YouSaid · the spoken record

Andrew Beer

lines on the record: 130
first: 2023-09-14
most recent: 2023-09-14
sittings or episodes: 1
sources: podcast

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“Spending a lot of time looking at Chinese companies right now precisely for the reason you describe. There is proverbial blood in the streets for investing in China. It is uninvestable. The macroeconomic situation couldn't look worse. But there will be guys like the guy that I started my career working for who's trying to find dollars for 25 cents. And he's set up where he doesn't need it to converge tomorrow. He can hold it for 10 years. And his clients want him to do that.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“We don't have good visibility on China positions per se, but I can tell you that it was China was adored three years ago, four years ago, by certain, particularly tech-focused hedge funds. And I think they got slammed. They didn't see the regulatory changes that came and the punishment of the sort of like, you know, sharp reversal of this kind of open economic system. Look, my guess is that any contrarian guy worth his salt.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Look, that just goes back to the dynamics of this industry. Everyone's trying to sell you something. I am, I am trying to, you know, I get on the phone, people, but I'm also very open about it. And because. We led with our money. We were trying to solve something for ourselves. And so we would invite you to come join us. We think we have found better ways of doing a lot of this stuff. But we recognize it's not right for everybody.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Bye now because we're going to go up 40% a year. That's crossing a line. That's promising because she was desperately trying to stem outflows. Everything was an argument. But this is what asset managers do. Everything's an argument as why you should remain invested. Back to your point, though, like there's a circularity to it Well, my value guy, do you want your value guide to outperform value stocks? You want your value guy to outperform the SP 500 because you think value stock's going to go well”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“They're terrible. They're terrible, right? But again, that's not her fault. I agree. I mean, that's not, it's, look, it was her fault when she was saying”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Ask them. So, why do I have so many different asset classes? You know, how do you think about do I really need 25 different line items in this? Do I really need four funds in this category? They may have really great answers for it, but you should feel it's your money and you should feel empowered to ask these kinds of questions. I mean, in a sense, our whole business, the other thing that this guy was telling you about kind of like coming up with a one sentence for a business, he said in a sense what you guys have done differently is you just keep asking questions. And when you get these kind of canned responses, if you don't feel that it doesn't make sense to you, you keep asking the same question, which is back to big. I don't get it. What do you mean you don't get it? Like, I don't get it how you think that for the next 70 years the world is going to look like the past 70 years and that you guys didn't figure this out 10 or 20 years ago.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“They're human beings, right? So if you go into a job picking hedge funds You probably like it. You don't want to do some replication robot dog. That might be good for people who want to put something in their portfolio and be happier in 10 years than they would otherwise be. But your job is to pick funds. You don't go back and say, by the way, I don't want to pick funds anymore. I'm going to put it all into this little robot dog of a strategy, this simple cheap robot ETF, and just leave it there. So those, and you should just know that you should know that if you have your money with an advisor,”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“If you talk to someone who, you know, I have an interview with folks like this who their fund is owning oil stocks, like don't expect them to be bearish on the price of oil. You know what I mean? And that's not their fault. That's who they are.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Somebody's love, oh, yeah, or yeah, or you know, GMO or something, you know, who's been in the trade on the wrong side for years and years.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Throw in one of these other issues, your probability of generating good returns goes down cumulatively, you don't really have much of a shot. But it is this. You know, it's trying to. Basically, think about the opportunities to make money in the context of a broader industry and where you can trust the advice. You can trust the advice. So when we were looking at this move from gross to value stocks. I trust a hedge fund who loved when he says value is coming back, but he loved growth two years ago, I trust his opinion.