“When investors talk about expectations, they are usually talking about the wrong expectations.”
He recently updated and rewrote the book he co-authored with Alfred Rappaport, “Expectations Investing: Reading Stock Prices for Better Returns.” It was as good an excuse as any to get him back into the studio to discuss what has changed over the past 20+ years,
He explains why people confuse multiples for valuations, and how lots of assumptions about stocks prices so often go unexamined. He explains why so many measures like P/E, P/S, P/B etc. tend to be circular arguments.
We also spend some time discussing the impact of the rise of intangibles: patents, software, processes, copyrights, algos, logistics.
Discussed on the podcast:
Categorizing for Clarity: Cash Flow Statement Adjustments to Improve Insight (PDF) (Morgan Stanley)
Chapter 3 Crist on Value
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with, Max Chafkin is a features editor and tech reporter at Businessweek. His work has also appeared in Fast Company, Vanity Fair, and the New York Times Magazine. His most recent book is “The Contrarian: Peter Thiel and Silicon Valley’s Pursuit of Power.”