YouSaid · the spoken record

Bruce Martin

lines on the record: 74
first: 2021-08-19
most recent: 2021-08-19
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Good, yeah, you need stuff in life to always work on. I think Munger says about Buffett, the reason he's great isn't just because he's really smart, but he said he's a learning machine. He never stopped learning. How does a guy at his age make such a huge investment in Apple so late after the fact and still make a huge fortune on it? If you never stop learning, I think it's great for your brain. I think it's great for your relationships. It's great for your mental health, all of it. So I'm already overwatering this plant.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Just give it some space, dude. Back off, like let your words land and let him sit. You can't force somebody, and I don't mean literally force them, but you can't make somebody see the light by continuing to show the light in their face because you don't think they're seeing it yet. So I'm trying to figure out the best way to do that. And I'm reading a, there's a very intense book now, and it's similar in that Zen book. It's taken me much longer to read. It's much harder. But the premise is almost like do nothing. I said this to my wife, and she's like, what? I'm like, it's sort of like trust and awareness and do nothing and be aware of what's coming up. You don't have to react to every single thing. Again, I'm learning it. I know it. It's going to take more work. You've seen it in my letters, right? You've seen me say things like do less. And I don't just mean it in investing. I mean it in everything.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a similar riff probably off of the previous question, and I would phrase it as not overwatering the plant, and this is why I've been reading these Zen and Buddha books, and I don't mean the actual plant. If somebody comes to me for advice, if it's my daughter, if it's a friend I can get on a tear and talk for a couple of hours, and I can follow up the next day and the next night, and again the next day, to the point where I'm not giving it enough space, I can make the excuse and say I'm just really fired up about it. I know I'm right on this, they're not saying.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“What does that mean He goes, I know what you're getting at. He goes, First of all, you have access to us. You talk to us. You're a private investor. So it's not like we would, but I can tell by the way you're asking the questions that you're trying to get us to say something in front of all these people. You're trying to imply something. And he was right. And he totally called me out on it. And so there was a big level of not just maturity, but just a different way of thinking. And again, I learned a lot of that at Angelo Gordon. And you learn a lot about that from Buffett, but you have to work with a person. Like I read it from Buffett, but I think you really have to work with people and see them in action and see them under pressure to recognize that there's a way to handle yourself. There's a way to do things. Nice guys can and do finish first by soften the edges.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sort of along the lines of what my father said you catch bees with honey, and words matter, and I'm still working on that. I have two daughters now that have graduated I try to give them advice, but clearly when I say stuff, my words land not how I intended them, and I can tell that from their reaction, I can tell when they go back to my wife and it comes back to me, and I'm sure I do that with friends. I'm sure I did that with people who worked for me. And so I'm aware of it. And I wish I had learned earlier on. And again, I probably would have had my dad lived a few more years, especially as I started working. It was funny, I remember on a conference call early on, the CFO calling me afterwards, big chemical company, many years ago, and he said, Bruce, you know, your questions on conference calls are not working for us.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“I worked from a very early age, and again I said money was a big part of our things, so I think what I learned from my mom was there's no beanbag here. Like, stand up and go figure it out”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was 17 when my dad passed away, but we were very close. He coached me in Little League, etc. And if my mom would get mad at me or disappointed because my grades weren't good enough, the lecture I was got from my dad was, he didn't really care. The only time he got really mad is if I misbehaved, which was not infrequently. And so to see my dad get really mad would be because I was being disrespectful in class or talking back or just not behaving. And so what I learned from my dad was like, I don't care how smart you are. I don't care how much money. I don't care what you do. Just be a good person. Be somebody, not that I can be proud of somebody you can be proud of that behave well. From my mother, what I learned, this will sound a little harsher, but it was more, you better find your own way. Now again, my father was sick when I was born. He had cancer, but then he was fine for seventeen years. I think it spooked them both enough, and she had said to me on more than one occasion, look, there's no money here. There's not going to be any money here that you're going to inherit or get during your life.