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The Intrinsic Value Podcast - The Investor’s Podcast Network

MI230: Buffett Indicator Says Stock Market is Overvalued w/ Lance Roberts

The Intrinsic Value Podcast - The Investor’s Podcast Network

The Investor's Podcast Network

Education, Investing, Business

4.6592 Ratings

🗓️ 25 October 2022

⏱️ 67 minutes

🧾️ Download transcript

Summary

IN THIS EPISODE, YOU’LL LEARN: 09:18 - Understanding the basics of valuations and how to interpret price multiples.  17:00 - What the Shiller P/E (CAPE) ratio is, and why it is telling us future returns are expected to be low going forward.   25:46 - What Lance thinks are some catalysts that could cause the market to mean revert to historically normal valuation levels.  31:35 - Why the Buffett Indicator is a valuable valuation tool and why it is saying markets are overvalued today.  38:05 - The relationship between earnings and GDP and why EPS cannot grow faster than GDP in the long run.   49:50 - Why Lance thinks bonds are the best investment right now and what investment strategy he recommends. And much, much more!  *Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members. Check out: RIA Advice. Lance’s Youtube Channel: Real Investment Show with Lance Roberts. Lance Podcast: Real Investment Show with Lance Roberts. Related Episode: Studying SuperInvestors, Investing Checklists, & Seritage Growth Properties w/ Tom Botica - MI148. NEW TO THE SHOW? Check out our Millennial Investing Starter Packs. Browse through all our episodes (complete with transcripts) here. Try Kyle’s favorite tool for picking stock winners and managing our portfolios: TIP Finance. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: Fiscal.AI HELP US OUT! Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!  Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0

You're listening to TIP.

0:02.8

Hey guys, I'm really excited to share an upcoming event hosted by the Investors Podcast Network.

0:08.7

Beginning on Monday, October 17th, we're launching a stock pitch competition for you all to

0:13.9

compete in, where the first place prize is $1,000 plus a year-long subscription to our TIP

0:20.3

finance tool. If you are interested in this,

0:23.2

please visit TheInvesterspodcast.com slash stock dash competition for more information.

0:30.5

The last day to submit your stock analysis will be Sunday, November 27th. And to compete,

0:36.2

please make sure you're signed up for our daily newsletter.

0:38.9

We study markets, as that's where we'll announce the winners. And all entries can be submitted

0:44.3

to the email, newsletters at theinvestorspodcast.com. Good luck.

0:53.1

If you're ever buying a stock based on forward earnings, you're almost guaranteed that you're overpaying for the stock today.

0:59.0

So always look at trailing in the pocket, what the company actually made.

1:02.2

You'll do a lot better over time.

1:03.7

Now, if I paid $22 for that dollars worth of annual earnings, that means in 22 years, I'll get my money back.

1:14.5

So when you overpay 22, 23,

1:21.5

25, 28 times earnings like you're doing today, you're guaranteeing yourself a lower rate of return over a long holding period because the company can't earn earnings and distribute

1:27.4

those earnings to you at that rate

1:29.6

over a long period of time.

1:33.8

On today's episode, I'm joined by Lance Roberts, who is the chief strategist for RIA advisors,

1:40.8

editor of the Real Investment Advice newsletter, and he also hosts the Real Investment

1:46.1

Show podcast and YouTube channel. During this episode, Lance goes over the basics of understanding

1:53.0

stock valuations on a company level, as well as we dive into some of the main tools used

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