YouSaid · the spoken record

Mark Wiedman

lines on the record: 71
first: 2024-03-14
most recent: 2024-03-14
sittings or episodes: 1
sources: podcast

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“And in theory, because of the tax basis step up at death, ultimately you may be limiting all those capital gains. To boil it down, you don't get those annoying capital gains charges at the end of the year for a fund you didn't buy or sell.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“Barry, that's a thoughtful observation about the tax efficiency of the ETF. So one reason the people that buy ETFs is they're cheaper than a traditional mutual fund. Sometimes there are great mutual funds with great managers and they may be worth holding on that basis alone. But generally, clients have shifted out of active mutual funds and they moved into DTFs because they get better value for money. But you're getting at is that you also avoid paying taxes. You postpone paying taxes effectively until the moment that you sell. The way it basically works is along the way with a mutual fund, you're paying all the taxes incurred by the underlying PM, underlying portfolio manager. He or she is generating the tax gains or losses. The gains is what we're worried about. They come through and you pay them that year as opposed to if you're holding them for $15, 20 years, you pay the capital gains when you ultimately sell the fund. The ETF takes those gains and puts it off to the future. And of course, there's always the...”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“but not have to go through a bank. And what that means especially is that in times of stress or as banks get smaller and smaller as they are in their trading books, what that means is you can trade risk efficiently with a transparent price on exchange in a way that fifteen years ago was literally impossible. So it was those two forces the securitization of risk in bundles combined with low cost indexing that's driven the iShares business to three and a half trillion dollars today up from about $350 billion when we bought it when the firm bought it back in 2009.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“The second force, and this is much more inside baseball and technical, but is actually really interesting if you're in the capital markets, is that it allows you to trade risk between a buyer and a seller without an investment bank being in between. So the market that has been revolutionized by the ETF, it's actually not the equity market, because that actually agency trading on exchanges has been here for a long time. The market that ETFs revolutionized was the bond market. The bond market was always an over-the-counter market where you went through a dealer. Always. And what the ETF does by bundling up risk in effectively like a set is you can sell that set of bonds to somebody else out there in the world who wants that risk”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“So, if you go back to 2011, what you'd see is a world where the ETF, the exchange traded fund, which is nothing other than an index fund bundled up as a stock, was a small part of many people's portfolios. It was small in or non-existent in most wealth portfolios. Most advisors weren't using ETFs. Most institutions weren't using ETFs back then. Some were. But most weren't. And what happened over the coming decade is pretty simple. Two forces drove the growth of ETFs and of the iShares business. The first was low cost investing. The basic recognition, as Warren Buffett has said quite publicly, most people are probably going to be better off just buying the S&P 500 and the cheapest way to do that is buying an iShare, not what he named another product. Buying a simple ETF that gives them access to the cap home markets at a low price.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“Is complicated. I think stock options are part of it. I think having restricted stock units that basically tie you to the actual stock price, even so it's always in the money is important. And I think we also have to remember that anything that ties people to long-term value creation. Is ultimately in the interest of the shareholders, it's probably also in the interest of the employees and in the communities they operate. The danger is when you have short data trickery, From compensation structures that aren't long dated, that's a place where I think actually, as an investor, you need to be careful.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a couple different angles we can go in this very if you're basically saying there's lots and lots of people in commerce who are making money at the upper echelons including with stock options as value creation happens in the stock market. So I think that's true. I think we just have to step back and like. How much do we think that the most successful people in a society should be able to take home? This is an open question.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“So, this is a group that brings together a set of asset owners, meaning like pension plans, some asset managers, and actually some companies. And the question is, how do we in the public markets and in the private markets, how do we get investors, the whole ecosystem focused on the companies, focused on making money over the long term? Our financial markets with daily mark to markets do encourage a lot of very short-term thinking. Companies are very focused on the next quarter's earnings. How do you get companies, investors, asset managers to think years and years into the future? And how do you set up incentives to achieve that? That's what the group does.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“So I lived in Beijing in 1999. I taught two courses one on American business law. Nothing extraordinary there. But I taught another class on the rule of law. And I have to say, 25 years later, it is unbelievable that I taught a class at what was formerly a communist party training school in the rule of law. It is literally impossible to imagine that this would happen today. But back then, really nobody bothered me as long as I didn't foment dissent. I wasn't. I just was doing academic teaching of what does the rule of law mean? What does an independent judiciary mean? The roots, for example, even in Chinese traditions. And I did this at a time when China was opening up. We in the West had the view that if we just trade enough with them, they'll liberalize and become at least a kind of quasi-democratic society. Didn't quite work out that way.