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Bought into it, right? And so it takes years of underperformance for people to have to then be able to say, okay, we're going to switch to something else, we're going to do it. So a lot of the stickiness of this business, and again, we started this whole conversation about what makes hedge funds different, is that by and large, the average hedge fund is much better at changing its mind at the right time because they can. And most of the time and most hedge funds, clients expect them to do that. that they don't expect them to be making money in five years because they're not it's the the category is this dynamic asset class the category is not thematic disruptive tech stocks or or xyz um and it doesn't work all the time i mean it's not in it's not and and when you layer lots and lots of high fees on it the markets get more competitive this is what i mean about you have huge headwinds you know you're like every time you increase every time you”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“And when it starts to go badly, there are haters out there. But the people she didn't have redemptions. How could you not have redemptions when you have walked into the propeller and stood there, smiling? And she didn't. And it's because the people who are invested with her.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“And that's a really, really, really bad way of looking at it if you're trying to think about is this person going to, if you want the theme, of course you should buy Kathy Wood or you should buy somebody who's doing something similar. But But you're making a bet on the theme that's actually the, I mean, looking at her as a theme is the right way to look at it. But the characterization of this alpha generator because the theme is doing well is like you don't compare the Nasdaq in the 2010s to emerging market stocks and say you're a genius alpha generator. But what it does is it gives people need a reason not to sell. And when people have made a commitment to a fund, it's not their problem now if it doesn't do well. And so Ark had all these firms that had thrown their weight behind her as the genius. And so”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“It's like if you ask you to fox news, you know who's going to win the election. You go to CNN, you know who's going to win the election, right? Really interesting about Kathy Wood and Arc, which was that when she outperformed massively for a number of years, and they described her in magazine articles, talked her about as this, you know, so the new goddess of investing and the modern-day George Soros, etc. And then when she went down, there was a really interesting heuristic flip. In that, oh no, no, all disruptive tech stocks are going down. She's representative of disruptive tech stocks going down. So it's not her fault. And in a sense, she became the theme.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Is why I so rarely interview people who obviously you want to talk to people who have skin in the game, but if I interview someone who they are the CEO of an oil company over copper mine and I ask them what do they think about the price of copper is going to do it's like yeah I think the price of copper is going to go up there's a shortage surprise surprise you know if you interview someone who's their whole life is about you know disruption of tech stocks they're not gonna they're not worried about the fed raising rates”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, and you're never going to, Kathy, she's never going to sell the technology stocks and buy coal stocks. Number one, that's not who she is. Number her clients, that's not what she's hired to do. Would not be doing her job.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Well, but also think about the dynamics, right? So I wrote a lot about Kathy Wood when she was going through. And I'm much more sympathetic to Kathy Wood than I think a lot of people, I think you had George Noble on your podcast once. I mean, people are very... Visceral and crazy. To me, the thing about Ark and Kathy Wood was that she can't change her mind. Kathy, do you think inflation is going to come back? No, it's going to be disrupted away.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“I believe in trend following back test and that there you have a back test and it's working keep doing it. If you have a backtest and it stops working, just stop doing it. But the people who have lost a lot of money over the ages, I think I've just have one narrative of, oh, this has worked from 1950 to 2019. So it's going to work now.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“And so look, I mean, but it's, you know, it's an exciting dynamic business, but I just think it's, I think you can avoid a lot of issues when you just come into these conversations with the skepticism and are willing to. Ask questions that are a little bit outside of what people normally do.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“So, okay, so this is your triage, right? And the response should not be wonderful. You bandaged the lost your right leg from the knee down and you bandaged it. The question should be, how did you lose the...”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Why didn't you do it 10 years ago Did you do 10 years ago? And this is what's strange about replication is that replication is a very strange strategy and that we hope we're doing exactly the same thing in 10 years as we're doing today. Like we want to find a way to do it well. It's not the hedge funds themselves will do different things, but the way that we identify what we're doing and copy it cheaply is the best outcome for us is we found the solution that works. And because then 10 years from now, you can say, what were you doing 10 years? Think how strange it is when a quant comes to you and says, We've introduced all these new changes in what we're doing. Found a new way to invest in it. Well, they only do that when it's not working.