Episode summary
The Market Will Crash. That’s Not a Prediction.
The Acquirers Podcast
· · 1 hr · Hosts: Tobias Carlisle, Jake Taylor
Summary
The conversation centers on Tobias Carlisle’s new book, which argues that market crashes are inevitable, hard to time, and impossible to forecast reliably with any single indicator. He and Jake Taylor walk through decades of backtests, valuation measures, moving averages, and hedging tools, concluding that most signals fail as timing devices and that the best practical answer is a boring, diversified asset mix that can survive different kinds of crashes and still participate in the recovery.
They distinguish among deflationary crashes, inflationary crashes, financial crises, and fast drawdowns like 1987, arguing that each behaves differently enough that a one-size-fits-all hedge does not work. The host says 60/40 worked for a long stretch but broke down in 2022 when bonds sold off alongside equities. Options, VIX calls, and other hedges are treated skeptically because they often expire uselessly or are too slow to monetize when the crisis arrives.
The episode then turns into a bullish case for the future. Jake Taylor’s “Veggies” segment argues that doomsday forecasts usually miss human adaptability, better tools, and wider access to knowledge. He frames AI, education, and scientific progress as forces that can bend population, health, and productivity curves, making the long-term outlook more optimistic even if markets and history keep serving up crashes.
Key takeaways
- The host says backtests across valuation, moving averages, hedges, and countries do not produce a reliable market-timing tool.
- The 60/40 portfolio worked for a period of uncorrelated stocks and bonds, but the host says 2022 showed that bonds can sell off with equities.
- The host argues the only durable answer to crashes is a diversified allocation that avoids the first and bottom quartile of outcomes.
- Jake Taylor’s case for optimism is that humans bend curves through fertility decline, public-health fixes, and broader access to problem-solving tools.
- Both hosts think AI may be transformative, but not because it makes prediction easy; it matters more by expanding compute, research, and productivity.
Notable quotes
“Nothing's useful for timing. Valuation is not a useful timing tool at all. Valuation doesn't work as a timing tool”
“the answer is there's no way to do it satisfactorily. Just let me just get everybody give everybody the answer that from the outset”
“The thing that worked in a preceding boom is rarely the thing that works in the next boom”
“I think that the solution is something like you have to have some sort of asset allocation mix which is like it's such a pedestrian response but I think that it's the only”
How the episode opens
We're live. This is Value After Hours. I'm Tobias Carlile, joined as always by Jake Taylor. No special guest today. We had a late withdrawal, but that's okay. It's JT and I talking about my new book, His Veggies. — How are you, JT?
Whatever else we can come up with to to kill an hour. Uh, should be fun. — We were talking about this just before we came on. So, let's keep on talking about this a little bit. — Yeah, — There's a I'm doing some research for the next book after this one.
It'll be out next Tuesday. It could could easily be but uh I did I looked up the definition of the singularity and it was this uh vering guy and he's borrowing on um the idea of the event horizon in a black hole that there's a point beyond which it's exponentially so much better that you can't predict the future. Not that we've ever been able to predict the future in the past, but you can't predict the future.
And then when we were in China last year, we heard this definition of the singularity, which was when you make a machine that can make a more intelligent machine. And at that point, so there was a there was a in 1965 there was this um short story by this guy by the name of Good was a statistician and a science fiction writer. He came up with the ultra intelligent machine which is a machine that makes another machine more intelligent than itself and so on until you get to this uh singularity.
So the singularity is making the ultra intelligent machine and it looks like right now we've open AI and anthropics seem to be using machines to make the machine.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- market crash preparation
- valuation and leverage
- hedging and drawdown planning
- options strategies
- ai and automation impact on investing
Companies and tickers mentioned
- AMZN
- Amazon
- Acquirers Funds
- The Acquirer’s Multiple
- Value Options Letter
Watch the episode
Watch “The Market Will Crash. That’s Not a Prediction.” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Acquirers Podcast, this episode and its artwork belong to Tobias Carlisle. Octagon is not affiliated with the show; this page is an independent summary.
