YouSaid · the spoken record

Ricky Sandler

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64
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2024-08-22
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2024-08-22
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  1. “The right decisions, I'll do my research on the company. And I think I did quite appreciate that executives don't know what's going to happen next year. The world changes. There are things that they can be blind to. They could have their own poor motivations that may be getting the stock up in the short run, but not good for the business. And I think that that whole area around understanding humans and why they tell you things and being skeptical is probably something I wish I knew 30 years ago.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “I think the biggest thing that I wish I knew was how individual motivations create decisions by executives and boards that might not be the most beneficial. I think when I started in the business, I think I understood human emotion about investing, fear and greed and how investors behave. But I think I took what executives told me and board members told me at sort of face value. This is right, this is what it is. The truth is that they have their own perspective, their own motivations. They might be trying to deceive you as we moved on in time, we've come to ask different types of questions of executives. I'll do my own research on the business. I'm not going to rely on you to tell me what the company's going to do next year. I want to know how you think. I want to know how you allocate capital. I want to know what you're going to do. I want to make sure that you're a person that I can trust to make.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Move on in life, and I would say this is a mistake that I made. I had this tremendous access when I worked for Morris Mark. I was 24 years old meeting with CEOs. I could have done a better job of cultivating these relationships and using them ultimately over time. I've probably come back to some of them and have used them. But we don't get anywhere in life all by ourselves. We need advice. We need perspective, somebody that you meet might know a lot about a particular industry. And that's not all that relevant today, but in 24 months when you're doing research on another company, it could be very relevant being able to go back to that, I think, is really important. So being proactive about that, sending people a note every now and like, don't just call them when you want something from them. Hey, I read this article and it made me think of you and your company and what you're doing. Just keep in front of them. Categorize your role of decks so that you can come back to that over time and use that as a powerful.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Couple of things I would give. One is this concept of finding your own investing compass. Don't try to be just like me or just like Buffett or just like any one person. The benefit of taking all this information in is to build your own investing compass. Because what's really important in investing is consistency and confidence. So when things go wrong, you got to be confident in what you're doing. We can't chase the latest trends. We can't try to buy the value investor when the market's value investing and the growth investor. Otherwise, we're going to be chasing everything. So build your own compass that will build consistency and it'll build something that you believe in. So that'd be one. I think the other thing that I would say is manage your Rolodex really proactively. At an early age, you start to get access to people who can be really helpful to you. And I think we often get that access and then don't cultivate it and harness it as we.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Lessons of the Titans, another good business book. So, a handful of business books. I think there's longevity and health books. I think Outlive, we mentioned Peter Atia, Life Force by Tony Robbins. Terrific book. I tend to read some stuff on politics, like understanding our system. So the politics industry, a terrific book around the duopoly we've handed to these two political parties and how we change it back. And then some fun books that I tend to like around people, sports characters or other that I think are great open by Andre Agassi. So good. So good. And a recent book that I read, The Gambler, Billy Walters, a terrific book about maybe the most prolific sports gambler of our time. That's a great listen. I would also say I talk about reading books, but I listen to them now.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “I would say similar to the podcast, my books come into a couple of different flavors, so some of the business books that I'm a big fan of, the Ray Dalio book principles, I think is terrific. The David Rubinstein book on leadership.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Peers and people who have done this before I did that, I think I've used little bits and pieces of, I'm a big believer that investing's about finding your own compass. But I'm not reinventing a complete wheel. I might take a little bit from Warren Buffett. I might take a little bit from a David Tepper. I might take a little bit from what Julian Robinson did, a tiger or some of the Tiger Cubs. And you build what works for you. And so I think there's been a whole community out there that have been mentors to me. friends and peers and colleagues.