YouSaid · the spoken record

Adam Parker

lines on the record: 106
first: 2022-05-27
most recent: 2022-05-27
sittings or episodes: 1
sources: podcast

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“It's an amazing firm, but it's traveling everywhere and getting fat and just all that stuff. So I think it's freeing from the standpoint of, you know, a lot of that was just, you know, you're flying to conferences all around the world and it's a lot of airplane time. I'm traveling some now, but it's definitely more like one week a month, five, six days a year to see clients and potential clients. And I find that great because you want the human connection. Obviously, I'm glad the world's reopening such that people are doing in-person meetings. So you want to do meetings to talk to investors. What you don't want to do is fly to Jakarta for one hour speech on U.S. equities.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“So, yeah, probably the smartest person I ever worked with was a guy named Marty Liebowitz who Marty's an amazing human being in his early to mid 80s is the most published person in the history of financial journals, worked, I think, with Mr. Bloomberg at Solomon back in the day. And so just very connected and brilliant guy. I think his wife is a brain scientist, and we went to dinner together with our wives. I told his wife at dinner that I spend five to ten minutes a day thinking this is when I worked at Morgan Stanley, and she almost started crying about how depressed of a level of thinking I was able to do. And so all the thinking I had to do was 5.30 in the morning to 7 in the morning and then 7 at night on and on the weekend, which was fine, but it wasn't.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, kind of macro risk of it so we can create a basket to help you hedge it. So we do a lot of that kind of risk work to help funds think through. And I think for us, it's great because I think people say, all right, well, I can hire Trivariate and they can help me once a quarter think through this stuff at big inflections and I don't need to build the team here to do that same thing.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Or more, where is it different today versus that? So maybe you have names that you think are defensive, you own Oracle and you own Walmart because you think you're defensive, but they get much more correlated in downturns than they look like in a steady state or all those kind of things that try to help people think through the risks of their portfolio. So I think we're good at that. We do a lot of like hedge baskets. So you got a big long position. You want to take out some of the...”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, you trim them out, you sell 500, 600 pips of tech, and okay, great, proactive, I got the call right. But it may not be that those names you trimmed were the risky ones, right? So it's about, so we think about it more from the risk standpoint as much as the exposure. And there's a lot of that goes in there. So when we do our work, it's a lot of every single name's exposure to size, substance, style, dollar, rates, spreads, oil, momentum, beta. So this is a lot more than just beta. Ownership, we look at filing data from 60 hedge funds that we tracked to do deep fundamental research. And we say, does anybody here have high conviction to name? Do they own 3% or more of their assets in the name? How does it differ from the broader population of funds? Is there good and bad crowding going on? I mean, it's a very kind of differentiated system to try to really help people understand what the true risks of their portfolio are. We take the portfolio and we say, how did this act in the last 10 downturns of 10%?”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, maybe unaware of the correlations, maybe unaware that they've got where the real risks are. So what happens when you run a fund is let's say you decide, all right, I'm a little bit nervous about my tech exposure a few months ago. Yeah, they're expensive and more worried rates are going to rise. So I'm going to sell it. So I think in practice, what happens is the CIO goes to some of the analysts or PMs and says, yo, give me at least two or three favorite tech names. I'm going to trim those out.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, stuff like that. Yeah, yeah. Or you can see if they're offsides because they may not realize they have that bet on as much as they do.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“So we have like, you know, in the last two or three years, think about what's changed. We created a work from home basket and reopening basket. And we look at every stock's correlation to low quality work from home like Netflix or high quality reopening or whatever. And we kind of see are you offsides on your long short book on those things or even on the long versus the index or if you're long.