YouSaid · the spoken record

Dennis Lynch

lines on the record: 65
first: 2020-11-19
most recent: 2020-11-19
sittings or episodes: 1
sources: podcast

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“That I always try to highlight to younger people because while I knew Matt a little bit mathematically, I probably didn't focus on how that can really benefit you, whether it's financially or whether it's even habit formation and what it leads to down the road, it might be your health or some skill you want to develop. So I'd say companional growth and really taking that to heart and making it a part of your DNA.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Probably everybody learns in math class or at some point in their life, you know, compound annual growth. And you can see when you're doing it that it's a powerful thing. But I think as I've gotten further on in my life, and I think we try to, certainly professionally, but in many ways in my life, you try to take advantage of those developing habits that will lead to good things down the road and making investments today that will benefit you later. But I would say I wish I had had an even greater appreciation of that earlier in my life. I mean, somebody like Warren Buffett, the real great investors, I would say, you know, probably really get that very early in life. So just a really great, even better awareness of that concept in hindsight is something.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's just ways if you want to be a learning machine, you can find internet resources that will really throw a lot of interesting stuff at you and hopefully round out your perspective if you've really been put into a narrow position. So that would be my first instinct.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Most actually very similar to what we just talked about in the previous question, but most jobs start off in that sort of expert, you're given a very specific task. And I think that that's just the nature of how the system is set up. And you follow a sector or an industry. I mean, when I was at JP Morgan on the sell side, got to follow EMP companies, companies that explored, produce for energy. oil and gas, excuse me. And so, you know, it's great to dive in and become an expert. And there's a lot of value in that learning process. But to the degree, you can complement that with broadening your learning and not just be so narrow. I think there can be benefits to kind of pursuing that. And today in today's world, there's so many sources for doing that. You can use stuff like Twitter to your advantage.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Broader perspective before you get too narrow. And that resonates us with our team too, based on some of the things we talked about today, just having that, being able to cultivate perspective in a world where there's a lot of expertise. Our whole industry is based around expertise. So I think often what's missing is being able to connect things between areas of expertise. And hopefully that's one place where set up to do that as a team.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Actually, he is a consultant or sorry, advisor from Morgan Stanley, but he wrote a book called The Ethical Algorithm. And it's really about the pluses and minuses of algorithms and where they can be strong and benefit us in society and how they can be harmful. And I thought that's a really, that was great framing and a good topic for the team. But then we also had David Epstein come in who wrote Range. And Range is kind of the other side of the Malcolm Gladwell argument about 10,000 hours equals expertise or mastery. It's more about cases where people don't declare what they're going to do to a little bit later in life, like Roger Federer in tennis as an example, instead of like the Tiger Woods model of playing, literally playing golf right out of the crib. And really interesting thinking there around the benefits of having”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“They think about themselves will find themselves doing a lot of fixed mindset things. So just the concept of trying to be somewhere open to new things and iterate as a learning style was really, for me, it was actually a really big help to me in my life. And I probably read that about 15 years back, but I would highly recommend it. What we're currently reading, frankly, I don't read a lot of books as much as I used to because there's so much material investment related that I like to read. We do have the book club that Michael rebooted for our team, Michael Modison this year. We just had two people in. The first one was a guy named Michael Kearns, who is the...”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. So, my favorite all time book probably is probably the art of learning, which is by a guy named Josh Waitzkin, who was the subject of the movie Searching for Bobby Fisher, which is about the young chess prodigy who might be the next great chess player from the United States. The book's about what it was like to be him during that time frame and his journey as a chess player. Eventually went on to be, I think, the Tai Chi push-hands champion of the world, which was a whole different domain where he excelled in addition to chess. But really I'd say the heart of the book is about this idea of having a growth mindset versus a fixed mindset, the idea that be willing to fail and try new things and learn from it as opposed to getting too wrapped up in your current identity and having that limit your ability to learn as a person. And I certainly know what that's like. I think probably most people.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And then, you know, there are a lot of people in the industry I admire. We talked about Bill Miller and his willingness to be different. And you talked about Will Danoff, who I'm friendly with. And I really, you know, think he's been unbelievable over the course of his career. It's on the to touch base with him on things. Other people like Ron Barron I admire mostly from afar. I think he's been really good at what he does. Henry Allen Boggan used to be a T-Row, now runs durable is another person, Bailey Gifford as an organization, James Anderson has also been great. So sometimes the mentorship happens just by, you know, sometimes being friendly with, but also in addition, just, you know, kind of learning from people from afar and some of those people have been influential for me.