The Intrinsic Value Podcast - The Investor’s Podcast Network

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

13 snips
Sep 16, 2024
Guest
Shawn O'Malley
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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ADVICE

Study Financial History

  • Study financial history to learn from past mistakes and prepare for future market downturns.
  • It's crucial even if our world today seems different, as human behavior and market cycles repeat.
INSIGHT

Mean Reversion and Inflation

  • Stock valuations tend to revert to their average levels over the long term.
  • This reversion is often linked to swings in inflation, which destabilizes asset prices.
INSIGHT

1921 Market Bottom

  • In 1921, the Dow Jones sat at the same level as 22 years earlier, despite significant GDP growth.
  • This massive undervaluation presented a lifetime buying opportunity with high subsequent returns.
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