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“In helping firms. So, when I left Morgan Stanley, I left the sell side, I went to work at a large hedge fund, and part of my role there was to be much more analytically rigorous around risk management. And then also diagnose trades to look for patterns of behavior and the like. So I brought that sort of risk framework into running my own hedge fund. And we have used that infrastructure now in the research role to help firms. So I think we signed on a little 20 something disclosure agreements where firms, they send us their portfolio. We put it through our framework. And I think they view me as sort of like an outsourced cheap risk officer where we'll talk to them through things that are not things they can get from the standard risk vendors. So things like idiosyncratic risk. Maybe they differ for your lungs versus your shorts. So you're a bottom-up stock picker, but your longs are pretty macro and your shorts are pretty company specific or as you know barrier like if wrists didn't change anyone could do risk management so most people know their growth value they're large small”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Worse, where should we be able to generate more alpha? Which parts of the market? Should we be able to do that right now based on the conditions that exist? So we're not doing macro from the standpoint of forecasting rates or dollar oil, but more recognizing where we are and saying, okay, in this regime, we ought to be able to pick winners from losers very well within the industrial sector, but maybe not so well in durables or things like that. So we're looking at those three lenses to try to help people who care about equities make money.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“It means you can't get out. Yeah, it's totally a self serving name. So, like, I was a number one ranked analysis, I have a PhD in statistics, and then I did strategy. So I feel like the three buckets of investing, the three variables investing, you know, quant fundamental and macro. So when I started a hedge fund, I called it Trivariate Capital, just thinking that, you know, go tell allocators that I'm kind of considering quantitative things and macro things and fundamental things as part of my investment discipline. And we ran money at Trivic Capital for a while. It closed it down and converted it to a research firm in the middle of 2021 and just kept the name. I had a fancy logo that looks amazing, so I didn't want to repay for a new logo. But yeah, I think we're approaching equities from the lens of systematic or quantitative some fundamental work and then macro is more about where are we and what to do about it, meaning where should we, where do we think we can pick stocks better or”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“I think for me, I've always been more about the industries, the sectors, the microstructure of the market. And it was hard for me because I had to get higher level. Because as you're pointing out correctly, people were just trying to get the mix of equities and bonds correct. Their mix of U.S. versus non-US correct. I don't remember how much of that money is qualified for alternatives, but that stuff obviously has a bit of a different flavor to it. So it was pretty high level stuff. I'm not an economist, so I didn't really get into that. There are definitely some other fixed income people who focused on that. So I think generally, you know, at least in the last decade, most people thought rates were going to back up and they've been wrong until the last six or nine months. So there was sort of. Pretty easy to like equities over bonds.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Rates call, and you know, so the private markets have been a little bit more richly valued before they come public. There's been some evolution in the last five, six years since I've been doing that. But generally, I think I felt responsible for making clear that U.S. equities had a pretty important and big place in the portfolio. And I think, as you know better than me, much better than me, how rich you are to start out with really impacts the proper allocation.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“For a decade. Yeah, we had a two year period where it hasn't been good for vacation, but I think it will be again this summer. But I think generally that's been right. And so I don't, you know, I felt like it's important to, um, Hit on the imports of U.S. equities, but I don't really know. You know, today I think the problem would be different and more complex. I think recently you've seen in the news, Fidelity say they're going to offer crypto for retirement plans. And there's other kind of diversifying things happening. And I think alternatives people have a different view now than they did five, six years ago, meaning maybe people now realize that some of private equity.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Back in the day with Morgan Sinley when I would say stuff like Europe is great for vacation but not for stocks. Which has, by the way,”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Trillion is still a lot of money. Yeah. A lot of capital Yeah, I don't know how much of that I felt responsible for. I was the equity guy that were bond experts, there were, you know, international experts and alternatives experts. But fortunately, I was there during a period where, you know, straight up, yeah, I just sort of said, look, you know, you guys can own whatever you think makes sense, but I'll take 20 U.S. growth stocks and I'll meet you in five years. And basically that worked. So I can look back and say I generally gave good investment advice because I just felt like we were in by the dip mode. You know, it was pretty clear that U.S. equities look better than other asset classes. Look, I generally think that Stillberry, which is that, you know, I'm getting two and a half percent net buyback plus dividend. I get some organic earnings growth of a few percent. So I think the US equity market looks like a six to eight percent total return algorithm. Yeah, normal. And that looks a lot better than most of these other things. And I never really understood the case for owning, I mean, I got a little bit in trouble.