YouSaid · the spoken record

Matthew Benkendorf

lines on the record: 102
first: 2020-01-10
most recent: 2020-01-10
sittings or episodes: 1
sources: podcast

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“So, you don't want to jump ahead and solve the problems, or go to the headline of the issue without backing down and understanding the plumbing. So I think that's the advice I would have known, wanted to know more. I think we've done a decent job preparing for that, and I think we're ahead of that, certainly where we are today, because that's another key element we didn't even get into today. You know, the mechanics and plumbing of the markets and where we are now versus where we used to be and that interaction with investing is going to be even more important.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that's a good one. What would I have wanted to know 20 years ago today? You know, aside from the generic things I would leave to general investment success, you'd want to know how complicated the business is outside of just the investing aspect and the analytical aspect, right? I think it's why it's important for people. And it was helpful in my own background, as I mentioned in my past, to know how the plumbing works, right? The plumbing is becoming even more important, you know, how markets trade, how trade settlement works, how those elements work. I think that's 20 years ago, that was something that wasn't parents, not taught in school, you know, you don't learn about the plumbing, you try to get a job, go to graduate school, and come out and be an analyst or be a successful investor. And you sort of skip ahead. So I think that's an important aspect. Do you want to really know with investing or anything, have that foundation of how things work first, where generally people have a tendency to...”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I'd say a lot of the things we've talked about today, I'll have to point them towards the podcast. But, you know, I think you need to find the investment philosophy that works for you, number one, because there are a million roads to heaven. You've got to pick the right one for you in the investing world. I have a mousetrap that works for me and my team and our firm and our temperament and our skill set and our investors critically. So you got to find the right path for you. I think reading and perspective is critical. Being a little less sensitive, being a little bit patient. I think those are the basic things you tell them to work on. You know, be a voracious reader. And that, you know, as we've talked about, there is a good future. You still have an employable skill set. I think the human element is going to continue to create opportunity, continue to drive most people to make mistakes. That's just the law of numbers. And you can stand their ready to capitalize upon them and make money. But critically, preserve capital. Preserve one compound number two.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“So that scares me, right? Because politics are politics, economics are economics, but strong community is very important locally and on a political stage as well. So I'm a bit negative on that. I know though over the long term, as we said, it's never paid to be a pessimist, as Buffett also said, I believe, investing is an optimist game. And you have to be that. And it's been the right way to be. So you don't want to be too near-term pessimistic. But, you know, near term, you get a little bit down. And as you see this, you know, this key element of life fracturing a bit.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Greater community. But in fact, I think what people are hopefully seeing and recognizing is we're actually seeing a fracturing of community because of maybe technology perversely.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you got to be optimistic that despite all the noise and change, success in investing still comes back to the same playbook, and if you can be disciplined around it. So that excites me, right? Where other industries have gotten hollowed out and they are fundamentally different, right? If you're a taxi driver and you're competing against Uber, your business is different, right? If you're a restaurant and delivery has come in and delivery apps, your business is different. Our business has had a lot of technological change and influence when people talk about AI and this and that, but I'm actually quite excited in that. We have an employable skill still here. I think that's kind of nice, right? We still have some value added to bring even as much as things have changed. So I'm really quite excited about that. I'm sort of, you know, if I get in negative at all and downtrodden, it is sort of around the sort of, you know, fissures, you know, where, and as I mentioned very briefly there, you know, community is important to me. We were supposedly living an age where technology was enhancing community and creating a”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“I can water skiing. I guess that's one way to get it out of my system. The hills are a little lower there, though. So I do like to ski. Look, I'm a family person. So I have two young kids, a quality of life's important for me too. We work hard. We work seven days a week. But I think you need to balance that and keep faith and family and all those elements very, very close to your life. They're important. So is important.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you know, I'm a University of Denver alumni, so I skipped. I like to ski. Certainly, I love the mountains. I'm a mountain person, even though I live in Fort Lauderdale, Florida, which is a little bit funny. But I got a little best of both worlds there. And that way, I can live in the worm and go skiing in the world.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“And those are ones that are more important to learn from because I think the investment ones are critical, and you do learn from them, but they are the obvious ones. I think the real failures we all need to focus on and I do are ones where you've fallen short personally. And we all need to do a better job.