The Crashless Generation

In their recent episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle discuss The Crashless Generation. Here’s an excerpt from the episode:

Tobias: I like this quote from– This is from Josh Wolfe. “An entire generation has not seen a downturn, has not experienced widespread loss from widespread leverage across sprawling interconnect systems, has not run back to safe haven occupations or embraced terms of value investing or timeless classics, warming of rampant speculation of devils taking the hindmost, or of the madness and delusions of crowds. Jonathan Swift said, reason is a very light rider, and easily shook off.” One, I just loved that paragraph. I thought that was a–

Jake: It’s like checking all your boxes.

Tobias: That was a shit hot paragraph, isn’t that?

Jake: [laughs]

Tobias: I really enjoyed reading that. So, thanks for that Josh. And I couldn’t agree more. I say this to you guys offline regularly, I may have said this on a podcast before, but I do think that there’s– you could be 35 now, I’ve started at 22 in this business, and not seen a real grinding bear market, which is amazing. You’d be PM at 35 and not have seen– We’ve seen flash crashes, we saw March 2020 flash crash. There’s been lots of like– December 2018, they’ve been lots and I freely admit that I thought every single one was going to turn into a bear market, because my investing experience has been, I saw the dotcom bust, and I saw the little short run up, and then I saw 2007, 2009 bust. So, Seth Klarman has a line where he says like, “You’re basically a product of the market that you come into,” and that’s certainly true for me. So, I probably see more bear markets than there are in actuality when I predict more than there are– I’ve predicted 14 of the last zero. So, feel free to ignore me. I’m not predicting anything. Again, I’ve partially learnt my lesson. Actually, I have got a little, I have got a little– you know, if you can see this. I’ve got a little crystal ball here.

Jake: Ooh.

Bill: Mm.

Tobias: My kids and you can actually ask it a question, and press a button, and it’ll give you a response so.

Jake: What ending are we in? Push the button.

Tobias: Well, you got to ask it like a little open end like, is this a big bear market coming? Oh, you joking? You’re not going to work for me? Here we go.

Device: Definitely.

Tobias: Definitely. There you go.

Bill: Oh, shit.

Jake: Oh.

Bill: [crosstalk] put it on the board.

Tobias: If that is a reflecting of the market though, you’re going to want to sell puts. [crosstalk] everybody else who want to buy [crosstalk]

Tobias: That’s my entire investment process. [laughs]

Bill: I like it.

Tobias: The real bear market, when we finally see one, which we will eventually, they’re inevitable. I’m not predicting one at all. But the real bear market, the thing that characterizes a real bear market as opposed to a flash crash or crash is this thing where you get all the rallies gets sold, and it just goes on and on and on until you’re 15, 16, 17, 18 rallies [unintelligible [00:08:09] a lower low. That happens. You can go back and have a look at it. It’s sickening. Say that again?

Jake: Buy the dips.

Tobias: Buy the dips. Yeah, you’re going to get a lot of opportunities to buy the dips. No need to shoot your bolt early on. I don’t know what the market is going to do here. I just think that– you know the way that you would see these things start is that, you often have the latest get smashed to pieces which we’ve seen like the ARKK complex of all. You know the Charlie Bilello tweet that does– has been doing the rounds like– There’re some of those stocks already of 85%, something like that, and they’re still expensive at that kind of level. Peloton’s one. There you go.

Jake: Oh.

Tobias: Alibaba, I don’t know. We’ve talked about that a few times.

Jake: You’re back to like, 2017, right now, Alibaba price?

Tobias: It can be a lot of that, right?

Jake: Yeah. It could be a fair amount of that.

You can find out more about the VALUE: After Hours Podcast here – VALUE: After Hours Podcast. You can also listen to the podcast on your favorite podcast platforms here:

Apple Podcasts