Motley Fool Money Tom Gardner and Morgan Housel on Inflation, Tesla, and Starbucks
4 snips
Jan 8, 2023 
Morgan Housel, best-selling author of "The Psychology of Money," explores insightful investment strategies with Tom Gardner. They discuss the unexpected effectiveness of cash as a hedge against inflation. Housel draws parallels between the recent stock market dynamics and the dot-com bust. He also highlights valuable lessons Tesla investors can learn from Starbucks' past challenges. Their conversation dives into the importance of a long-term investment mindset and the need to revisit historical data for smarter decision-making.
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Market Volatility is Normal
- Recent market behavior isn't abnormal; volatility is a common feature of market history.
- A 30-40% decline is typical every 5-10 years, especially in the NASDAQ.
Re-evaluate Risk Tolerance
- If recent market declines caused you significant stress, re-evaluate your risk tolerance.
- Adjust your asset allocation to better suit your ability to handle market volatility.
Inflation Hedges
- Cash is a better short-term inflation hedge than crypto or gold, as it experiences smaller declines.
- For long-term inflation, stocks and real estate are superior hedges, often exceeding inflation.
