92 - Discount Rates: Past, Present, and Future

Mental Models discussed in this podcast: Discount Rates Supply and Demand Please review and rate the podcast If you enjoyed this podcast and found it helpful, please consider leaving me a rating and review. Your feedback helps me to improve the podcast and grow the show's audience.  Follow me on Twitter and YouTube Twitter Handle: @TreyHenninger YouTube Channel: DIY Investing Support the Podcast on Patreon This is a podcast supported by listeners like you. If you'd like to support this podcast and help me to continue creating great investing content, please consider becoming a Patron at DIYInvesting.org/Patron. You can find out more information by listening to episode 11 of this podcast. Show Outline The full show notes for this episode are available at https://www.diyinvesting.org/Episode92 Discount Rates have changed over time  Past Short Lives A small or non-existent investor class No control of interest rates Present Longer lives Larger investor class Central Banks and controlled interest rates Future Massively longer lives (no death?) Massive investor class Discount rates will approach 0%.  Summary: Discount rates form the foundation for the process of stock valuation. Value investors, therefore, rationally adjust their discount rates based on their expectations for their future. Changing expectations will reduce discount rates over time.