We Study Billionaires - The Investor’s Podcast Network

TIP409: 2021 Top Takeaways

Dec 31, 2021

Guest

Howard Marks, a renowned value investor and founder of Oaktree Capital, discusses the intricacies of price and valuation in the current market. Jeremy Grantham, known for his contrarian views, analyzes the Federal Reserve's role and market bubbles. Morgan Housel shares insights on hyperinflation and its implications, while Jim Collins emphasizes the importance of strong management teams in navigating business challenges. Together, they unravel the complex dynamics of inflation, investment risk, and high-growth companies.

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ANECDOTE

Chain-Weighted Inflation

Kyle Bass explains how chain-weighted inflation manipulates the CPI.
He illustrates this with the example of car prices, where only a fraction of the real price increase is reflected.

INSIGHT

Hyperinflation's Missing Ingredient

Morgan Housel explains that hyperinflation requires both excessive money printing and supply-side shrinkage.
He uses lumber, airlines, and rental cars as current examples of shrinking supply leading to price spikes.

ADVICE

Valuation for High-Growth Companies

De-emphasize valuation for early-stage high-growth companies with large potential.
Focus on whether your assessment of their growth is correct, not the initial valuation.

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