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's no detail too small, and I hate to say this because it's a terrible way to think, but to have a partner, it's great to have a partner. It's one of the reasons I'm working alone now. It's great to have a partner to talk things through and bounce things off of, but you got to look at everything, which is frustrating to me and from that experience. So we almost lost control of that entire fund. None of that should have happened the way it happened, and all of it happened because A, I trusted, and I didn't verify”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“And then sure enough, the 2008 crisis hits, we're getting margin calls, and not only margin calls, we're basically having to post three times the capital that I thought we were going to have to pull their head risk guy in. My partner was on the road at the time. I'm like, what is going on? And I call him. I'm like, do you understand how this works? And he didn't. He hadn't. It wasn't what he explained to me. He goes, I needed to get a margin. I didn't realize you'd have to post another. Because what happens with loans at that time, if the loan fell to 90 from 100, you have to post those ten points. But at 90, you also don't get the same advance rate. And loans were falling. And so I realized we're not going to outrun this. That was the biggest mistake in the lesson learned was.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“I wouldn't say this was the biggest investment mistake. I don't tend to make really big ones, and I don't mean that in a overconfident or cocky way. I've lost plenty of money. But to me, I would say denture car don't total it. So I'd never done that investing-wise. Back in 2008, we had raised a one-turn lever credit hedge fund, and we were extremely busy at the time. We had just raised a bunch of CLOs, and I had a partner at the time, a co-portfolio manager, and we had negotiated all of our loan agreements, credit agreements for the CLOs together, and so when we were raising the hedge fund, I said, you know what, why don't you go negotiate our total return swap agreement, and I'll go deal with the investors, I'll raise the money. And we said, fine.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“I stumbled upon her. I never really had heard of her. There were other authors over the years that did it for me, but in the last twelve months those are the three.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I'll cheat on that question because people ask me and I say, well, I'll tell you my favorite book read in the last 12 months because I have so many favorite books over the years there'd be no way to pick one. And I'll actually give you three because as I said before, there's three different kind of genres. So for investing, I would say richer, wiser, happier by William Green was the most recent investment book that literally made me come out of my shoes. I loved it. I probably sent out 30 copies in addition to I sent it to an entire class at Sacred Heart. I sent it to my daughter who's graduating. I sent it to my other daughter graduated years ago. I think it's phenomenal. It struck a huge chord with me. Buddha's brain by Rick Hansen in sort of that Zen mode of stuff that I try to read that gets you to slow yourself down, I would highly recommend. And then for escape books, almost anything by Lily King, father of the rain, pleasing hour, the English teacher I find her writing just awesome. They're like classic.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think financial engineering like I'm not big on gimmickry. Okay, you guys should raise a bond and split this off and do this. Those are all pet peeves of mind. They all get in the way of compounding. They get in the way of finding, I think you and I have had this conversation once before. Do you want the jockey or the horse? But you really want both. And if you have the jockey, like, don't go in and start whispering stuff in his ear that you think you know better if the jockey asks that's fine. I'm having that experience now. There's two large investors. They're actually trying to take over a company management's in Bev them. I just find the whole thing a little toddy like this shouldn't be happening this way. And I'm not going to maximize my return because of what's happening. In fact, in this case, I'm going to end up with a large short-term capital gain because it's part of the game, but that would probably be my pet peeve.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say if I own something and an activist comes in and the activist thinks he knows better than management, that irritates me. I mean, I've seen so many whether they're private equity guys or guys.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“How do I say this without using a bad word? People who are full of it, and including myself, people who are bullshitting themselves me, I'm like, have we not had this conversation before? It's just not true. And I tell, again, college kids who are coming out. They're like, what's the most important thing? I'm like, authenticity. Be yourself. That's all anyone wants. It's all I ever wanted from any analyst who ever worked for me. It's all I ever wanted from myself. If you know the answer, great. If you don't, just say, I don't know it. Don't make it up. Whatever the opposite of truth is, that's my biggest pet peeve.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Even more so than what I enjoy the most, that is my most important daily habit by a mile because it sets the table. And the days where I'm like, you know what? I'm not going to work out first thing. I'll get to it later. Those are always worse days. Going for long walks is an important habit. I love it and I love doing conference calls on long walks. It's like a walking conversation. So those are probably two of my most important habits.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Enough to feel flexible, good. I love that. And my second, which is sort of tangential, is just sort of outdoor experiences. And I phrase it that way because I'm not, you're not going to see me hiking Kilimanjaro or anything like that, but I'll go for an hour walk. I love that. If my son's got a baseball game, I love sitting outside and watching that. I've got a 12-year-old, 26 foot boat, and just getting on it and trying to find nooks and crannies and getting the wind or salt air in my face. I don't do it extremely often, but I call those outdoor experiences. It's pretty simple.