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you know, when it comes to failure, I have obviously all the classic pitfalls in investing. We all sell too early, even great businesses. We do it because we have some valuation sensitivity on top of that. On the other side of the coin, you often hold on too long. But, you know, I think my greater failure is I hone in on are more personal failures. Not in interpersonal relationships speaking up or stepping up, you know, both in family or friends or things like that, not to get too specific. But those are the failures that I think you hold a little bit closer.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“That's the crucial lesson we all need to hold on to, you know, through all the turmoil we see every day on the news, right? And why is that? Because we're people, right? We're people. We talked about certain elements. We're people we're animals. We have animalistic nature in certain ways too, where we like the negative, and we just need to step back and appreciate that, I think, at the end of the day. And then I like to read also, as you can pick up in my book's Leadership, right? Which is also something we wonder about the world today. We need collective leadership, really. We're maybe in a vacuum here where we're looking for real clear leadership because historically there were times where leadership mattered a lot. So I think reading about that's interesting.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“There's tremendous lessons to be learned longer term, and that's why I think reading is important. You know, unfortunately, I think, you know, first of all, radio versatia is important as a medium because you have more time to be thoughtful. And reading is time to be thoughtful. And we all need a little bit more of that than 130 characters or whatever.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“And now I think visually, and I can picture the book now on my table sitting there after I finished it. I'll have to come back to you with the name of it. But it wasn't that specific one. But also, I'm not looking for carnage when I read about it. The 30s and 40s in the Crusades.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“It'll Fantastic too, right? You know, the jobs book was great, right? Isaacson, too. So there's certain authors, right? What they write is just always great. But I tend to read about people in history and in periods too. So it's not just always people. You know, I finished a book on the Crusades. You know, certain periods of history. What's an image?”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, the other one, you know, that I liked, and unfortunately, you know, this is like, you know, when you like sports teams and they were unpopular, then become popular, right? You know, the churnoff Hamilton biography was awesome, right? But Hamilton's now this global sensation because of the deserved success, right, of the play. But Hamilton, you know, was a character that I long before all this recent success had a lot of admiration for in his contribution to our country, which people now, I'm glad they've broadly learned more about, but that's obviously a great biography. I tried to read a lot of president, you know, sort of presidents. I think you learn a lot about.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Or poor capability, have some perspective that over time I'm not making indictment on a political, a party or group, but it's pervasive everywhere, right? So just have that perspective of how decisions in history have played out maybe in the short term seemingly difficult or scary or risky. But as Buffett also pointed out too from that period, you know, as he first started investing in the 40s, right? Who would have ever invested in that environment in the face of carnage in the South Pacific with World War II, right? But it was the time to invest. It would also be a great time to spend. Yeah, for the long term, it's always a good time to invest, but you got to have perspective then and sort of dampen your sensitivity through experience that this stuff we all see and read and hear about today, it has a lot of rhythm to what happened even in the 30s and 40s for one example. So I read a lot of biographies like that.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, I'm boring in a way in that I like to read nonfiction. I like history a lot. Give us some titles. Not the sci-fi. And it's funny the books you end up with, you know, sometimes you wonder how you ended up there. But the current book I'm reading is a biography of FDR from Jean Smith. And it's a really good piece of perspective as you read about that time period and relate it to the time period today because I think a lot of investment success also in why I read history is this element of perspective getting out of the frenzied flurry and feeling of this is also different and also wild of today to looking back at the way things have been and were. And I think FDR's period is actually quite interesting, right? I mean, you look at what was going on at geopolitical stage. You look at geopolitical missteps. You mentioned it earlier in terms of Powell, in terms of a cabinet committee nomination by Trump. But, you know, look what past cabinets were filled with, right? The cronyism and the lack of experience and capability.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“In secret to my success from the mail room to the top. You know, I literally started at the bottom, I started in trade processing and settlement, and I worked my way through the organization. And along that journey to your question, there's been people at every stage that have helped me, that have really helped me in certain aspects that I've now put together.