YouSaid · the spoken record

Gerry O'Reilly

lines on the record: 44
first: 2016-10-18
most recent: 2016-10-18
sittings or episodes: 1
sources: podcast

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“Patrick, thank you. Everyone, Patrick here again. To find more episodes of Invest Like the Best, go to InvestorfieldGuide.com forward slash podcast. If you're a book lover, you can also sign up for my book club at investorfieldguide.com forward slash book club. After you sign up, you'll receive a full investor curriculum right away, and then three to four suggestions of new books every month. You can also follow me on Twitter at Patrick underscore OSHAG O-S-H-A-G. If you enjoy the show, please leave a quick review for us on iTunes, which will help more people discover Invest Like the Best. Thanks so much for listening.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Wonderful. This has been a blast. Really appreciate all the time and I think some insight into how things work around here. I think people think index fun and they think, okay, it just works, right? And obviously it's a lot more complicated than that. So really appreciate your time talking about Vanguard and about markets.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“For example, in Canada, that's very low. Closet indexing is very high. In Europe, dividends are favored over buybacks. All these different things that affect. Things. So it would be interesting to see a company that's focused so much on US markets really get its feet wet elsewhere. Yeah, I think that would you agree, Jim, over the next decade or so?”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Or improvement if you want to think about it in those terms. Well, I think in broad terms, I think a lot of Vanguard's growth has been here in the US and on the ATF and on the mutual fund side. But I think as we look the next 10, 15 years down the road, I think it's going to be on the global side. And whether that's Canada, Europe, or Asia Pac, I think there's a framework in place now that probably wasn't in place 15 years ago to really grow Vanguard Vanguard's brand overseas. So I think you're going to see a lot on the global side. I've been amazed how different even the Canadian market, let's say, we do a lot of work up in Canada, how equities and corporate culture is different, how the level of indexation can be drastically different.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“But I've also, you know, I like some of the lighthearted stuff on the desk if somebody has a good experience with a book. I remember back when Freakonomics came out, everyone's like, guess what? And then what do you think will happen here, whether it's realtors selling their own homes or whatever the case may be? Obviously with the whole IEX coming along, we have known Brad and Ronan when they were brokers at RBC. And so when that book came out in 60 minutes, I'm Michael Lewis, that was one that we knew a lot about what they were talking about. So that was a book that I think pretty much everybody on the desk has read. Last couple of questions. What is the area that you're most interested in in improving upon or exploring in markets in the future that maybe you haven't, maybe you've already gone started to go down the path but haven't mastered or felt that there is room for exploration and discovery.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“I've read quite a few of the Malcolm Gladwell books. I think initially someone had put me onto them because, hey, this guy used to be a runner. He's a good runner. Yeah, he's a good runner. I think, isn't he a master's competitor now? Yeah, he is. And quite good at it. And he may have actually spoken, I think, at one or two Vanguard events back in the day.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Very selfishly in search of great new books. If you could pick one or two, we'll call them formative books, books that shape the way you think or that you just enjoyed and always think back on, with, I'll say, extra points for a book that's not obvious. So everyone keeps telling me read, thinking fast and slow by Danny Kenneman, which is a great, great book, but it's on every bestseller list. So any favorite or formative books?”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Say, Mike, look at this situation. What do you think? Phenomenal person mentored I kind of have working with you. So I think Jim and I are both beneficiaries of a lot of people within Vanguard who've been like that. And one of the competencies that's really valued here, I think, at Vanguard is how are you when it comes to developing other people? And so it's something that people really kind of take seriously. And I know we have younger traders on the desk, and that's something that one of the more senior traders is always trying to make sure that these people know everything that you can possibly pass on to them to help them grow their career. And it's something that it definitely is something that's taken seriously. And we've both been great beneficiaries of it. Yeah, that's great. It definitely seems like a component of the culture a lot for a lot of people. I would agree. So my first love is reading, and I ask this question of everyone.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think the same thing. Like, Patrick, I just think of, we will sometimes have interns that will come through and ask for some career guidance. And I remember one time I was asked the question, like, what do I need to do to be in your seat in 10 years? And I thought about it, and it's like there's so many people that did great things for me along the way that it's impossible for me to say if you follow this roadmap, you're going to end up in this seat in 10 years' time. Whether it's coaches that instilled in me certain work ethics, whether it's, you know, getting Gus probably taken a little bit of a leap in terms of a belief that I could do the job initially, people along the way, just great mentors, great, great, great people to work with, Mike Bukoy worked with on the desk. There's probably nobody more knowledgeable about market structure and trading. And I sit three feet away from him. I don't need to call up anybody.