YouSaid · the spoken record

Matthew Kadnar

lines on the record: 95
first: 2018-04-05
most recent: 2018-04-05
sittings or episodes: 1
sources: podcast

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“It's reading and Buffett's compounding knowledge through time and you just need to be a voracious reader. I would also say that Certainly, you know, when I was in college, my understanding of being a portfolio manager was quite glamorous. I mean, it is a humbling, soul crushing. In many times, when you're not doing well, it is a miserable existence. And so you really need to love it in order to kind of persevere and stay in the game. And if you don't really love it, I would encourage you to find something that you really did because I think it's impossible to be successful, certainly in this industry, unless you really love it and you can give it 110.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, obviously, the family, you know, we have three kids, 13-year-old boy-girl, twins, and then a nine-year-old daughter, wonderful wife, wonderful family. That's a lot of fun. So we're going skiing in Vermont this weekend. Got lots of snow here in Boston, up in the mountains, so skiing in the winter, and then golf in the summer.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, when I was a lawyer, I was desperately trying. You know, it was just that perseverance of like, listen, there's got to be a better way to do this. And so kind of keeping to push and to kind of deal with that failure, but keep adapting and evolving to get to a point where I was excited about coming to work every day. And I think that process was a long and difficult one and much more difficult than I would have hoped. But I think it also gave me a greater appreciation for how incredible it is to be excited on a Monday morning to come into work.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and there's always new lessons to be learned, and I'm sure some of the people will navigate it just fine. It does feel like it is late cycle in terms of the number of people who claim that they can do it.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“And because they're always very different. And so the cause for this one's going to be different, how we come through is going to be different, what's going to be cheap is going to be different. And I think it's just, you know, as you talk to clients, you talk to folks out there, you know, I think there's more a sense of like, oh, we do the asset allocation. You know, we'll listen to what you guys have to say, but we've got this thank you.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“So being part of a team that's done asset allocation for coming on 30 years, one of the things that I'm impressed by the number of people who believe that they can do asset allocation today And I wonder how many of those people were around in 07 and 08, how many people were around in 1999 and 2000 towards you get to the, when you get towards the end of the cycle, everybody seems to be able to do this asset allocation thing quite easily. And so I am looking forward to the turn of the cycle and that kind of that shaking of the industry where people with skill will be differentiated from people who really don't have skill.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“I think building a portfolio today is really hard that in 08, at least on our numbers, it was pretty clear what to do. You should take as little risk as your career should allow. I think today it's much more difficult. It's much more complicated. The other aspect of it is our business is evolving so rapidly where 20 or 30 years ago Jeremy and Dick Mayo and Ike Van Otterlou, they could focus on defined benefit pensions and that's all they needed to worry about. I mean obviously today you can't do that defying contribution. We know that there are issues there. The RIA space, high net worth family office, how taxes impact that I think that trying to solve the problems for clients is much more layered and intricate than it was even 10 years ago.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Had no money to invest in them. And how much money he could have made if he did put some capital to work. And I'm struck by today where the concern for illiquidity is so removed, the private equity, direct lending, everybody's trying to lock up their money for 10 years, nine years ago. We saw how important liquidity was, and today that seems to be a very much a backseat consideration. And I think about Benjamin Roth in that book.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, on the finance side, anti-Lminen wrote a fantastic book called Expected Returns, where it's basically a finance textbook. And he goes through all of the asset classes and the risk premiums, and he does a wonderful job of laying those out. And I think that's a very good book. I did read years ago at David Rosenberg's recommendation, a diary of the great Depression. It's about this lawyer Benjamin Roth in Youngstown, Ohio, and it was his diary, you know, contemporaneous diary of what the depression was like, and it was fascinating in that what he had to do to survive, you know, in terms of a businessman bartering. I was amazed how he was worried about inflation over that time period. And it also struck me how much he looked at stocks, these blue chip stocks, and how cheap he said they were, but he said he...”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, there are other kind of the traditional value folks out there. I think Ed Chancellor is also influenced. So Ed was a former colleague, although he still is engaged with the firm. He's a financial historian and he has a deep understanding of bubbles. And I think his historical approach is so helpful because there's so much rhetoric as to why it's different this time or elegant explanations as to why it's different. And his understanding of history cuts across a lot of that in ways that Yeah, I just find so much more credible than a generic sell side report.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah Like you, I kind of put the legal stuff to the side because it was such a painful episode in my life. But when I think about Putnam, I had such valuable business mentors. So Kevin Sullivan and Alex Nelson originally Rob Job in consultant relations, they were so formative John Brown, who ran the institutional group. It was such a good group of people that there was a ton of things that we learned from, that I learned from them. And then more recently, it's really been Jeremy and Ben, I found that the way we approached asset allocation in the world was so different than what I had learned in the CFA or kind of normal institutional investing that that has just such a profound influence on the way I think about returns. And if I would have known about the seven-year forecast in 1999 or mean reversion, I mean, I think it could have would have been.