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“I guess I would say my favorite is exercise, believe it or not. And like everyone else, I don't love going to the gym every morning because when I force myself to do it and I do it, and like I said, I try to do something every day, the day is just so much better. I think if I was going to be really honest with myself, exercise is probably my favorite activity. I'm not killing it in there. 30 to 60 minutes. Sort of like I got through college taking the gentleman's beat.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“That are the most right, et cetera, et cetera. So I do that all day, and I'll usually read an investment book or listen to a podcast to hear how other investors think. But away from that, I like to read personal brain stuff, so I read a book this year called Buddha's Brain, which I thought was phenomenal, and I recommend it to anybody I could get to incentive to some people so helpful in terms of creating distance from your own sort of thinking and creating space in there and stepping away from it, which I think is so important. And then I love to read good novels that really just help me escape from all of that and get into someone else's world.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Things on a list, and he would sort of create distance between the board and the CEO and say, look, John, there's three big levers you can pull. Figure out what they are, and pull them, tell the board, and if we succeed in all those, maybe we'll move on to the next three. So I'm way more focused on that when I'm researching. So that it distracts me from reading a little bit. I want to understand the business. You're going to get that from what we call original source documents, which is 10Ks, mostly Ks, Qs, you're not getting a lot. I do like really good business writings, but even then it's been disappointing. Like Barron's used to be phenomenal for me, and I feel like it's much more about the sound bite, the stories are just not nearly as deep as they used to be, and everybody I talk to feels the same way. I like Bloomberg news stories. I feel like they've got the best journalists, but then Bloomberg is a filter for me. It's worth every penny of the subscription price because they pull the best story.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is transactional and almost everything they write is to generate activity that's not as true as it used to be, but the bottom line is I'm still shocked and it's not to take anything away from sell side analysts, but for the most part, the breadth of stuff they cover and the way they're supposed to communicate, like when I'll ask them really probing questions or deep about a company if I can't get a hold of the CEO and I really, they never know the answer. They just don't think about it the way I do. They're way more focused on PE ratios and this and that. And I've sat down with CEOs of banks and other and at the end of the meeting they're like, wow, you ask questions that nobody else asks. Like people are so much more focused on to the decimal. And I'm way more focused on what are the three big things. How are you running this company every day? What are the three big levers you're going to pull? And I got that from being on the boards of some companies back in 08 and I got that from a smart guy who we used as chairman who said that. Like we would come to a board meeting, CEO would have 23.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's funny, you can talk about insecurity. I feel like people read way more than me, like Buffett and Munger and the people who really follow, they would say you need to read 500 pages a day. I think Munger would really insist on that. And if you can get up to 1,000. And I think the two guys that Buffett hired, that's what they do. And I would say that they're much more focused in their reading, meaning I think they're reading almost exclusively annual reports. I think they want to read the annual report of every company. I would kind of aspire to that. I have too many varied interests and there's different ways I like to think. So my reading takes three forms. I'll call it three different genres. Most of it is investing because all day at work, that's what I'm doing. And it's an annual report. It's quarterly report. I don't read as many research reports as I used to, and I think that's a typical thing for experienced investors. It's cliche to say that the street is...”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is a huge part of my life. Like, just get rid of it, Bruce. It's a distraction. It doesn't matter. Just go value your businesses. If I can find 20 to 25 to 30, that's a lot. That's plenty. That's it.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's not a risk because I don't need my money tomorrow or in five years. It's an opportunity. It's a risk if you're levered or of no cash. Other than that, it's a pothole that's not going to total your car if you're a value investor. It's a detour. I've explained it this way in my letters to our investors, which is I know I'm going from here to there. Let's call it 10% a year over rolling seven year period. That's my goal. But sometimes I got to take a detour. Sometimes I have to go backwards because there's this huge accident in front of me. And in 08, it was the credit markets. Last year was COVID. Could it be the popping of the meme stocks? It could be. And you don't know until it happens. I barely watch with all due respect to CNBC. I can barely watch it anymore. It's not doing me a service listening to pontifications about Bitcoin or GameStop or AMC. So it's not doing anyone a service, but I understand they're in the entertainment business, so that's what they're going to do. But noise reduction.