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I was very lucky my dad has always been a great influence. He was an investor as well. He had his own firm for many years. But just, and what we do is very different than what he did back then. And partly that is opportunity set driven. But really my dad has always been a really great role model in terms of how he handles himself and how he's very thoughtful and he finds he's really able to find the positives in other people, which has really been valuable for me in my life. In terms of specifically in investing as well, certainly help me there as well. But when I think more specifically to my career, I took a class at Columbia Business School with a guy named John Griffin, who used to be the”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Which is kind of shocking. Literally a different universe than where we are today. But no, I enjoyed Madman too. There's some really great stuff in there.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“All The series I just finished, and I blew right through it. I thought it was not super well known, I think, but might have flown under the radar. It's called Halt and Catch Fire. And it's available on Netflix. And it's kind of like a madman version of the gaming world, the video gaming world in the 80s, and how that environment went from the 80s and what was happening with the Atari's of the world and all the early PCs. And then the evolution of that up until sort of the advent of the internet. And you follow these characters through that journey. So it's really interesting to watch the progression. I think it's really well done from an entertainment standpoint, but it also happens to fit things we're interested in in terms of how technology has evolved over time. My wife and I are also enjoying Tedla. On Apple. So good.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“At the end of the first act or the final act, those themes kind of intermingle musically at some point. And you're kind of like, wow, the audience feels like, wow, that's amazing. Or like, you know, she's leaving home by the Beatles. Or I've got a feeling by the Beatles. These are cases where there are multiple melodies happening that stand alone. So hopefully from a team standpoint, whether it's our ideas that we can put into different products where they fit or whether it's the people or the way we can combine our products, hopefully there's a benefit, a counterpoint, which is creating something that exceeds the sum of the parts”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“To evolve. And I think that's hopefully something culturally we've been able to achieve. But part of that is even the name of your funds or even the name of your team. So Counterpoint Global, the idea behind Counterpoint simply, there's actually two meanings. One is Counterpoint is often thought of as the other side of the argument. And so it connotes that willingness to be different, not always contrarian because that I think is generally wrong, but you have to be willing to stick your neck out in order to succeed from time to time. So that's the symbolism there. But the other meaning in music is Counterpoint in music is when you take unique melodies or voices that are sound great on their own, but when you layer them together, you get a situation where the output's better than the sum of the parts. So like in a musical, and usually each character has its own theme. And at some point,”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“But if you limit yourself through these designations, you're doing a disservice to the people that have allocated your money. Because if I take a real big step back about the industry, The real goal is to beat an alternative. And the alternative is really probably the SP 500. And, you know, if you're really good at doing a part of that world that still doesn't beat the S&P 500 and you haven't given yourself enough flexibility to do that, then at some point your asset class is not that useful or it might be considered null and void or not worth pursuing. So what we try to do is name the funds in ways that are indicative of the team culture, but also aren't and have tendencies, like I said, these buckets at the end of the process, the conventional consultant thinking, but where there's still more flexibility in running inception than there is, if I call it small cap growth because there are more constraints with that naming from a 40-act legal standpoint. And so leave yourself flexible. Be who you didn't know who you are in this business, but you got to leave enough flex.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so is advantage, but the only difference there is that we have two different constraints. Growth can own whatever it wants in terms of opportunity set, whereas advantage from a competitive advantage standpoint when we look at why a company is unique, like is it network effect or scale or switching costs or brand or the designations we look at there, we stay away from intellectual property driven technology driven competitive advantages and advantage and we tend to own companies a little bit later in not in the early part of their life cycle. So it's a different variation for that product of our large cap growth thinking but at the end of the day and as you say with the names I mean the names were really what we wanted to do is not be large cap growth fund or small cap growth fund and I think great investing is you know you have to define yourself to a degree”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Start off with a product or a category and build a team around it. And obviously, their strengths in a week could be strengths and weaknesses to both those strategies. I think in a world where most people are compartmentalized, it's better to have some perspective because you're kind of going against the grain and maybe picking up things that they can't. In terms of these individual products, Inception is our small cap product. And so ultimately when we find companies that have market caps in the range of the general of the Russell 1,000 growth small cap arena, that's the home for which we can take advantage of hopefully those insights or ideas. Discoveries really more of a mid-cap growth strategy in the sense of the market cap range. And by the way, both are US and the ones we're discussing here are all US as well centric. And then whereas large cap is where gross, sorry, excuse me, growth is a large cap growth strategy by market cap.