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “I think there was a handful of people, most importantly, my father, who ran a hedge fund. He was a Goldman Sachs analyst up until the early 1980s. And then early hedge fund founder ran a hedge fund, always been around markets. And he was a mentor in sort of understanding the power of good businesses and growing. My first boss, Morris Mark, also another great mentor, a brilliant investor who's still at it today in the age of 80s. And going back to longevity, continuing to work in our life is important. A gentleman named David Harrow, who runs the Oakmark International Fund, he was someone I met when I went to school in Wisconsin. He was working at the state of Wisconsin Investment Board, brilliant value investor. He's been a terrific mentor to me on the business side. And then there is a whole community of...”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Yeah. I mean, the truth is, you boil down all of this longevity stuff to a few key things. Move, eat less and eat healthy, get sunlight, have meaningful work and meaningful relationships, some strength training. You know, you read the blue zones and you look at there's all this data and”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Wrote the book on longevity. Outlive. Yes. Really interesting guy. Tremendous, really thoughtful. There's so much we've learned in the last 20 years about health, longevity, wellness. And he's a big believer in medicine 3.0, which is really us doing things preventatively versus medicine 2.0, which is like you get sick, your hip hurts, you go for surgery. Well, what do we do to prevent that ahead of time? What do we do to prevent heart disease ahead of time? What do we do to keep us strong and living greater health span, not just lifespan?”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “In the podcast land, I tend to listen to a number of what I would describe as business and health and fitness podcasts. So I listen to the founders podcast. I love understanding kind of prior successful people, invest like the best. Your podcast, these are kind of interesting market-oriented podcasts. I also listen to a lot of health-oriented stuff. So Peter Attia, the drive, Huberman podcast. Peter Atias.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Humble, hardworking Midwestern kids, every bit as capable as the kids that go to Ivy Leagues, but with better attitudes. And I think that there's a lot of this going on in the working world that I think the working world is realizing that I don't just need the kids from the best schools in the country. I need good kids that meet a certain standard of intelligence and capabilities. And then what I really want is kids with the right attitudes. And kids that go to schools like Wisconsin, Midwest, humble, hungry, public school kids, they have a different attitude than maybe kids that might come from some of these Ivy League schools that have an expectation that the path is laid for them and that they just are going to be CEO within the next six years.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “How did you deliver those returns? Are they repeatable? Was this a cycle? How much risk did it take in there? And so it's been a really good exercise for me to be able to understand our investors in the investment community around. And it's been a great experience on both scores and helping the school and they have a wonderful CIO and I think that we've done a good job of not falling prey to the issues that could happen with a committee managing an investment team, but it's also allowed me to see things from the other side.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Like the University of Wisconsin are significant investors with me. Wisconsin is not an investor in our main fund, but we have similar institutions. And so it gives you a perspective for how endowments work, how committees work, and some of the same things that I've said about investors are also true about committees. Very sophisticated people coming together on committees look at backward-looking returns, often don't ask the rigorous questions about”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “I'm actually only on the investment committee today. I used to be on the Broader Board of University of Wisconsin. My alma mater, I do a lot there. I teach a class there. I host interns. I built the whole Badgers and Finance community. And I am on the investment committee. So I commit a lot of my time. It's a passion project. I feel great about helping kids in the things we do across the university. With respect to the investment committee, this is a traditional foundation, runs a bit over $3 billion allocating capital. And this is an opportunity for me to do two things. One is help this foundation with our perspectives, help evaluate how should we allocate the money, how should we think about evaluating this manager, how should we think about evaluating this strategy? How should we be appropriately diversified? How should we be opportunistic in times of dislocation? And secondarily, it's an opportunity for me to see investment committees and foundations from the other side of the table. Sure. Obviously, people...”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “trying to make a difference on the board. And I think we've been very effective. I've been very pleased and surprised by how receptive it's been for me on the board. This is not a traditional activist where we're fighting with people. I think they saw the errors of the company's ways and believe that I and our agenda are breath of fresh air. And so we're making really good progress. Time will tell how this works out.