YouSaid · the spoken record

Jon Harris

lines on the record: 97
first: 2025-06-30
most recent: 2025-06-30
sittings or episodes: 1
sources: podcast

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

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2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Geopolitical is an interesting one because 30 years ago, 20 years ago, a geopolitical event would have massive market implications. Since then, geopolitical events have had less and less and less implications to the market. I feel like the pendulum went from overreacting for geopolitical to now we're really underreacting.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Deficits. We talk about it, but it hasn't mattered to the US and to our conversation about the dollar and 60-40. And you've got places like Germany and the EU writ large where deficit spending is now much more common at a much bigger level than it used to be.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Impact a geopolitical, I think. We got a lot of stuff coming down the pipe. The Middle East this past week is a major, major reshuffling that is going to have impacts globally. We're going to be going into midterms. You got a lot there. And I'm very concerned about college campuses this fall. Geopolitical will be back on the table.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Just saw cold play with my daughter That was two years ago. Last year, we do our annual. Concert. So I'm a Te Tay fan. Still am I've given up on her”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Even in June. Seriously Same thing with kids. My son's going off to college, so just trying to enjoy as much time with him when he's willing to talk to me.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“I do miss the Saturday afternoon or Saturday morning Randall's Island soccer games is I do not miss that as much as you can play”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a great piece that comes out from Jeffreys every morning that I read every morning off their sales desk that's really interesting about what's topical today. I do try very hard not to be looking at the screen thinking about what's daily, but just being really informed used to be reading the front page of Wall Street Journal. Now you read the front page of the Wall Street Journal and it's all stuff you learned about yesterday or the day before. They've got a great Side piece that goes out. The guys as strategists we think are excellent. I really like their stuff. The Washington Research Group at TD Cowan has some great DC stuff that I do over time. Chris is great.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, we got puppy dogs over here. We got Brex Green. I mean, Meredith, help me here. I'm even a little bullish. What the hell's happened with this world? Very, very strange.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“The question I have is with the democratization and the fees, because you're paying higher fees to administer everything else for that, it costs more, are those returns and correlations going to be compelling enough to get the diversification that we're able to get with our sized clients by going multi-asset class? Because we have a huge advantage to be able to do that in a big way. That's things we're thinking about on the 60-40. I always come back to Brett Barth on this, actually. And when I quote the, you know, if I'm happy with everything in my portfolio, I've done something wrong. You can criticize me that I'm being overly flip about this. But I think the way we all manage is we're constantly looking at the 60-40. Is something on the margin changing private equity? Do we need to extend the years?”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, as the bond yields are cheating, I'm like, oh my God, who's dumping our debt? That's the question. And then we always say there's not another one. But there's lots of easy reasons why they might start dumping our debt, which then cascades into all of these other things.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's the question mark. I think when Liberation Day was announced, we're down your summit the night, the Bonnyels started trading off and I was on with my head of credit, Alison. I'm like, This is feeling like 08 when the tarp didn't get passed right away in the house where things were about to like fall off a cliff.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know, at least where we sit today, what has the scale? Some people say it's Bitcoin and whatever. There's nothing right now that even comes close, even if you said it's going to be these three things or these two things, whatever. My concern about the dollar then is more near term in terms of, yeah, it's pretty overvalued. It's how to run of being overvalued. I think it's a fair consideration that you should have diversification away from it, but that it's still for all intents and purposes the major form of currency in our portfolio.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“I agree with you. I have concerns about the dollar too. And I try to separate my concerns about the dollar in terms of why I have them. Right, exactly. Yeah. So there's that. Not that it's a good bridge from that.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“And we've really had the exorbitant privilege of the dollar being a reserve currency. Do I have to worry about that or not going forward?”