YouSaid · the spoken record

Brian Portnoy

lines on the record: 86
first: 2018-06-18
most recent: 2018-06-18
sittings or episodes: 1
sources: podcast

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“Of wealth, which we will do momentarily. Asset management side, the institutional allocator looking at funds in a certain rigorous way You've spent more around wealth advisors. Different type of investment approach. Of thinking about the world.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“To assess what they're really doing, this is a book based on thousands of conversations with wealth advisors and their clients, just regular folks like you and me or our parents or our friends, and trying to write something meaningful for them. So before”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“As so much product has become commoditized and it's less of an edge, the ability to bundle content with very compelling product is sort of the recipe. And so we think about how do you generate Mindshare before generating market share. And so now I'm on the road most weeks speaking to a variety of different groups, sometimes advisors, sometimes end clients last year in 2017, for example. I think I did ninety client presentations of one kind or another and I met about six thousand people. And it's great. You get immediate feedback and you listen. You try to listen, even though I'm the speaker. I'm trying to read body language, listen to comments and questions. And a lot of the new book is sort of a reflection on me just listening to what people are truly worried about. If the first book was based on thousands of conversations with portfolio managers and trying to”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“And given me a blank piece of paper to write blog, podcast, tweet, speak on really any topic that we think is going to be helpful, number one, for the end client, the mom and pop client of Merrill or a Meriprize or UBS or Raymond James and so forth for them to really achieve their financial objectives. And secondly, to help our immediate clients primarily financial advisors grow and sustain a great practice. The wealth management industry is going through a ton of really interesting changes now. And so nearly four years in, the not surprising part of the role is that I'm writing a lot. I'm creating a ton of content internally at Vertis, which is being shared with thousands of Var clients, and that's quite rewarding. The unexpected part of it is that as the wealth management business has increasingly embraced content and honestly,”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“A hedge fund platform, and you know, that was having mixed success, it was kind of fun, but it wasn't great. And Barry said, this is what I'm trying to build at Virtus Investment Partners, who I work with now. It's a $100 billion investment solutions platform, and we work with advisors and institutions across a pretty wide array of investment strategies. He had just gotten there at the time in 2014. And he said, hey, maybe come aboard and help me figure this out. I think there's really an opportunity to do right for a lot of people and Barry's mantra has been and continues to be how can I help you versus what can I sell you? And I've learned a lot from him. He's a mench generally. He's a mentor. At the end of the four hours, I said, what's the job? He's like, I don't know. And if we somehow got buried on the line right now and we asked him, what's my job description? He would probably say, I don't know. But the real blessing is that the firm has really embraced that how can I help you?”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“A guy named Barry Mandanak, who lives here in New York and he's a veteran of the investment business. He's been in the business for decades now. He picked up the book at the Barnes& Noble in Midtown. I don't even know if it's still there. So few bookstores left. And the title sort of intrigued him, the subtitle, the power of simplicity in a world of overwhelming choice. And he liked it so much that he cold-called me. You know, he said, you know, we have some friends in common and referenced them. And man, not only do I love the way you write, but it really seems like we think about solving big important problems in the same way. I'd love to just have coffee with you at some point. A couple months later, I was in New York and he and I sat down for a 30 minute coffee. And after four hours, he asked me to quit my job at the time. I was working for a relatively small asset manager in Chicago at the time, helping them build.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“No, number one, the first thing that happens is that I had sort of an unmitigated sense of joy. I was actually quite proud of myself. I wrote the book that I wanted to write. The first thing I was able to do, not only with myself, but with my wife and my kids and close friends and community, was take stock of, hey, this is a pretty cool accomplishment. Like I did it. There was that part of it. It did go out into the world and people read it. It sold pretty well. I got a lot of great feedback. I made some new friends along the way. And probably the most...”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“A strategy, the more moving pieces it has, the harder it is to set expectations. So, precisely the funds that we think are positioned to do the best for us during complex times are probably the ones best positioned to disappoint us. Yeah. Well, we've seen that over the last couple of years for sure. Yeah. So you go through the process of writing a book. You write the book. You publish it. What happens? Crickets.