YouSaid · the spoken record

Andrew Slimmon

lines on the record: 60
first: 2024-02-22
most recent: 2024-02-22
sittings or episodes: 1
sources: podcast

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“Or your Cuba story. I mean, there's just a behavioral element to this investing, investing business. And look, you know, again, I go a great example, which I mentioned before, which is it didn't matter what gross stocks you own in 2022. They all went down, right? And so was it all the companies did poorly? No, growth.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think 30 years ago, I thought it was all about just what's going at the company level. And then I realized, oh, wait, that doesn't really drive most of the stock's return. So you have to understand more about the broader implications of companies. I think 30 years ago, there was less dissemination of fundamental news broadly. Today, it's much broader. So having information access fundamentally is more difficult. So I think the business has changed. But again, I go back to, I think the biggest change in how I think about it is behaviorally. I've come to the real estate that being an advisor, sitting on the front line, I view that as a very key part of what's shaped my career, understanding that, you know, again, it doesn't matter that the company didn't have any stores in Crimea. It went down for quite a bit.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so it's interesting. I have four kids that are in the process of or have just come out of college or in the process of. And one of the dangers I see today is kids come out of school and they think they know exactly what they want to do. And then, and I'll say, you don't know what your capabilities are when you're 22 years old. I mean, I was an introvert when I was 22. I've realized in the early 30s I knew how to communicate. I all say get into, if you can get into a firm that has a lot of opportunities. Today there's less training programs, but those types of things with lots of opportunities because you don't know what you're going to be good at and what you're good at always follow what you think you're interested in as long as it makes money because that's ultimately, but you don't know initially. So I always encourage people initially, don't come out and say, I want to do this the rest of my life. You don't know. That's too narrow. Try to go to something broad.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll tell you the last story. Or I'll tell you a story. I was on the floor of the New York Stocks changed the day that Russia invaded Crimea. And one of my stocks was down. My biggest position was down 8% that day. And I said, they don't have any stores in Crimea. Why is the stock down? Well, because it was geopolitics. Well, you know, and within three days, the stock came roaring back. So it's all, it points to is sometimes fundamentals dislodge from the stock prices and you have to understand that there's a behavioral element.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I just finished same as ever by Morgan Hauser. Again, this concept of behavioral I will eat up you put a behavioral, anything about behaviors in front of me, I read it. So like, you know, Richard Thaler misbehaving or, you know, think fast, think slow, all those boats of books, Daniel Crosby is another one, all those books I just, but I just finished that. And I just love it because, again, all he spends, the whole book is about these things they just don't change over time.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“You had a little cancel exactly, so there's been people along the way that have been great influences on me that have mentioned me at the right time in my career.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I mean, again, I look at points along the way where valuable. When I got to Morgan Stanley, Byron Ween, who I barely knew, but he was the first person that I recognized had this very good touch of fundamentals, but also the psychology. And so he was a great mentor, even though he never really knew me, but listening and reading and understanding him was really important. But then I had a guy who ran our department named Glenn Regan who had come from studying money management organizations. And I didn't know how to start a money management organization because it was a team within and how do you grow and diversify. So there's been different people along the way that have really shaped me. I came out of University of Chicago, Gene Falmer told me buy cheap stocks, but then William O'Neill said, yeah, but that doesn't work. And you need to have some momentum to, you know, like he didn't tell me.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so if I think about my career, no one took me aside and said, this is how you manage money, right? Like think about it, I learned about fundamental research. I learned about quantitative. I learned about the practicality of being in wealth management. And so I've always researched and watch. And what does that have to do with your question is I've learned my way to being successful portfolio manager. So I'm obsessed with kind of always learning along the way. So, you know, when I watch podcasts, it's all about or listen to podcasts or watch things. It's all how to advance my knowledge base. Now, I did play tennis in college, and so I love all those, you know, breakpoint, first tee, you know, the formula one. I love all those things. But as my wife gets frustrated with me, because I'm probably not going to sit down and watch a three-hour mindless movie because it's kind of like.