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“That I would say there wasn't a day go by that we didn't speak to at least one of them. And so, and just the whole way that that day played out was just was something I will never forget. And I'm not sure I ever will forget it. I know there was, you know, just I think for the next four or five days after that event, I'm not sure I slept a wink. And I know that the guys who've been on the desk a while, they'd probably say that that's a day they'll never forget either. That obviously was a very tough day, but there were so many great days here at Vanguard that are, you know, they're good too. But if you're asking me, what's the day, I'll remember most. I mean, the look on Gus's face when he saw that the towers were coming down, that I will never forget. And just people just realizing the enormity of what was going on.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“The most memorable day is actually not a good day. My most memorable day was 9 11. That was very, very difficult because we lost some brokers that we actually traded with, the guys that we spoke with on a daily basis. And, you know, we just had the anniversary just a few weeks ago. And I think it's still raw. It's still raw when I think about those people that we lost. We had some very good friends, very good colleagues that we worked with at Kenner Fitzgerald.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Say Patrick, on my side, it's on the trading desk. You see what you talked about, the cash flows coming in earlier. So you kind of have a front row seat of what's going on in the business. And just knowing that you have some small part to play in helping people, whether it's for the retirement, getting their kids through college, there's incredible satisfaction out of that. It makes you feel like if you're having a tough day and you're on the way home, you feel good about the fact that you're helping people, whatever it is, those life challenges that come along the way, that you're involved in that. And the people that I work with on the desk are just second to none. So that's the part that I enjoy.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“And I would say to get back to your point, Patrick, as we work very closely with our fund accounting group to determine where we are in the funds. And then we have tools available to us on the desk that allow us to basically, if potentially we're looking at tax harvesting, what is the most efficient way to do that? What type of tax lots should we be signaling in order to get the biggest bang for the buck? So you could have potentially a relatively small notional value that you need to trade that could potentially generate large tax savings. So we're all the time tweaking that, but we're very much aware of it on the desk. And there are people that kind of specialize in that area too.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say that there are certainly the ETF mechanism has advantages in that fund, but I would also say that in terms of just the fund itself, every week we are fully aware of where we stand in the fund in terms of potential gains, what the losses are in the fund. So there is some definitely an awareness on the portfolio management side as to what we're looking at within the funds. Now, for every stock that we've bought at 20 bucks that's gone to 100, unfortunately, there's those stocks that we've bought at 30 or 40 bucks that have gone to bankruptcy. So to the extent there is an ability at the fund level to look at tax harvesting when it's prudent to do so in a risk controlled manner. But our ETF is another share class of the fund. So to the extent that there is ET activity in there, that can be beneficial to the fund as well.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think when I started at Vanguard, I started off entry-level position at Vanguard and I have some legacy dollars in funds that I probably, if I was looking today, I was like, why did you ever do that? But I keep it relatively simple. I think all of my investments are maybe in five different funds. And some of them are the, well, most of them are BroadMark, whether it's total stock, total international, total bond. They would be, I think, three of the funds that most, and all of my investments are at Vanguard. I actually do not have any ETF exposure. It's all in long-term mutual funds.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“It is, you know, I will say this: that a lot of whether it's on the buy side or on the sell side during large rebalances, one of the advantages, I think, of having it publicly available, that that information out there is that it tends to become a liquidity event. So whether it's a company that's in buyback mode and knows that indexes are going to be selling, I can't tell you the number of times that you've looked. And if you just look at what your trade is relative to what trades on a normal day, you think, wow, we may have some impact on this name. But the buy side will actually show up to offset that because I think they will be prodded and given a heads up that, hey, indexers have X number shares that they're going to need to trade and they'll offset the other side of that. So a lot of times I'm surprised that there's actually little movement in these names.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“I would hope that the companies, that the fact that an index might need to sell because we're buying back our shares, I would hope that's not the primary reason for doing that. In fact, I would be shocked if that was the case. I think they are obviously doing it for other much more meaningful reasons.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Flip side of that basically is so, for example, if you have a company that's doing that, so I mentioned earlier we have this float, this idea of a float adjustment. So obviously when a company is buying back, that's going to have an implication for the float on the fund that was available to shareholders. And generally, we are, if a company is buying back shares, we are going to be selling, yes, absolutely. And it's the same type of rigorous controls are in place, whether it's on the sell side or on the buy side.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Transaction cost group as well as in our risk group to make sure that these rebalances are done in a kind of a risk controlled way.