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.