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Read how other people invest, how they make money, whether in fixed income, whether commodities, weather equities, because also the key to long-term successful investing is finding something that fits for you. And maybe it isn't equities, maybe it's fixed income. Maybe inequities, it's value, it's not growth. But a key to success is finding what fits for you. So reading a lot about how other people invest, how they think probably the nature of what your podcast audience is. I think that's very important and that's where you can drive mentorship from in a lot of ways, how reading and learning from how they think. But then, you know, the obvious key instruments in my life have been a lot of the investment professionals around me at the firm. You know, it's my team and colleagues today. It's the Ed Walz Acts, the Henry Schlegels, who's a founding father of our firm. It's our former colleague, Rajee Jane. It's a number of people at our firm that have helped build me from this kid who came ahead of university in 1999 and has built his way like Michael J. Fox.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, there's been several, I think. You know, you have to go back to your childhood. Clearly, you know, as most people do, their parents, I grew up in one of the traits I try to push once again today is just the idea of hard work. As I said, we had a small business. We had a business where we dug our hands in the dirt. We work seven days a week. Work ethic is extremely important to me and my father in that way and my mother were very important. And we worked when we were at a school. I was at work after school and we were at work on the weekend Saturday and Sunday. And I think hard work, that old puritanical work ethic, you know, was very important to me. So from a mentorship, definitely my father instilling that in me. And then from the investment side, which is key, you know, to where I am today after that or subsequent to that, there's been a litany of people. I think a lot of it has been read to start with too, you know, one of the great pieces of advice my co-manager on our US equity product did WalzAc gave me earlier in my career was to read a lot of these money masters books, right? Even if it wasn't just equity.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's suboptimal for your clients, you know, and I think it's suboptimal for retaining great people longer term because why do most of us change jobs is because we need opportunity? Financial is important, right? But people are people and they want self achievement. And I take a lot of satisfaction in that half of my job of really, I really smile and I really feel good when I see the accomplishment and achievement of others. And I'm saying that, like I said, not in a self-promotional way, in a selfish way. It's what makes me feel good.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh boy. Look, I'm a person who cares a lot about other people. You know, I think half of my job has been managing money and half of my job has been managing people. And I really do care about the success of my people. And I'm not saying that sort of in a way to promote myself. It's admittedly what makes me feel good. You know, people do things for self-motivation. And I really do take a tremendous amount of personal satisfaction in the success in others. I've taken great lengths over the last three to four years to build a deeper, broader team to build real lead capable portfolio managers. I think we should have a team for our investors where we're all redundant. I think that's a better situation for our investors. So I think maybe not as.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, as I said, I grew up from a farming family and a landscaping business, so my first car, not surprisingly, was a Chevy pickup truck. Uh-huh. I got my license in New Jersey at 15 because I got a farmer's license because we had a farm, so to speak. And I drove around town with the name of our business and phone number plastered on the side, which could be a good or bad thing depending on how you're driving or where you're driving.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Is that accurate? Yeah, typically they want to be registered locally and they want an account that maybe sometimes has some customization that they may need. We don't and won't accept a lot of customization. We need to be able to do what we promised we could deliver. I think this business is about integrity. It's saying what you're going to do and then sticking to it, doing what you mean to set out upon, I think integrity is very, very important. So our clients, we need to make sure we can deliver with integrity the philosophy process that they bought into. They saw the results for but sometimes at the institutional level maybe there's a nuance where there's a market they can't be in for an institutional reason, et cetera.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Generally buying mutual funds. We actually, as a firm and a well developed firm, we have the whole suite of structures and products for our end investors so we can manage subadvised accounts. We can sub-advise mutual funds. We can manage mutual funds. And we have basically half our business and then also I'd cut our business also again another half half North America US focused and international. We have quite a global business.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Our business is roughly a mix, I would say, of half, half, you know, between more institutional oriented investors and then more retail oriented investors. And in that world, we're a manufacturer of an investment product. We're a style approach, a discipline. We deliver an investment product. And then our partner who in the U.S. is Virtus Investment Advisors, they're the distributor of the product to the end retail investors. So we're removed from them, but we help hold them along the journey.