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Environment is good. So we have those going on all the time. And the quarterly rebalance is, you know, depending on the index provider, those are trades that are known to everybody out there in the market. And we basically will be notified ahead of time from the index provider. Here are the changes that are going on. Usually it's about a week to two weeks ahead of time that we're going to know what the index, the new index constituents are what changes are going to be. And then we will set about putting a plan in place. So we have a group within the desk actually that is a rebalance group that basically looks at these. They would have history going back as far as we've been doing these about how certain names have worked. And we incorporate all of that into how we handle rebalances. Now, as I mentioned earlier, it's a lot of dollars, but we look at it, we work closely with the folks in our...”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Maybe start by telling me Yeah, so maybe just a two second overview of index methodology. So for most index providers, the line is 5%. If a company issues shares of over 5%, that tends to be done the following day. So company A is buying company B and is going to issue 6% of their shares outstanding. That change will generally hit the index the following day. If it's less than 5%, they kind of group them all up together. And as you pointed out, they wait until the end of the quarter to do that trade. So you're right in that, you know, as we own so many names, it's not unusual at 10 after 4 in the afternoon to get multiple calls from syndicate offerings that are going on. And, you know, they may be issuing stock to pay off debt. They may be acquiring another company, whatever the case may be. So to the extent that our index providers are going to be making the change the next day, we will participate to some extent in those, assuming that we feel that they're priced right and that the...”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“And we would say that from a retail perspective, spreads have never been tighter. It's been a net positive. Nonetheless, we feel as traders on the desk, it's our responsibility to protect our order. So we have techniques that we've developed over the years to make sure that we're not signaling out there that, hey, I'm out here, I'm a big buyer and let people run in front of our order. We own that process and it's up to us to make sure that we do that in a way that's not going to be harmful to our shareholders.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think it's, I agree with you. I don't think it's all or nothing. I think there are aspects of high frequency trading that are absolutely beneficial to the market. I wouldn't say that everybody involved, but I think there are the high frequency trading firms that are arbing out between futures ETFs and the cash and keeping markets kind of to some extent knitted together is not a bad thing. I think spreads have come in dramatically in the last 15 years. I don't think it's a coincidence that that also is when HFTs have gotten involved. But I do think there are players in the HFT space that are not, that are looking to take advantage of, whether it's latency ARB issues, if looking to take advantage of potentially sniff out larger orders, that may be out there so that they can jump in front of that. So I'm not naive enough to think that all HFTs are great, but to a great extent, I think they are a huge provider of liquidity in the market right now.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“And I would say Patrick on the trading side. I mean, price discovery, I think, has never, I'm always amazed at just how quickly in today's market, I don't know if you've been back to the trading room, but there's no shortage of TVs there just to see what's going on. And it's amazing to me a name will get halted. And for whatever reason, and that thing is, once they open that up, it's up and running in size. And it seems like it's not an issue to get these stocks back up and running again. So I'm amazed at the speed of it. You know, I think there are times when it's somewhat, when you're dealing maybe in the when issued market occasionally, you've probably seen it yourself where there is issues about price discovery. But as it gets closer to”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“And here are the results that we're seeing. And if there's results that we're seeing that are not, well, we don't think are optimal. We're going to have a conversation with the broker and say, we're noticing on this particular, when we use this, we're seeing quite a bit of adverse selection going on in these names. And can you give us any color as to what's going on? And if we don't feel comfortable with it, we actually won't use it. But to the extent that you take that information and use it as a tool to help enhance your trading, I think it's a win-win for everybody. Yeah.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, I mean, it's a very fragmented market. I mean, and anytime you have, as I said, 13 exchanges right now and understanding how your orders are getting routed, that whole venue analysis, that is something that is probably not optimal. Now, the benefits are if there is an issue at one of the exchanges, it has happened in the past where you have the ability to trade and avoid that one index that's having a particular problem, but it does add a whole level of complexity to trading. And I would say that understanding how your orders are interacting in this maze of pools and exchanges and being able to take that information and apply it to the way that you trade is really important. So we're fortunate that our TCA group, they live and die by understanding that venue analysis. And so we can look at the end of a month. We have monthly meetings to determine here are different algos that you're using.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“So we would be referring to risk. So if we have, for example, large trade coming up, what type of, we would be looking at that trade relative, what type of tracking error would you be looking at relative to the benchmark? So as you have a rebalance coming up, say at the end of a month, obviously names that are going to be added to the index names that are going to be deleted to the index. So you look at basically, hey, how is this trade looking relative to the current index? And as you, you know, obviously you can't trade the entire rebalance in the last hour of the day. You could certainly match your benchmark, but you're probably going to have impact that you'd rather not have. So to the extent that you're going to start to trade some names early, you need to know what type of risk that is to the portfolio. So we have very, very, very good risk folks that are analyzing that every day, letting us know how we're doing, what the tracking is looking at relative to the benchmark.