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “You go into a situation you think management's a bee, maybe a B minus. And it turns out you're wrong. They're a D or an F. And your choices sell it, move on, which we often do, or push for change. In this case, because it is such a strong, a strategic asset, we felt stepping in and trying to make changes was the right thing. I've been on the board now for seven or eight months. We've made great strides. The interim CEO has done a terrific job. We just named a permanent CEO a couple of weeks ago, Gavin Isaacs, who a lot of U.S. investors know. And I think that the capital allocation decisions have been significantly better. We are in the path to turning around this company. I think this is a terrific growth business. It's a company that's a leader across many markets, and it's a company with so much opportunity because it had been so poorly executed and managed for three years prior to the last six or eight months. That's the opportunity here. And at this point,”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Over the three subsequent years or two and a half years to that point, In Taine lost its way. It had a terrible CEO. It had a board that was not informed and unable to make the appropriate changes. And over three period of time, really underperformed, we have followed the company. We've owned it for this period of time in various sizes. And recognizing it is both a really good business and a leader. And it had a CEO that was absentee, completely taking the company down the wrong path and making poor capital allocation decisions. We decided there needed to be change there. I would say just taking a step back, in general, activism is not our strategy. While we get called activist investors in the press, we are not activist investors. We never go into a situation expecting to be activists. What happens from time to time is...”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “Be a pivot And Tain is a global online gaming company. They own brands like Ladbrooks and Coral in the UK. They own half of BedMGM in the US that partners with MGM. They have businesses in UK, Australia, Italy, Brazil. The industry is growing. They have been a leader across many markets, and it is fundamentally a good growing business. MGM tried to buy the company in late 2020 and then DraftKings tried to buy the company in mid-2021.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “That's what you and I would have done if we happened to be in that situation. Good for him. He is maybe saving the company long term from being bankrupt. That doesn't mean that this is a successful business.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Well, they are blockbuster, but they have $3 billion in cash now to Ryan Cohen's credit. When this squeeze happened, he came out and sold a bunch of stock for the company.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “It has been a good winner since 2021. We made back more than losses that we lost in January 2021. Having said that, it hurt us in the second quarter and we lost about one percentage point shorting GameStop. We're still shorted today. It's come back down. And the portfolio construction changes that we've made post the meme stock craze and how we ran into the portfolio allow us to ride through things like this. This is one sort of position. It hurt us in one period of time. But ultimately, I still think that GameStop is a short here, but it will not go broke. It will not go as far down as I ultimately originally thought it would.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “We lost only a little bit of money the first time around in 2021. We have been short GameStop for most of the post-meme stock craze period of time.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “So I think that Netflix in certain ways got lucky early on and then capitalized that when I say lucky, the movie studios gave Netflix certain rights to online streaming that they didn't think were all that valuable. They had a Disney contract that allowed them to offer this product the... Gaming companies are never going to allow this to happen. So I don't think it's possible for GameStop to do what Netflix did. They tried NFTs for a while. They've tried kind of collectibles and a few different things. And at the end of the day, it's a physical retailer with leases in malls that are dying. But he's got $3 billion in cash now. So we'll have to watch.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “Of Roaring Kitty, he now has cash, and he's going to have to go try to reinvent the company. But ultimately, I think that's going to be a failed attempt, and he's going to ruin what reputation he got through Chewy.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “I won't opine on that, but I will say he's not a chief merchant of Sears and Kmart. So he ultimately put an enormous amount of his fund into this. He ultimately went and ran the company and tried to turn around or make a failing business successful. This goes back to the Warren Buffett quote, you know, you show me a good executive and a bad business. And I think that the reputation of the business is going to win out. I think Ryan Cohen putting himself in as CEO of GameStop, I think he's going to ruin whatever reputation he has as a businessman because this is a business that is going to be really hard to turn around. That's my opinion. Maybe he's going to develop something I'm going to be surprised. But when I look at where the world is going, GameStop as a physical retailer selling computer equipment that you can buy online, games that actually will have no physical component, you can just download them. It strikes me that this is a dead end. And to the credit.