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Or better or worse analysts is everybody can be smart, everybody can find facts, everybody can then maybe even put the story together. But can you actually then spit it out regurgitate it so someone can do something with the information? And that's, I think, something that investors struggle with too. And really smart people sometimes struggle with, right? They just know so much and they can put it together in their own mind, but they either aren't in the position to make a decision or they can make a decision because they just can't spit it out in newspaper reporters, obviously that's their job, right? They need to put it into a sellable fashion, which means it's articulate and you need the ad articulation to be able to make a decision and know what you're dealing with.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think experience, you know, experience working in this way with the structure of a team, with these individuals has been very important. It's been a learning curve from the beginning. So as an idea at the beginning of how they could fit really well with how we invest. And the idea was very simple, right? One, given that period you go back, you know, 10, 15 years ago, the carnage in the news industry had already started. So you had really great smart people there where the industry was being affected by technology and they were now available, so to speak, number one. Number two, what reporters clearly do very well in their job is find a subject they often maybe know nothing about and figure it out. Start the building blocks of what makes it tick to figure out whether not to skip ahead to your endpoint, whether story is good or bad or just what the story is, number one. So that was a great analytical skill. And the other one that's most underappreciated, I think, where you actually find a differentiation between good or bad.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Constantly challenging from a devil's advocacy position, weaknesses in our businesses, when anything new comes up, digging deeper and into those issues and ferretting out the real facts of the matter so we can accumulate and at least determine our own view of the issue rather than just read the headline of the issue, which someone else built upon their own facts. They're fact finders, they're devil's advocates, they're there to challenge us day to day. They're there to challenge even great businesses over the long term. And then very specifically where they've also been able to help us a lot is looking into narrower issues with the business, which might not be negative, could be positive. But a fundamental analyst, maybe when they prioritize their time, it could be smaller yet important, but we can dedicate a journalist to dig deeper on a singular issue rather than the analyst, you know, get mired down in the fog of war in this one small issue while they accumulate the bigger, broader picture of the underlying company.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“I think one element is certainly human temperament, right? I think that's the skill that you add as a portfolio manager on top of being a good analyst over time. It's temperament. Temperament comes with experience, but temperament is somewhat chemically wired. In you as a being, as you said, you know, that tendency to not jump for the next shiny object, you have to have a temperament for that or at least develop a good temperament for that. And I think as you described properly, a lot of times, particularly with great businesses, you need a little bit of patience, right? Even the greatest businesses with even as Buffett has described them, the widest moats face threats. There's people always trying to sack the castle, you know, and cross the moat of the best businesses with the biggest moat.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Or two, hand in hand with that, how do you improve the fundamental risk dynamics of the portfolio by giving your investors a collective group of businesses, which is still growing attractively, still durable and predictable, but maybe has a slightly different idiosyncratic driver whereby you do have some diversification benefits.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“The starting point of a good rich management approach is fundamental good old fashioned risk management. What is the business? What drives the business? What are the economics of the business? What does it do? Where does it do it? Forget the statistics first. That and then the accumulation of several businesses together as you own them, having if you can get there some idiosyncratic drivers, right? Equally good businesses, but what drives this horse is different from what drives this horse over here. That's great risk management if you can achieve that over time. So in your question, you know, the decision to get into the portfolio is you need to upgrade the quality of the portfolio if you do it.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Maybe sometimes it isn't about replacement. This business is equally as good as a name we already own, but it offers something else from a risk dynamic, which is nice. And that's where we think about risk very fundamentally. I think there's way too much focus on the Greek letters, as I call them. The betas, the standard deviations, et cetera. I think they're a byproduct or they fall out of a good risk management process and approach. They're not the starting point.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“That's what you mentioned is the latter I would mention before that though the key determinant is this new idea or business, how is it better than what we already own? That's the first litmus test. We've accumulated over time via several decisions this group of concentration of these businesses that we like for these reasons. So now when we evaluate this next business there, how is it better than the weaker links in the current portfolio in terms of their relative lower quality versus the highest quality names in the portfolio? That is a litmus test is very important to the long-term investment journey. You know, holding yourself to get over that hurdle over time, I think that's one piece first. And then the other piece, as you point out then, is, okay, if you hold that first hard crude test there where you got to replace a name if it's going to gain entrance.