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, certainly the extent that more people are investing in indexes, that generates momentum. And I think that generates price inefficiencies. So for us, we're largely quantitative in our equity investing. I think it presents some opportunity. Now, we do need to work harder than we did 10 years ago, quant tools, smart beta, those things have been largely commoditized. So I think our efforts in quantitative, we've done a lot of work over the past several years with our models trying to uncover intrinsic value. We know we're less about AI and more about trying to discover the intrinsic value. So I think we have to work harder in that realm than we did historically. But I think that there's Certainly more scope for alpha than there was a couple years ago”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“I think as the world comes more and more into the, does more and more indexing the ability to find cheap stocks out there increases. So I think for active management, the more the world indexes, the better it becomes. There's nothing better than a cheap stock that stays cheap because you get the gift that keeps on giving. You keep getting that earnings yield. You keep generating the dividend yield. Bernstein has some great research on the asset management industry, but I read a report they had, at least according to the S&P, there's over a million indexes now, which just seems like that's not possible. I know Bloomberg ran a story last summer saying that there are more indexes than there are stocks. Well, a couple of U.S. agents ago.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, values underperformance has been brutal, particularly for us who tend to tilt more towards value type strategies. Its magnitude is not as bad as it was in the dot-com bubble, but the duration has been longer. So we think that there's opportunities for certainly for value outside the US that we think is much cheaper than growth. We do think value is cheaper than growth in the US. However, we still think quality is more attractive in the US. It's been a long cycle, you know, whether the rise of interest rates and inflation, value stocks, they have kind of intrinsically assorter duration, whether they do better in that type of environment. We're not sure, you know, I think that's tough to tell. I think that story makes sense, but we'd rather focus on the valuation, which looks attractive, particularly in EM.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“For them, I think the 20 model is under significant pressure, and certainly the fund to fund industry seems to have gone the way of the dinosaur.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that's a dirty little secret of the hedge fund industry. I won't tell any well, I think the game has changed for hedge funds, although, you know, just like most things, like the pendulum swings too far the other way where people are kind of throwing the baby out with a bath water. One of the things that we like about the profile of some hedge fund returns is that you are taking risk, but you're doing it with a shorter duration. So merger ARB is kind of the poster child for this. So you're trying to capture an equity risk premium. You're doing it, our merger, our portfolio. There's 20 to 30 deals. The average duration of the deal is 90 days. If you do get that duration increase that we talked about earlier, merger R may get hit, but it's going to get hit a lot less than something else. So we think that diversifying hedge funds, particularly at this point of the cycle, are reasonable activities to be thinking about for your portfolio. There's another question as to how much you should pay.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think the game has changed. I remember looking at some data from Morningstar that, you know, there was about a thousand hedge funds in 2000 or something like that, and it rose to 7,000 or 8,000. I don't know how many there were.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“As we think about benchmark free, for instance, we owned equality stocks in the US outright and then actually recently this year we converted that to a long short. So we go long quality and we short the market against it. The only longs that we have are EFA value and EM value at this point in the cycle.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“I think our mantra with clients has been own as little US equities as your committee or your career will allow that they've just beaten the rest of the world by 100 points. They've beaten EM by 150 points. And you can look historically and see these cycles where U.S. performs and then IFA outperforms. And we've just been through the period where we've had the greatest outperformance of the U.S. stocks relative to the rest of the world in history. Well, that we've seen since the 70s where you kind of have legitimate data. And so we got a lot of questions from clients in 16, the beginning of 16, saying, hey, this diversification sounds like good in principle, but I generally prefer more money to less, like what are we doing here? We're really not seeing the benefits of that. Now there's less questions about that over the preceding two years as EFA and EM have done much better.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“We certainly don't frequently refer to ourselves as contrarian. What we refer to ourselves are value investors. And it feels like people are tripping them over themselves to call themselves contrarian these days. you know, kind of a natural responses. You need to be a trend follower in order to be contrary, and it feels like. I think we try and design a process that we recognize that we tend to be early. We build some things into the process to try and help ameliorate that. It is what we do. It is kind of the curse of a value investor. There's nothing worse than thinking something's cheap and not owning it and having it go up. We try and be as transparent as we can with clients as to what we're doing and why we're doing it so that they can kind of get to the finish line so that they can get to the finish line with us.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“I think. I think that's a concern for any investor as to their process and what they're doing and whether things are different this time. And certainly if you believe on mean reversion, things being different this time is really the critical question. So we spend an inordinate amount of time in what we would refer to as risk management as where these forecasts can be wrong and how are things different this time. And it's nuanced. Unfortunately, there's not, you know, we can't quantify all of these things. It tends to be more art than science, although we do want to reduce things to numbers. You know, people who've been around the block like Jeremy and Ben is very helpful because they've seen multiple cycles.