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, and so I think people realize that these businesses back to my original comments, yeah, the slope has been upward, but they're also overearning at the same time. And so that's why the stocks have come in so much. I think it's probably still a little bit too early, but I think as we get closer to production line and consumption and the stock's correct, maybe it's time to get in again. And the world needs semis. You can't really produce anything without them. So I'm not kind of a long-term bull, but kind of short to medium term, just feel like this correction needs to. Happen.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, exactly. Adam Parker on semiconductor. So I could tell you about high school in 1987 also. But I... I think that some of us who've been around the block probably missed at least the first half of NVIDIA because we didn't trust the management team. And I think a combination of lucky and brilliant, not all brilliant, but graphics and crypto and they got into a bunch of other things that really worked. Right space, right time. It's been a monster. Now, it's been reset a lot because the valuation was high”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Up to date design. I'm in like the danger zone of thinking I know stuff that's no longer relevant today on Dunning Kruger.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Is just picking everybody else's butt. They did a lot of stuff right. I mean, look, I dropped coverage of semiconductors a dozen more than 15 years ago actually January of 7th”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, but we don't really care. Like, we're stock guys. Like, I don't like, you know, I want to buy a stock that goes up. I don't really care if their revenue goes up and the stock doesn't. So the stock's gotten cheaper. And they've lost share in major areas. So I think that That it may be fruitless, but it may not be a high return on the investment, but maybe it's just good for America. And there seems to be bipartisan support for that as well.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's a good question. I mean, we looked at, I did a research note recently on capital spending and R&D and sort of R&D intensity and capital spending intensity, meaning relative to sales, changes in that, what it means for subsequent returns. And our work shows that Intel's been one of the biggest destroyers of shareholder value of any company in the last 20 years because they spend, you know,”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, security as well And I think there's also been diminishing benefits to outsourcing it on the cost front as well. Now, maybe that doesn't mean I don't know if that means Intel's going to be a good stock, right? Just because they're going to spend all that CapEx doesn't mean it'll be shares. Let's talk about Intel. They've been creators.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there's a lot of things that could change that deglobalization theme, I think, is a real. If I think about what's kind of changed pre-COVID to now, probably the deglobalization theme we're talking about is one of the bigger actual changes. You don't need to package and test every chip in Taiwan. There's some cheap areas here in the US. And I think that structurally changed. I know Intel's announced some massive, was it, 100 billion CapEx plan over multiple years to build some stuff in Arizona and other places. So I think we're going to onshore more of the manufacturing. And I think that part's real.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“They had to sign up front saying they had more steel than two Eiffel Towers and enough cement to go to Portland from Portland to Seattle. Like they're big facilities. So I think it's just not as easy to quickly wrap up a bunch of the capacity as people think.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Going through multiple clean rooms to get into exactly now it's all synopsis and cadence and software and the stuff goes on the ceiling on tracks and comes down to the right machine. And I don't know if people can mentally imagine a fab, but away from a fabrication facility. But they're like the size of a football field. And there's $10 million machines as far as you can see in every direction. So it's multiple, multiple billions of dollars. I think when I went to, it's been many years now since I covered Sammy's, but when I went to one of their state-of-the-art fabs at Intel in Oregon many years ago,”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“So I've been in first around. Exactly. So you and I are the same vintage. So I've been in the Bunny suit in the old factories. And if you think about, they used to talk a lot about yield and some of the yield was just like people's hair getting into stuff or, you know, dropping these things on the floor. Triple vent.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Know it's a number of issues, but you may have excess capacity in a factory, but you may take you several weeks to start building it and ramping it up. You can't really turn on a dime your production as rapidly as people think. It is a lot more automated now than it used to be, though, in terms of how it works inside a wafer fabrication. Not people in Bundes.