YouSaid · the spoken record

Dave Butler

lines on the record: 104
first: 2018-07-13
most recent: 2018-07-13
sittings or episodes: 1
sources: podcast

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“And then some. Yeah, the 10 year numbers on value versus growth value was ahead of growth as of mid of 2000. So you had nine and a half years or nine and three quarters years where growth was just pounding value. And then within a three-month period, value over that whole 10-year period actually had a better performance income. So I think, you know, there's a lot of stories like that.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“That's just it is counseling. It's education beforehand and then it's counseling during and then it's kind of a recognition after the fact. So you look back at that 1999 period that you were just mentioning when Warren Buffett was out of favor, or value was out of favor. I think it was in like three months value actually turned around so quickly or actually growth dropped through the floor. Right.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there's always going to be these big trends, if you will, or kind of these movements in markets that reflect well or poorly on a specific area of the market or asset class. So having been around this for 25 years now, you look back at every factor, if you will. There's always going to be moments in periods of time where they don't actually outperform or have the premium that we discussed earlier. Equity is underperformed T-bills for 16 years from 1966 to 1982. Value underperformed growth all through the 90s until the tech bust. In March of 2000”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a combination of, I think, those two parts. One is great portfolio management and great implementation, but there's also the great research aspect as well. So there's a lot of research out there in the public domain. The question is, can you implement that research in a very effective, efficient way?”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Introduce the three factor model, and that was when the value portfolios were launched back in 1992. So what I would say is I think dimensional has always been through our connections with academics externally and even through our internal academic teams, we've always been on the cutting edge of multi-factor investing. But most importantly, and David Booth will point this out, is that we've been able not only to recognize the data and the research that is out there, but we've been able to implement in a very, very effective way. So when you look at our returns and our quote-unquote body of work over 36 years, 1981 was the launch of the microcap. We've not only been able to capture the multi-factor rate of return, but we've actually been able to add some value from an implementation perspective. So it's a”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, Smart Beta is a catch-all phrase for multi factor investing in certain ways. The way I look at it, and I'm definitely not in the academic circles like the famas and Frenches and so forth, but I look at dimensional's existence in 1981, we started with the first small cap portfolio. And that was probably the first multi-factor portfolio that was out there. 92, Famine French, you know.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“No, it's very what I come back to is, and we talk a lot about this at the firm, we talk about models, and models are not reality, and models are used to get a sensible view about a way things work. So what dimensional has always been about, and I think this is why we have such a long-term relationship with our end clients, is we're not going to come out with anything that's fancy or different just to do it for marketing reasons. We have this group of people that look at the capital markets, their empiricists, they look at data all day long. What they want to come out is they want to come out with something that's sensible, that's reasonable, that's repeatable. There's an aspect to it that, from my perspective for advisors and then for their clients, is that there's an expectation that we are going to deliver something that is going to be implemented in a very, very robust way.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“And more. It's Myron Schultz is on our board. So we've got three or four notebooks that actually are participating in the firm in some respect. So the great thing about it is they all are actively engaged in the business, in some aspect, particularly with Ken French and Gene Fama there on the investment committee and they participate in all investment discussions around the firm. Is that a little bit?”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, they're all fully engaged, so when you talk about all those names, and it's so it's Martin Miller, it's Gene Falmer. It's Gene Fama, it's Ken French.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“They're not happy about it, but they're not upset at the point where they actually pull their money and decide to do something else. So there's a real important aspect here that I don't think has ever been addressed in a significant way. And that is trying to get people to be more comfortable with the expectations longer term around the capital markets and the expectations on returns.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think the concept of meeting expectations is important here. So when I think about why we had the kind of inflows that we had and the performance that transpired over that time is I think the advisors did a terrific job of educating their clients. And when I say educating, I'm talking about what is it that we expect from the capital markets. So long term, if you look back to 1926, equities have returned 10%. But there's a lot of time periods where that 10% isn't realized. And there might be markets that are down 40 or 50 percent. So at the front, what the independent advisor does is they actually do train and they educate the client as to the potential outcomes that they might expect over time. So when it does happen,”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Understood why their assets were invested the way they were, and they were able to keep the emotions intact so that people had a chance at the long-term returns that we always talk about of 10% for the equity markets. If you're not in the market full time, you're going to have a hard time getting those long-term rates of return. The model was really different. It was brand new at that time. The idea of an independent advisor was more an idea of the natural reality. And what we see now, we've seen a real transition towards this model in a significant way.