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“50 in 1999. And so we want more and more choice and we want more and more complicated choices in order to solve what appear to be complex problems. But the more we get, the more overwhelm we become and the more difficult it is. The second level of the investor's paradox is that the ideas, well, when expectations are met, we're in a pretty good place and when expectations are not met, we're pretty upset. This is where I got into hedge fund due diligence and alternative investing generally in the book was that because we feel that complex problems of figuring out the global bond market or where equities are going to go or anything else like that, you want complex strategies. And we saw both of us in our professional lives last decade, literally more than a trillion dollars flow into these complex strategies. We engage in complex strategies to meet complex problems, but the more complex”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I read Barry Schwartz's book, and at some point I emailed him to say, hey, I think I'm going to use the spirit of your book as the title of my book by virtue of him not writing back. I took it as negative consent that he was okay with that. But the paradox of choice profoundly states that humans are wired to want more choice and more opportunity, but the more choice they get, the more miserable they become. And this is very endemic to Western societies, wealthier societies, where we have more of everything, whether it be in investments or in commerce or in education or in leisure or in technology, and across every single domain. where you have 24,000 share classes on morningstar.com, you tell me how many hedge funds there are these days, 11,000, 12,000, I don't know. There's now four or five thousand ETFs.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“Kind of do is set out a set of parameters, almost a script that could be the framework for what that conversation should go by. So I concluded that the whole conversation in a fund researcher, in a due diligence context, is that you're talking about trust, talking about skill, you're talking about risk, and you're talking about fit. Those are four pretty distinct areas where you really want to understand as either or buyer or seller what you're getting yourself into. What is the investor's paradox? Yeah, so the investor's paradox operates on a couple levels. The first is there's a book called The Paradox of Choice by Barry Schwartz, who's a psychologist at Swarthmore. I actually sent him a note as I came up with the title. I think the original title of the book was something like picking winners. And my agent said, that's just awful. I'm like, yeah, I know. I know.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“What I realized after four thousand interviews and fourteen years of stumbling around and recognizing that I had made so many awful decisions and the handful of good ones is that the conversation between buyers and sellers of complex investment products often lack the ability, the vocabulary, the skill set to structure a conversation so that both people get what they want from that. So it's funny you reinterpret what you've written, you know, looking back. And so, you know, maybe at the time, you know, the book was sort of, okay, how do you pick a good mutual funder hedge fund? And now I realize I think the better version of what the first book, the investors paradox, is all about is how do you structure a conversation between buyers and sellers of anything that's complicated so that you can have a win-win scenario?”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“peer group, it's whether you had met client expectations. When I dove into that world of expectations formation, I was immediately introduced to the world of behavioral finance, how choices are made, not only condomen, but heavily influenced by a book by Sheena Ayengar called The Art of Choosing. It's probably the book that's changed my life professionally and personally more than any other because she writes about choice not just in a sterile sense, but she writes about choice and expectations formation as being kind of definitive or even constitutive of the human spirit. So you just don't enjoy the steak dinner. You just don't enjoy the nice vacation. You also, in some cases, more so enjoy the ability to choose the good dinner or the good vacation. Choice is actually a proxy for control from an evolutionary sense. And when we lack control, we are scared. And when we have control, we feel.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“To think about, okay, am I making good decisions? Am I making good non-decisions? It's impossible to say because you pass on 99 funds for every one that you really dive into, well, you can't really say whether you're skilled or not unless you think about the 99 that you passed on and whether they worked out on an absolute basis in relative to the one decision that you did make. What I concluded after putting a lot of thought and time into it over a couple years was that true success in investing broadly defined is when expectations map up with outcomes. And I began to realize, not in its fullest fruition in the second book I explored this, I think, a fair bit more deeply. But I began to grapple with the fact that success really wasn't so much quantitatively and precisely about your ability to beat benchmarks or to achieve a ranking in a certain”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“To be able to see the entire landscape of really smart, often very well compensated people making just a wide massive variety of decisions about how to best navigate global capital markets. In my own exploration of what I really want to do now, what do I want to do next? Where am I going to find my flow? The introspection that I put into sort of what I was doing led me to think about, okay, well, what's really driving success to your earlier question and sort of implicit notion that I'm a little bit anal and a little bit aggressive at times. I actually kept a spreadsheet of sorts over those 14 years of almost every interview that I did and I tried to keep track of type one and type two errors. It was another disaster. I mean, you read Mao Bustan and you read Annie Duke and you read Kahneman and you read everybody on decision making and I actually tried the time.