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“Bury what I actually really love doing is teaching and growing people. And so I've always either hit the lottery or simply got sacked. I think teaching would play an important part in my future. What I love about teaching is about something that I know about. I've typically taught about either something around exchange-traded funds and the capital markets or around the financial crisis when people are interested in that is basically is how do you get across the core understanding of something very complicated but make it simple, not simplistic. And if you can do that, people walk out understanding that a financial crisis is nothing other than an overdone bank run. If you really get down to it, it all comes down to people borrowing too much money with too short maturity. And if you understand that, then other crises, other panics all make more sense. That's why I like teaching. I think it's fun.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, there's a bit of that too. Honestly, Barry, you wonder when you were sitting in a seat like that. Am I just talking? Am I doing anything”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“Utility outfielder somewhere, you know, things that were not properly organized and marshalled, somebody needs to step up in an organization and put it together. And that means, for example, a great example. We launched a joint venture with a Singaporean entity called Tomasic, which is effectively like a sovereign wealth fund. It's actually not, but it's what they do. And what we did with them is build a joint venture to have our first growth equity strategy. There was no natural place for that to sit anywhere in BlackRock. It was called Decarbonization Partners. We raised $1.4 billion in the midst of Gale Force wins against growth equity over the last couple of years. That all started because I had the free time to be allocated to that. Minister Without Portfolio, organizations need them.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, effectively, it was Minister Without Portfolio. My job really, I had other formal duties, but the real job was handling, managing, organizing the things that had no owner at the firm.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“It's the number two independent mortgage company after Quick and Loans. And they focused on basically rebuilding efficient access to credit after the financial crisis when most of the big banks retreated. Most of the big banks just left the market.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“It is. So, this is a company that's based out of California that we started, we did it as a joint venture with another firm, a guy who became a close friend of mine. It started off with a whiteboard exercise. The financial crisis had swept And we thought, what is going to come like the little mammals after the dinosaurs have been swept away? What will evolve afterwards? And we did a whiteboard exercise around a mortgage insurer. We thought about a credit rating agency. And we concluded actually where the money would be made, where clients could be served was actually in buying distressed mortgages. And that was the origin of what now is Benny Mac.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, we worked for, I mean, this is years ago, but we worked for the business still continues at BlackRock, when you work for anybody who has a big, massive exposure. We were particularly good at mortgages and structured finance. That turned out to be pretty handy in 2007 into 2008. And basically, you know, when we started it, my question was, what in the world do we have to offer to these institutions? And it was pretty simple. One, clear thinking. Two, we had a risk management platform called Aladdin that's the foundation of how we manage money at BlackRock, and we were able to actually run other people's assets through it and actually get some order out of chaos.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“Want to work with these people, I figure I'll learn because you really can't predict how the future is going to go, you really don't know, but if you work with great people, that tends to work out. So what we started doing was building something which was basically advising financial institutions on balance sheet problems that were of a capital markets nature. So what does that mean? It means, for example, that imagine you were a global bank that had a huge toxic mortgage book during the financial crisis, or perhaps you were the New York Fed, which got saddled with books like that from AIG and from Bear Stearns. We helped work all that out. That's the kind of work. That was a few years later, but that's conceptually what we were doing, which is helping our clients figure out how to manage complicated capital markets exposures.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“But a mentor of mine, a guy named Peter Fisher, who later ran fixed income for BlackRock, had been my boss at the U.S. Treasury. And he went to BlackRock and said, why don't you just come and meet some people? I came over and it was the best management team I met Larry Fink. I met Rob Capito, our president, I met Sue Wagner, who's on our board. And these people, I walked out and I said, you know, this is the best team I've met. I'm in”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“I'd actually argue that that ability to write, to write, not just speak, but to write clearly and concisely, is almost the foundation of civilization. It is how we move forward is actually putting things in categories, beings precise. And memos, that boring topic are actually how you build civilization.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“I work for a judge in Chicago on the federal appellate court there of the Seventh Circuit. And that's where I learned really how to write, watch it, because now you're writing for a proper audience, which is like the litigants, but also actually all the other judges who are trying to figure out what does this case mean, figuring out how to be clear and concise”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think the great thing about how American education, college education is set up is it's less about what you learn. It's more that you learn how to learn. So when I think about actually what shaped how my mind at least works, it was two things. It was one, social studies, which is a department I went to undergrad that focuses on books, great books in the social sciences. And you learn how to read and write about a text. So, I really studied, for example, Max Weber and Melee Durkheim. These are great sociologists. John Stewart Mill, understanding their text, their concepts, and being able to write short, concise papers. Went to law school, but I'll tell you, Barry, the thing that actually I learned the most from was not law school. It was clerking for a judge after law school.”
2024-03-14 · Masters in Business · Mark Wiedman on Managing Money at BlackRock · IDENTIFIED FROM THE TRANSCRIPT · source