In This Episode
In a week of schizophrenic market behavior – a Monday morning rally followed by an intense midweek selloff – a lot of people are understandably rattled.
With talk of a recession becoming even more pronounced thanks to inverted yield curve, Dan gets straight to some historical perspective.
Meanwhile, it’s impossible to miss the headlines and chatter about negative interest rates – including the debut of the world’s first negative interest rate mortgage – paying borrowers to take out a loan – reported in The Guardian. Launched by Denmark’s third-largest bank, this could be paving the way for an eventual global phenomenon.
Dan then gets to another big headline – a major IPO of a company run by a young, dynamic CEO – before reading an excerpt of the filing that tells him the CEO is front-running his own IPO, starting with a loan totaling almost $500 million.
He then gets to this week’s podcast guest, Tobias Carlisle.
Tobias Carlisle is the founder and managing director of Acquirers Funds, LLC. He serves as portfolio manager of the firm’s deep value strategy. He is the creator of The Acquirer’s Multiple, and has authored the books The Acquirer’s Multiple, Concentrated Investing, Deep Value, and Quantitative Value.
Tobias has extensive experience in investment management, business valuation, public company corporate governance, and corporate law.
His theory of value investing has proven extremely lucrative over the years – and as you’ll see, it comes down to largely one metric.
NOTES & LINKS
- To follow Dan’s most recent work at Extreme Value, click here.
- To check out Tobias’s book, “The Acquirer’s Multiple: How the Billionaire Contrarians of Deep Value Beat the Market” click here.
1:54: Dan makes sense of the market’s whipsaw activity this week, from a Monday morning rally to Wednesday’s market carnage of 2% dips across multiple indices.
6:27: With the 30-year bond just over 2% today, Dan points to one ETF that’s paying significantly more – “mostly a boring thing rich people bought to get a little more yield safely… until Wall Street saw the opportunity to turn them into toxic waste.”
13:35: Dan predicts Wall Street’s next target for corruption – interest rates, and specifically the phenomenon of negative ones. “These people are meddling with the primal forces of nature.”
16:10: The headlines are full of negative interest rate rumors – especially amid the inversion of the 10 and 2-year yield curves. How can markets be saying it’s riskier to lend for 2 years than 10? Dan breaks down the manipulation behind the madness.
23:33: WeWork, the company that essentially rents out office space, is going public under a young CEO who’s borrowed $380 million based on his ownership of WeWork stock. “That sounds insane to me… he’s front-running the IPO here.”
25:38: Dan introduces Tobias Carlisle, the founder and managing director of Acquirers Funds, LLC. He serves as portfolio manager of the firm’s deep value strategy. Tobias is the creator of The Acquirer’s Multiple. He is also the author of the books The Acquirer’s Multiple, Concentrated Investing, Deep Value, and Quantitative Value. He also has extensive experience in investment management, business valuation, public company corporate governance, and corporate law.
28:17: Tobias explains his deep value approach to investing, and his method based on analyzing the relationship between managers and shareholders and liquidation value.
30:36: Dan asks Tobias about the Acquirer’s Multiple, and the one metric that is a wonderfully lucrative way to screen stocks.
39:15: Tobias gives his own theory of negative interest rates amid compressing margins, and why it may not matter much at all what the Fed ultimately decides to do.
41:11: Tobias makes his prediction about the next market bust, and how value investing will stack up against growth.
1:00:40 Dan answers a mailbag question from Matthew S., who asks about the mechanics of managing trailing stops during extremely rough weeks, for people who have never invested in 2008-like conditions.