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, over half. It's been a significant part of the business. And the upside too is when you look at what has actually transpired is that the quote-unquote retail assets, the individual assets have performed and acted and been very compatible to the institutional assets in the fund. So there hasn't been a retail aspect to the kind of the in and out of the markets based on market performance. There's been a nice consistent cash flow in 2008-2009 in particular when markets were tanking and there was a lot of fear and emotion in the market. I think there was $500 billion that went out of the market over a couple year period out of equity mutual funds from Dimensional's case. We actually had positive net flows during that time period, positive over that time period and over each quarter during that time period. And that was because of the advisor's role and the discipline that they provided to the client to make sure that that client”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly, exactly. And how did that work out? It worked out fabulously well. So when I started, we were about a billion and a half from financial advisors. Today, I think we're $365 billion from financial advisors. Well over half.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Disruptive expensive. We're in the smallest part of the market. We can't have that kind of trading. We have institutional clients in those portfolios as well. So Dan came back and said, no, listen, we've got a different type of a model here. We're going to go educate these advisors. We're going to make sure that their long-term buy and hold advisors. We're going to go through a methodical process to get them engaged and understand how we work and why we work. And that money will be compatible to the money that's already in the portfolio, institutional portfolio. So that's how it started.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“What is it called 910? 910 as in the 9th and 10th Deciles. So the bottom 20% of stocks, if you will. So that was the portfolio that he was interested in. He came to David Booth and to Rex Singfield, and he said, you know, I'd like to use these portfolios with my clients And to their credit, you know, David and Rex said, well, that's retail money, our expectation on retail money is that it's hot, meaning that if markets were good, they'd come in and markets were bad, it would go back out. We can't have that kind of cash flow in the portfolio.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“The original Booth and Company put out. The original fund. It was called the 910 Fund at the time when I started, but it was 91. Well,”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“And he thought the better way to do that was to flip that around and change that in the sense that as he became an independent advisor, he worked for the client, he worked in their best interests, he worked on their behalf. changed the model to say, hey, this client would basically sit at the top of the stack. And then this advisor, this independent advisor, would be working for that client. And then the advisor would make decisions as to what was the best solution, investment solution for the client, again, in their behalf and in their best interest. So it was a change in the model, this independent advice model was something that was very, very different that nobody had ever seen really in the financial services space where we were really used to having product developed and being pushed as sold commission type product. So that was a big change. Dan had that idea. He also liked the idea of indexing. So we liked this idea of low cost.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Again, all of it goes towards Dan's creativity and imagination, but his view, he was a broker for many, many years. And he felt that the industry, in essence, was conflicted in the sense that product would be developed and delivered by the industry, and then it would push be pushed to commission salesmen and those commissioned salesmen would sell that product to clients.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“And people ask me why would you start without any detail around what were you going to do? And I said, well, it was that moment in my life, in my career where I wanted to do something that I felt really good about and really passionate about. And I didn't really worry about the monetary aspect or anything like that.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“And we didn't talk about any compensation. We didn't talk about what my title would be. We didn't talk about any detail other than this idea that this concept, this mission, this energy that he was putting towards this approach around clients was what he felt good about and basically over the following week as I read and thought more about it, I felt really good about as well. So I really joined what I would call kind of a mission rather than a job. And it was a passion for all of us. And we thought that we could change the way financial services were delivered in the country. And that was sort of our mantra and our energy in the early days.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I started out as what we call a regional director, so that's a person that works with advisors out in the field. But I think the key point for me is. As I mentioned earlier, on Monday morning, I walked into De Menschel's offices and had this interview. And Dan Wheeler was terrific. And he said, you know, why don't you come back the following Monday and start?”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Dan, David Booth had another appointment to go to, so he asked Dan to take Merton Miller to lunch with him. And Dan said, sure, but I got this new guy here, Dave Butler, that will have to go with us. And David said, that's fine. And so I sat there at lunch with a Nobel Prize winner in finance, Merton Miller, and he talked about all those really simplistic financial concepts, your buddy, costs matter. Markets work, prices are efficient, et cetera, et cetera. And I just had this kind of epiphany of what I thought the capital markets could deliver and should be, and then how that coupled with the independent advice story from Dan. And I thought, man, this is a place where I think I could spend some time.