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, no. So, you know, ultimately, it's a great question because I talked about how the team, you know, I think a differentiator for us is that we're investors first and this sort of category stuff happens at the end of the process. And I think most of the.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“To be a little careful about market aggregate discussion because, again, our DNA and what we're focused on is company investing and finding those unique situations. And if you get too much of your time on the aggregation of trends or the aggregate trends and predicting them and discussing them, I think it's a little bit gets you off track, at least from it does for us from what our core mission is.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Markets, and there were times when railroads were 50%. So certainly today's market is very different in the earnings of it. Maybe the quality of those earnings might be different and their puts and takes, to be fair, I don't want it could be a very long discussion. But I think that is whole concept that of tangible versus intangible, and Michael's actually written about that a bit and was really focused on as we speak, Michael Movison, is something that most people haven't appreciated enough probably, that earnings and the way companies make investments has changed, and that definitely affects some of these rules of thumb that maybe people have thought about for many years. So again, the last thing I'll say here, though, I'm reacting to the question, which is really kind of about the market. And I think you always have.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think it's a good point. We talked earlier about how markets can change over time, and that's why rules of thumb are sometimes useful for periods of time, but how they often can become, actually they can become a problem, right? Just like expertise. It's useful in when the world's not changing too quickly. But if there is a change over time, expertise can become a real problem. You suddenly have to jettison your way of thinking and learn new things and most people are often hesitant to do that. I think the constituencies in the market today, meaning the earnings or the cash flow that sort of backs up ultimately the valuation of, let's call it the market, even though I don't love talking in aggregate, frankly, but there's no question that it's driven more from more of a capital light vantage point than maybe when you look back over time and the history.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, we have a wide range of products, but we're in the 80s and some in the 90s, so it just depends on each one. And part of that really is about the benchmarks. Some of them are super concentrated, so that can affect those metrics. But yeah, we're at the extreme, similarly, to what you just characterized.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, we've known Michael for a long time. In fact, when I was at business school, I was exposed to some of his great content and great thinking at Columbia. And we've always respected a lot of what he has to offer. And in fact, when he was on the”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Asset classes and things of that nature, which I think aren't that useful to us or not that useful. If you tell me the market's overvalued in aggregate, it doesn't help me make a decision about the one company I'm looking at. It might be really undervalued, right? It actually might hurt you to think the market's overvalued 10 years ago. And so, you know, I think the market's overvalued right now. So I'm not going to buy Amazon even though I'm interested. So if anything, sometimes I think the discourse in the industry around these aggregate notions of high-cost mutual funds are bad or the market's overvalued or like. In hindsight, those things are always obvious, but it almost hurts your ability to make individual decisions. So again, we're really focused on the individual company decisions.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And cost of capital, and it's a consideration in how you think about company valuation, whether you like it or not. Having a strong view about what's going to happen to those variables, though, I think it's some people might do that well. It's not a part of our DNA. And I think that the only problem with that thought process is that if you think interest rates are going up and you're going to build a portfolio around that thought, if you're wrong, you got to change your whole portfolio. And what we try to do is collect unique companies that have exposure to many different end markets ultimately that can be hopefully a lot bigger than the market caps are today in excess of hopefully the alternatives and let some of the rest of that all play out. And really, you know, control what you can control and it just fits the way we think about the world, which is more individual judgments as opposed to kind of larger takes on action.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And if they do, why we don't know what circumstances might lead to those things happening or why the Fed might do what it does. So I think given that our mindset is that some of that's so unknowable, it's better to focus on specifics that you can control. And in the process, when we look at our companies and play around with the sensitivities of what they could be worth, we obviously need a cost of capital. We need an alternative to look at, and that includes other companies and asset classes, including the rich free rate. We've tried over time to not give a whole lot of benefit to the fact that interest rates are as low as they are today. And generally, we don't. But when I play around with the sensitivities of values of the companies, it is a consideration because it's also possible to stay where they are. So it's probably a long-winded way of saying we're not that focused on the macro. It does matter in the sense of things like interest rates represent fundamental alternatives.