Soft Landing Or Big Flush Coming? | The Acquirer's Multiple®

In their latest episode of the VALUE: After Hours Podcast, Brewster, Taylor, and Carlisle discuss Soft Landing Or Big Flush Coming? Here’s an excerpt from the episode:

Tobias: I don’t want to misquote Chanos here, but he said something like he never seen a market bottom as high as this one is. Yeah, “bear market is doing something unheard of in my career. I’ve been on the street since 1980 and not one bear market has ever traded above 9 times to 14 times the previous peak earnings. Things are not cheap.”

Bill: Soft landing would crush a lot of souls. So many people wanted to want the final flush. Soft landing would just absolutely crush so many people to see everything not implode. It would be funny. That’s what I’m rooting for.

Tobias: I think that if there’s a soft landing, I will become the Fed’s biggest cheerleader, because I will have been 100% wrong and I’ll own that. If there’s a hard landing, I’m going to go the other way.

Jake: [laughs]

Bill: What’s a hard landing now?

Tobias: A crash, a flush. Honestly, it’s not their fault. I think these things are like natural occurrences. I think there have been business cycles going from ancient times.

Jake: Toby, no, come on– [crosstalk]

Tobias: But I think that they’ve just exacerbated it. They’ve made it much, much worse– [crosstalk]

Jake: We had QE into last year still. These guys were fighting the last war always.

Tobias: I think you can delay it. I think you can push it out and you can make the bubble worse, but I don’t think you can eliminate the cycle. But so far, it does look like we’ve eliminated the cycle.

Bill: Things are going up and things are going down. There’s a cycle. It’s just like quality assets are trading at pretty high prices still.

Tobias: I have to [crosstalk] soft landing– [crosstalk]

Bill: I fail to see a reason why that should not be true.

Jake: Who has on their bingo card, a soft landing economically, but the market still pukes?

Bill: Yeah, that could happen.

Tobias: Or the other way around. The underlying is terrible and somehow the market just levitates through it. That’s more likely, isn’t it?

Jake: Is this that bad news is good news again that we live through for five years of hell?

Tobias: I think we did. Yeah.

Jake: [laughs] More fed intervention. Bad news is good.

Tobias: The question that I always get, and somebody raised this here, “Could go modestly lower and just grind sideways with chop for a long time. That’s probably more painful for non-business pickers.” [crosstalk] I don’t think that’s ever happened in the past though. People get tired of it. People get bored and disappear. I think that the boredom is the thing that created all of the really highflyers through– Boredom created that stock market bubble and then boredom kind of killed it as well, because there just wasn’t as much action.

Bill: I’d have more action than 2020. That was action packed.

Tobias: That was an action year.

Jake: 2021 had a lot of action too. There was some crazy stuff happening.

Tobias: 2022 was kind of sleepy even though it was down 20% or almost 10%.

Jake: The market quiet quit. [laughs]

Tobias: Yeah. “The VIX went to bed.” Don’t think it’s woken up yet either. That’s time, fellas.

Jake: We made it.

Tobias: We made it. Thanks to everybody.

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