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Zero penalty. Zero consequence. Zero penalty. And so I think that's a key, that's why I think back block and book to bill are really important to watch. And if you get any whiff that some of the backlog is not real, I think that causes fear. Now, we've seen semis come in a lot here because I think people know they're overearning and they can see where we are six months from now. And so now I think you're at the point where you're going to pick winners from losers a little bit more, as you can imagine some of semiconductor business does not have perishable pricing so the cancellation, yeah, they have inventory, but they don't have to cut the prices so the Texas instruments and all devices of the world, their products really aren't perishable. Whereas, you know, some of the microprocessors that Intel and AMD make or graphic processors that NVIDIA and AMD make or obviously Micron with memory, like that stuff's super perishable, right? So they make excess, the pricing comes down a lot. So you'll start getting discriminating between winners and losers a little bit more in that sector. But I think the broad tenor of your question, Barry, is backlog.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“How about stop bottlenecking my final revenue? So, what does that person do? It calls the semiconductor supply chain and says, I want $200 million, 18 months from now, I want $200 million, 12 months from now. And by the way, I want $200 million, 24 months from now. And you start piling on the backlog so that they know, hey, I'm going to be there and I'll be there for a while, ramp it up, right? And so that has some interesting contagion in the economy, right? Because these guys start planning their backlaw, their capacity as if that backlog is going to be there. One of the very weird parts about the semiconductor industry that I don't think everyone understands is there's zero penalty for backlog cancellation. You and I can, if we want to go to Nobu for sushi, we're going to pay 25 bucks if we cancel our reservation, but somehow I can order 200 million of silicon and have zero penalty. It's very strange, right? So if you get any whiff, that backlog's got air in it, meaning when we get production, you going consumption, probably you're going to call some of them like, you know what, I probably only good for 100 million, 18 months from now. I don't need the 200 million.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Supply Yeah, I think that's right. And I think the second thing that's important related to that is backlog. So one of the things that I think Bernstein was good about is making you think like you're the CEO as an analyst. So think like your CEO, step in, kind of step into the thought process that you're running the company. So if you're the CEO of any industrial company, auto home appliance, any real businesses, you've had trouble selling product in the last 18 months because you couldn't get the supplies you need. So you go to your procurement officer and you say, yo.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“As we finally get supply catching up post COVID. So I think if you think about it, it's a weird way to think about it, but there's probably only one second where production equals consumption. And then you're either about to start overproducing consumption or you're about to start underproducing. So I think we'll get to equilibrium in the second half of this year in most parts of the semiconductors. Wow.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I think what you said is right, though, that they're kind of an important barometer for a lot of broader issues. The two things that I'm tracking right now really carefully are a concept called book to bill, which is sort of how much revenue did you ship out versus what does your order flow look like? And is the order flow higher than you shipped out book-to-bill ratio? Generally, that's still above one for most semiconductor companies, meaning future demand looks a little bit better than trailing demand, but that book-to-bill ratio has come down from maybe 1.15 to 1.08 to 1.06. Come down due to...”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, you know, one of the things that is tricky when your investor Barry is what is cyclical and what's structural? And, you know, you can confuse yourself when something's cyclical and you think it isn't and when the purity changes and those kind of things.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Portfolios and we kind of analyze them and try to give them some interesting thoughts about it that aren't in axioma or things they can get from other vendors. So it's really freeing. It's really freeing. But you don't have the resources. You don't get first class to Beijing either. So there's some positives and negatives.