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “It is a little bizarre. I've asked myself if this is this decade's version of Eddie Lampert, who made a wonderful trade buying Sears when it was on the verge of bankruptcy, putting it together with Kmart and like in the short run saving that company.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “Historically, that is going down. But now it's like a spack with a couple of billion dollars and a famed CEO named Ryan Cohen who, you know, people want to believe in. And so the company really benefited from what Roaring Kitty did here, which is get retail to come back in and try to buy the stock, get professional investors who had PTSD who were like, oh my God, here it happens again. I better get out of the way. Last time it hurt me. And so that created a situation where the stock went from like 18 to like 50 in a couple days. The company raised a bunch of money. The stock is back to 20 again. So they don't affect the long term of it, but they create a lot of P&L pain, a lot of emotion. And in this case, allowed the company to raise $3 billion.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “I'd love to have some hope and trust that the SEC and the government is going to get to the right place, but I don't necessarily have that belief. It's nice to see that they looked at some of the actions and suggested, are you misrepresenting? Are you committing fraud? The size of Roaring Kitty's position was about 150 million dollars from what people understood Roaring Kitty had made $30 million in the first go-around in GameStop. People are unsure of where he got $150 million to buy more GameStop. He was also buying Chewy. The ultimate beneficiary of Roaring Kitty was GameStop itself. They raised $3 billion at prices that are well in excess of what the company's worth. They bought themselves a huge lease. They could try anything. That company will not run out of money for the longest period of time. It is a money-losing, bad business.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  30. “Six months, they have been putting a billion dollars a day into SP and a day, a day, a retail investors. You want to know why a month ago the market was at a high, even though the economy was slowing. It's because the retail investors are just giddy buying the indexes. And until we get a trigger to make stocks go down, other investors aren't selling. And so they are a real factor in the market. We have to both respect them. And then ultimately take advantage of them because I don't think they're the most sophisticated savviest investors. Some of them may very well be, but as a class,”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  31. “This is the essence of what we're not allowed to do, which is act as a group. But the SEC doesn't do anything about retail investors. If 30% of the company all got together and they were retail investors and they did something, that's illegal as per SEC rules. But nobody goes after the retail investor. And that's okay. This is the sandbox we got to play in. I'm not complaining about it. It's a new phenomenon. It goes back to this new market structure that I talked about because I mentioned retail investors are a big piece of this new market structure. And one of the things that's happened that people don't appreciate is how significant they are as a player in the market. Even in indices, in the last...”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  32. “Absolutely. Robin Hood Schwab, you'll contribute for free. So all of a sudden, the ability and access for retail investors to be meaningful players in the market is even bigger than it was back in 1999. And then I would say the other change is that no longer is this just creative research that at some sort of savvy individual did, let's say, on a stock like iOmega. This is actually bullying. This is coordinated efforts to all come in and try to buy the stock at the same time. We'll drive it up and then it'll cause short sellers to have to cover and other investors who get triggered by price movements to buy. And so we're going to create the price action. That's going to create further price action.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  33. “So, I think the fundamental differences are we now have much greater access for retail investors to the market. So we have access on our phones, we have free trading. Robin Hood.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  34. “For that one sock in the original period, right? When the short interest was probably 80 or 90 percent after this more recent episode, I tweeted, I said, I don't know what the thesis is now if the company just massively increased the float. So short interest as a percentage of the float went down and other short sellers covered. So now your short interest is 9%. That's fairly low as far as short interests go. So you don't really have a thesis if your thesis is mother of MOASS with rocket ships. Right. To the moon.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  35. “If we corner the market on GameStop shares and nobody and we never sell then these short sellers are screwed. Which turned out?”