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“And Dan was the first financial advisor to use dimensional funds in his practice. He was an independent advisor working through Schwab at the time, and he was running the business four dimensional. And Dan sat me down basically, and I had what we call an aha moment. He just sat me down and said, here's how the capital markets work. Here's how we think. Here's what an independent advisor is. Here's how they act as a fiduciary to the client. That combination is one that we think is the right answer for the end client and one that hasn't been delivered to clients in financial services space. And I remember I walked out of that office and I thought to myself, I could be part of this. This is something that's really interesting and exciting to me. I went up and had lunch that day. Merton Miller, who is a Nobel Prize winner”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, just a long story short, I was here in New York and I had decided that I was going to get out of financial services. I didn't want to necessarily be in the industry. From what kind of I saw and I felt. And I decided I was going to go be a teacher and a coach in California. So I mentally decided I was going to move back to California. I was sitting on the desk one day. I was reading the Wall Street Journal and I saw an ad that said money manager, Santa Monica, California. And I thought, well, you know, why not? I'll just send a resume out just in case. Yeah, have one more option. And it turned out that Santa Monica, California firm was dimensional fund advisors. And so I think it was on a Christmas break back in 1994. I flew out to California. I went to their offices to do an interview and I met a gentleman named Dan Wheeler.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“We'll have basically two large headquarters. So Austin will hold 1,200 people. Charlotte will hold about 600 to 700. And we still have an office in Santa Monica in California. We have about 150 people there.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“I was here, I'd say, about seven years total, so about, I think, three and a half years with Meryl, and I came back with dementia for another four years or so.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“So I end up going for my last year. I went to England, to Birmingham in the UK. And I went for about two months and I realized my leg was still as bad as it's ever been. I knew my career was done. I had mentally pretty much checked out. I had actually interviewed with Merrill Lynch back in my time doing my MBA at Berkeley. And at the time, they said, well, we don't have a spot for you right now, but we'd love to keep in touch. We think we have a spot for you. So, long story short, two months into it, I'm sitting in Birmingham, England, and my mom calls and said a gentleman from Merrill Lynch just called and wanted to talk to you. So I got on the phone with him and he said, we've got a spot for you on the desk.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you're a New York guy, so I think you'll get a kick out of this story. So I had gone, well, I'll step back. I had started my MBA as a basketball player in college. So I happen to have a knee injury in my junior year of college. And what that allowed me to do was it allowed me to start taking grad classes my last year while I had eligibility. So I started my MBA. I had gone off and I wanted to find out if I could play professionally. So I'd gone to Istanbul, to Turkey. The following year I had gone to Japan. But there's a window, I think, of five years to finish up your MBA once you had started it. So I decided I would go back because of my calf injury. I'd go back and finish up my MBA at Berkeley. And so I did that. And like every athlete, I still had the bug. I thought I could still do a little something.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“God bless you. That might help you get into a better school, but it's never going to be about that. It's going to be all about academics.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“So, there's a lot of ego into it. There's a lot of parental ego. I see that now with my kids. Really? The parents, I think, are so enamored with sport and with the notoriety, if you will, that comes from athletic success that they get involved and they get energized by the whole thing. And I think that's problematic as well. So I, you know, with my kids, I try to just say, look, it's all about school, just like my dad is, all about academics. If you happen to be a good basketball player, I happen to be a good volleyball player.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“At 21 or 20, it just is not going to happen because, again, they're invincible and they can't imagine that they're not the one that's going to go play professional sports. I can tell you every player on my Cal basketball team, all 12 guys thought for sure that they were the one that was going to go play in the NBA. And it's frankly because all of them were all state and all American and all this and all that.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Put some sort of a trust fund together with the money they're making off the NCA tournament and so forth, put a trust fund together that's not touchable, not available until age 25. And at age 25, once a kid has had the chance to go through the professional process, maybe they get injured like I did, and they start looking around and they think, hmm, you know, this athletic thing is not going to happen, then that's the moment when I think a trust that would allow them to go back to school, go back to get a grad degree, et cetera, et cetera, would be really, really valuable.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“And when you think about how long these careers after the athletic career is going to last, it dwarfs anything athletically. But to get that message across to a young kid, I think it's really tough. My personal perspective on it, and I've talked to David Booth about this as well, is I think the NCAA with college athletes ought to.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“I've been doing this for 25 years now, dimensional, and I've had the same discussion I did 25 years ago as I did today because people ask me that as an old athlete. How do you change the energy and the momentum around athletes and their future in terms of finance? And it just, I think it comes back to there's an ego aspect. There's a mentality that this is never going to end. But to your point, you look at the NFL, I think the average career is three years. I think the NBA is something on the order of two to three years.