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, there's two elements. I think one that's often underappreciated when people think about what you buy and they often think of it very much in a clean slate approach, right? But one is perspective once again in that we have a live portfolio. And that live portfolio isn't sort of an organic organism, right? It's an accumulation of thousands of decisions already that have been built upon each other, why we own what we own today and what size is a consequence of millions of interacting things. So that I think is important to understand as your litmus test or starting point.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“You do have to sell and harvest names. We have evaluation sensitivity and a strict valuation approach, so you do have to replace names that do reach fair value. But the process and the philosophy is what enables us to have success on a global basis with the structure. I don't know if that necessarily would work for people who are more benchmark oriented, right? They just want a plus or minus the benchmark weight in country and sector. They might need a whole lot more people and they might need to be a little more focused from a strategic standpoint of certain products. I don't know. It's not my approach. But I think for us it works very well.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Is more rare. I think it does add a lot of value for investors at the end of the day, particularly as I always have to be careful with our investment philosophy. You know, I think that's something people often misunderstood. They can find something that works, but certain things that work in the right situation, and people often try to take that what works and put it in the wrong situation, then they wonder why it failed. So when you are very narrow and restrictive in what you're trying to look at and which you're only willing to ever buy, you know, when you think about risk the way we think about it, when you think knowledge is cumulative, when you have longer-term holding periods, when you have lower turnover, you can really then do this successfully with one team. We have across all of our portfolios, you know, 160 odd names, right? And the turnover of names annually is maybe 20, 25%. So with a team of 21, you don't need a whole lot of new idea generation. We do have good new idea generation.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, absolutely. And as you know, businesses have developed now and those analysts found this false wall between, you know, the Asian tech analyst and the US tech analyst to be a little bit lower than the wall used to seem. I think that's led people towards our model. But I still think the model...”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it was extremely rare two decades ago. I think more have started to move that way a little bit in more recent years, probably the last five or seven years just because businesses have launched and then they've launched simultaneous products. So they've just sort of from business.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think two keys there. We're quite proud of our results, right? And we're quite proud one and what we've achieved in terms of. And maybe surprising, right? One mousetrap does work. Actually, you don't need a different emerging markets mousetrap, which is also, I think, a bit of a fallacy sometimes. You don't need a different mouse trap for this market. You need one good style approach. You just need discipline then and a good team.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Models. You can't get back in the developed markets. And that, to me, is why you should be in emerging markets. It should be about the businesses as all investing, I think, should be, as we've talked about today. So go to emerging markets for the stake, not the sizzle. Go there because there's great businesses. You can't get in the S&P 500 or you can't get elsewhere. I think that's a big misunderstanding still.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Relevant to an expensive world. It plays right into it. And I think that's been fundamentally wrong in that not that emerging markets aren't attractive, but it should be about the stake of emerging markets in that you should go to emerging markets and you really should because there are great businesses there. I forget the sizzle story. And let's also take the fact into consideration that if you bought the sizzle story, which if you sort of play that out in a number in GDP growth, the emerging markets take out China and India over the last two decades basically their composition or percentage of global GDP has been flat. So you haven't seen the sizzle-sizzle sizzle story outside of India and China. So if you bought the sizzle, you've been disappointed. Good news, as I mentioned earlier, is GDP growth is necessarily correlated with stock returns. So if you got the stake right, if you got the great businesses right and what's unique and misunderstood about emerging markets, I think is there's actually stake there. You can't get in the developed markets. There's actually businesses and businesses.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, and it's sort of a classic you think about how marketing has evolved, a classic thought, right? Don't sell the steak, sell the sizzle. And I think the misunderstanding to your question on emerging markets is largely because there's been a lot of sizzle sold. You know, emerging markets has a great sizzle story. People consume less of this and they'll consume more of that. There are these poor people. They'll get richer. All these elements, it's a great sizzle story.