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“What we did, why we did what we did, what we didn't do, and why we did that, and whether that's right. So I think that process of self introspection is very important. I think having James Montier around, who's an expert in behavioral aspects is very helpful. And the game is hard. And so figuring out whether you're in a bubble or not, we have technical quantitative definitions, but it's much more nuanced than that.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I feel like the market does a wonderful job of humbling you very, very quickly. And Jeremy has an expression that you always cry over spilt milk. And so I think part of our process is to ask questions as to, you know,”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“I think if you had a significant uptick in inflation, it would really do a number on PE. So, Jeremy and Ben have something they call this comfort model, which is an explanatory model for current PEs. And it looks at the volatility of inflation, the volatility of GDP, and the level of profit margins. And so if you do get higher inflation, I think that has an impact on profit margins or at least Buffett thought in the 70s from inflation had a big impact on profit margins. That model would be perturbed and you would get a much lower multiple. And we saw in the 70s certainly that inflation really was scary for equity and bond investors. But I think inflation definitely, your multiple comes down.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I mean, that's definitely not built into anybody's asset allocation models. If we, you know, we talked about that hell scenario earlier, that forecast is minus two.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“As we kind of hot off the press, the forecast for U.S. large assuming normal mean reversion is minus 4.9 real a year for seven years.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“And if we were to continue just following a price to sales methodology, I think our forecast are minus eight or minus nine reo for the S&P 500. So we've diversified that into other what we think are reasonable proxies, and that has those are expensive, but just not nearly as expensive as price to sales.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“No, it's your return on capital that should mean revert through time. So we're not quite sure what to make of it. We used to run our models exclusively on price to sales because it was nicely comparable across regions and across time.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, price to sales is an interesting one because there's not a, we can't think of a theoretical reasons why price to sales should mean avert. We think really.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, stocks should be vulnerable under that scenario. We've certainly read and heard so much from the sell side over the past five, seven, nine years. Lower rates require higher multiples. So it'll be interesting to see how they walk that back. They're always pretty good at giving a pretty elegant explanation as to why it's different. But it certainly seems like that would be a pretty key underpinning as to why you should justify paying multiples similar to these. I think as we were talking about before, the real concern is what happens with inflation. And that is the one thing that could really croak all portfolios. And I think that's just the longer-term worry.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Margins, stocks trading at higher multiples than normal kind of start of the green span, continued with Bernanke, yelling.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“It's like when the Fed chief It was extraordinary. And I think we have an inherent skepticism for central bankers and their ability to influence the economy and markets. But I think we did not grasp that as quickly as some others did. It took us a while for us to really internalize that and think about it within our framework. And that really was the genesis for kind of creating these hell forecasts which take into account the fact that financial repression can go on long enough that can really start to impact the cash flows and then the fair value for equities. But the Fed seems to continue to play a dangerous game. Who knows what Powell will do? Maybe he's more hawkish. Maybe he's got more of a business background versus the academics that have preceded him. But it seems like the mean reversion of profit more.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's always fun to bash the Fed, at least in these halls. I give them full credit for their transparency Bernke went to the Washington Post and wrote an op-ed saying, hey, we're trying to gin up the prices of these things.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. Sorry, on just SP versus MSCI IFA, and then you get some premium for owning value on top of it. So we still have 11% of the portfolio in EFA value. Now, it's not cheap in absolute terms We think it's worthy of having some space in an equity portfolio. It's hard to get stand on the table, pound your fist bullish on it. But we think that certainly relative to the US, you could get very bullish on it. In absolute terms, it's a little bit harder to get excited about it, but we think it's still worth a portion of your portfolio in benchmark free.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, EFA value, so kind of taking what you just said and just broadening it to EFA value is the really the next cheapest asset class outside of EM. It is certainly relative to the US. EFA is, I think it's in the top decile of attractiveness of EFA versus the U.S.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“You have two or three things that are within spitting distance of each other. But today, EM value is by so far the most dominant in terms of its forecast that we've actually altered our portfolio construction to take a bigger bet on it because there are so few other opportunities out there”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, EM is really the only game in town, and specifically EM value. So the value side of EM is the exact opposite of the 10 cent and the Baidu and the Alibaba. It is Taiwanese semiconductors. It's Russian energy stocks. It's Brazilian utilities, Turkish financials. It's a fairly Korean kaibals. It's a fairly motley group of stocks. But those value stocks are priced to deliver a significantly higher return versus the rest of the market. And we think about this, and we call this the margin of superiority, that how cheap is the cheapest asset class versus the next cheapest asset class. And normally...”