In their latest episode of the VALUE: After Hours Podcast, Travis, Taylor, and Carlisle discuss The Market’s Imperfect Discounting Mechanism. Here’s an excerpt from the episode:
Jake: I think a similar thing happened in 2000s with retail, where there was some pretty reasonable big box retail companies that were earning pretty good money during that time period. But everyone had this narrative that the Amazons of the world were coming and we’re going to eat their lunch. They were probably right, but it just took much, much longer for it to play out. Those companies can earn for a long time. And so, the market getting ahead of itself in discounting that allowed there to be a lot of meat left for the person buying when everyone thought, “Well, this is a dead end.”
Tobias: Solo Prosperity says, “I track a Profitable Universe and it excludes Financials/Energy and even in 2000, Cheap had higher quality than Expensive. So, it doesn’t think it was a sector thing.” Solo had a look at this for me when I posted this last week.
Jake: Oh, good.
Tim: Yeah. We’d have to look at the components, I think. It’s always like what’s the definition of value for someone? What’s the definition of growth? At particular times, it just depends on how that’s being defined.
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