In one sentence: A rerun of 196 from January 2019, replayed because Danielle thought the same conditions still held six months later; read that note for the substance.
Key ideas
- Rerun. The body is 196 played again: why a market is dangerous, why "move to bonds" is weak advice when yields are low, and the Rule #1 answer of a wonderful business at a good price. [01:00–33:00]
- What's new. Danielle's intro says she re-listened to see whether it still applied, and thinks the situation "pretty much" matches the one six months earlier. [00:00–01:00]
- Dated figures. The numbers (Dow near 27,000 falling to 21,000, December 2018 the worst month since 1931, 10-year yield 2.6%) are early-2019 figures. The S&P 500's 6.2% loss for 2018 was Danielle's own check. [20:00–24:00]
- Teaser. The original ends by promising a discussion of that year's big IPOs and dividend-paying "equity bond" businesses; this rerun still carries it. [32:00–34:00]
- Caution on the bond claim. As noted in 196, Phil's "cut in half" figure for a bond move from 2.6% to 5% is too big; about 20% is closer for a 10-year bond.
How it maps to RuleOne
- Same as 196: the screen doesn't call the market; cash on /holdings/ is what lets you act on a drop.
Buffett, Munger and Graham links
- See 196 (Mr. Market, cash and fear and greed).
Words to know
- Risk-free rate: the Treasury yield used as the baseline for other returns.
Try this
Look up today's 10-year Treasury yield and compare it with the 2.6% quoted here. Then write which of Phil's January 2019 claims you think aged well and which didn't.
Check yourself
- Is any new teaching added to this rerun?
Answer
No; only Danielle's 2019 intro. The teaching is the content of 196.
Short quotes
"We pretty much have the same situations now as we did six months ago." (Danielle, ~00:30, auto-transcribed)