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“The argument or the investor's paradox is that expectations matter. I went on to a couple other gigs after Mesro, and so all in over the course of fourteen years I did something north of four thousand manager interviews. And I don't think there's a strategy on the planet that I didn't do some form of.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so you take this experience where you were deeply ensconced in active management, doing manager research long only and then hedge funds, and you write your first book, The Investor's Paradox. Why don't you paraphrase what that book was about?”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“I left Mesero in twenty ten we had lived in London for a while because I ran global research from there. And I'll say I'll make a very long story short by saying that 2008 changed the business. The hedge fund industry changed. The fund of funds industry changed. My role in London and then back in Chicago changed. And it just didn't work out. I mean, I'd been doing it for a long time and it just felt like it was time to do something else. That's about the time that call it sort of a low key midlife crisis. Wasn't anything dramatic, but I really began to think, okay, what in the hell am I doing with my life? I vividly remember. I was sitting somewhere. It might have been right down the street here in New York where I was having a drink before meeting somebody and I wrote on a cocktail napkin, who grows up wanting to do manager research. I left academia with all this vim and vigor and had a great”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think a lot of people, especially during the heady days, I mean in 03, 04, 05, 06, 07, I think we were bringing in somewhere between one and two hundred fifty million dollars a month that we needed to allocate. So it was fast and furious. And I think there was an appreciation that at that pace of growth, if you're not dotting your I's and crossing your T's, you can get into a lot of harm. It ends up that we lost some money in 2008, but not nearly as much as some of our bigger competitors. And I think some of that diligence that was in the culture at the time had something to do with that because institutionalizing skepticism is something I think is very valuable but not easy to do.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“I could speak sort of a personal level at an institutional level at a personal level and something I've thought about as I've tried to grow over the years is that I am naturally curious about a lot of things. And when I want to know something, I really want to know. And so I was able to express that in one way, you know, doing a doctorate in the University of Chicago, a different way at Morningstar, and then a different way again at Mesro, but the underlying passion for asking questions and trying to come up with good answers, it drove me then, it absolutely drives me now. From an institutional point of view, I guess I could say that at both of those firms, there was an institutional integrity that was unflappable. Different organizations, and I've already spoken about Morningstar, Mesro had a similar attitude, vast majority of the assets were pension, endowment, foundation, and”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“Mesero at the time. Chicago was a global hub for the funda funds industry. I mean, at the time, you had Glenwood, Harris Associates, Grosver, Mesero, and so forth. And it was just really intriguing. It sounded fast-paced. And a part of the story is that after four plus years of interviewing long-only managers at Morningstar, it got a little bit boring and I wanted to stretch my legs a little bit. And it was sort of like in Willy Wonka when they're in that really tiny room and then he opens that small door that brings you into this room with a chocolate river and lollipop trees. It was like, holy moly, this is much bigger and more colorful.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I got hired away by a firm called Mesero, which you know well, really good Chicago institution, and they had a very quickly growing fund of hedge funds. And, you know, they were just bringing in a large amount of assets in the early 2000. The big institutional wave into hedge funds began after the 2000 to 2002 drawdown because so many funds, as we've talked about for a long time, were pressioned enough or smart enough to be long value and short growth, and they survived 99, and they put up absolutely monster numbers. And so all of the factors that seem to drive really good performance in absolute return strategies, not just long short equity, but in convert arb, merger ARB, global macro, and so forth, it was just a perfect storm in the good sense. So unbeknownst to me, until I got a call out of the blue from a friend of a friend who was running research.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I recall that Christine gave, who was my editor at the time starting in mid-2000 when I joined, she said, this was the harshest first analysis that anybody had done in the history of Morningstar.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“Here's a hard question, and I asked it in my very first interview, which is that if you have such a fantastic process, why have you trailed the market over every trailing period for the last ten years?”