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“In terms of analyzing our trades and taking that information then and baking it into our trading strategies, also I would say the ability to work with our risk areas. So we have an investment risk group that allows us to trade large rebalances in a very risk-controlled fashion, which was something that probably we didn't have 20 years ago. And now today, so the ability to understand that. So obviously, you know, individuals would need to have pretty useful skills when it comes to just technology skills, use a lot of different systems, understanding market structure. As I mentioned earlier, it's somewhat, it's not exactly, I think if you had a blank sheet of paper, I'm not sure you'd design the current market structure that we have today, but just understanding that and how does that interact with all of the different tools that you have available to you. And so we also have the ability to work in teams and groups.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, yeah, I mean, there's a lot of different, I mean, we've actually done that this year. In fact, we've hired some new traders on the desk. The first thing I would say is that the traders on the desk, we probably have an average tenure of about 13 years. We have some guys who've been on the desk close to 30. So we've got a good combination there. The things that we look for is a couple of things. We look for people who are passionate about the markets that absolutely they enjoy what they do. We obviously there's this when you're tracking a benchmark. I mentioned a little earlier, there's understanding what the importance of tracking error versus impact is. I mean, as you talked about our growth in assets over the years, that's become a challenge that everyone needs to be aware of. The ability to work with other groups, specifically, I would say if you looked at our desk today and looked at it 20 years ago, transaction cost analysis was something we did very limited, I would say, back then. Now we have a transaction cost analysis group that works very closely with us.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say, Patrick, though, we will get called on the desk when a company, an issuer, is looking to speak to someone in our proxy area about something that may be coming up down the road. So certainly to that extent, we will put them in touch with that group. If they have an opinion that they would like to make sure that they were aware of, absolutely, that happens, not infrequently.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Always in terms of whether it's corporate actions, making sure that, hey, we might want to consider if there's something somewhat complicated, be aware of this, always giving feedback and if there's a lot of times there's opportunity for us for input when an index provider is considering making a change, whatever the case might be. I know in our emerging markets, you know, there's been discussions about China if it's in or out. We were very much involved in that. Along the way, we do have an opportunity to be involved, albeit at an arm's length.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think we've probably looked at that in the past, but I think there's a lot to be said. I mean, CRISP has been around, I think, 90-odd years studying indexes and providing that type of information. And there is something to be said for an arm's length between us, the manager, and the index provider. But, you know, having said that, we're always in touch with index providers in terms of how to better improve their index methodology. So I think back to when I started, there was no such thing as float adjustment. So you potentially could have had a name that had 100 million shares outstanding, but in insiders would have owned 70 million shares. So you have all these managers trying to track, you know, go after the 30 million shares. And it led to pretty severe price movement when if a name like that got added to a benchmark or was deleted from a benchmark. Now most of the index providers have adjusted for float. So it's really just what's available to us in the public. That's just one example. But I mean, we're...”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, but I would say, you know, there's always going to be a challenge with trading those smaller microcap type names. The good thing, I guess, from the fun point of view is that they represent a relatively small.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that, I mean, we still, obviously, there will be, I don't think small caps are going to be that much significantly easier to trade two years from now, but we're just going to have to adjust to it. I think that's maybe a tad optimistic that we're going to get to that size. But there's always going to be those issues.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“The bottom docile names, it is a challenge. And I'd like to think that over the years we've accumulated some expertise with regards to trading those names without singing out to the market that I'm out here as a buyer, whether it's using algos, crossing networks, or whatever the case may be.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“And I would like to think that the traders on our desk are very much aware of the trade-off between tracking error versus impact. So obviously there's certain names, and you mentioned, you know, the bottom deciles of the total market, where if you needed to get something done and you had to be done in a day, you're definitely going to have impact. So we tend to be somewhat opportunistic in those names, and we will exhaust all different types of ATSs, dark pools, crossing venues wherever we feel we can find liquidity, we will take advantage of that. Most of the cash flow that's coming into our funds tends to be benchmarked to the close. So when we're running lists that are going to be for that night's closing price, that tends to be traded more towards the close where you tend to get a pickup in liquidity in that last half hour of the day. So, you know, there's not the issue in there, but there's no question on.