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure That is a big concern I have is losing that access. So I still, I'm going to, I'm speaking at an event tonight with a room full of advisors. And then we'll get together afterwards and I'll listen to what they have to say. So I'm always interested in feedback that I get from advice. Obviously, I can't spend all day talking on the phone. That's the big reason why I left being an advisor was I recognize, hey, being advisor, you got to talk to your clients, so forth. You can't manage money and worry about. Really, behavioral finance, you know, the longer I've been in this business, I've been in this business a long time, it's the behavioral finance. That's the consistency of this business. Geopolitics changes, right? But how people react is not really changing.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“It is a huge amount of capital and it drives kind of asset out, suggested asset allocation for advisors. They don't necessarily have to pursue it that way. My input is obviously on the equity side, but they have people on the fixed income, high yield, alternatives, and they all provide inputs into framing an overview. So I'm really, I sit in Morgan Staley Investment Management, but I do provide that context. And I think they like to have me on because I actually have skin in the game and I run money for a living. And I'm not always there saying, you got to buy growth, you got to buy value. So I'm an agnostic. I'm just trying to figure out where the kind of the ball is going.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, look, I want to grow the assets. I want to perform well. But I value the responses from the those who sit on the front lines dealing with clients every day because they're the ones that feel kind of the emotional side of the business. If you sit back in my office and all I'm looking at a company and just evaluating whether it's PE is appropriate and earnings, you're missing a huge part of this business. It's a behavioral business. And so having access to advisors and listening to their feedback is so important.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Obviously, I'd love to talk to each and every one of them, but I can't. But I've learned in this business if you communicate in a way that they can understand, and I don't mean understanding in a bad way, like, but writing a six-page diatribe about why my stocks are so great and why the rest of the market stinks, no one's going to read that. They put it aside, say, I'll read it tonight, then they don't. But if you can provide short bullets of what's going on in the market, why people should be bullish or bearish, you provide them with talking points. And that's what we really try to do within the firm, but beyond the firm as well.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, so that's when I left being advisor in 2004. I started this group within Morgan Salient Wealth Management. The products were only available to financial advisors at Morgan Sealing. But when I left to go into Morgan Seal investment management in 2014, the purpose of that was to make my products available beyond Morgan Saly and Wealth Management because I was getting calls from consultants and institutional investors saying, how do we get access to these funds? And I'd have to think, well, you have to go through an advisor. So that I wanted to broaden out the reach beyond. So I would say we're on a number of platforms. You can buy our funds through the self-directed route. And so we're broadening out the distribution. And you mentioned the slim and take before. That is a methodology that we use to reach out to our investors.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Correct. And that goes back to last year one of the other reason I was optimistic is I kept hearing our companies say to me, I'm being told the recession is around the corner, but our business seems to be doing well. We don't see it.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Which is it, right? And, you know, and so the point of this is that I go back to listen to what companies say and I suspect as food inflation starts to come down and people have jobs, they actually could start to go buy higher ticket purchases.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Very interesting between listening to Wall Street and what you listen to companies. And so I'm a company guy. I listen to companies. And I'll give you a great example right now. People think the consumer is getting tapped out, but on the Costco call, the other day, they say they see big ticket purchase items re-accelerating. Well, wait a minute. I thought the consumer...”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, and remember, I said didn't get reelected, just ran for reelection, right? And so what happens, and I see it this year, is when presidents run for re-election, they want to juice the economy. They want the economy going well. And we have Joe Biden has in his pocket the infrastructure act, the Chips Act in the Inflation Reduction Act. We own the reason why we own industrial stocks is because they are telling us that the money is just starting to come in from the government. And these projects are getting just getting off way. We've seen this with the Chips Act. The money has just started pouring. That's why the market tends to do well, because the economy stays afloat during a re-election year.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Fed does announce the cut will say. Oh, they know something you don't know. There's a problem out there. And I think there's another anxiety. And so I think that's, we're in a good period right now, but it worries me when they do cut. Will it be, people start to worry about there's a problem in the economy?”