TIP409: 2021 Top Takeaways

We Study Billionaires - The Investor’s Podcast Network

Stig Brodersen

Education, Investing, Business

4.6 • 3.6K Ratings

🗓️ 31 December 2021

⏱️ 76 minutes

🔗️ Recording | iTunes | RSS

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Summary

IN THIS EPISODE, YOU’LL LEARN:

01:15 - Chain-weighted inflation with Kyle Bass.
04:48 - Hyperinflation in the US with Morgan Housel.
08:44 - High Growth Companies with Brian Feroldi.
12:10 - Howard Marks on Price & Valuation.
17:39 - Chamath Palihapitiya on Value.
19:51 - Tom Gayner on Assessing Management Team.
36:50 - Jeremy Grantham on Fed's limits.
01:00:50 - Definitions of Risk.
and much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

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Transcript

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0:00.0	You're listening to TI-P.
0:30.0	You're listening to TI-P.
1:00.0	Let's kick things off and I'd like to start with the topic of inflation.
1:19.0	Specifically around the idea that inflation is much harder to determine than you might imagine.
1:25.0	One fact that's becoming more and more obvious to most folks is that the CPI might not be the most accurate way to track inflation.
1:31.0	That and it's been adjusted and manipulated in many ways, some of which were highlighted in my conversation with Kyle Bass.
1:38.0	I'd like to share this clip from episode 396 with Kyle Bass where he talks about chain-weighted inflation and how important it is to be mindful of which inflation metric you're really using.
1:48.0	It means the government rigs inflation. Let me give you a perfect example.
1:54.0	30 years ago, the average price of an average car in America was about $13,000 a car.
2:03.0	Today, that number is just over 40,000. It's over 300% in 30 years.
2:10.0	When you think about the construct of the consumer price index or the CPI, there is an auto component to that construct.
2:17.0	I'm just picking one out just because it's easy for us to remember how much cars used to cost and how much they cost now.
2:23.0	Of that, 300% increase, what percentage of that do you think has made it into the CPI?
2:31.0	So, of a plus 300 number, what do you think has been calculated into the CPI over that time frame?
2:38.0	100%.
2:41.0	Yeah, 5.5%. So, here's what chain-weighting means. They say, Tray, we realized that your bank account just went down by $41,000 because you wrote a check for a new car.
2:51.0	But, you know, we, the government, well, we must compare Apple's to Apple's. So, in your new car, you have a digital speedometer.
2:58.0	In your old car, it was an analog speedometer that was just driven by more mechanical means. So, if you were to replace your digital speedometer with that analog speedometer from 1990, then your speedometer wouldn't cost $900.
3:15.0	It would only cost $70.
3:18.0	And so, they chain-weight every part of the car. You have electric windows. Well, maybe in 1990, you have the roll-up windows.
3:25.0	So, you have to subtract the cost of electric windows. You have to subtract the cost of your GPS navigator. You have to subtract the cost of everything to try to compare an Apple to an Apple.
3:35.0	When, in reality, your bank account still went down $40,000 and you wrote the check.
	...

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