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Is it better? Why is that better than this? But that's what advisors need to do when people come in to sell them. They're coming to sell you something because they are trying to make money off it. A quant comes and writes a paper and sends you their paper about how they found some new magical trade. They are not doing this for the sake of humanity. They are probably consulting for an asset manager. They work at an asset manager. This is not altruism. This is hardcore capitalism. And so that's great in a lot of ways because they are motivated to find new opportunities, to find new strategies, find other ways to make money. Like we want people to be doing that. But you as an allocator, as an advisor, as an investor just should be prepared to ask some awkward questions. And those questions are like if this sounds great”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“There are people that we compete with who have one really good product. And it's an awkward question. And a lot of the human dynamics of this industry is one of, I know a guy who's one of the kind of leading luminary hedge funds managers. And I've known him for over two decades, almost three decades at this point. He's really unpleasant to talk to. Because he, the niceties of just letting things go is not wired into him. He is on the balls of his feet. So, you know, So, anyways, I've rented this place and we're going up there. Why'd you choose that? You compare that to something else? What is it that you think about it? Like, it's you're just like, whoa, whoa, he's always.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Thing is structurally the industry. Like, if you want to run an asset manager firm and you go with one fund, you're not hiring a lot of people to do that. Because if you have a rough six months, you've a lot of people sitting around playing cards, expensive. So it's rational for you to do Farley one through six. And then you can hire more people because you always have a product to feed them. That's good from a business perspective for asset managers. But just be aware of it, right? So somebody comes in and tells you, this is a great product. Say, I want to see everything you're doing.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Yes, and I think it's human nature. I mean, I just noticed people, if there's someone who's a bear, they're known as a bear, people, the demand for people for me to interview that person is at its highest when the market is at its bottom. Right. And they hate that person when the market's at a top, you know, or you've had a big rally like right now. And if I were to interview them now, they'd say, Jack, why would you have this person on? It's wrong. In October, they would have loved for me to have them. So I think it's everyone's fault. That's what I'm saying.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Right. And so, but like, I mean, I've written about the asset management industry is designed to fool you into buying things with unsustainable performance. They're called hot dots, right? Hot dogs Hot dots. And Morningstar does great analysis where they basically do the Allen analysis you've described where the vast majority of money always comes in at the wrong time. That's not the asset manager's fault, by the way. Like in general, it's not the portfolio manager's fault. It's the structure of the industry, right? Yeah.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Business is built to sell hot dots. That you're going to have a firm that's got six products and you're going to only hear about the one that's going up.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“But think about the bizarreness of that, right? We are describing a permanent truth of the market, but we have to change our definition of the permanent truth of the market every two years. That should scare the daylights out of you. And so I think some of the questions that you're an advisor and somebody's coming in and showing you some hot product, the first question you should ask is, that's great. That's really interesting. Show me every product you've done in the space and what you thought was your best product three years ago and what you thought your best product five years ago.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“But it's so, but this is actually sort of an interesting point because you say value, right? Yeah. You cannot find two quants who agree how to define it.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Or that the dispersions or whatever The mispricings can be corrected on a time horizon that is sufficient. In other words, yeah, okay, value is going to work by 2030. If you invest in value from 2030 to 2050, a thousand basis points a year about performance. But it's like, can you wait that long?”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“And luckily, you think, I mean, they're really, really smart guys in quantitative finance. Who have really mediocre and sometimes horrible performance over time? But if you think about how you would get comfortable with a quantitative strategy, the longer you look back, More comfortable you're going to be Do we really think that the lessons of the 1950s are really relevant today?”