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“How many participants in the market own a bunch of Bitcoin? How many are levered on that bet? How much own Tesla? How many are levered on that bet? Because if these things collapse, Is it going to take the market down with it or not? Now if you're a value investor like I am,”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“But the point of that is of all those dot coms, Amazon made it. But people look back and talk about it like it was almost easy, like, oh, you just buy these great companies and you sit back. I'm like, no, there was tons of companies that went bankrupt or that never lived even close to those valuations. If you're paying a trillion dollars or 500 billion dollars for a business that either has no or little cash flow, it just doesn't make any sense. That's where the risk is to me. So if you have to know what you own and how excessively valued it is. So I'll take a bigger, more faraway view, which is what I don't know about the market, if you want to talk about the market.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he was a value guy, and here now we're talking, and he bought Amazon. I'm like, how could you buy it at that valuation? Which is ironic, right? Because it's so much higher today. But he said, I have no choice. It's this much of the index. I compete with the index. I have to. I found that very distasteful, but I understood it”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, Vitalik Hatzen Nelson, who's written a few books, who I really like reading his stuff, he wrote like a, I don't know, fifty page I'm looking around my desk for it, pamphlet on Tesla because he really wanted to understand it. And in fifty pages he came to the same conclusion that I came to just really looking at its financials, which is wherever Tesla is now, five hundred plus a share, 600. It's probably in our brains I'd pay forty or fifty bucks a share. But as a multiple of the cash flow, that's to me where the risks are. When you're paying astronomical prices, you're just speculating that a business is going to grow into that, right? Nobody knows that. Amazon's amazing. I mean, I was at Putnam back in 97 and 99. That's when the dot-com era really took off. A guy was running an equity fund.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's unlevered cash flow. It almost equates if you think about a company with no debt and you're paying 10 times e bit if you assume a 30% tax rate, it's like you're paying a 14 PE, which is cheap. So if you have a good business and it's stable to slightly growing, you're going to make good money if you pay ten times EBITDA less CapEx. If you can pay less than that, you're going to make great money. If it's a really good business growing faster, you can pay a little more than that. It's all okay. So if you look at a business, I've talked a fair bit about Tesla to people. I had a friend of mine said, don't I have to own it? I'm like,”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Going to be bad for me and you. I'm like, I just don't want to do it. And so the risks are more obvious. I'll make it very simple. I try to buy businesses, non-financial, regular businesses at 10 times EBITDA less capex. I have found and have read other pieces and I'd love to find this one piece that he's like, there's seven ways to look at a company. We use all these seven, but when we look back, ten times EBITDALS CapEx has really been the barometer, which basically is 10 times eBit”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“I really have big thoughts about the market. I'm always security specific, someone will ask me, what are the opportunities? I'll say look, here's a couple of names I own, here's why, and I almost never tell anybody that anymore because inevitably if somebody's like, give me your single best idea. In fact, a friend of mine, my mentor, he did that three years ago, that year my fund was up twenty percent. The name I gave him, I think, was down fifty. And so I tell people, they're like, what should I invest in? I'm like, just invest in Stilllake because any individual thing I tell you.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“To handle it, you're in the wrong game. And so I can take a big distance from that kind of perspective and say I got this.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“And then destroy you. You often looked at the numbers and said, wow, poor Brucey started this at the wrong time. I will look back, I am sure, and I've heard other value investors say this who started around two thousand eight. You're almost better off starting in a really trying period, in a really testing period, because if you stick with it through that, the stuff you learn from that, I feel like I can just about guarantee you that the next time we get a dip like that, it will be less mentally taxing. I self-reinforce. I was going back and looking through Berkshire annual reports, and I was telling my investors, if you look at Berkshire's stock performance, there's been, I think, four or five times in the last fifty years where the stock collapsed as much as forty percent. And Buffett said it two years ago, I think, in his letter. He goes, about once every ten years, you're going to suffer a 30 to fifty percent drop if you're not mentally prepared.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I heard a value investor say a couple years ago, which I'm now finally really experiencing the upside of, which is delightful, which is underperformance is the price you pay for future outperformance. So when I say I underperform the index for a while, I don't know if you play Jin Rummy, Buffett says you can learn a lot about people from the way they play cards. He's referring to bridge, and I haven't picked up bridge yet, but I love playing Jim, but I'm the kind of Jin Rummy player who I'm more likely to hoard. Really good stacked hand, and then just dump it all down at you, and it'll look like I have nothing. I used to play with my grandmother. Every time she got something, she threw it down. And I'm more trying to starve you out.