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, yeah, we're mostly focused at what people would call bottom up, so making companies specific investments. A few things that come to mind when you ask that question. I mean, one is I think I'd be remiss, and anybody would be just for all asset classes in general, but the fact that we've had a tailwind behind a lot of pretty much every asset class over the last 30 years with interest rates kind of going from where they had been to where they are today. And that's partly something that sort of lifts all asset classes to some degree and probably does help companies on the margin more intellectually you can understand that have high growth in the future and where the values on the come as opposed to something that's like right today currently there is some something that might be more of a hard asset so i think interest rates obviously matter the problem is we don't know what they're going to do you know and so um you know are they going to go up are they going to go down”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“That are caretakers of something that's already been built. And not to disparage some of those situations, but I think the more interesting component is trying to find that identify cultures that act like owners like we do. And I think that that's really appealing. And when you can combine that with high growth potential and big addressable markets, obviously that's even more appealing.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Always really interesting to us when you have somebody who's not just the CEO and managing a business, but really someone who acts like an owner. Similarly for us, our team has a lot of ownership of our product. I mentioned we have a large number of products across the platform. I personally have money in every one of them. I don't think you should start a product unless you think it can succeed and are willing to put direct investment in. In addition, I think what's great is Morgan Stanley through its deferred compensation program forces you, whether you like it or not, to put at least 25% of your deferred pay into the products you manage. Our team tends to put over 90%. So for me, we're putting our skin in the game every day in the products we're managing for our clients at Counterpoint Global, and we're looking for companies that do the same thing, that are owner-operators, not just people.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, those are some actually good stabs at it. I think our ideas tend to emerge from all the activities of the people on the team. We've been lucky to have people on the team for, I think we've had very little turnover over the last 16 years. So we're proud of that. And part of the benefit of them being in one place for a long period of time is they get to develop really stable contact networks within industry, companies, corporate world, the investment world, et cetera. So we always have ideas. They tend to emerge from our research and our daily activities. But you're right, there are certain things we're looking for. It's not from screening for high growth rates or something of that nature. It's more certain characteristics jump out at us, like inside ownership. Like a lot of these cases that you just mentioned, or at least many of them, you have the founder or the person in charge has a large equity stake, a lot of skin in the game.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And it really depends on you and personality, right? Some people might think 1% is too much or not enough. And for us, at least for our funds, that's usually more of a 50 cents out of a dollar, 50 basis points.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Bet one penny out of a dollar, you really haven't lost much if you lose. So it's really about sizing. And sizing is a function of our conviction and the quality of the idea.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Outcomes and manage that risk with sizing those ideas properly. I think there really aren't any bad ideas in life. I mean, obviously you could probably come up with a really bad idea, but just It's really about sizing. I get a less.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“In that case, we'll own things even in the small as like a 50 basis point increment. Because what I would call that is betting small to win big, where you're not risking much, but it's kind of worth it in the context of the overall portfolio because the upside is so great. And I think more broadly away from even the funds we manage, like somebody might put Bitcoin into that category as a personal investment, you know, amount that you're willing to sort of take a risk that this is going to zero, but you're opening up your overall portfolio to some big upside potential and maybe even potential that can help at a time of crisis, something that's anti-fragile or that can benefit from disorder while the rest of your portfolio is going down is always appealing. So the bottom line is we have our core position sizes, as I mentioned. We think a little bit about speculative value and speculation and binary.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Than the market by our DNA. And I think a big part of our culture is a willingness to be different. You don't want to just be a contrarian in life, as I think Jeff Bezos has said. Being a contrarian is usually wrong. But the big ideas and the big kind of gains in life occur when you are willing to be a little bit outside or away from the crowd or against the crowd and you have to have that in your DNA. But in terms of our general thought around sizing Generally, when we have a core position that we think really fits all of our criteria, it's usually going to be a two and a half or three and a half percent of the portfolio type of allocation of cost initially. Occasionally we'll have ideas that are a little more speculative but have maybe some binary components to them. Things like biotech might fit there or there's some limitation, but the upsides are significant enough for us to want to make a small allocation.