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“There are two that I've been grappling with What is 6040 going to look like over the next five, 10 years? We have a lot of equity exposure in our portfolios. We're trying to be thoughtful about how we get it. Interest rates are at a level that are a lot more interesting than they've been over a lot of our careers. They may be going higher. I'm not sure that's a prediction. And if higher interest rates mean lower multiples, that's a really bad outcome for 60-40. My premise is I'm a little worried about traditional portfolio construction. We've been leaning into, I think we all are with non-traditional. And the other one is the dollar. At the end of the day, we own dollar-denominated assets or assets where I look at performance converted back to dollars. We think about that as it relates to asset liability. What's the money for? Asking clients that question. Whatever it's for, it's charity intergenerational lifestyle that is spent in dollars. So I have to worry about inflation and I have to worry about returns. But I think about it in dollars.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“I have a couple of closing questions I'm going to ask before we do that. Curious, if there are any questions or topics you have of each other that you'd like to probe to either learn more or share some insight that you've had of late.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of people feel like a person is inherently good at sales because they're outgoing, they form connections, there's amazed networking. I think that's been completely debunked. He said, you guys are getting stuck in talking about how amazing your bridge is. We use the best engineering. We paid top notch. We did this, this and this. And our bridge is so much better than the other bridge. But nobody actually cares. They just want to walk over the bridge to get to the rainbows and the unicorns, teaching the team to stop getting into that bridge unless you're asked to get in that bridge and focus more on understanding what the client's actually trying to ask you.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“That gets back to this question about sales because as much as all the seats are buying investments, everyone's in the sales business. What have you learned from doing the sales training that we may not have been exposed to”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Right now they're just unemployed. Recent graduate payments as high as it's ever been. We can talk about kids going off to college. I'm more worried about my kids leaving college right now.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“What I worry about though, I completely agree with the premise, and that's clearly how we all were trained and will be training the people who will ultimately replace us. But if there's fewer junior people, if what we're really using AI for early is efficiency enhancements, that just means in the future I'm going to be hiring less junior people because the junior people I have are going to be more efficient. That's going to make their jobs better and they're going to be able to think more and I can train them more, but I'm going to have a lot fewer people going into that pipeline. It puts a premium on hiring the right people, which I hope we do. And I have confidence that we're doing. But we're just going to have a lot fewer people at the entry levels of our industry. That's going to have some negative ramifications down the road.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“That AI is going to change that. Ultimately, the most effective are these interpersonal how do you ask questions, hear the answer and realize what the next question should be from what you follow up. Nuance, right? The nuanced piece of it.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Actually, doing sales coaching. I'm all in on it. One of the key things they say communication is tough at every level, kids relationships, managers, teams, and people often assume they know what the question is or if you're telling someone you don't get any feedback. Asking questions, which is kind of what we all do for a living with our managers is one of the key things to getting at making sure you're actually on the same page, which I've also realized in so many areas, including work, sometimes you think you're on the same page and you're not, and that can lead to a lot of frustration, especially when you're in the leadership position. I love asking the questions because you learn so many more things from that. The other thing pulls in AI too. I was talking to someone and they were talking about like, oh, it's going to make it so much easier and we're not going to have to spend so much time training people. I actually totally disagree. What we do is an apprenticeship business. And I don't think.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the things we've been talking about is how do we help younger people in office learn to listen? And we have all the sange. Listen, understand, don't listen to respond. You have two years, one mouth, use them proportionally. Our new one is invert the ratio of question marks to periods. It's really trying to get them to step back and think about what's the question, what don't they know? That has been something that I've been spending more time trying to help them do. I haven't been fully successful. Again, it's individuals. I think that that's the most important thing, especially with these today. Everybody's just taking information. They want it. They want it immediately. And they're not stepping back and listening and reading and saying, what questions have I not asked?”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Piece related to that that I've found and continue to work on developing the skill because I find it is much more effective in that regard in terms of the coaching is instead of telling them, asking the questions so they answer it because I've found frustration sometimes with when I've told it's not necessarily”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“We've always had a management philosophy for most of our history where the concepts are giving somebody for the outcomes and giving them the authority to make those decisions. Those go hand in hand. And then you measure those outcomes. That doesn't mean putting someone on an island. So what I find I'm spending more and more time on, even though you've given somebody the authority to drive a process is coaching them to come to decisions on their own faster, it's pattern recognition. History doesn't repeat itself, but it rhymes. I've not invested in that particular area before, but it looks a lot like these three mistakes we've made in the past. Here are the things we really should worry about before you decide to move forward. More times than not, that helps them figure out that it's really special because those three things that I brought up aren't impacting. Or listen, yeah, you're right. These are some things I didn't think about.