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the emerging markets is the class, quite frankly. And, you know, I've been actually talking to some clients recently about this. I'm going to bring up a name. You might know the name Elmer Wheeler, right? I don't know if you've ever vaguely familiar. He was around in the 1930s in the Depression. He was a newspaper reporter in a near and dear to your heart. And he was fired in the Depression as a newspaper reporter because his boss said, I don't need any reporters anymore. I need salespeople. And then Elmer Wheeler, you know, as a pragmatic guy, said, all right, I'm going to be a great salesperson. And he coined the term that sort of a lot of us know today as an old-fashioned marketing term. Don't sell the steak, sell the sizzle.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Subsegment of names. Out of those names, we build regional portfolios. The best of those investment opportunities compete up the pyramid up to the top to our global portfolio. So it's not just an amalgamation of the geographic portfolios, but it's the best of the best of those names, competing for each other and having the proper risk diversification alongside of it, what the businesses do, where they do it. So the fundamental risk is contained and managed.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“In the businesses compete across geographies, surprise, surprise, right? And analyzing a fundamental business of whether it's a great business, an average, or a poor quality business perspective is the key to that, right? Life's all about perspective and investing is about perspective too. As the old saying goes also, you know, to a man with a hammer, everything looks like a nail. So you don't want to pigeonhole people, right? You need them to see a lot of nails. You need to see broad perspective. So being global in structure as analysts really helps the scrutinization of what's a great business because we can look at one in Indonesia and we can look at one in Ohio and try to figure out what are the nuts and bolts that make these great businesses. And then we're a totally agnostic to where it is because we have a group of portfolios where that name will then try to compete to get entrance into. And all of our portfolios from a regional basis are competitions for capital. Our universe eliminates, it creates a smaller pond out of the pond comes a smaller.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“This is where we're actually a little bit unique. You know, it's hard to say you're unique and different in the asset management industry, portfolio managers, analyst products. It seems pretty homogenous, right? But our team is sort of rare and unique in that the same team manages those six strategies, you know, not just myself sitting at the head of it. I have a collective group of really talented individuals who support all these products simultaneously and as analysts. And there's a lot of investment value in that, having the same analyst work on a US equity fund and an emerging markets equity fund. And it's the way we've been doing it for two decades.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“And then you have this whole ecosystem around Asia where it becomes a big issue like Taiwan. They're in a pickle, right? Which sandbox are you in there? Korea? Which sandbox are you in there? That's alongside interest rates. These are both longer term issues clearly, but those are longer-term binary issues that if anything worry me a little bit, right? It makes the world a bit more complicated. It makes the success or collective success a lot of us could have had a lot harder to achieve. It's very disruptive. And the downside, as I said, mostly is we just miss out on what we could have had, you know, in a collective world. But look, it's life. It is what it is. I'm not passing judgment whether it's good or bad either. I think it's just the reality, and that's investing what we have to deal with reality, not hopes and dreams, hope isn't a strategy, as they say. We got to deal with reality. And the reality is we're fracturing.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“Something more specific. Not necessarily a total deglobalization, but you split the world into two spheres. There'll be the U.S. Western sphere and then there'll be the Chinese sphere, right? And there'll be people who have to make a choice or countries that have to make a choice of which sandbox you want to play in, right? The rules are going to be different in the two different sandboxes, which is where the tension is today, right? The US and the Lightheisers are saying, look, you're in our sandbox. There's rules to playing in our sandbox, and you haven't been following the rules. We let you go for a while, but now you need to follow the rules, or you got to get out of the sandbox as the extreme sort of outcome. And the outcome, as I said, the extreme result could be a balkanization where they say, look, we'll get out of your sandbox. Who wants to come in our sandbox?”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source
“At the end of the day. So I think that is clearly still the problem. You know, there is this tendency, and I know it's sort of been like screaming fire in a crowded movie theater for a while, fear of inflation, fear of inflation, fear of inflation. And I can't tell you when it's going to happen, but I can tell you there's great effort to do it. And there are tools to really do it. If you want to go to extreme end, so that will end up in a poor payback, I think, for investors who are in negative yielding securities. I think that's a problem. The other issue, I think aside from that in the interest rate backdrop is what we're facing in terms of, I call it this sort of balkanization of the world. You know, what we see playing out in geopolitics is not about tariffs. It's not about a current account deficit. You know, it has wider ramifications. If we continue, we're sort of pushing this world. And I'm not saying continue in terms of a political sense of it being right or wrong, but just the path we're on, generally speaking, which I think doesn't have to do with just one president or one administration.”
2020-01-10 · Masters in Business · Matthew Benkendorf on Managing Equities · IDENTIFIED FROM THE TRANSCRIPT · source