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say maybe 10 years ago when I worked at Morgan Stanley, I think there was 50,000 employees and 10,000 in legal and compliance and 10,000 in IT. So those are something like that. So look, these are amazing firms and Morgan is an incredible firm with great people and a lot of whom I'm close with. But what I'd say is that there's positive and negative. The big firms have bigness disease and the taxes on your time become substantial, right? You know, you need a bunch of videos to money laundering and a bunch of, you know, every firm has this, you know, compliance stuff. You got a bunch of 360 feedback, MD&ED promotion, ESG, diversity include. The number of things you have to do, just time tax is a great time tax. Yeah, it's a huge tax. And so for me, you know, it's very freeing. We're not a broker deal. Our whole job is to write interesting research that makes people think we sell data. We create baskets. We do a lot of outsourced sort of chief risk officer work where people, we sign on to sculpture agreements, people send us their.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“It still trades at 100 times forward free cash flow. It's got a high correlation to low quality and work from home. It's got a high correlation and negative correlation to inflation. So I don't know if growth stocks like that are going to work. So I don't know the fundamentals well.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. And so it's reopening, and the micro is they've got to think about pricing and maybe charging people to or not charging the inverse for advertisement. So that's kind of a business model change. And the other thing, so maybe you have to say to yourself, well, it's not exactly the same fundamental. Maybe, you know, sometimes I guess I'd answer your question by saying sometimes the stock's down 25, but the fundamentals are worse than 25%. Maybe not in this case, but I'm saying in aggregate. And the second learning lesson I've had from analyzing a lot of behavior on the short selling side and running my own fund is you make more money shorting stocks down from highs than you do at highs. Right. So it's very tough to short stock at a high because you're fighting positive price momentum. Don't fight the tape. Right. So when the stock's down 20% and then you short it, I guarantee you you make more money shorting stocks down 20% from highs than you do at highs. So it's not necessarily true that Netflix isn't a short here, but I'm not a fundamental analyst. In that case, I'm not convinced that it isn't worse.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Last 12 years in that sort of combination sphere. So I think I'm trying to defend it by saying, look, I think there's some value in it for sure, but there's not value in changing the recommendation after it's happened. My own personal opinion on Netflix, and I'm not a fundamental analyst there, but I did write about it, Barry, it's interesting. I've had two learning lessons that this one applied to. One, when things change, you have to admit it. And this one, I think, has”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“They didn't like. Yeah, well, that was kind of a market neutral, right? So, like, you overweight longs and you're short to equal one underweights. And then I had a quant model that, you know, the long, the top quintile beat the bottom by nine percent. So I sort of said, look, I think quantitative stuff probably is a little bit better than fundamental stuff. But then the last bar was 13%, which was if you only bought the overweight rated stocks that the model liked and you only sort of shorted the equal and underweights the model didn't like, you'd get 13. So the whole point of this was a combination of something quantitative and maybe unemotional combined with the fundamentals would be superior to either discipline alone. And actually, I've spent most of my life since then.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Loose on the data. And what'd you find? So about half were overweight rated, half were equal in underweight. So I thought, all right, did the overweights beat the equal and underweights? Your exact question I considered. So I didn't, stocks down 25% in the aftermarket, and then they downgraded it. You do not give them credit for that being a credit call. You lag it by 24 hours. You bet it adjusted, meaning adjuster how much the market moved. And it turned out, at least for the $3,500 observations over seven years, that they had about 4% average alpha between the overweights and equal and underweights. So I published that as a bar, 4%.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Community go. Okay, yeah. You know, when I got to Morgan Stanley, I'll answer it this way. When I got to Morgan Stanley in the late fall of 2010, I wondered if the research department there generated any alpha with the recommendations. And so I analyzed, they had stored data from 03 to 10. There was about 3,500 stock recommendations that were kind of stored.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“In their weight class. I think there, you know, it was multiple things, but I'd say you don't have a prime brokerage business. You don't have a banking business. So there was this perception of independence. You hire people who generally were experts in the industry. I was an exception, but there were generally people who were running the McKinsey practice consulting the aerospace companies, and they would be hired to cover Boeing or those kind of things. So kind of the industry knowledge. And I think the buy side, you know, relied on that as sort of an external voice. When you interview the buy side, they tend to not care if the sell side are good stock pickers or not. They might blame them if they're bad, but they're never going to say, oh, I rely on this sell side for their stock selection skills. That's what they're supposed to be doing. So I think what helped Bernstein gain prominence was the fact that, all right, we don't even try to do that at an expert level, just try to help people be smarter about the investment countries and write detailed, sensible issues on those investment controversies. So that was the business model.