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Also, just having had my own private partnership that was really strong and amazing because we each brought something very unique, both in our knowledge but also in our vantage points and the way we attack problems. There's a benefit to having people being different. The other piece that we're really focused on right now is excellence and hiring. We've always hired really smart capable people and we have an amazing team with longevity. We're increasingly also wanting to make sure that the next person we add incrementally every time is this strive for excellence, not just excellence in one area like grades, but excellence in other areas that you've shown resiliency and perseverance, pushing through. If we can find that type of person combined with varying vantage points of the team together, we're just going to come to better answers because you get much better debate out of that. You get the ability to debate those things coming together. We're like highly focused.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“I need to be better at and try to spend more deliberate time thinking about positive feedback on the kind of person who just puts my head down and does the work and I don't care as much about feedback, but I realize that I'm an N of one. I need to be more thoughtful about that in terms of the team and thinking about, okay, where are opportunities to elevate the work that someone did in front of more people than just me? And where can I let this person step up and get positive feedback from me and from others in a more public setting versus assuming we're all going to come and put our heads down and do our work? No better lesson than raising kids, and I'm in teenage land right now that people, individuals, human beings are motivated by different things. That's probably the biggest thing I've learned over the last 25 years.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Best lessons are just no two people are the same. I'm going to sound like the old guy, but this generation, it's really understanding what motivates different people. What I found is that it's network, network, network. Talk to any 22-year-old and that's all they want to build. You hear this in interviews. And I'm thinking, don't mention network. If you're interviewing someplace, I also have a problem as I look back and I look at a 35-year-old manager, I go, I'd never give them money. They're too young. And then you look at Andreas Halverson, 99 when he started. So it's a little bit of adapting. It's a little bit of perception. It's a little bit of taking a deep breath and trying to think things through a little bit and understanding that things are more individualistic than a straight management style.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Compared to 25 years ago when we started doing this, you're all in more senior leadership seats than you were 10 or 15 years ago. And I'd love to hear how you think about leading a team differently now from how you did in the past.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Like lending against hard assets. A lot of that is more smaller balance loans. There's a lot of underwriting to that. The underwriting process might have software that scores something first. But if that score can be a LLM that is looking at your data and outcomes and learning, it will do that better than a human.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“I agree completely. We have spent so much time the last several years on data. And it goes back to, one, we've got some regulatory constraints. We can't use ChatGPT in the office. And there's a lot of LLM we're not allowed to use. So the key is what can you learn on your own data? But you can only learn off of 25 years of our data if your data is organized really, really well. And there's a lot of advantages to that. Part of it's switching vendors. A lot of it is being able to train models on our own decision making and our own portfolios.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Across. So they're doing a lot of cross functional contests and they have groups present proposals and then sharing that information. And then lastly, the most important thing is data architecture. Putting on a new software is a big exercise. What's most important actually is your data and your data architecture because the switching costs are going to be going down, down, and down. So focus more on that aspect of it and then come up with ideas how to use it.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“I found after talks with people at varying age levels, we were hitting some roblox and we were really focused on starting bottoms up, what are one-off things we can do. So we created a committee within our wealth platform that was made up of the most recent grads. And we had them do work on how they're using it. People are using it more than we even realize. We wanted to both have a way to say give guidance. You shouldn't be using it that way or you should, but also learn because our brains can't possibly come up with the things they're coming up with. That has been amazing and they've really taught us new ways to think about it and we've been able to mentor them on certain things that shouldn't go into the AI or that you have to check it. It hallucinates once you come out, it's really important and that it's most powerful we found when we use our own data, when we're putting in our own information and asking for things on top of that. This has been like a huge initiative across the firm thinking about AI and how it integrates.