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Very young, very immature. Very young, very immature. And oftentimes, and I will include myself, you feel invincible, so athletically you're bigger, you're stronger, you're faster. The idea of being 30 or 40 or 50 years old doesn't even seem plausible at the time. So the idea of actually thinking into the future and then saving or trying to be conservative about how you spend and so forth is just not something that comes to mind at that time. And I think that's part of the issue is I just don't think the maturity level is there to be able to differentiate how and why you would actually make a plan from a financial perspective into your future.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, it's funny, David Booth, the founder of Dimensional, and I talk about this all the time because we're both big basketball fans. I think it's, you know, success comes really early to athletes.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“I came back and I told my mom dad I go, I think this is where I want to be. It's going to be a great place to play basketball and enjoy myself as a student.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I had the story go, I went on a weekend visit to each one of those. I'm a California kid, Southern California. I went to Harvard. It happened to be 10 degrees and snowing. And I just sort of scratched my head and just couldn't contemplate being out there in that weather. And I thought I was going to be back in California anyway. So came down to Cal Stanford and I went up to Stanford. For the weekend and went to two movies and sat around a dorm is super boring at the time for me. I went to Cal, and first night there, I went to Toga Party at a fraternity house that I thought was great. I went to a football game the next morning with great son and a lot of fun people around. We went to San Francisco that night.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“What's going on in your math? What are you doing in class and so forth? So I was sort of geared in that direction anyway. And I think when I... Finally, made my college decision. It came down to Cal, Stanford, and Harvard. Those are my final three. Choices. So obviously, there was some academic aspect to those three names that clearly weren't basketball shops necessarily, but really great academic. You got into...”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“He's 6'3. Okay. So a decent size. But he was always very focused on academics Regardless of all the athletic accomplishments or acknowledgements, he never really paid much attention to that. He always talked about school and books.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“He's the run to the litter, but growing up, people used to laugh because they look at the three of us growing up. We're all about a year and a half to two years apart, but we're all the same size growing up. So people thought we were triplets, possibly. Oh, really? There's no size difference. But he was the tougher guy. He was more physical. So I used to play against him quite a bit and played him in the front yard all day long.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, Broy, we played all day long. We had a, you know, like every other kid, we had a driveway front yard. We had a basket up on the garage. And we played. I had an older, I do have an older brother, Mike, that he's about 6'4", 6'5". So he's the run.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Berkeley versus Stanford. So that's UCLA versus USC in the Bay Area kind of thing. And we actually guarded each other. So we were on the court playing against one another, which I imagine you did”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, my brother Greg is a bigger guy. He's about a seven footer. Oh, really? So this is my, I call him my little brother, but he's a seven-footer. He played at Stanford.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“A little bit more, maybe a little bit more outside. I had to score in Europe. I had to be able to shoot from the outside. And three-point line had just come into the existence at that time. So the three-point line wasn't part of the game like it is now. So I didn't really shoot threes, but I could, you know, it was a good mid-range score. I could rebound. I could dunk and I could jump pretty well. People used to think of me as kind of a high flyer kind of inside type of person. So that was always a big part of my game.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“You heard it pop on television. It's Because you know exactly what it is. You know, right when it happens, you know you're done. So that was it. That was the moment when my leg kind of just limited my potential. So I always thought I was a good enough player. I played enough. And I did enough things well. I didn't ever do anything super, super well. But I was good enough to, I think, at my peak and my highest level at 100%, I could be the kind of guy that could collaborate and be on a team. Six men off the bench, is that what you're thinking? Yeah, you know, I could tip and I could rebound and I could do that sort of dirty man kind of work on the basketball court. The coaches appreciated it.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“It was actually a practice injury, so it was kind of one of those up and back drills, and I stopped and get ready to take off and I heard this big snap. You heard it. Yeah, other people in the gym heard it too. And I thought my Achilles had snapped. Right, because I've watched it. Because that's what you always hear.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“You did permanent damage. The downside is I did a little bit of permanent damage to my calf and never really quite got back to where I thought I could actually make the NBA.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source
“Minimum and a maximum. It's the only number you can have. There's one player, one American per team. And the expectation, of course, if you're that one player is that you need to lead the team in scoring, you need to lead the team in rebound. You've got to be the main person. So when I got back to the States after my injury, my doctor said, you know, that was probably a two to three month sit-out type of an injury. And I was out for about a week.”
2018-07-13 · Masters in Business · Dave Butler Discusses Finance and Basketball · IDENTIFIED FROM THE TRANSCRIPT · source