The Taylor Rule suggests that the real interest rate should roughly equal nominal GDP, which is the sum of real GDP and the inflation rate. In times of economic growth or high inflation, interest rates should rise, while in times of recession or low inflation, interest rates should come down. Contrary to popular belief, rising interest rates are not inherently bad and falling interest rates are not inherently good. This understanding helps to shape the mental framework that in good times, rates go up, and in bad times, rates go down.
Clay Finck chats with Dan Rasmussen about why Japanese equities offer some of the most attractive valuations in the market today, how stretched growth stock valuations are relative to value and much more.
Dan is the Founder and Portfolio Manager of Verdad, which is a global asset management firm that strives to achieve the highest risk-adjusted returns possible through rigorous research and its practical application.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro.
01:45 - Contrarian views of the market Dan holds relative to the rest of the market.
05:14 - Why the US is overvalued relative to international stocks.
09:19 - Historically how undervalued value indices are.
13:27 - Why Dan is bullish on Japan.
13:44 - The value mandate that Japan put in place to try and juice stock market valuations.
24:11 - Dan’s views on Japan’s policy of yield curve control.
24:42 - What’s keeping investors away from Japan’s stock market.
30:57 - What the financial accelerator is and how it relates to the 2023 banking crisis.
36:12 - How equity markets tend to behave after a Fed pause.
36:30 - How high-interest rates are affecting corporate earnings.
51:21 - Dan’s views on the Chaos Kings and their strategy of Crisis Investing.
60:40 - How Verdad’s portfolios are positioned today.
72:21 - What technologies excite Dan in creating a better society for the future.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!