They cover a decent amount of ground in 14 minutes. Fleckenstein says that he doesn't believe you can make a lot of money in other stocks if you can't make money in large, diversified multinational companies like Microsoft and Verizon. In other words, if you can't make money with a great company, how can you do it with a marginal one? Fleckenstein then channels Benjamin Graham for a bit and says to watch out for accounting shenanigans from these marginal firms that are desperate to pull down the numbers and please analysts in the short term for the benefit of their stocks.
Building on that point, Fleckenstein then begins to channel Zen Buddhism, asking, "So what if a company misses its EPS estimates by a penny? What does that matter?" The market punishes companies for missing statistics that are, ultimately, arbitrary projections and ignores the quality management and quality. earnings-producing assets underneath. Again, giving a nod to Graham, the flipside to this observation is that a company that misses its earnings estimate marginally, resulting in a big disappointment for the market, could potentially be priced afterward in such a way as to make it an appealing value again, enabling the savvy investor an entry-point into a quality name.
I enjoy Fleckenstein's interviews, especially with Eric King, because the guy just shoots straight. He discusses simple investing concepts and ideas in a way that almost anyone can grasp and almost no one can argue with. He always can be counted on for a great observation or two per interview. Here's one of my favorite quotes from a previous interview he did with Eric King:
So much in the investment business is about marketing. I see people with horrendous strategies and horrible numbers and they're still running zillions of dollars! I mean, how can anyone have any money at all with someone who was loaded with financial stocks in 2008? If they owned financial stocks they basically have a neon sign on their forehead that says, 'I DON'T GET IT! I don't understand the financial crisis.' Or housing stocks or anything like that. If you didn't understand the biggest bubble in the history of the world, why should you be allowed to run money?