Episode 389

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

Rebecca Hotsko chats with Lance Roberts. In this episode, they discuss the basics of stock valuations, how to interpret price multiples such as the P/E ratio, what the Shiller CAPE ratio is, why the current high CAPE ratio means future returns are expected to be low, why the Buffett Indicator is a valuable valuation metric and what it is telling us about markets today, why returns cannot grow faster than the economy over the long run, what Lance thinks are some catalysts that could cause the market to mean revert to historically normal valuation levels, why Lance thinks bonds are a good investment right now, and so much more!

The Intrinsic Value Podcast - The Investor’s Podcast Network

October 25, 20221h 3m

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Show Notes

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.

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