Yet Another Value Podcast Sep 25, 2026 31m · 17m saved
With Andrew Walker, Portfolio Manager and Head of Research at Rangeley Capital, and host of Yet Another Value Podcast
The 10-year Treasury yield started 2026 at 4.2%, reached 4.6% in late August and stood at 5.1% when Andrew Walker recorded this episode on September 24. The S&P 500 was still close to its all-time high.
The textbook view is that markets reprice the moment rates move. Walker suspects higher rates act on stocks with a delay, through slow-moving investors and a wave of corporate refinancing due between 2028 and 2031.
"So anyway, my bottom line here would probably be, I don't think stocks are ignoring rates, but it doesn't seem like they've really adjusted to the current rates."
Andrew Walker, portfolio manager and head of research at Rangeley Capital, on Yet Another Value Podcast, has written Yet Another Value Blog on special situations and overlooked stocks for more than a decade. This is his monthly solo episode, with no guest, covering what has been on his mind in markets and in investing.
The full episode is covered here so you can skip it. 31 minutes of audio, 14 minutes of reading.
Here are the 9 insights that matter.
Key Takeaways
Stocks are near record highs while the 10-year yield rose from 4.6% to 5.1% in about a month
Corporate debt issued cheaply in 2021 to 2023 starts rolling over in 2028 to 2031, at rates he put at 8% to 10%
Today's free cash flow is flattered by that gap, in his view
Housing, levered small caps and biotech are already falling underneath the index
A $95 price on a $100 deal is not a bargain when rates are 5%
Investors who came of age around 2015 expect deals to trade right up to the offer
The long bear market has disappeared since the early 1980s: the financial crisis lasted about nine months and COVID about two
Heavy Fed support may make the market more fragile, not less
Nearly every great investor he can name reads as overconfident, and he places himself in the imposter camp
Survivorship hides the overconfident investors who went to zero
Everyone outgrows a mentor, including Buffett, who moved on from Ben Graham
1. Rates as Gravity
Walker said two stories dominated markets as he recorded: agentic AI, which had set off a sell-off in consumer companies he described as "consumer inertia plays," and interest rates. He has written about the first on his blog and spent this episode on the second.
The 10-year yield rose half a point in about a month
"So if you look at the 10 year, it was at 4.2% to start the year. It was at 4.6% in late August. And it's at 5.1% now." — Andrew Walker
Higher rates should pull asset prices down
"I think Warren Buffett is the one who said interest rates are to asset prices what gravity is to the apple." — Andrew Walker
Around 2011, when long-term rates were about 2%, Walker was doing valuation work at a consulting firm. The discounted cash flow models he ran implied an unusually large gap between what companies paid to borrow and what their stocks returned.
"And you'd look at the stock price in the DCF and you'd say, hey, either there's huge terminal value questions here or we're completely off in all of our modeling or equity prices are wrong, because these companies were borrowing at like 4% and their equities were yielding 10%." — Andrew Walker
A DCF, or discounted cash flow model, values a company from its projected future cash flows. He said the following decade was a boom for stocks, much of it from rising valuation multiples.
Growth is strong and rates keep rising
"The Russell and S&P 500 are up 12 to 13 percent, and the Russell's been a little weak over the past month, partly because of this interest rates." — Andrew Walker
"But economy's doing well. Stocks are pretty high. and interest rates just keep on ticking up." — Andrew Walker
He compared rates to gravity acting on something thrown high in the air, which keeps rising and slows before it falls.
"But I guess I'm wondering if interest rates work on a little bit of a lag when it comes to the stock market and this longer-term thing I'm talking about." — Andrew Walker