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. Well, look, I think there are only so many great ideas globally, right? And so I think, and as I've mentioned, we're opportunity set driven. So you're right. Today we're fairly concentrated in relation to what you might expect generally within the mutual fund industry. But right now, or at least in the last few years, we've thought there were just a unique group of companies that warranted taking a larger position and maybe slightly more concentration given our conviction in their competitive advantage and the opportunity that they have in front of them. I also think though that it's bad to be dogmatic. You can have another environment or an opportunity set where you want to own some more names. The word more names make the cut and that might affect the weightings that you are going to allocate to all the names that you currently already own or want to continue to own. So we generally though are going to be more active and different.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Hear the word valuation, it usually means what someone really means is a short term multiple. And again, that's a simplification. It's not really giving you a full picture of the potential of a company in my mind. And finally, we'll sell because the thesis changes, right? We're constantly focused on competitive, the competitive landscape that our companies are operating in and monitoring that every second of the day. And from time to time, threats will emerge for our companies that are competitive. And it might be from a company that's disruptive and young and most people aren't following it, or it could be from an existing company trying to follow some sort of bundling type of approach. But we will closely watch how that's changing, and that might be a variable that hasn't shown up yet in the company's results, but that we're starting to anticipate that the uniqueness of the company and their competitive advantages in what we thought it was.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, yeah, there's several reasons we'll sell. I mean, the first that comes to mind is diversification. Sometimes part of the portfolio just gets too big, and we need to think about that to some degree on now I'm talking primarily on an individual company specific name basis that we don't want to have too much exposure to one idea at some point, no matter how strong it's been. Then we also might sell because we think the risk reward is no longer as compelling as other ideas that we're looking at. So that would be under the valuation bucket of selling. There, I think it's important distinction, like you mentioned earlier around PEs and such. What we're really looking at when I say valuation is what's the market cap today? And based on our analysis over the next five and ten years, where can the market cap be? Not necessarily a multiple. Because I think people sort of conflate that.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And you're not open to thinking about how the actual economic circumstances in reality might affect those variables, i.e. intangible capital being more valuable and those investments than they have been historically and more important and more necessary. Then I think it's just important not to anchor on I can't buy something because of one variable. I mean, the reality is real life is more complex than that and looking at a lot of different vantage points, I think, can help you understand the situation more fully. And in this case, I think what you're saying has some validity because sometimes people, just to keep the case, it's easy. We all got to get through our days and it's a lot easier to live with rules of thumb or that either you identify with a tribe or you identify with an approach and just stick to that. And it is to kind of try to think beyond some of those things and explore the ideas that might.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I definitely think to an extent that is true. If you define yourself so narrowly in any business, but in particular in this business as a low PE investor or a high PE investor or a low price of sales or if you”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“That can lead to things like lack of earnings, but not necessarily bad decision making at the corporate level or something bad about the business. So that openness and willingness to look at the different opportunities out there also has led us more recently to some of the companies that have succeeded more recently. So I think overall the team has an open mindset, but also we're constantly trying to understand where the best ideas are today in the markets, given the fact we have a global mandate. And I think it's the perspective plus that openness that hopefully leads to an environment where we can succeed.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Industry, I was surprised how little people were focused on those metrics. This was probably around the time when Joel Greenblatt wrote a book, like it's called The Little Book that Beats the Market about those kind of variables, ROIC and free cash flow. I think for quite some time, being more focused on that than sort of, let's say, earnings and PE multiples was sort of an interesting way of looking at the opportunities in the market differently than other people. When I think about our experience halfway through the 20 years having some success with companies like Amazon and Facebook before they had reported earnings, it led us to continue to be open to the idea that investing through the income statement can be a good idea. And more recently, I think there's a little more recognition that investing today on the corporate level is happening more from things like an intangible assets relative to tangible assets.