The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 23 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 1 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Inker: Assuming an automatic illiquidity premium across private equity is dangerous
“This assumption that you get paid an illiquidity premium for anything that happens to be illiquid is I think dangerous. I think it is going to cause you not to be focused on the question of, all right, if I think this is about operational excellence, why do I …”
Inker: Stock market volatility of 17% vastly exceeds fair value's 1%
“There is very, very little volatility to the underlying fair value. It's about one percent a year. And yet the market has a volatility of 17. And that's a mismatch that says there must be some predictability to the market”
Inker: Stated Earnings and Book Value Are Poor Metrics for Business Models
“When we are analyzing these companies, we realize it's not just that we don't care about their book value anymore, but even their stated earnings turn out to be a lousy test of whether this is a good business model.”
Inker: US Value Spread Suggests Value Stocks Will Win Over 5-10 Years
“Again, in the US, the value spread is significantly wider than normal, and that probably means value deserves to win over the next five to 10 years.”
Inker: SoftBank's Vision Fund proved capital alone cannot buy market dominance
“I think one of the things we have seen in the, in some of the trials of what's gone on with the Vision Fund is this basic idea that, well, we can determine who is going to be the winner here by throwing a ton of money at one of the competitors. And assuming th…”
Inker: US manufacturing productivity has been net negative since 2011
“Productivity growth has been net negative. We are less productive making stuff than we were in 2011.”
Inker: Client banned GMO in 1999 for Grantham's 'persuasive' views
“In 1999, we were disinvited from speaking to their investment committee on the grounds that their committee chairman said that Jeremy Grantham was both dangerously persuasive and totally wrong.”
Inker: Google cannot outgrow GDP forever without a new business model
“Google has been able to grow extraordinarily fast by taking share from every other kind of advertising that has happened.
The underlying fundamental truth that advertising grows with GDP has not changed, and as their share of advertising gets bigger and bigger…”
Inker: Valuation spreads in Europe and Japan lack underlying economic justification
“But if you look at Europe, if you look at Japan, if you look at the emerging worlds, the spreads are both wider, and the underlying economic justification for them is a lot more tenuous.”
Inker: 12-year value drought causes standard quant backtests to penalize value
“If you are a quant, your favorite tool is the back test. And it has now been 12 years that value has underperformed. You are much less likely to come up with a quantitative stock selection technique that is predominantly value, because if you look back, you sa…”
Inker: Long-term equity value loss requires either lower ROIC or shareholder dilution
“The two ways you can lose value in equities from a long-term perspective Is if an event causes a long-term decrease in the return on capital, or if an event causes you as a shareholder to be significantly diluted.”
Inker: Bear markets progress across three distinct phases of quality and valuation
“In the first stage of bear markets, everything tends to go down the same, and if anything helps, it's quality. In the second phase, valuation tends to matter. That doesn't mean value stocks always outperform in the second phase. It is the stuff that has gotten…”
Inker: Replacement cost, not historical cost, should drive asset pricing
“The way to have a simple way of determining, is this a fair price or not? It doesn't matter what you paid. It doesn't matter what you will pay tomorrow. It is, what is the replacement cost of this thing? And the replacement cost should drive price.”
Inker: Quants excel at backtesting but miss structural regime changes
“The great strength of quantitative investing is if you have a theory about how the world should work, you can vary You can efficiently express that across kind of a wide view of assets. You can test it across a long run of history. The danger you always face i…”
Inker: Pre-2020 value investing drought mirrors the 1994-1999 era
“2000 to 2002 was a wonderful period for value. The similarity to the 1994 to 1999 period is this has been another dreadful period for value as a strategy. We see that kind of on a individual stock level. It's also been a lousy period for valuation driven inves…”
Inker: Allocators lack 1990s-level disgust for value investing
“We don't see that level of disgust with the idea of value today that we did back then.”
Inker: Profitability gap between mega-caps and peers widened most in US
“There is no question the gap between the biggest companies and everybody else in their industries, the gap in profitability has widened very significantly, and that widening has been much more pronounced in the U.S. Than it has been elsewhere.”
Inker: Equities are longer duration than perpetual bonds due to cash flow growth
“Equities are in principle an exceptionally long duration asset. Relative to bonds, they are both a perpetuity, so there is no maturity date, and that makes them long duration. But also, they're even longer duration than a perpetual bond because their cash flow…”
Inker: Value historically beats market by 1% despite 3% earnings undergrowth
“Historically, they traded at a 25% discount, and they undergrew by three percent a year, and it turns out that a 25% discount and three percent a year undergrowth allows you to outperform by a point a year.”
Inker: Low Rates Enabled PE and Tech Giants to Buy Growth
“Given how low rates have been, and indeed how tight credit spreads have been, private equity firms have had an enhanced ability to buy growth companies and take them private. We've also had a world where, frankly, the big dominant companies have bought a lot o…”
Inker: Over 80% of polled endowment allocators believe they beat the average
“One of the obnoxious questions we asked Ask the audience is, how many of you think you are better than average at finding active managers? The surprising thing was, I think, 18% of the audience said they did not think they were better than average.”