Why Gotham's Greenblatt Likes 'Gushing' Cash-Flow Stocks

The video discusses value investing, focusing on market valuation and expected returns. It highlights the current market's position in the 22nd percentile towards being expensive and explores the potential for subnormal returns. The speaker emphasizes the importance of cash flow over traditional metrics like PE ratios. The discussion also covers tech stocks, particularly FANG stocks, and the challenges of investing in high-multiple companies. The video concludes with a comparison of value and growth investing, noting a potential shift in investor preference towards value stocks.

What percentile is the market currently in terms of expensiveness over the last 28 years?

• 78th percentile

• 50th percentile

• 22nd percentile

• 10th percentile

What is the primary focus when valuing businesses according to the speaker?

• Market capitalization

• Cash flows

• Dividend yield

• Price-to-earnings ratio

What is considered the world's worst investment strategy according to the speaker?

• Investing in high free cash flow companies

• Investing in companies with high price-to-earnings ratios

• Investing in low price-to-book companies

• Investing in dividend-paying companies

What is the relationship between growth and value investing as mentioned in the video?

• They are completely separate

• Growth always outperforms value

• Value always outperforms growth

• They are tied at the hip

What could potentially cause a shift from growth to value investing?

• Stable interest rates

• Rising interest rates

• No change in interest rates

• Decreasing interest rates

What analogy is used to explain systematic value investing?

• Buying a stock

• Buying a house

• Buying a business

• Buying a car

What is the speaker's view on traditional value metrics like low price-to-book?

• They are the only metrics to consider

• They always outperform the market

• They are not considered a factor

• They are the best indicators of value