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Going to tell you exactly what we're going to do and what we're going to try to do. And we're going to explain to you why we think it's a good idea. And we hope you're our client today. And in 10 years, we're doing exactly the same thing in that fund. And you're happy with the outcome. And that's a very rare experience for allocators because they spend so much time jumping on the thing that just looked great. It's hugely disappointing. And now they've got to decide: do I sell it? Do I get out? I explain to my clients and all of those dynamics, they're just inefficient and costly. If you're an advisor, you should be spending your time. You want to describe this thing about it just to work. And that often means simpler. It means more straightforward. It means sort of a common sense approach. So we're a very strange hybrid in that we have.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“So you may be right. But look, sometimes, I mean. I think this just be humble about this and spread your bets and think through one guy described us, he was talking about kind of our approach to hedge funds and he says, he said, I don't know whether to say you guys are, it's like, it's either common sense or the thinking man's approach because you're not saying you have the answers to everything You can, you're pretty good at figuring out when the odds are stacked against you in a very, very meaningful way. And not doing it because we're not working at a bank where our job is to crank out products. Not working at a quant firm where we have to like, you know, come up with the next new product this year. We heard somebody else is doing a product and we're going to copy and launch it. We want to be known for the guys where”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Credit spreads were tight. But the thing is, though, if you were saying that in 2021 and you were saying it in, you probably say it in 2019, and you were probably saying in 2017.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“My friend, you have a much better career opportunity just going out and managing money. But look, I mean, it's what makes this business fun. It changes a lot over time. You're dealing with. Human beings who are, we're all trying to make good decisions in what we do. But there are lessons you can learn to avoid making. Big mistakes, and a lot of the asset allocation business, a lot of the things is people making, every now and then you could look at things and say buying a 10-year Double B rated bond at a 1.5% 10 year yield when the company was not so great back in 2021, unless you were forced to buy it because you had some bucket that said, I must own this certain amount of AA bonds, that's one you should walk past.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“An asset based business to a company's based business. And anyway, that had sort of profound implications. But when I looked at this space, the alternative was Cremia space. I was talking to a bunch of guys who are much better quantitatively than I am with terrible unrealistic business judgment. They were basically saying, I remember talking to one guy and he said, and he said, Well, the underlying strategy itself is not really interesting, but we found a way it only goes up when the S&Ps, we found a way basically, we know when we've came up with a signal when the S&P is going up or down, and we know it's going to go up or down over the next week, that's when we're going to invest in the strategy. And I'm like, if you think you know when the S&P is going to go up or down on the next week, why are you bothering with this?”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“What if Carlisle bought it? What's the analysis that they would do? Well, the analysis they do is you model it out. We have computers now. You can build an Excel spreadsheet and you can say if the cash flow goes like this and I can discount it back and come up with a cost of capital, you can decide, ah, the stock should be worth 20 today and it's trading at 14. Therefore it's cheap. But when you do that, right, when you're looking at the company, at the balance sheet of the company, these terrible company but with lots of good assets in it, you don't care about management. You know they're bad. Because if you're talking to them, they're terrible at their jobs. Here you care because these guys have to make wise decisions and grow and what, you know, do they take the money? They buy stock. Do they go buy another, you know, try to build another stupid factory? And so the value business changed in the 1990s from”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“So, what happened is actually there was this pivotal shift in the value investing world, in that they gave up on the buy, well, let's buy cigar butts with a margin of safety because they didn't exist. So what they started to become, they would say like, we're going to buy good companies, but at reasonable prices. But the way that they would calculate that was to say, what if KKR bought it?”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“So, the Warren Buffett stocks that he got rich in the 1950s with his clients no longer existed as value stocks. Companies that you could buy that literally they had more cash in the bank than the market cap. So now instead those value stocks no longer existed. So instead of the value stock was just something that traded with the price to earnings ratio of five. But there's a reason it trades like price to earnings of five. It has a lot of problems.