We’re In ‘The Boring 20s’ MarketThe Acquirer's Multiple
Q2 2022 hedge fund letters, conferences and more
In their latest episode of the VALUE: After Hours Podcast, Brewster, Taylor, and Carlisle discuss We’re In ‘The Boring 20s’ Market. Here’s an excerpt from the episode:
Tobias: We were talking about this before we came on. I think it’s hard to be excited about anything at the moment, because I didn’t think anything is super cheap and I don’t think anything looks super good either. So, it’s all a little bit blah. That’s why I like JT’s blah thesis, where it’s the summer malaise or the boring market.
Jake: Yeah. I’ve coined it The Boring 20s.
Tobias: Oh, damn, that’s good.
Bill: The Boring 20s, I like it. I don’t know. If you think that Morningstar is any good at what they do which for free not to, a lot of four-star stocks, there were a lot of five-star stocks. They’ve moved a little bit, but there’s some interesting stuff on these lists. All a matter of figuring out which ones are worth betting on.
Tobias: They’ve got an aggregated market level valuation tool that they use. I think that they aggregate all of the stuff that they cover to come up with a level of the market valuation.
Jake: What’s it say?
Tobias: I was wondering if Bill had it there.
Bill: No, I don’t have it up.
Tobias: “Is it still a bear market rally if S&P makes new all-time highs?” No.
Bill: Yeah. When? I just said, it’s a new bull.
Bill: Literally, just said that.
Tobias: When do you call a new bull? Just has to get past the old all-time high?
Bill: Ah, I don’t know. I don’t think so.
Tobias: Because if you’re measuring it, you probably say from the bottom to the peak, right?
Bill: I think you need a couple of higher highs and higher lows.
Jake: You’ve definitely got to take out all time high-
Bill: The old technician–[crosstalk]
Jake: -to be a new bull?
Bill: I don’t think so. Do you?
Bill: I guess it depends on your timeframe.
Bill: It could be a long-term sideways with a short-term bull. I don’t know.
Tobias: It’s all a little bit bullshit, isn’t it?
Jake: It is. It’s all just a lot of– [crosstalk]
Tobias: It doesn’t matter. Just names.
Bill: My man, Bill, he thinks we’re going to the highs.
Tobias: Who knows? It could be all-time highs, it could be all-time lows. We don’t know.
Jake: It will be a sucker rally. Who knows?
Tobias: You can call it in. Whatever happens, you’d be right. Double mess.
Bill: Yeah. I think Bill is a data-driven dude. He goes by Wabuffo on the Twitter machine. I think people should follow him. He’s interesting. He follows monetary plumbing. When things were selling off, he was talking about how high tax receipts were and that we were actually running a governmental surplus and how that was phantom tightening. And now, we’ve switched to deficits again, which means a reflate, baby. Mo bubble.
Jake: Isn’t it concerning to anyone else how much government policy, that kind of stuff is what drives this as opposed to what are the businesses doing? [laughs] It’s all just this liquidity game in this particular view of the world.
Bill: Yeah, that’s right. It always has been.
Tobias: Liquidity is always a short-term answer, right?
Bill: Always has been.
Tobias: Liquidity or market animal spirits, probably it’s liquidity driving animal spirits. And then over time, it becomes a weighing machine. But in the short term, it’s always liquidity.
Bill: Yeah, but then–
Jake: It flows.
Bill: Then, the populations get older, and people get wealthier, and there’s more people that are in the capital markets. I don’t know. I just think– I don’t know. I think Buffett was born at the right time.
Jake: That’s true.
Bill: I think he’d be fine anyway, but I think he was born at the right time.
Tobias: Ah, you’re going to be okay one way or the other.
Bill: Who, me?
Bill: Not me.
Bill: Everybody else. I won’t be sucking my thumb.
Jake: Not going to make it. [laughs]
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Article by The Acquirer's Multiple.