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think it's good news for this year, but also worries me about this year if you look at the history of the period of time when the Fed said we're done hiking till we're going to cut that period does very, very well for equities. And we're kind of at a juncture where we've done pretty well, but if they're not going to cut rates until the summer, I think there's more room to run for stocks. Now, the flip side is I hear a lot of people talk about when the Fed cuts, the perception that that's going to be good for equities, I'm not so sure about that. Because if you look back in history, when the Fed cuts, markets tend to go down initially, not up. And you could argue, yes, but Andrew, that's because usually when they're raising rates, it's an economic cycle and therefore if they're cutting, there's a problem. And this time it was all about inflation. But what worries me is when the”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“It's because a hot product invariably pushes oftentimes valuations to extreme. And one of the things that we got very right in 2023 was in 2022 bear market, what did people buy into the lows of bear market? They bought defensive stocks, dividend-oriented, low volatility type strategies became very popular in 2022 during a bear market. And so we could see that the defensive factor, safety, became very expensive. So as we came out of this bear market, what lagged? Consumer staples, healthcare, utilities, all the safe things. Hot products pushes things to extreme. And that usually unwinds itself badly.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, again, if I go back to kind of growth investing, it got expensive and the growth rates of companies was quite as good. And in 2022, and the Fed started raising rates and that was problematic. It was no different. It reminded me a little bit of the dot-com bubble, what brought down the dot-com bubble is that companies just couldn't report the earnings that were expected. And you had plenty of time to get out, but the problem is what I saw in the dot-com bubble, people wanting to kept buying these stocks as they're going lower because they were rearview mirror investing. They were the previous, the loaves. And what's amazing is think about it, I said before, half the value managers went out of business 99 by the year 2008. Do you know what the biggest sector of the S&P was? Financials. They grew from nothing to 30% of the S&P. So value worked all through the first period until we know what happened in great financial crisis.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Think about last year. You know, it's the old saying by Sir John Templeton. Bull markets are born on pessimism. They grow in skepticism. They mature on optimism and they die on euphoria. Well, we had a bear market bottom in October of 2022. And so we came into last year, 2023, with it's going to be a hard landing. It's going to be bad. And so there's high levels of pessimism. And now as you advance into the fourth quarter, fund flows turn positive as people realize, well, maybe it wasn't going to be so bad. We've moved into the skepticism phase. So that's why the biggest return year is always the first year off the low because that's the biggest pivot. And it has the least volatility. We didn't have a lot of volatility last year.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. I watched that, but we also watched revisions, and I've learned also from being, you know, cynically in this business, companies don't always come clean right away and say, our business is really bad. It's that they drip out the news. Right. Usually one bad quote as follows another bad quote. I mean, it's very rare. So be careful that, and analysts are slow to adjust their numbers. Anytime someone says, I'm cutting my estimates, cutting my price target, but I think it's bottomed. Be careful.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that's the biggest air investors make over time is, well, this stock is, you know, as you said, this stock is cheap or this market, think about Europe. Europe has looked cheaper than the US for a number of years. The flaw in that is the E is a Ford estimate. And it's turned out that the E for Europe hasn't been as good as what's expected and the E for the US, especially the NASDAQ, has been a lot higher than was expected. So the denominator has come up in the US, which makes a PE lower, and the denominator has come down, which made it look more expensive.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Dead on dead on in line. It's uncanny how these things repeat itself. And that's very, again, it goes back to your experience, my experiences, the macro changes, but behaviors don't. That's the consistency of this business, and that's what I'm fascinated with”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“So I put out a piece in September of 2022 saying, market's down 20%. You should add money down 20%. And of course, I felt like an idiot, you know, a month later because then the market was down 25% and I produced a piece saying the average return is just over 20%. If you buy into down 25%, which doesn't necessarily mean it stops going down. But what's amazing about that is you know what the return off that October 22nd low of 2022 was?”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I mean, think about it, the likelihood over time in any one year the market's going to go up. And if it doesn't go up, that's irregular. But then to have another year in a row is very, very irregular. So that's why I began 2023 saying, hey, it's highly likely it's going to be a good year just purely based on the odds. And then you layer in that whole recency bias rear view mirror, and people were way too negative.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“We noticed that just our quantitative factor model alone was doing well, right? Beyond just adding the stock to buy. So we wanted to start a strategy that would add a little bit of excess return versus just buying an ETF that was just focused on that factor models, but we would diversify away the stock risk.