YouSaid · the spoken record

Kathleen McCarragher

lines on the record: 23
first: 2024-06-28
most recent: 2024-06-28
sittings or episodes: 1
sources: podcast

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“I think technology is a positive, I think education and environment the two I just cited are long term beneficiaries of what we learn as we go forward with this and I just have an optimism about what will unfold.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“Oh, I love the outdoors, hiking, biking, skiing. I've been involved philanthropically and involved. I've also been involved in educational efforts, in particular with neurodiverse populations.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“Know what you know and what you can't possibly know, and try to lean into what you do know, and if something's running away from you on the upside and you don't know it and you don't understand it, that's okay. There are a lot of fish in the sea.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“SIG, no doubt his ability to take a new information, his flexibility, his commitment to building the people around him to be the best they could possibly be, and his pure focus on client returns, incredible.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“In my experience, it has come when there's an industry and change. And the industry might have had very attractive characteristics and something has come into play that's leading to new pressures that are going to change the growth opportunities for that industry. Classically, what you will find is a really good company as an industry is going through change can hold on for longer than less well-managed or less robust companies. And it would be easy to be fooled into the idea, well, this company can outrun the secular changes in the industry, because they often do for a period of time. But if that company cannot significantly adapt or change to the new, if the industry changes overarching, then each A really solid, well managed company is going to struggle as that industry changes.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“Okay, great. Well, you might have just given us the answer, but your biggest lesson outside of the name not mattering as an investor knowing that sometimes these lessons can come from good investments and others from more challenging investments.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“Oh, goodness. Okay, does a paper portfolio count? When I was in fifth grade, I had a paper portfolio. We were allowed, my father ran this, we were allowed to have three stocks. And every Saturday morning, we would get out our graph paper and pull out the newspaper because in that era that is where you found your stock prices. And we would plot on the x and y axis, the movement of the price over time. And my three stocks were Disney, Coca-Cola, and something called Fair Foods, which I don't think existed for much longer than my paper lasted. My father, I recall, quizly, looked at me and said, you know, fair foods, why did you pick that? And I said, I liked the name. And he continued to look quizly at me. And that was my first lesson. Name is not one of the criteria you use in picking stock.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“Well, we do still appreciate our positions in all things AI related. One of the big questions is, is this a bubble? We don't see it similar to the TMT 99-2000 scenario. Enterprises are spending on this and they are beginning to see returns on that. No question as spending levels go up. We'll have to monitor the profitability of those companies that are accelerating their spend and what we expect to see of it, but we believe that's useful.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“Clearly, the immediate beneficiaries have been the NVIDIA and other arms dealers that are really benefiting from the investment in and the spending on all things AI. When you go beyond technology, we start to talk about productivity gains. And at this stage, the way we believe we will see them first is skill sets that can be enhanced rather than headcount reductions. Over time, What we will find is as these technologies move into other industries, whether it's healthcare, whether it's education, whether it's oil and gas, we expect to see real foundational capabilities emerge out of utilizing this technology that will enhance growth rates, enhance productivity, enhance returns for those companies that can lever them the most.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“Is if we can find other companies, other stocks that will do as well or better than the large benchmark weights, Apple and Microsoft in particular, than if we own a large position but are underweight the bench, that's okay because we only have to do as well or better in the names that we are using instead. And that's a great portfolio position. The other thing is mathematically the largest seven contributed disproportionately to benchmark returns. We know that. It's been well documented. But there were another hundred fifty names in Russell one thousand growth that outperformed last year. In theory, you didn't even have to own any of them in order to outperform the benchmark as an active manager. Have the luxury of picking and putting the assets where we think they will do best.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“There's no question that the talk around the M7 and before that the Fang Ma and before that Fang has been around for a while and it speaks to the business models that these large and very successful companies have built and the sustainability of those business models. So as we were talking earlier, if companies go from strength to strength and can still drive outsized revenue growth, outsized returns, looking forward, they can remain attractive holdings. Now this idea of concentration in the benchmark Russell 1,000 growth benchmark is not diversified. We run diversified portfolios and so we are not going to have benchmark weights in the largest of those companies. But the way we think about it”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“We think about investing in three, five, ten year time horizon when we look at a stock. So if a client can share that kind of a time frame, that's productive. But we would really encourage even longer. Again, back to this idea of the power of compounding. The longer that persists, the more impact it has to those cumulative returns. And we do have clients that think that way. We have clients who've been with us twenty, thirty, forty, and some even 50 years.