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“So it was really a number one machine in terms of the analysts that worked there. And my job was get the five that weren't in the top three, in the top three and hire a few more that will eventually be number one in the future. And then that was in the US. And we also were building a European business too.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“So in 07, when I was a director of research at Bernstein, these are the data Bernstein had 23 U.S. analysts that were publishing, 18 were ranked in the top three and 11 were number one. That's awesome.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Of research. Yeah, got me away from that. But the beautiful for a year, but the beautiful part was I then was helping other analysts ramp. And so I got to learn, okay, I'm going to launch the household products guy. I'm going to launch the capital equipment guy, industrial. And so in that year, I was helping kind of four or five analysts ramp. I started realizing like this is kind of interesting. I can apply what I know in semis and help them. And so early in 2008, very beginning of 2008, the strategy and quant research job opened up at Bernstein. And that's how I transitioned to being a little bit more quote unquote macro. So I did that for a couple years and then I transitioned to Morgan Stanley to be the strategist there.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so after I did semis for a few years, and that's a very competitive business, you get up every day and there's a person at Merrill and a person that everywhere. They're your competitors. You want to just, you want to make them look stupid on the conference calls and you want to ask the smartest question and you want to be number one ranked, right? So you do that. And Barry, once you get number one a few times, all you think about is like, am I going to lose it? There's no joy in repeating as number one. There's only the fear of losing it, right? Because then you've like, wait a minute, like investors don't like me as much as I used to. So, you know, I felt like I wasn't really incremental doing that again wasn't going to drive me anymore. And I was offered this position to run research at Bernstein. And so I transitioned to be the director of research for a while, which was attracting and retaining, hiring, firing, that kind of stuff.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of the analysts covering semis their electric circuit designers, computer software designer. I used to, you know, and Bernstein's hiring model back then was basically get a McKinsey guy who was an expert on the industry or somebody who worked at one of those companies. I was one of the rare counterexamples of mode from within? Yeah, I think the PhD in statistics probably helped me. I used to just say, look, I'm probably better at counting the chips than knowing what they are. And it turned out that in those days what really mattered to getting the stocks right was sort of a non-consensus and correct view of the gross margin six months forward. And so that didn't really require the expertise on circuit design and the like. In fact, you know this, but sometimes the people who worked at the companies turn out to be not very good at calling the stock price of their own company they worked at because you have all kinds of biases from the people you like and you don't like and that kind of stuff. So it worked to my advantage, but I think probably wouldn't have happened if I didn't labor through that PhD. So how do you”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Can't move to London. Yeah, that's it. I can't move to London. I just get engaged or whatever. So I enabled to sort of convince them, yes, thank you. I'm an analyst, but no, I'll wait for the first U.S. one. And it could have been anything. It could have been food. It could have been, I didn't really care. And when Semiconductor, you didn't have a tech background. You didn't have an engineer.”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source
“Were you an analyst in semis there also? Yeah, so I switch to being semi. Look at that time, late 90s into the TMT bubble. What seemed cool to young Adam Parker was being an analyst. Oh, man, these tech analysts, that seems like a great job. And Bernstein in those days, you know, you were really an expert. You wrote 200-page black book it was called on an industry and you could tear apart the P&Ls of the companies and you really understood we spent all our time on six to ten stocks so you really knew those companies the management teams the things that impacted the volatility of the P&L you kind of became an expert and so I really wanted to do that and I just got lucky that it was semiconductors I basically just kept going in saying I want to do this I want to do this and the first sector they offered me very was European electric utilities oh that sounds like so much fun yeah and I really struggle with how I'm going to communicate to them I'm really on board with the fact that you're allowing me to be an analyst”
2022-05-27 · Masters in Business · Adam Parker on Strategies and Valuations · IDENTIFIED FROM THE TRANSCRIPT · source