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very slow. I am extremely positive about the opportunities. Remember at one point in like 2000, 2001, a manager we were meeting with was like, it's not the internet. The internet is just a means to what is going to come and it's just a means to what is going to come that's going to be so much more efficient. And ultimately, I think, get so embedded in everything that everyone does that it's hard to imagine right now exactly how it actually plays out economically.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“We desired a young guy who just finished up a project for a major endowment, how they do it. We're in the early innings, Brett's point about efficiencies, trying to figure it out. Somebody said if you're over 50, you basically use ChatGPT as an enhanced Google. And I think it's great with some managers that we've been with for two decades trying to figure out how do we take all that past letters, the past data, how do we summarize it, how do we figure out biases, how do we hold ourselves accountable. I think there's going to be tremendous opportunities. We'll have to see. We're even earlier than you guys. Remember, I work for a church.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Things that are time consuming but thoughtful, like rebalancing portfolios or flagging things that are out of balance, you can do that through analog software that is just looking at equations and rebalancing, but doing it more thoughtfully, especially when you've got things like taxes and liquidity, which make those rebalancing decisions more complicated. I'm really optimistic there.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Right now it's early innings. Most of the stuff we've been either been able to do or is in our roadmap to do, I would say are more efficiency enhancements. First drafts of investment committee memos, sorting of presentations, creating analysis of return streams. That stuff that a junior mid-level professional does and it takes some time and it makes them more efficient. That's where we are today. I think we're a little ways away, but I'm much more optimistic that we're going to be able to do things. I mean, I think what GA is doing is really cool in terms of having an AI bot on their investment committee thinking about investment decisions they made in the past and having that institutional memory in a bot, I don't think we'll get there if ever, but things like triaging managers, understanding what our preferences are and to be able to make those kind of initial spend more time not spend time decisions. The other place that I am really optimistic are”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Drug development has really gone sideways. And then you've got a massive decrease in investment in basic science here in the United States. And so you got to be able to look outside the U.S. The story's terrible, but we think it's going to climb that wall of woe. And back to entry point, you've got companies with great management teams, great science, cash on the balance sheet and trading at massive discounts of cash or are desperate for money and you can structure private credit transactions that are really equity transactions. These are pre-revenue companies, but where you've got massive seniority and wonderful preferred returns and really neat structures. And so you can buy that through public companies, VC, private equity, and private credit. There's all kinds of things you can be doing in biotech today.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'd agree with a lot of what's been said on the real estate side. I completely agree. Public, private credit, the niche year areas, in addition to the ones Casey mentioned, we're spending a lot of time and have done work and have made some investments, industrial outdoor storage RV parks, all kinds of things like that on the infrastructure side, rail cars, barges been really interesting for us. One of the places where we see public, private, and credit incredibly dislocated, unloved, and where we think there's huge opportunity is biotech. It has been such a bubble through the pandemic where biotech and vaccines were going to solve everything. And now we've had a massive dearth of capital for years. The public markets cratered in 22 and have yet to meaningfully bounce. The capital markets, except for brief windows, have not been open. No one's reallocating to venture capital funds. It's incredibly unloved. You've got an FDA that doesn't think vaccines should be around.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Multifamily. We're doing it in self-storage. We're doing it industrial. We're seeing it across the board. The other area we were finding is just niche real assets. For example, we're doing a thing on container ships. A lot of them are not coming to the US. It's within non-US ports. Your downside is scrap metal, which is actually pretty compelling. Your upside is huge. So there's a lot of nichey opportunities we're finding that are really compelling in this marketplace.