Test Your Investment Beliefs

During their latest episode of the VALUE: After Hours Podcast, Tobias Carlisle and Jonathan Treussard discussed Test Your Investment Beliefs. Here’s an excerpt from the episode:

And then I talk about purpose, which is, forget what the money is is for. Let’s start talking about what is this money about. I find that in a lot of cases, particularly people that have been very fortunate in this world to accrue a lot of wealth fairly quickly, they don’t want their money to define them. And the best way to do that is to define it. If you turn it around, people get a sense of like, “Okay, this is where it fits in my life,” as opposed to it’s like, whatever you call it kind of the winner’s curse. But when it comes to investment beliefs–

And again, I believe that investment beliefs– That’s a lot of believing in one sentence. I’m always wary of being dogmatic. And so, I continue to test my own investment beliefs. I think sincerely that because as I told you, I started in this world thinking about bubbles and all of that, markets are susceptible to behavioral biases, and in the worst of cases, real behavioral excesses to the upside and the downside. When you start from that premise, then very quickly, you’re forced to be value centric or value oriented. Because the whole idea of human psychology pushing markets too far to the upside or too far to the downside is, well, when the stuff is really blown up and no one wants touch it, that’s going to be a pretty good price. And of course, when everybody’s enamored with it and prices are starting to be objectively high, the data tell you that expected returns going forward are inherently lower.

So, being a student of bubbles and being a student of just behavioral excesses in markets very quickly gets you to a place of value, and just being sensitive to prices. Again, I think that’s all you can say is, “Do you actually look at the prices of the things you buy? Because if you don’t, then that’s going to have implications.” And so, that’s– [crosstalk]

Tobias: Probably outperform.

Jonathan: So far.

Tobias: You’ve done much better. Let’s talk about, when you look at the current investment landscape what psychopathology do you diagnose? Do you see us as being closer to bubble territory or the other end or where I guess to– [crosstalk]

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