The corporate bond market is significantly overvalued with spreads at historically tight levels, presenting a high risk for investors.

“The morning sorry, you know, US corporate bond index, that's our proxy for investment grade corporate bonds. You know, Titan 10 basis points. I think it hit 71 basis points. You know, intra quarter, that is the tightest it's ever been. Let me repeat that. Tightest it's ever been”

Market valuations of company mergers are frequently manipulated and unreliable predictors of long-term profitability.

“My argument would be that share prices are not a good estimate. That they are essentially rigged. That they reflect the power of big business in cahoots with big finance, sometimes central banks, often government, the power to manipulate share prices.”

Market valuations are inherently subjective opinions and are likely to be inaccurate, though this is not a significant concern compared to institutional biases.

“In fact, I would go further. I think markets are probably wrong at all times. The issue in terms of market capitalizations or in terms of market valuation, these are basically opinions that people form in real time all the time.”

Despite not being objectively cheap, Mercado Libre is trading at its lowest valuation ever relative to its growth and profit expansion potential.

“And while Melly isn't obviously cheap, it is trading at its lowest valuation ever. So it's a good time for us to look into it.”

Mercado Libre presents an investment opportunity with an expected return that clears the firm's 12% hurdle rate.

“And when I put it all together, I get an expected return from the current price of about 17%, which comfortably clears our 12% hurdle rate.”

Current market valuations are high, requiring investors to be cautious and avoid passive index investing.

“So, you have to be careful. And we warn people if you're just buying index S&P 500, be very careful.”