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And Philip Kim is the other portfolio manager. We've worked together 14 years. I started these quantitative models and then he really took it to the next level. And this was what has the likelihood of outperforming for the next 12 to 18 months from a style standpoint? That's how we biased the portfolio. Things could get just too expensive. Things get too cheap. But we need to see some migration in the opposite direction. And then we buy us accordingly. We want to stay in the game.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“But think about this way also if I can own 20 stocks, okay? But they're not all correlated to each other. So they have a lot of different themes like I really like this infrastructure stocks right now. But I also think there's a place, as you said, Microsoft, but luxury brands only a few stocks, but have a different theme, then I can control the risk in the portfolio. You're diversified to share. High active share, but lower kind of risk.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Goes back to bury that concept, which is clients don't care really where they make their money And the problem with the benefit of global, a global strategy is I can own some U.S. stocks. And internationally, I can't own. And what happens if the US just so happens to do better than the rest of the world, then international doesn't work as well? So it just gives us more flex. It's that flexible flexibility to go where the opportunity set it.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. So people are more likely to pull from the market. So I believe in owning stocks. But the problem is, again, it goes back to, but if you own 200 stocks and they don't have anyone wedded. So could we start a strategy? We started in the 708 where all the securities would be on one page.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, so taking a step back again, one of the, you know, remember, I run mutual funds, but I start in the separate manage account business. So what it means is they would, wealth managed would implement our portfolio for individuals by buying stocks. And one of the things that I observed is that clients pull from the market faster than they pull from stocks. So in other words, when you're worried about the market, if it's about the market, some mackerel story, well, do you want to sell your Microsoft? Oh, no, I like Microsoft. But I'm worried about the market. Okay, well, owning individual securities is really powerful because it actually keeps people invested.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. And that's why, as an active manager, I have nothing against ETFs. I think it's done great for the industry because shame on funds that own lots and lots of securities. You're not doing a service to your investing. But at the end of the day, if I marginally underperform, not me, but in general, you know, it will take time to lose your asses. You know, what's right for the money management firm is not always what's right for the investor. So the right thing is choose passive strategies, but there's a place for active marriage, but it's got to be active.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“And at the time, it wasn't really, there wasn't really passive investing. But then as time progressed, all these studies came out and said, well, actually, the most excess return in active management comes from managers that are very, very active. And if you own 150 stocks and you're the benchmark is the S&P, you're not active. So it was clear to me that we needed very concentrated portfolios, but control the risk. And so that's why we run these limited portfolios. The applied term is so it gave some quantitative approach to what we do, but here's the practical theory, which is when the firm came to me and said, okay, you're going to become an asset management arm, you got to come up with a name for your team. I knew that these firms show asset management companies alphabet.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Manage So it's funny going back to that first job at Brown Brothers, you know, and the time in the 80s, no one knew about passive investing, but I observed that, you know, they'd have these portfolios and they'd have kind of two or three stocks in every sector so you'd end up with 100,000, 150 stocks. And, you know, it's not that they did poorly, but they never really, it was really hard to drive a lot of active, you know, performance.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And what I observe from my time being advisor is at the end of the day, clients don't really care where they own growth or value. They don't care where they own European, US. They want to make money. And they don't want them to go backwards. And if all you keep saying is, yes, but, you know, my value manager has outperformed the value index. And they're like, yeah, but the S&P is going through the roof, right? So you have to have some flexibility in your approach. So I wanted to start a group that at the core would use those quantitative metrics, but pure quantitative takes out kind of the fundamentals of investing because a certain portion of a stock's return comes from what's going on at the company level. And the other thing is if all I did was focus on the quantitative, you'd end up owning 300 securities. So let's talk them. In SMA, you can't do that or you don't drive enough active share.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And the goal of that is to keep people in the game. Flip side is, you know, things are out of favor. They can stay out of favor. The problem in this business is styles and investing can stay out of favor longer than the client's patience duration.