Market Value?

Talking Real Money - Investing Talk

Don McDonald

Business, Investing, Education, How To

4.5 • 811 Ratings

🗓️ 24 December 2025

⏱️ 41 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

It’s surprisingly hard to know what something is really worth until someone actually tries to buy it—and that problem is front and center in private funds. Don and Tom unpack why private equity, private real estate, and other “alternative” investments often look calm and stable on paper, only to suffer brutal price drops once they finally trade in public markets. From a Wall Street Journal example of a private real estate fund losing roughly 40% overnight, to Morningstar’s troubling enthusiasm for expensive, speculative new ETFs, the episode reinforces a core principle: prices discovered by real markets beat internal estimates every time. Along the way, listeners call in with real-world retirement questions, inherited IRA rules, portfolio simplification strategies, and a healthy dose of holiday banter. 0:04 What something is “worth” versus what someone will actually pay 1:06 Defining private funds and why valuation is murky 2:27 Private fund pricing versus real market pricing 3:56 BlueRock fund haircut: paper value meets reality 4:24 Market pricing, efficiency, and the wisdom of crowds 5:42 The myth of private investments being “less volatile” 6:27 Real estate as the perfect valuation example 7:39 Listener call: inherited IRA and annuity distribution rules 12:42 Holiday humor, crypto annuity joke, and Kentucky bourbon 16:01 Moving assets from Edward Jones, loads, and simplification 19:41 DIY portfolios versus advisor value 21:08 Morningstar’s “Best and Worst New ETFs” critique 22:21 Why most new ETFs exist (and why you don’t need them) 24:43 Shockingly high ETF expense ratios 26:27 Leveraged crypto ETFs and financial absurdity 27:37 Seasonal podcast plug and ratings gripe 28:44 Listener call: Boeing retirement and rollover planning 34:40 Holiday reflections, gratitude, and comfort over riches Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

Click on a timestamp to play from that location

0:00.0	Reality Radio for a really great future.
0:07.9	We're talking real money.
0:10.1	It's really hard to figure out what something is worth.
0:15.8	You hear a lot of people say, you know, my house is worth a million dollars, and then they go to put it on the market, and then you hear them say, you know, my house is worth a million dollars and then they go to put it on the
0:22.6	market and then you hear them say, well, I can't sell my house. Well, then maybe it's not worth
0:30.1	a million dollars. And this is something that's becoming a real problem among private funds as they try to determine what these things, the latest hot investment is worth. Let's talk about that. Let's talk about what a private fund is first, but I know you want to say who we are and what we're doing here. Exactly. I was going to get to that. I know. I was going to give you that opportunity as soon as if you just wait. Please go right ahead. Oh, patience. Patience. Yeah. That was the message last hour. I know,
1:00.4	which I'd never listened to 30 years ago and I wish I had. So,
1:04.0	hi, everyone. Welcome to Talking Real Money. I forgot what the name of the show was. I'm Don McDonald.
1:11.6	Over there is Tom Cock, chomping at the bit to tell you what the heck a private fund is.
1:19.5	These are made up of companies of, you know, assets that are not traded publicly versus publicly traded.
1:29.0	You know, okay, so you can buy and sell Amazon any day or Tesla or Boeing or
1:34.4	warehouser knocking some Northwest names off the Costco Northwest.
1:38.7	Anyway, you can, every day the value of that company is determined by people that trade that those equities, right, those
1:47.6	stocks. So we know, we know what it's worth. That's what it's worth. And by the way,
1:52.5	there still would people tell you, well, oh, that's worth way more. No, it's not. That's because
1:57.6	you see what the people are willing to pay. What something is worth is what someone else is willing to pay.
2:04.2	And the problem becomes one of either well-meaning or evil intent obfuscation.
2:12.7	Yeah.
2:13.3	And that's one of the problems with private equity.
2:16.3	These private real estate trust, these private acquirers of businesses, of consumer credit, or whatever it might be, these things value their assets in ways that are certainly subject to being questioned.
2:35.5	And are being questioned the minute they actually get traded, right?
2:39.7	I mean, not when just somebody down the hall is saying your company's worth
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Don McDonald, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Don McDonald and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.