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Large cap or non U.S. companies that can hurt the small cap companies, I think it's something that not all teams share and I think is a huge competitive advantage from a structural standpoint. I think also we look at great, I think really good investing over a long period of time as opportunity set driven. And that's how we kind of define ourselves. We don't think in terms of sort of the value growth and some of the standard nomenclature because as we said before, the markets continue to evolve. It's a complex adaptive system. So the behaviors and ideas you had 20 years ago might no longer be leading to success today. When I think about my own career, I went to Columbia Business School and I got the chance to learn a lot about things like return on invested capital and free cash flow yield. This was back in the late 1990s. And when I got into the investment,”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think if you think about the investment industry, it's become over time maybe as a mature industry, very compartmentalized. And so most people have a very specific area that they're focused on. Maybe it's small cap growth or international large cap value. So I think to some degree that's a bit of a trap and people get lose perspective in being so compartmentalized in their knowledge. So I think one thing we've done, and we talked about this up front, is as a team we're structured in a way that the investors spend their time looking for great ideas regardless of those that end the end objective of those kinds of compartments. And I think that that additional perspective is valuable and useful when we look at the opportunity set. It gives us a different perspective. The fact that, you know, Sam Chani, who's a world-class internet investor, can look at small cap companies that could disrupt large cap companies or”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Emotional level that there might be some secret formula that always works or works for an extended period of time. I generally think that's a bad thought given that the markets today are so different even than they were three to five years ago in terms of the level of passive investing or the number of hedge funds or the types of companies in the markets that comprise the markets. So it's very hard to think in those terms. It doesn't mean quantitative can't be a useful tool in some ways maybe in helping us conduct our research, but generally we're set up more in the judgment business and the qualitative assessment business. And I think that given the nature of markets, that you have to have that as part of your DNA.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Definitely I put most of it in that second category, which is certainly so much of our time is spent on numbers in the industry when we do our research. But at the end of the day, I think that this is more of an insight business and a creative business and looking at the world differently or looking at an idea differently than the rest of the world and trying to understand what that is as part of the process. So I think we're much more qualitatively driven. That doesn't mean we're anti-quant. I think a good investment culture is constantly thinking about alternatives and not being closed-minded, but being open. I do think generally the problem with quantitative or algorithmic or kind of very specific rule of thumb based thing is that markets are complex adaptive systems that change over time. So the idea that while it's appealing human and”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think about it more on a company specific level and making sure we believe in those companies, the people running them, the skin in the game or the people running them, hopefully there's often mostly in our case a lot of equity ownership of the management teams. And then just thinking first principles, are we betting on one big thing or not? And sometimes everyone else thinks you're betting on one thing. My guess is when we look back in five years, many of the companies that are being grouped into some of these artificial classifications like work from home or Fang or the four horsemen, these types of things that are used from time to time to discuss markets, if you look later on five, three, five, ten years later, often the outcomes are very different on a company specific level. And part of our job is to be able to communicate that with our clients when we live through periods like this.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Says, you know, it's not really about how smart you are investing. It's more about your temperament. And this is the timeframes where you kind of learn a lot about a team. You know, whether they can handle that, and also your clients, and there has to be a nice, you know, hopefully symbiotic relationship where their clients understand that that's a part of the equation that you're going to experience them from time to time. So while we would love to avoid them, at the same time, I think it is a part of any successful investment in a public market that you're going to have these kind of really dramatic swings. And the way we think about it is not really trying to figure out things like beta.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“No matter what you do, you're going to have any successful investment over time that's publicly traded usually has some drawdown period. And we've lived through so many of them over the last few decades. I mean, I can remember vividly having a large position in Facebook after they'd come public and having the stock go down 60% at a time when I believe the market was up pretty significantly. And that was a very challenging time. And the way we think about risk generally is not really beta. It's more about company specific fundamentals and exposures. And we're trying to make sure we build a portfolio that has exposure to all parts of the economy so it's not one big bet. But from time to time on a company specific basis and even sometimes on a short-term correlated basis with a group of companies, you can have these drawdowns and they're painful. And I think it's why Warren Buffett would say.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“What's pretty interesting, right? Because as you use the word beta, which is obviously the modern portfolio proxy for risk, and one would have guessed that if you had a higher than average beta profile in your portfolio, that if the market was going to have the drawdown it did earlier in the year, that these stocks or those stocks would do worse. And it actually wound up being the opposite, which is pretty amazing. But I think what shows you is the limitations of quantifying risk in that way. Or really, we love quantifying things, right? But sometimes it really only tells us so much and we can kind of overly that over simplification can lead to overconfidence. Meanwhile, now you have the opposite happening where you have good news and these companies going in the other direction, at least temporarily. So I guess how we think about drawdowns are, you know, they are part of investing in general.”
2020-11-19 · Masters in Business · Dennis Lynch on Global Portfolio Management (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source