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“So that's my goal. I have heard other investors say I'll digress for a moment like you have to beat the index if you're not beating the index. What's the point of doing it? And that just doesn't resonate with me. If I was in the index and the index was up, pick a number, 30%, 40%, and I could see what was in the index. And if I saw stocks like Tesla or Netflix or things that had these valuations that made absolutely no sense to me, I wouldn't own them. I don't want to own them. I won't stay in it. And so the point to me isn't, did you beat the index? The point to me is how comfortable are you overall? Like I sleep extremely well at night. I happen to love what I do, so I would do it anyway. But it's not even the control freak in me. I've just been studying this for 25 years. I'm not going to hand my money off to a blind index that may be about to go off a cliff.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Trying to be a guy who compounds, I use ten percent for a couple of reasons. I think it shows you my mindset, which is I'm not trying to shoot the moon. If we end up compounding it more than 10%, no one's going to be more thrilled than me, eighty percent of the fund, it's a vast preponderance of my family's net worth, but I align it with the risks I'm taking. If I compound a ten percent, we'll double our money every seven years. So if I end up doing this for twenty years, I'll double my money three times. I plan on doing it for more than twenty years. So that's sort of my barometer. And I wrote in my first letters, I'll tell you what the S&P 500 is doing. That's what I'll compare it to in our sheets. And the way I phrase it was just so you know what the weather is like outside. Is it sunny and we're up fifteen, but guess what? The market's up 25. You should know that. Over rolling seven-year periods, the goal is to compound to ten percent.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“So talk about what you are trying to do, it's still like just like you were so transparent when I first met you when we talked about CLOs, when you launched Stillake and we talked about what are you trying to beat? Are you trying to be a small cap, a large cap, a growth of value? You actually explained it to me. You're like, I don't know what I'm trying to be. I'm trying to compound my capital consistently.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's okay if it's 4% of the portfolio, five percent. I don't want it to be ten. I don't have any hard rules. I have guidelines, but generally speaking, if I have a position that's getting over seven, seven and a half percent, that's starting to get uncomfortable for me unless it's the biggest no-brainer on the planet. I don't consider 25 to 30 names to be concentrated, certainly more concentrated than your normal fund, but to me not as concentrated as others who do what I do. It's just, it's my sweet spot. It just feels right.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“For me, I just know for so many reasons, and I mentioned my dad dying when I was younger, stuff happens. Stuff comes out of nowhere, stuff you didn't see you didn't plan for, the company that had the cyanide scare in Tylenol thirty years ago, but you could have a great investment in a pharma company and then all of a sudden somebody breaks in and injects and everything's pulled and the stock drops thirty, forty percent and you don't know if it's an internal systems problem I've just seen those kinds of things happen so many times the fraud era with Enron and Adelphi etc. I don't think a lot of value guys owned that. I remember looking at those back then the financials were too opaque but the point is if I'm going to get blown up on an investment”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“As an analyst, I used to say I cover sixty names, twenty I know really well and cover close, forty they're kind of higher quality, I don't pay close attention. So it's almost like the index approach, right? People solve it that way. It's just not appealing to me. So in equities, after reading all the buffet stuff, two books I read that pretty much put me over the hump and convinced me that I'm going to do this alone and do it this way. One was the Dondo investor by Manish Pabri, and the other was the education of a value investor by Guy Spear. They happen to be good friends. Those two guys run their own funds. And I think they have maybe ten positions. I think Guy may have may have as many as twenty, but they're way more concentrated. I thought that's what I was going to do. When I started Still Lake, I thought that, and then everybody's got to find their own comfort zone. And I just concluded 10 positions, 10% each is not comfortable.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Earlier, the reason we didn't raise thirty billion in credit, and this was a speech I got when I first got to Angela Gordon that I repeated to people, we wanted to be excellent. That was way more important than being huge. And to be excellent in credit, it's not a very liquid market. So I wanted to own only the best names that we thought as far as solidity coupled with spreading the most for the best names. And I wanted our analysts to be so focused on them that if there was any whiff of trouble, we would be one of the first ones to sell them, so we didn't get stuck because when loans fall, they don't drift down usually. They just collapse. They go from one hundred to eighty, and if you didn't see that coming, that's a problem, and it can go lower and lower from there. And I learned that at Putnam. When I was at Putnam, each analyst covered 60 names, 60. And we had a lot of analysts. So we had hundreds of names because it was a $18 billion high-yield board.