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  36. “So that was a tweet about GameStop specifically because we obviously had the original GameStop episode in 2021. And then more recently, Roaring Kitty had come back and kind of created a new short squeeze in GameStop and admits that short squeeze, the company issued $3 billion of equity, massively increased the float, and a number of short sellers had covered. And the thesis behind being long GameStop for any of these retail investors is the market's rigged, the short sellers are going to have to cover, you know, just hold the stock.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  37. “That could be a business that's overearning, that supply is coming onto it. It could be a company that has poor accounting or a fraud. It could be a fad. Lots of different baskets of overvaluation. And then you also need to understand what is going to change that's going to cause investors to value the right way in a reasonable time. It may not be tomorrow, but it can't be five years because you can lose a lot of money between that and then.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  38. “Thing for the market. It's not a helpful thing, and I think we've had a number of kind of media and regulatory pushback on short selling and stuff as if we're the evil empire because, you know, stocks only go up and people own stocks and we're like betting against it. The truth of the matter is Schwartz sellers do better research because the risks are skewed the other way. I can only make 100%. I can lose thousands of percent. I better be really good and really accurate to really good research. I think it's an important part of being a skeptical investor. I think it's an important part of portfolio construction. And I think it's an important source of valuation add to our investors. And so for us, we are typically looking for both an overvalued stock and a reason why that overvaluation will correct. So we need to understand what is going to happen. So it's fundamentally worthless and something is going to drive that to happen. That could be an earnings miss.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  39. “People said, you know, you don't want to own unprofitable growth. Rates were going up. And again, they treat everything as one. Uber was a perfect example of a stock that was technically unprofitable, but it was fundamentally profitable at its core and it was unprofitable because they were growing in Uber ETH and they were growing in new markets. And what we've seen happen over the last two years is Ubers all of a sudden become profitable. And point being they're selling it because I classified it as something. But having nothing to do with both the micros of that company or how that classification might change in 18 months. And so that creates other sources of mispricing. So getting back to your question, we are trying to find durable businesses and mispriced stocks and there are more mispricings coming from investors because it's not just fundamental investors now, it's this new market structure or this thematic type of stuff.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  40. “So you're eating habits or less, you snack less. And so there's the potential that we consume less food. I think it's moderate, but accurate. I mean, today we have a relatively small percentage of the population on these things, but people projecting out to when we have 10 or 20% of the population and they might eat 10 or 20% less. So alcohol is another one. There's no craving for alcohol. People are drinking less. That's a GLP1 loser. And then some of these healthcare things could be GLP1 losers. People throw you in this bucket and then it doesn't matter that you have a new product. It doesn't matter that you're gaining market share. It doesn't matter that you're going to grow your earnings at X or Y. They're just selling you because you're in this basket that Goldman Sachs and Morgan Stanley told you about. That is creating other sources of mispricing. Throwing companies into the unprofitable growth basket. So back in 2020.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  41. “Market junkies. Yeah, so GLP wanted they are the diabetes drugs that are helping people lose weight. This is Ozempic. This is Manjuro. Magovi is Ozempic, just a stronger version. It is an existing class of drugs applied to a new use and is applied to weight loss. And then there are a lot of downstream effects to weight loss. So a lot of the comorbidities or the co-issues we have in the health system come from people who are overweight. So heart disease, for example, or other procedures, if people are healthier, are we going to have less of these other things? So you could be a GLP1 loser because you help patients that have heart disease.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  42. “Good companies. I want to make sure that I'm delivering value to my investors and that I'm buying that good company when it's mispriced. So I earn outsized returns. So I think our team is doing lots of research across these sectors, identifying the right kinds of businesses, and then through different events that happen, there are things that create mispricings. Short-term company goes through a disappointment. Everyone gets short-term and no one wants to look out. 12 or 18 months. Maybe there is a turnaround story in a business that has been underperforming. Maybe there is a hidden asset that's going to start to show. So things that fundamental investors could create mispricings. On top of that, the new market structure that I talked about is creating new sources of mispricings. So this is, everybody's doing one thing. You're in the GLP one loser bucket. And you know what? Goldman Sachs decided that and Morgan Stanley decided that. And they put you in this basket of losers.