Prof. Joel Litman: Beyond Headlines – Strategic Insights on BRICS, Debt Crises, and Investments

Palisades Gold Radio

In this episode of Palisades Gold Radio, Tom Bodrovics interviews Professor Joel Litman, CEO and Chief Investment Strategist of Valens Research and Altimetry Research. Litman criticizes the financial system’s reliability, questioning media credibility and the effectiveness of modern accounting standards. He believes that while GDP is inadequate as a measure of economic strength due to its tax-based foundation, the US benefits from a lower tax rate and substantial income generation.

Despite his concerns over political spending, Litman trusts there’s a control on deficits and sustained growth, believing in the US economy’s resilience. He reprimands financial media for prioritizing headline numbers over credit research, stating earnings can be misleading due to regulatory capture within the accounting sector. Litman emphasizes considering various economic indicators beyond stock market figures and addresses China’s economic concerns, including its debt crisis and RMB devaluation.

Litman presents a bullish stance on cryptocurrencies as a medium of exchange and storage but suggests converting back to dollars for spending or investment. He encourages passive investors to focus on long-term investments in US equities due to their consistent outperformance. The conversation touches upon macroeconomic factors affecting mining industry decisions versus specific mine analysis, emphasizing productivity and worth. Litman discusses potential US election implications and anticipates a thriving US stock market regardless of the outcome. He foresees continuity in economic policies under either Democratic or Republican leadership and significant productivity gains from AI integration within industries over the next ten to thirty years.

Time Stamp References:
0:00 – Introduction
1:24 – The Bearer of Good News
8:44 – Net Earnings & Accounting
15:45 – Metrics & Complexities
22:06 – Tax Base, GDP, & China
31:14 – Talent Exiting China
38:42 – U.S. Economy Benefits
41:28 – Buffett Selling
47:23 – Misleading Financials
52:07 – Inflation Metrics
55:40 – Dollar & Global Trade
58:30 – China’s Problems & Russia
1:03:44 – BRICS & Latin America
1:07:40 – Dollar Alternatives & Crypto
1:12:04 – Gold Uses & Investors
1:19:29 – Macro Factors & Miners
1:26:22 – Russia/Urkaine & Gold
1:28:16 – Middle East Concerns?
1:30:53 – US Election & Sides
1:36:10 – Wrap Up

Talking Points From This Episode

• Litman questioned the relevance of modern accounting standards and criticized financial media for focusing on headline numbers. He stressed the importance of looking beyond GDP for a true economic understanding.
• Litman is bullish on cryptocurrencies but expresses concerns around converting to dollars for spending/investment. He advises long-term investment in US equities due to their outperformance.
• China faces economic challenges, including debt crisis and potential insolvencies, which could lead to job losses and instability. Litman anticipates continuity in US economic policies after the election and sees productivity gains from AI integration.

Guest Links:
LinkedIn: https://www.linkedin.com/in/joellitman/
Website: https://altimetry.com/
Website: https://www.valens-research.com/

Joel Litman is President and CEO of Valens Research, a global corporate performance and investment research and analytics firm. In the role of Chief Investment Strategist, he advises institutional investors in equities, corporate credit, and macroeconomic strategy. He is also a member of the Board of Directors of COL Financial Group, a leading brokerage firm in Asia (PSE:COL).

Litman has been on CNBC, quoted in Barron’s and Institutional Investor, and interviewed in Forbes.com. He has published in Harvard Business Review, is a top contributor to SeekingAlpha, and co-authored the highly-acclaimed book, DRIVEN: Business Strategy, Human Actions, and the Creation of Wealth.

Litman has taught or guest-lectured at Harvard Business School, U Chicago Booth, Wharton, LBS, SAIF Jiao Tong, and others. He is a Professor at Hult International Business School, an FT and Economist top-ranked international MBA program. He conducts seminars regularly for financial and industry conferences around the world such as CFA and CPA chapters.

Litman is Chair of the UAFRS Advisory Council which is spearheading usage of Uniform Adjusted Financial Reporting Standards aka Uniform Accounting. He helped build Credit Suisse’s HOLT University and the Center for S.E.V. and MBA Concentration at the Driehaus College of Commerce at DePaul University.

Past employment includes Credit Suisse, Diamond Tech Partners (now PwC), Deloitte, and American Express. He is a member of CFA Institute, the global association for investment professionals, and the Association of Certified Fraud Examiners. He is a CPA (Certified Public Accountant), received a B.S in Accounting from DePaul University and an MBA/MM from the Kellogg Graduate School of Management at Northwestern University.

Litman’s philanthropy is focused on community development through scholarships, job training programs, and extensive microfinance lending, particularly in the Philippines.