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm actually really excited about real estate, both on the equity and credit side. If you take away all the macro noise, real estate can still be an area disconnected from that. I think a lot of people forget 2022 when rates were high. They've come down. They've not come down enough. A lot of capital structures don't work. We forgot about the wall of maturities coming due. We're seeing groups buying things very small one-off, like self-storage, for example, and then rolling it up all into a portfolio and handing it to everyone who's running interval funds and other things for purchase. You're seeing a lot more price realization, things coming to market and therefore deal activity. If you're a veteran and you've been in the industry through multiple cycles, I think you have the conviction to move forward faster. Sourcing is key in this situation because you want to be that phone call with the broker at the small end who's like, I got.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Where's the camera? We're not giving away that away. Take NIL dollars for that areas that we're looking at are we do a lot in the defense tech space. Obviously drones, I think it's a lot more difficult than nine and a half years ago when we first got in. A lot of players figuring out how to manufacture cheap inexpensive drones is one area within there. We're spending time on nuclear trying to figure out picks and shovels, things like standard nuclear, supplying the fuel. We think that that trend is one to stay. And if we can figure out the tailwinds try and take advantage of that.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“What I'm hopefully looking forward to, and I hesitate to put this out into the world because it feels like that might not happen, but the free lunch on diversification might come back because it hasn't been that way for it felt like a long time. And you had to have the bet to truly keep up. I'm happy to underperform when the markets are running, if we can protect on the downside, but to year after year feel like you can't keep up is a lot. That's what I'm looking forward to and happy about.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think the betas are more interesting than they've been in 15 or 20 years because of not just the entry point, but because of the de-globalization and you've got a declining correlation of those markets. And the only free lunch we get as allocators is diversification. If I can have international markets that are decoupling with the US market, that's just a portfolio benefit that's freed to us. There aren't a lot of those around.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“You hit on this key thing that it's rare when alpha and beta line up. Alpha you've always had to some degree in the non-US markets because they're inefficient. That's why we've always liked them. But you now have the beta. You have the valuation piece. And so you can get those two pieces like Brett said together. It's compelling.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Give you the terrible answer, which is it depends. In something like small cap, I want a real premium, which you're getting today, and I want a very high expected alpha. And I want that alpha to come from fundamental research that is picking winners that we can then hold for a while that are going to be long-term winners. I want to get paid that premium two ways buy and hold. If we're going to trade or have a manager who's involved in commodities or emerging markets, I want them to think like a trader. We have been able to find managers that upside downside capture is really skewed because they're really good at those markets. For there, I'm not thinking as much about what is the premium I'm getting to buy that and more of how much volatility is there and can we capture that volatility versus just be penalized by that volatility.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“How do you guys think about premium? What type of return expectation do you think people should be looking for or accepting?”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Everything's interesting at a price. And I agree with you. You do have to be very on top of what the situation looks like on what you hold and be willing to rebalance when it's run. We're on the same page as Meredith in terms of emerging markets. A next level too is you have to be disciplined about selling high and buying low. You just have to be really careful about when things are running up because it is true emerging markets tied to commodities. That tends to run faster. We made a lot of money in the early days and the mid 90s, early 2000s playing off the volatility of our managers. The one nice thing about global equities is we're long-term investors, but you can trim on the margin and add to your other managers. Things are kind of running up or coming down. This is one of those markets. Even managers actively saying, I'm going to look at things that aren't tied to tariffs, then that all gets bit up. You have to have some sort of mechanism to be disciplined about it.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source
“Taking a lot, a lot, a lot of risk, and you don't know about repatriation of currencies, liquidity of the markets. And at the end of the day, it's fund flows that drive a lot of those returns. Basic commodities have done really well this year. That's really good for emerging markets, particularly emerging market countries that are both central banks are easing and they're big exporters of basic commodities. But for us, that's a cyclical play, not a long-term hold. And I worry about what the long-term risks are in a lot of these countries. If we could do it tactically, but it's hard to do tactically given the liquidity in those markets. And most of the managers tend to be believers, not tactical traders of those markets. But there are things like Korea that we've liked a lot, value ups for real. And it's working great this year. And we've been leaning into that. And in Japan, and obviously not emerging markets, but there are places you can be outside the US that have been phenomenal this year. But I think the biggest opportunity both out.”
2025-06-30 · Capital Allocators · Friends Reunion 3 – Five Allocators Riff on Investing (EP.454) · IDENTIFIED FROM THE TRANSCRIPT · source