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Based on historical assumptions, or if you kind of evaluate it in new normal assumptions, the US market just is so expensive no matter which way we slice it that it's just hard to justify these multiples.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. So it justifies a higher multiple. Now the real question is what. How much higher? And so if you think at 25 multiple is a normal return for stocks, well, then your long-term expectations are pretty small. Your earnings yield is four. There's some slippage in there between the earnings yield and what you receive. I don't know that many investors really think stocks are there to determine or there generate three reels. For us, what was always, there's the risk parity folks out there. We've always had a greater confidence in the equity risk premium. We would rather have more of our portfolios associated with the equity risk premium because equities are inconvenient assets. They go down at the time that you just don't want them to as recession as people lose jobs as that hits. And so there should be a required rate of return there. And so you can debate whether that is six or five or four. But when you look at the market today and whether you value it based on the...”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, the world has always changed And so, you know, if you think about 100 years ago how the economy has evolved over that time period, it's really been unbelievable. And I think we would say that the normal required return to stocks has fallen through time because there's less volatility in the economy, there's less volatility in inflation. You have things like the SEC. You can debate whether the Fed's actually helpful or hurtful, but there's more institutional controls in the economy. And so that we do think that the required return to stocks has come down because they are inherently less risky than they were. Less friction?”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Excuse making. You know, just as you were giving that hypothetical, I just started thinking about how many more people that we have in compliance and how complex our business has become and the demands of clients are greater and how you deal with the data. Those issues, so much data has been created in the last two years. Like how do you deal with that data? So you need people for that. So I think our world in general is becoming more complex and that is requiring additional resources in order to combat that. You know, I think we have to work harder on the investment side. I think you need more people. You think you need more smarter people in order to do that as well. You can run multiple portfolios and you can do it more easily, but that doesn't mean you do it as well.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think what you're saying is true. The issue that we have with that is it is true for the technology sector. It is not true for the system as a whole. And so as we value profits for the system as a whole, that is what is elevated. Tech is a part of it, but it's also true outside of tech as well.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“And so I think all of the benefits have accrued to capital rather than labor, and that's allowed profit margins to be higher. And I think that does present some pretty difficult issues for the economy in the long run.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that's a, I mean, that's a really hard question. It's a question that we puzzled over for literally years and years, actually before the financial crisis when profit margins were high. We spent a lot of time thinking about why those profit margins are. Jeremy has put together, again, a pretty interesting mosaic as to why profit margins are high, that you have... Decreasing competition within industry. That leads to higher profits. You have greater After Citizens United. You have greater corporate influence in Washington, making it harder for new companies to come in. So I think there's qualitative reasons that we can come up with as to why profit margin. And so the”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll own gold when it yields the same thing as a T-bill. And so in 08, it actually yielded more than a T-bill for a period of time. And so we did own some gold in our mean reversion hedge fund for a period. And then we actually made a good bit of money on it, and we tried to value it, and we just couldn't, and we got scared, and we just took our profits and ran.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, well, you know, I asked Jim Grant once how he valued gold, and he basically said it was the value manager's indulgence. So even he could not put a price on it. You know, for years, Jeremy said”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“The problem, the confidence in those forecasts less understanding the supply and demand dynamics in those markets is very difficult. We did have strong views on copper and iron ore in 2011 and 2012. We had a fairly exhaustive view of the supply side, and we just felt like demand couldn't be strong enough to match the prices and the supply coming on. But the confidence in those forecasts generally tends to be lower.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, they're different for different reasons. Commodities, we do look at oil, iron ore, a copper iron ore, oil, and natural gas.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“They're certainly not expensive enough to really cause you to lose sleep at night, and they certainly have room to run. When you're dealing with purchasing power parity, with EM, you always have to take with a grain of salt because the data is not so great. But when you're really looking at currencies, you're looking at extremes that that's when that really matters.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think the interesting thing about emerging currencies is that they can be valued in and of themselves. You have the mean reversion of the currency, which you get as part of being an equity owner. You get the real rate aspect of things. But for us, as we think about emerging historically, the times we're emerging has really got into a lot of trouble has been when the currencies have been overvalued. So kind of heading into the Asian crisis, 13 or 14, we thought that the EM currencies were very expensive. So that almost becomes, in addition to an expected return tool, it almost becomes a risk management tool as well. And so EM currencies have ripped. They've had a great run over the past probably two years now. But they're at the point where they're basically fairly valued.”
2018-04-05 · Masters in Business · Matthew Kadnar Talks About His Transition From Law to Finance · IDENTIFIED FROM THE TRANSCRIPT · source