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  43. “It's a different set of research and analysis. There are corollaries, but shorting is not just the inverse of long. Because of the nature of shorting and what you need in the form of catalyst and recognition, it's a little bit harder. You can be patient on the long side. And so for us, the long side, I describe this durable business or good business and mispriced stock as the repeatable process that we're trying to do. So our research team of 20 people, we have 13 sector-based analysts and PMs that are really know their sectors and tend to look amongst those sectors for businesses that are durable. And then the opportunity to buy them when they think there's a misperception out there. And I think that means that a lot of things we do, we're researching companies and we say, well, it's not the right time. This is a good company. It's a good CEO, but it's fairly priced. There's nothing wrong with it. So I'm not just looking to buy.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  44. “Never going to take over from markets while we can get the benefit of quantum computers, human emotion is backward looking, and let's just do more of what worked in the past.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  45. “And I'm like I don't want to call it a moment in time because it was long in that, but it was a cycle, it was a period. And that's what we've seen over time is markets go through phases and then everyone says, this is it. Now you have to, just by indexes. And so we're at this phase right now where everybody's convinced that the S&P or the QQQ, like just buy that and don't worry about anything, I would tell you that the last 10 years, which has been dominated by that, is probably not going to be the same as the next 10 years. So to your point on higher interest rates in a different world, I think we're going to go back to a place where stock picking matters a lot. All this history has showed me is both markets go through cycles and investors, whether you like it or not, are backward looking, return looking animals. They rarely look forward. And so it's like this work for the last three years, just keep doing it. Even if the world looks different going forward. And so this is human emotion. This is why computers are...”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  46. “With Lov On top of that. So, this is why investors started to move away from long short, because any hedging was not helpful. It was harder to outperform the market.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  47. “To make money every month, maybe a newer manager doesn't, or if you're at a platform shop, 5% drawdown and they cut your capital in half. Another 5% drawdown, you're out of a job.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  48. “And to your point, ADD investing is also ADD with my P&L. If I start to lose P&L, I move. So this is not eminence, but other investors have no tolerance for pain. There are all these risk triggers. So on top of moving to where the narrative is, I also know that even if that narrative isn't what I believe, if my P&L starts to do something, that triggers me to do something. I de-risk, I delever. And so you have on top of people investing in ways that are narrative driven. They're also backward looking to their own P&L. So if I have a bad month, that means that I might have to do something differently. When I'm telling you all this stock prices are moving for non-fundamental reasons, we realize we have to absorb volatility. And that is part of the new market structure. We have to be comfortable. We have to be willing to live with it and then lean into it. We have the advantage of 25 years of investing, seeing a lot, having built a lot of credibility with investors. So I don't have...”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  49. “It's ADD investing. Give me a narrative versus like I'm going to do the hard work. I'm going to do three weeks of research. I'm going to rip through the financials. I'm going to build a model. I'm going to go out and talk to the whole ecosystem. I'm going to find interesting field research contacts. I'm going to interrogate management. I'm going to look at the footnotes, old school stuff. Investors don't do that anymore. And that creates a great opportunity, assuming you've made these adjustments to how the market is going to be.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source

  50. “And you need to say, you're providing no signal to me. And so I, as an investor, am I going to take advantage of that? And so it requires mindset adjustment. It requires some portfolio construction adjustments. We have to be a little more diversified because the volatility of individual stocks is quite high. And if you run Uber concentrated, you run the risk of kind of having such bad performance over shorter periods of time that could scare your investors. And I think it also requires higher turnover to take advantage of this market vowel, or what I would call High Val that has little to do with the bottoms up fundamentals of that company, and we see it in both directions.”

    2024-08-22 · Masters in Business · From GameStop to Meme Stocks with Ricky Sandler · IDENTIFIED FROM THE TRANSCRIPT · source