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“Performance. If, as an active manager, we can outperform our benchmark, over time that outperformance compounds to a material number. When we see investors shifting from active to passive, it often follows a period of relative underperformance, where a different risk profile may be applied as they're looking at that asset. And then we often see the shift back from passive into active when active outperforms. We like to think about it on a multi-year, multi-decade basis where that compounding of the outperformance will truly matter.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“Okay, let's pivot for a bit to the macro trends shaping investing today. Passive investing has obviously become increasingly popular, particularly in spaces like U.S. large cap growth. What does that mean for Genesis' business when you speak to investors? What's the strongest case for active management in this asset class?”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“I never take culture for granted. I believe that Jennison has a strong and self reinforcing culture, but it's much harder to build a culture than it is to unwind it. So what does it take? I think a common purpose. I think acting with integrity and clarity. I also think, as I mentioned very early in this, that winning helps, and we win as a team. So when we think about developing and retaining talent, how do we create an environment which allows them to do their best work? And how does our process leverage that work into productive results for clients? We value individual contribution within a very interdependent process. I think the people sitting around the table make each of us better at what we are doing. That's a great environment in which to work.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“We are on what I'd consider to be our third or maybe even fourth generation of investors. So over the five decades we've been investing client assets. What we do is produce Genesison portfolios. And they're not the result of any one person. If you look at the portfolios and the results, the return characteristics, you can't find the generational shifts in our team. And I think that's very important because when a client gives you this responsibility over the long term, we shouldn't be changing who we are and what we do. Of course, the names in the portfolio will change. The portfolios themselves will change, but the role the portfolios play in our clients' mix of assets should be able to be consistent.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“You're also known as someone who's actively involved in the career progression of your team and really aim to diversify your investment approach and those driving it across generations. Can you describe how you do that and why you believe that's also a driver of success?”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“The market definitely reacts more quickly and more fully to the news than it used to, so what it means for us is that we have a higher need to distinguish the noise from true news, and it requires us to be very crisp in our investment thesis, because there's a lot of emotion in the move, and the valuation reaction, we can't let it swamp our understanding of the fundamental opportunity.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“Has evolved. We've typically had a three to four year holding period, but that's an average, and there have always been names that we've owned materially longer than that. But even that has been lengthening, both because some names are being held even longer and because there are more names that can actually be held for longer, where growth rates stay attractive. So some of these companies have scaled globally and they have meaningful market opportunities. At some point, maturation or the law of large numbers will set in and growth will slow. But right now, the competitive barriers and dominant industry positions allow them to continue to grow at really attractive rates. But we know not all names will have this kind of holding period, so there are some where we intend to own them for shorter periods than that one or two, maybe three years. And then, of course, there are those where we've been proven wrong.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“World leader in gaming compute. However, we also saw them leading the next era of compute with GPUs, where the data center business was doubling. So gaming was recovering and a new important market was developing. By 2018, demand for compute power was growing exponentially and CPUs could no longer keep up. What NVIDIA offered was optimized across the stack, and it offered compelling cost and computed advantages. So we have seen a massive shift in the way computing has done. And that is what has set up NVIDIA's place in all things AI today. That $5 billion revenue company that we bought in 2016 is annualizing revenues at greater than $100 billion today.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“Very topical today, of course, with all things generative AI taking center stage. We've been following NVIDIA since it became public, and it began marketing GPUs initially in nineteen ninety nine. The purpose of those was to accelerate and improve 3D graphics. So the primary market at that time was gaming and visualization applications. In 2014, the company focused on becoming a specialized platform company with end to end capabilities. So gaming was still their most important market, but this accelerated high performance compute led to an emerging role in data centers. They were absolutely the”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“We And as one example, one company that you invested in quite early was NVIDIA. I think you've been invested since 2016. So tell us the story around how and why you decided to invest when you did in that position.”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT
“So let's talk a little bit more about the investment approach, take a deeper dive there. You and your team have been early to identify and invest in some of the biggest names driving the market higher today. Describe the investment in research processes that help you make those calls really oftentimes before the rest of the market does. With the significant experience of the”
2024-06-28 · Goldman Sachs Exchanges · Large-cap investing with Jennison Associates’ Kathleen McCarragher · IDENTIFIED FROM THE TRANSCRIPT