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Never going to be able to make up for your losses. You can do cool things, you can buy a loan at 97 or 95 or occasionally cheaper in really big dislocations. Most loans you'll get a slight discount to par and maybe you'll make a point and you're spread. Maybe you get pre- but generally speaking you're earning your coupon if you're lucky another 100, 200 basis points. So you cannot make up for losses. When you remember this and not to digress too much, but when you model a CLO, you assume 2% of your loans will go bad and you'll have 20% loss or 80% recovery on those loans. So keep it simple. You make 100 loans to go bad and wow you got 80 cents back and that models out to a good 20% return on a well structured CLO probably not anymore but back then so I want it to be as concentrated as we could be and I was told people and I think you hinted at this”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“So in lone land we were pretty concentrated to have a platform I think at our peak we were I don't know five or six billion when I was managing over those 10 years all the different funds most managers of loans I would say had several hundred loans I didn't believe in that I didn't want that but in credit it was”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“So let's use that as a pivot into what you're doing. It's still so many changes from a large company with a commute into the city with tons of analysts working for you. And even the portfolio, you mentioned with CLOs you would bundle together 100 different loans, highly diversified. Today, at Still Lake, Mile from your house, mostly your own money with some outside investors, you're 100% aligned. I don't think I've ever met a GP who's more aligned than what you are, a very concentrated portfolio relative to what you had in the CLO space.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“My next thing would be, and what are the most important things? And I can tell you two of the most important things on the list was no commute and the ability to wear jeans and a t-shirt. And again, you're laughing and it sounds silly, but the quality of life, and I don't mean that in a casual way, the ability for me to think clearly is that to not have to get up on a train schedule. And I used to call it, you know, if you've seen the movie Rainman, you get Rainman brain. Like I'll be on the 710. I'll definitely be on the, if I don't get the 710, I'll be the 712. 712 is not an express. 718 is definitely a local. So maybe the 720, it rattles me. Like some people love that and you get into the game. You don't realize you're doing until you're not doing it. And then it's like a fan going off in the room that you didn't even know was on. You're like, wow, it's just quiet. But I find the same thing with clothes. If I can throw on jeans and a t-shirt, okay, I'm not thinking about the suit and the shirt. So it's all back to I just want to invest.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Three, six analysts. So I don't miss that commuting no, but it's not just commuting. I still do this. And I did it a couple of weeks ago. A list of things I advise students on, and one of them I always say always think, can I tell my kids this? Always sort of think five years down the road. Whatever you're doing, you don't have to know what you're going to be doing in five years, but have a vision in your head of roughly what you'd like to be doing and make sure that what you're doing today is putting you in that direction. Don't just aimlessly do something. Don't not think forward. Be open-minded. Be open to pivoting, but have that vision. This part may sound a little crazy, but I had a spiral notebook that I always kept with me, and I always had an active list of...”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Maureen, it's funny you say that to me, and this is very selfish, if I come into the office, I know what I want to do, and I just want to do it. If I want to take a break in the middle of the day and start chatting with people, I'm happy to do that and I enjoy that, and I still do that now. I go for long walks in the middle of every day and I either call someone or listen to a podcast. But I don't want to be distracted by everyone else's desire to talk it first thing in the morning or any time in the morning. It's why I don't work from home, even though I could. I'm a mile away. Like when I'm in the zone, I love being in the zone, and I love having my private time to focus and focus, and I can't if I'm being distracted. So I do love people I love chatting with people I love bouncing ideas, but I want to do it on my time. There was no way to do that in an environment like that. And Angela Gordon was one of the calmest environments you'll find on Wall Street, but this is, again, a different conversation which boils down to why do you work by yourself as opposed to have one, two.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“I didn't want to hurt anyone's feelings by telling them that I didn't miss that. The woman who took my job when I left Maureen Daleva I had known Maureen for many years before asking her if she wanted to come to the buy side. She called me when I left and said, Bruce, I'm worried about you. I said, why? She goes, You're going to miss people. You're a people person. You love coming. I go.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Do you want to do Bruce? Do you want to go inside of a big company again? Do you want to go inside of a little company again? Do you want to go on the road for a year to raise money? And so I pushed myself to get enough personal capital and I can tell you like at Angelo Gordon I had a smaller house in a lesser town than all of the analysts who worked for me for twenty years because I was stockpiling all that money and investing it so I could grow it so one day I could do what I did. So to be able to drive to your own office pull the shades sit in quiet solitude make as few decisions as possible and just read. That's always been my dream. It was an easy pivot. I just put up with all the noise for 23 years to get to the dream.”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source
“Those skills to the equity world, which is much bigger than the leverage credit world in terms of number of things you can look at, and much bigger in terms of money you can make. The give up is volatility. You're going to get a lot more volatility in the equity world than you're going to get in the credit world. But one of the things you really get is liquidity. I'm going a different tangent. So to me, the decision to go do still lake, that wasn't a leap. The question was”
2021-08-19 · Capital Allocators · Bruce Martin – Still Lake Capital [Manager Meetings, EP.7) · IDENTIFIED FROM THE TRANSCRIPT · source