Low valuations act as an antidote to interest rate risk; stocks with high free cash flow yields (12%+) are less impacted by rising rates than stocks with low yields (3%), because the gap between yield and risk-free rate provides a buffer against valuation compression.
causalpending
Speaker
John HuberEvidence Quote
“if you have a 12% um free cash flow yielding you could think of like a bond like an equity Bond like a you know these are stocks we're talking about but if you have a 12% yield um and rates go from one to two the the impact on valuation is you know much less”
Source
Value Investing Fundamentals & Current Market Conditions w/ John Huber (TIP634)— The Investor’s PodcastCreated: 8/12/2026, 6:07:54 PM
My Notes
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