OMalley_) breaks down two of the greatest bear market bottoms in stock market history which left stocks incredibly undervalued, as outlined by Russell Napier’s book The Anatomy of the Bear.

You’ll learn why it’s important to study financial history, what bear markets have in common, how the bear market of 1921 differed from 1932, how the financial system has evolved over the last century, which factors really caused the Stock Market Crash of 1929 and the Great Depression, plus so much more!

Prefer to watch? Click here to watch this episode on YouTube.

IN THIS EPISODE, YOU’LL LEARN

00:00 - Intro

01:31 - Why it’s important to study financial history

03:53 - What similarities and differences there are between major bear markets

08:51 - Why the Federal Reserve was first founded and how its role evolved

10:22 - What types of stocks led the stock market across the 1910s and 1920s

11:56 - What circumstances led up to the great bottom of 1921 and how you could have identified the bottom

38:44 - Why the economy boomed in the 1920s

47:17 - What sparked the Stock Market Crash of 1929

55:40 - How a stock market selloff turned into an economic depression

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
Russell Napier's book, The Anatomy of the Bear.
The Library of Mistakes website.
Russell Napier’s newsletter.
Check out the books mentioned in the podcast here.
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