Edward Chancellor - Author of The Price of Time, The Real Story of Interest

INVESTOLOGY: re-think investment management

Edward Chancellor is a financial historian, journalist and investment strategist, and the author of The Price of Time, the real story of interest. This is an essential book for investors who want to understand the impact of interest rates.

Episode links

Edward’s website: https://www.edwardchancellor.com/

Link to the book: https://www.edwardchancellor.com/books/the-price-of-time

Quotes

"If interest is an omnipresent phenomenon and the ultra-low rates wormed their way into all economic and financial activity, then it would follow that the everything bubble turns into the everything burst."

"If you know history, this late 1990s stock market looks a hell of a lot like the British Railway Mania of the 1840s. You've got a new technology. People are getting very excited about it. Very, very similar patterns. If you know the history, you are aware of the vulnerability of the markets."

"You couldn't really understand the world unless you understood interest. And you have to bear in mind the Fed funds rate of 0% and the negative interest rates in Europe and in Japan. But those zero rates and negative rates were the lowest interest rates in five millennia of history. So that, that obviously has to be a noteworthy factor."

"If you think about it, it took two and a half years for losses on subprimes to the Lehman's blowup. Everyone expects that everything happens very quickly, and after the fact, the timeline seems to be compressed. But if you're living through it, actually, it takes much longer."

Timestamps

00:00 Teaser

00:19 Introducing Edward Chancellor

01:31 A historian in the investment world

06:21 The study of human activity can't be explained by science

08:46 The historian’s edge

14:30 The problem with models

16:46 The consensus view on interest and inflation

22:04 The 5 roles of interest

27:33 Buffett's quote on interest rates and gravity

30:40 Interest rates, investment decisions

33:49 The everything bubble

36:15 Where the cracks show

37:48 Active management

38:19 Areas most at risk

39:48 PE troubles

45:58 We are early in the burst

46:52 regional bank problems

47:56 Bubbles burst slowly

About the Podcast

Investorama is your guide to the future of investing, without the hype. In each episode, reformed investment banker and marketer, George Aliferis and his guests take a deep dive into a key topic that shapes our financial future.

George is a reformed investment banker & marketer, who is now running Orama (podcast & video company), as well as its content arm Investorama, a podcast, YouTube channel and Newsletter.