Europe, United States, Warren Buffet discussed on We Study Billionaires - The Investors Podcast
I go to is which company is giving me. The most earnings for the price that I'd pay on the market, right? That's the first thing I'm looking at, but I'm also looking at a lot of other factors in pulling them all together and I think that it's just important for people especially for young, people. People that are in college right now. That are learning about valuations right. They're learning about discount cash flow models about irr calculations all those things those are very important things in there's going to be a day when the person who's really good at those things is going to be extremely lethal. When the market I tell you the last five years. They have not been extremely lethal. It's maybe much more momentum based in order to have been the person who's really outperforming, but I think. Think once we return to some type of sound money and I. Have No idea the timeline of when something like that's going to play out. You better darn well. Believe Preston Pysche is going to be the biggest value investor on the planet by an up the picks that are kicking off. The biggest cash flows based on the price that I'm paying, but I really think that you have to have a sound money in place in order for that to be such a slam dunk. Dunk shooting fish in a barrel approach like it was for Warren Buffet for decades and I. Think you're starting to see wides. It isn't shooting fish in a barrel for Warren Buffett in the last ten years. You know at the end of the day I think. I'm just kind of a chameleon. In the way that I approach investing. I am trying to look at what works trying to look at all. The external factors and I'm trying to adjust if I was on a sailboat. The sale and a majestic the rudder in order to navigate where I WANNA go I. Guess That's all I'm trying to say, but anyway. Stiglitz Transition. Let's talk about what's next on our agenda here. We've got European markets monetary and fiscal policies. Let's do it. 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So let's talk about some of the somewhat comparable thing you know the ECB are growing their balance sheet to like person minutes before what they're saying is that the program is vital to ensure that especially southern Europe has been hit. The hardest by the pandemic won't see search in boring costs, and we recorded this a third of June. There's going to be A. A new meeting tomorrow June fourth, and the room is saying that the probably going to spend that program. That is what the market expects, and you've seen that in European markets here lately. That's been trying to factor N, and so I think what's interesting for American listeners to understand when there were they learn about Europe is that it's comparable and it's not. Not Whenever you look at some of those numbers. No one thing we talked about before is that the debt market in Europe is just not as deep as in the US so it has a dollar. A euro for that matter would just have a different impact, but it's also because of fiscal policies, and whenever I say fiscal policies as opposed to monitor policies. Policies where you were more controlling the monetary supply fiscal policies, that's a different way of spending money. If you're like might be government programs like unemployment, programs or fiscal policies can also be taxes so much more directed at consumers than the financial markets now in Europe. We don't have a central unit as you guys do and us to determine the fiscal stimulus. We have that in the sense that we have a long-term E. U. Budget, but in the states you also have something that is state based something that's fit based, but it's structured very differently in Europe due to store could reasons because we are still very independent nations, and so what the e U has been trying to do, and this is not the euro-zone, but the EU just to clarify that it's two very different. Different things man the country, the same, but different, and not all of them is that the German Chancellor Merkel and the French president. mccown has proposed a five hundred billion euro recovery package, and there are a few interesting things about that. The first one is that it's not a lot of money and so what I'm. Burnett five hundred billion euros. That's should be a lot of money, but it's not because fiscal policies. are a lot more comparable between the US Europe in the sense that it goes directly to the consumers, and so the death of the Magi are not different. Actually Europe and the US has a similar size economy, so it's a lot more comparable. Five hundred billion euros is not a lot whenever compared to what has been happening in the US and how much it's been stimulated there, so that's one thing. The individual member states can still print. But it's trickier situation because if you look in the US such because we have the construction that we have. All twenty seven countries had to agree and the sounds ridiculous. You have something where the rich northern European countries supposed to pay for the poorest on the European countries. Whenever you have something twenty-seven countries have to agree. You just bound to run into problems. which is also what you're seeing now so right now. The all European countries are saying hey, guys you to help us and all the European countries who are typically wealthier saying we're not going to you out because this won't be alone. This would be made as grand so it will be. Be Money raised all over Europe, but distributed to the poorer countries, a lot of countries are against. Since you have to have twenty seven countries agree on this is just very difficult, so that just tells you something about the inefficiencies of the European markets now what are the implications then for US investors like? How are we supposed to deal with those facts that are brought before? Well despite all of this I would still say that if you're too exposed in the US might consider diversifying into.