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I think if you step back a little bit, I've been on the trading desk for about 20 years, and there's no question, there's a lot has changed in the market structure in that 20-year period. You probably remember yourself back in the days when it was really, you know, you had New York and Nasdaq. It's very different today. We have 13 exchanges. We have about 40, 45 different pools of liquidity. I would say with regard to small caps have always been difficult to trade. I would say what's different today is the fact that, you know, even though we've had large assets coming into our funds, you know, one of the great things about indexes is that there tends to be little turnover. So while the assets in the funds themselves are huge, the rebalances tend to be 5% turnover in a year is kind of around the norm. So it tends to be a little in the way of turnover. So even when we have rebalances, relative to the size of the fund, they're not huge. Now, having said that, there is still a lot of trading that needs to be done.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“The groups that I interact with, it's a lot of what Jim mentioned. It's not the eye. It's the we and it's working together. I think, I remember when I interviewed for the job on the desk, Gus Sauter was in charge at the time. And Gus said, you know, I like to use the analogy of a high school basketball team where you don't really have these big egos. You've got five people plunged together and you can achieve incredible things. And that type of environment is alive and well here at Vanguard. And when people get in here, we tell them, hey, you can have a phenomenal career path and it doesn't really matter where you went to school. It doesn't matter who your parents knew. It's what kind of a job are you going to do here? And you'll have opportunities here, which is great.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I mean, and this may sound a little corny too, but I have interns come in and they talk about what makes Vanguard different. And I was like, well, Sunday evening, I'm actually looking forward to coming to work on a Monday morning. Now, I think I'm in the minority. I work out, you know, I live out in a neighborhood where I talk to other people who are involved in other businesses. And I think that's not normal. And I think the reason I look forward to come is the people I work with, incredibly team-oriented, as Jim mentioned, just great environment. I mean, they're not only colleagues, but they're also good friends away from work. So we socialize together. I think the fact that you are involved in an area that can be quite stressful at times, you do tend to bond together. And that, I think, just is great. If you can work at a place where you enjoy actually coming in here and spending time in here, it's fantastic. And Vanguard's actually managed to create that.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I ran for a few years later. I think it got to a point where, you know, if you're a professional athlete, which I was for a little while after college, you don't make a whole lot of money, at least not at the level that I was at. And at some point, I started, I was dating my now wife back in the time, and I started trying to put it together. Well, let me see. What I'm making here versus what it's going to cost to have a car and a mortgage, the meth didn't really add up. And so I was fortunate enough to have a competitor I used to run against who was working at Vanguard, Jim Norris, and Jim said, I'll drop your resume off. So that was almost 25 years ago. I thought I'd be here for a few years, and here we are 25 years later.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it is absolutely. I mean, and overcoming that mental aspect of it, once I think I. I realize that there's no question I'm going to break it. It became a lot easier.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“You do, yeah. I mean, when you're running four minutes, there's no, at no point are you kind of taking it easy? It's 15 miles an hour of a treadmill. I mean, yeah, it's cranking it. It's keeping it honest. I was probably not gifted with the best closing speed in the world. So I had to ensure that the pace was reasonably respectable. And then hopefully off of that pace, then I could still come home hard, which was my best races were races like that. If it was a really slow first two laps where it was more of a race probably set up for half miler, I was probably in trouble. But if it was an honest pace with a strong finish, I was generally in there.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Going on here. I think I was right. I did start running at a very, very early age, probably eight or nine. The town that I grew up in Ireland didn't have a whole lot of options available. There was Gaelic football, soccer and running, and that was kind of it. A neighbor happened to be into running and invited me to, hey, you should come down and try it out, tried it out, liked it. But I'd say it was probably 15 when I realized, you know, I actually have something going on here where I can, I tend to be able to keep going when other kids start blowing up. And I just said this is maybe something I should stick with.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay. So I had been knocking on the door of four minute miles for my sophomore year in college. And I just, for whatever reason, 4.001 two tenths of a second just never quite got there. And so at the end of my sophomore year, a little disappointed. And then went into my junior year and kind of figured, okay, this year it's going to happen and trained like I'd never trained before. And when I got the opportunity, I actually went from, instead of running 359 or 358, I actually went from a four minute mile or to a 354 miler. So I took almost six seconds off my personal best in one race. And that was, I think, just, I think the fact that I didn't have success, my sophomore year in terms of breaking it, made me even more determined. So that's kind of was the fodder for breaking it.”
2016-10-18 · Invest Like the Best · Humble Giants – Vanguard’s Gerry O’Reilly and Jim Rowley - [Invest Like the Best, EP.06] · IDENTIFIED FROM THE TRANSCRIPT · source