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“Through the whole cartoon, but at the end the whistle blows and they sort of walk off into the sunset together. That was the Hyde Park culture where I had some of the smartest people I've ever met in my life tell me what an idiot I was. Right before they bought me beers and told me I was doing good work. So getting on the phone with mutual fund manager and asking hard questions about what's their process, what do they own? How do they think about risk? How do they distinguish skill from luck? All of those things that I really didn't fully understand at first and maybe don't fully understand today. I was trained really well. So, you know, just having the confidence to ask hard questions of people who in most cases act like they have all of the answers was something that took a little bit of getting used to, but I have to admit, rankling the occasional hottie PM was quite fun for me.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“Part of the skill was being able to just get on the phone with somebody you don't know who manages ten or fifteen billion dollars of other people's money and ask tough questions. I had the benefit and the curse of having survived about a decade of seminars at the University of Chicago where if you recall the old cartoons where the sheepdog is chasing the fox and they just beat the crap out of each other.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“investing and I was just a cub analyst on the desk a lot of the friends who I made at the time I mean everybody sat in a cubicle Don Phillips was three cubicles away Joe Mansueta was eight cubicles away it was a very flat culture but Christine Benz and Jeff Patak and Kunal Kapoor and Bill Harding and a lot of folks that are still friends to this day that have gone on to great things were sitting right next to me and I fell in love with it I first got on the phone with a portfolio manager and asked really the only question I asked for about 15 years which is what do you do it was a good place to start and just let them kind of dig their own hole by trying to describe a coherent investment process that produced anything of merit and it was fun it was a lot of fun I was there for about four years and the culture that I was able to observe and be part of the people”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“What we do as hire quirky people who are fascinated by the markets have some writing ability, and we teach them the details that they need to know. And so I went for it. And it was just an amazing culture because it is sort of a quasi-academic culture. There are a lot of MAs and PhDs outside of finance. Don Phillips, who really invented the field of manager research, I think he is a master's degree in literature from the University of Texas. But the culture that he built right next to Joe Mansuedo, who remains a mentor to this day, it was just summarized by what was on the door then as it is now, which is investors come first. People are completely overwhelmed by the amount of information that was available to them. And this was when Joe built this. This is in the early 80s when you would go into a library and look at these mutual fund guides. And so what he built was an amazing culture that aimed to democracy.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“Brian, it's great to see you. Good to see you, Ted. Thanks for stopping by. Let's get started with your start in the business. My start in the business is odd. I had a career of sorts in academia. I did a doctorate in political science of all things at the University of Chicago. And I could summarize that experience by saying that by 1999 I was both miserable and broke. And I was really thinking to myself and thinking out loud to my fianc ⁇ at the time, like, what do I really want to do? And I did have some success on the academic job market, but I simply wasn't happy. So I just wanted to do something else. As I began to talk to people around Chicago where we wanted to stay, I met a friend who was at Morningstar, a guy named Josh Charleston, who's still there today, still a good friend. And he said, you know what?”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“And private wealth management, distinction between seeking wealth and trying to get rich, his terrific new book, and why volatility is risk. Brian's insightful take on investing and his journey from the complex to the simple is full of investment nuggets of gold. Please enjoy my conversation with Brian Portnoy.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“My guest on today's show is Brian Portnoy, the director of investment education at one hundred billion dollar investment solutions provider Vertus Investment Partners, where Brian strives to simplify the complex world of money in an effort to help investors make better decisions and lead a joyful life. For the past two decades, he has held senior investment research and strategy roles in the hedge fund and mutual fund industries at Chicago Equity Partners, Mesero Financial, and Morningstar. Brian is the author of The Investors Paradox, a book about manager selection rooted in choice theory. His second book, The Geometry of Wealth, Hits Electronic and Physical Bookstores This Week Our Conversation covers Brian's experience in manager research and lessons learned, choice theory and managing expectations, differences between institutional investment,”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hello, I'm Ted Sides, and this is Capital Allocators. This show is an open exploration of the people and process behind capital allocation through conversations with leaders in the money game, we learn how these holders of the keys to the kingdom allocate their time and their capital. You can keep up to date by visiting capital allocators podcast.com.”
2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
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2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
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2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
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2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source
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2018-06-18 · Capital Allocators · Brian Portnoy – From Complex to Simple (Capital Allocators, EP.57) · IDENTIFIED FROM THE TRANSCRIPT · source