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so there's the theoretical story about it, and then there's the practical story. I'm sure you'll get a kick out of the practical. But the theoretical is that I don't believe that a stock price return comes purely from what's going on fundamentally. You have to decide, should I own growth, value, large cap, mid-cap, US versus non-US? Any stocks return about two-thirds of return in any one year can be defined by those. So we have to get that right first. And that's the quantitative side. So we use factor models to say, hey, should we own growth stocks or value stocks? And so we tilt our portfolios quantitatively based on which of those factors is sending a signal that they'll work in the future.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“It net flows from mutual funds, ETFs were net. They're always negative the first year because of that rear view mirror recency bias. The reason why that's relevant, Barry, is because when investors finally said, I shouldn't sell anymore, I should buy, they're not going to buy what's already worked. They're looking for other things. And that's when the equated really started out for them.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. But if you go back to 2020, March of 2020, flows were negative until February of 21. So it always takes about a year.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“But the thing that's fascinating about this variant, and again, you know this is that it's always the first year off a bear market low investors sell. So retail flows were negative from the low of October 22 until for a year.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“It outperforms about half the time. It certainly has, I mean, think about last year, and through October, the capweight had performed the equated by 1100 base points. Wow.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Very hard. But also, when stocks get very, very big, companies get very, very big, it just gets tougher to grow. In my experience, and this has nothing to do with GE, just in general is when companies get big, usually the government starts looking into their business because they might dominate too much. And so it's a combination of why over time, and I know this is hard to believe given the last couple years, why the equal weighted S&P does.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“From the wealth management side. We bought Smith Barney. That's another thing. So then over the asset management side, there's Eaton Vance, E-Trade Wealth Management. And with Eaton Vance came parametric and Calvert. So the firm has grown in the areas that I've grown personally. So it's been a great, great marriage for a long time.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you have to remember that when I started in 1991, wealth management was a relatively small part of the firm. And I give James Gorman tremendous credit. He really grew that area because of the stability of the cash flow. I'm a pretty stable cash flow. And then when I progressed to, and Morgan Stanley investment management, it was the same concept, which was we value the multiple on. Stable cash flows is higher than on capital market flows. And so that's, I've kind of followed the progression of how Morgan Stanley's changed, and that's been a great opportunity. And then I look and say, well, I was able to go from wealth management into the asset management because the firm grew in that era. So it's been a tremendously great firm to be with, but my career has changed over time as a firm's changed over time.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“It's the other side of the same coin, but I think what complicates us is taxes. Sure. Because people don't want to sell for taxes. And general electric was a very important experience in my life back in the 90s, which was it became the number one stock. Everyone loved it. And then, you know, it went through a can't grow as quickly anymore. So the issue that I see in the industry is stocks never survive as the number one company. And so eventually they decline and people don't want to take money off the table when they're the number one or tops because they have big gains and then ultimately people sold a lot of general electric with a lot less of a gain. So the trick is to reduce the exposures over time. So if I'm a core manager and I know that growth is expensive relative to its history versus value, we'll tilt the”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“And so that's the problem with the dedicated style you're always fighting human behavior just at the juncture with which you should be investing. They're selling. They're selling their stocks.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“People frame, oh, maybe I should buy more growth because it's working. Well, except it gets too expensive. So the reason I left being in wealth management, I was convinced that I could start strategies using more quantitative, but give us flexibility. So if we could start core strategies so that if growth got too expensive, we could tilt away from growth. Or if Europe wasn't working, we could tilt away from Europe that gave us more flexibility as an active manager versus saying, I'm only a growth manager, and then I'm always trying to justify why you should buy growth. Or if I'm a value manager, I'll always justify why I buy value. Remember, by 1999, a half of value managers had gone out of business in the last three years just before they took off.”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source
“Does not care what happened in the past It only cares about what's happened in the future. But as humans, we all suffer from recency bias. So what I observed in the 90s, it's a long way to answer your question, is what I observed in the 90s as a coverage offer, you can't get clients to actually buy what's out of favor. And the flaw in the whole growth, value, US, international is”
2024-02-22 · Masters in Business · Andrew Slimmon on Quantitative Factors in Markets · IDENTIFIED FROM THE TRANSCRIPT · source