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Same guy who was looking at a stock and saying, Wait a second, this is trading less than its cash. Why don't we just borrow money by the company, take the cash, give it out, we'll have a company for free. Strategic requirements did the same thing. The whole MNA bus. So MAs, leverage buyouts, all this stuff happened. So all the companies were gone. Anyway, so alternative risks”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“1994 But this is two years, by the way, after the Nobel winning prize paper from Eugene Falman and Ken French came out basically talking about the value factor. And what they did was amazing. But what they described was the past. And by the time they published it, the world had already changed. I knew this because I was kind of nerdy. I almost went into the PhD program in Harvard Business School because I thought, you know, God, it'd be really fun to study all this stuff. Look at all these like, you know, study seven years of the markets and find all these interesting truisms. I realized very, very quickly was that it wasn't that value investors wouldn't have bought it. They hadn't changed. It's that the stock didn't exist anymore because LBOs.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“That's not your thesis. You need to turn the dials some more. Okay, you weren't looking at sunspots. You need to incorporate sunspots. Oh, you know, and so what happens is the whole academic finance business is this truly insane game of backtesting. So I wrote on the value factor, right? So I worked for one of the great value investors. The value factor, as people thought about at the time, was dead at the time. This mythical company that was trading its stock market capitalization was less than its cash at the time didn't exist. Not because...”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“No, no, so a lot of academic finance is insane. You have guys, first of all Think about the incentive structure. You, Jack, you just got your PhD, or you're getting your PhD at University of Chicago. It's time to write your thesis. And you work on it for six months, you don't find anything interesting.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Past performance is not a predictor of future returns. You know, I mean, I put up things on Twitter all the time and, you know, oh, the last time the unemployment rate up this time on a historical basis, this is what happened 12 months later, I'm just some guy on Twitter. I'm not putting people's, you know what I mean? The standard is high enough for me to, it's an interesting thought, but Things change. Regime shifts change before 1997 or 1993. You tell me, I mean, stocks and bonds traded in line with each other. It was only kind of a recent phenomenon that stocks and bonds, you know, bonds were a hedge for stocks. Things change all the time.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“So I remember there was a scene where Tom Hanks says they're talking about this new product or whatever, whatever. Killer Raisin is like, I don't get it. And they're like, what don't you get it? I was that guy. I was like, I don't get it. Why didn't you do this 20 years ago? It's such a great idea. Who actually started doing it 20 years ago?”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Disaster, right? We're going to, you know, we're going to do this particular currency pair because it's worked better over the past 20 years. Disaster, and so I was looking at it because I was saying, God, I mean, if we could, if it worked, right, think how great it would be. You could get these, you know, let's say other sources of alpha, whatever. And I kept raising my hand that I was saying, you ever see the movie Big?”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“See, these were quantitatively based strategies where you were making these. Long term bets based upon what had happened over the past 70 years. So, oh, our model says over the past 70 years, value went up. So we're going to buy value in short growth.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Oh my God. So one great so 2013-2014, these quants Basically, came out with things and said, We're going to do what hedge funds do, we're going to do it cheaply, but they did in this incredibly mind numbingly complicated way. It was an area called alternative risk premium. And the best and the brightest jumped on this. Every invested firm jumped on it. People launched mutual funds. He did all their stuff. We looked at it. It sounded great. Back then, you weren't earning much money in your cash, and it was supposed to be a 6% return. Not a lot of volatility, no correlation to anything. And it'll be daily liquidity not too expensive, other stuff like”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“That's really much better off just focusing your time and energy on a limited number of things that make sense. And that's why we're a bit different. I run a quantitatively based firm, but we have avoided a lot of the things that people have done in the quant space that sounded great at the time. Then ended up looking bad.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT
“Bias in this business to just come up with new things. What's the new thing? What's the new hot idea? Most of our terrible ideas. And you waste so much time. We launched a new product. Well, I mean, you look at the ETF world. It's like everyone's launched a new product, this product, this product, this product. Three years later, five years later, half of them, three quarters of them will be gone. And what Bodhi does for the allocator, for the advisor, is you're bombarded with these ideas. You're bombarded with somebody coming in and saying, oh, we just launched the tail risk fund where we're going to earn 10% a year and then also happen to make 50% a year at the right time. And then here's some hypothetical numbers that we put together.”
2023-09-14 · Forward Guidance · Andrew Beer: Hedge Funds Charge Way, Way Too Much · IDENTIFIED FROM THE TRANSCRIPT