YouSaid · the spoken record

Roger Fan

lines on the record
63
first
2024-11-22
most recent
2024-11-22
sittings or episodes
1
sources
podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

  1. “Days, but it's still a great place to look. You have the same market dynamics and market participants, and so it's still going to work.”

    2024-11-22 · We Study Billionaires · TIP677: You Can Be a Stock Market Genius w/ Roger Fan · IDENTIFIED FROM THE TRANSCRIPT

  2. “This non economic selling. It makes no sense, but for private investors and for enterprise investors who are looking for special situations, they can really step in and take advantage of those situations. And of course, you don't want to buy them all, right? But you have to analyze each and every one of them and then pick the ones that you have the most conviction in, the ones you can value, the ones that you can understand. And if you're a concentrated investor, put it on in size. And also on that note, this is spin-off companies when they get spun off. They can also really just focus on the business and just improving the business, turning around because when they're kind of stuck with the parent, the parent company has to allocate resources to all the divisions. And so it's just hard to unlock value. And so at the end of the day, spin-offs, it's just a way for the parent company to unlock shareholder value. So overall, I think spin-offs are still a great place to look. It's more competitive.”

    2024-11-22 · We Study Billionaires · TIP677: You Can Be a Stock Market Genius w/ Roger Fan · IDENTIFIED FROM THE TRANSCRIPT

  3. “They receive the shares of spin offs, they're just going to dump the shares because they were investing in the parent company. They don't necessarily want anything else. And so when they get shares in their brokerage account that is for a small company that's in a really bad business, they're just going to sell. The same thing goes with institutions. They were invested in the multi-billion dollar company, not this little $300 million market cap situation. And also, when that situation comes into the portfolio, again, if it doesn't fit their mandate. and or size parameters, they just have to sell.”

    2024-11-22 · We Study Billionaires · TIP677: You Can Be a Stock Market Genius w/ Roger Fan · IDENTIFIED FROM THE TRANSCRIPT

  4. “Than outright sale, for example. And so these are just strategic options that management teams have at their disposal. And I think you touched on it as well, but it's a way to solve strategic issues, antitrust issues, regulatory issues. And when you solve these kind of problems, they lead to acquisitions and other transactions because a lot of the times antitrust issues or strategic problems prevent companies from doing deals. And so if you do that spinoff, you solve that problem, then the deal that they were actually thinking about gets done. And I also think the spin-off returns will continue because I always tell people and my analysts that half of the game is just investor psychology, right? It's knowing market psychology. Half of it is economics. Half of it is doing models and working with the numbers and doing all the good reading and stuff. But the other half is market psychology. And so just in general, shareholders, when”

    2024-11-22 · We Study Billionaires · TIP677: You Can Be a Stock Market Genius w/ Roger Fan · IDENTIFIED FROM THE TRANSCRIPT

  5. “Yeah, so I think Joel Greenblatt is, I think what he wrote about is still very relevant today. And I think results will continue. I don't know if it's going to be 10%. But if you pick your spots out of the many spinouts that take place in a year, I think you can generate similar results relative to the market. And so the first thing is that spinoffs, they're going to continue to occur regularly because these same dynamics that happen today that are in the markets today, it's the same as 1985 or the early 2000s because what spinoff does is that it leads to better market perception and appreciation of the separate businesses and better valuations are definitely going to happen for the good company but also for the bad business as well when you separate out when you have the parent co and the spin cost considerations make spin-offs possibly a better option”

    2024-11-22 · We Study Billionaires · TIP677: You Can Be a Stock Market Genius w/ Roger Fan · IDENTIFIED FROM THE TRANSCRIPT

  6. “He had small cat value names as well. But the bulk of his portfolio was special situations and he's known as a special situations investor as it pertains to the first two decades of Gotham Capital.”

    2024-11-22 · We Study Billionaires · TIP677: You Can Be a Stock Market Genius w/ Roger Fan · IDENTIFIED FROM THE TRANSCRIPT

  7. “Situations or $30 billion situations. I mean, maybe they are the size of the parent, but not for the spinoff or for the company that's being acquired, et cetera. And so to the extent that he uses them, he basically ran a special situations fund. And so 80% of his portfolio would be in special situations. And he would say that of that 80% or more, I mean, it was just concentrated in five, six, or eight situations. And so I would say, obviously, we don't have 13Fs to verify and I don't think he's made his letters public, but I think we can gather that the rest of that portfolio, the 20% or less, those are probably in risk-arb situations and leaps, in options, in warrants and preferreds, and also just small cap value. He's got the magic formula now. And so I don't know if he had large positions or small cap value, but I would imagine.”

    2024-11-22 · We Study Billionaires · TIP677: You Can Be a Stock Market Genius w/ Roger Fan · IDENTIFIED FROM THE TRANSCRIPT

  8. “Are efficient, but they're not always properly valued and priced. And so the special situation is a great place to look for mispricings. And a lot of it is you have what's called for selling or people who sell for non-economic reasons. And that's because institutions, they have mandates and they have very specific strategies. And so when they get a security or a CA security or a company that falls outside of the mandate or the strategy, they just sell without asking questions because it can't be in their portfolio. And also, if you focus on the smaller situations, like the microcap type situations that fall under these special situations umbrella of investments, you can really, really do well because I'm sure we'll get into some case studies. But if you just look at the bulk of Greenblatt's case studies, all of them are small situations. They're all 500 million or billion dollars or less. We're not talking about 10 billion dollars.”

    2024-11-22 · We Study Billionaires · TIP677: You Can Be a Stock Market Genius w/ Roger Fan · IDENTIFIED FROM THE TRANSCRIPT

  9. “Yeah, you're absolutely right. So it's that ick factor, right? You just hear bankruptcy, or you hear about a distressed company and you just say, oh, it's too complicated. It's not the situation I want to be in. You just shy away from that. And so I think just the key word is mispricings. Special situations, it's right hunting grounds because it just naturally leads to mispricings. And that's the name of the game when you're a fund manager or a private investor. You're looking for mispricings. And I don't know if you believe in EMT, the efficient markets hypothesis, but I think by and large, that's true, but it's definitely inefficient at times. And there are pockets and niches, such as special situations where you can find mispricings. And if we just go back to the magic formula or just companies in general, you know, you have the 52 week high and the 52-week low. There's no way that a business's valuation fluctuates as much as 50% or 100% in one year. It just doesn't happen. And so the markets in general”

    2024-11-22 · We Study Billionaires · TIP677: You Can Be a Stock Market Genius w/ Roger Fan · IDENTIFIED FROM THE TRANSCRIPT

  10. “Really takes even Joel Greenblatt's concentration to heart. And last, you mentioned he was a good person, just a great human. He's done a lot of work in philanthropy, right? A lot of work in education. And so I know he's done stuff with charter schools and whatnot. And so all these things added together and he's got the record. He's a great writer, teacher professor, great at backing managers and also the philanthropy. I think he's just got the overall package and so I really admire him as a fund manager and he's up there in terms of the Mount Rushmore of great investors.”

    2024-11-22 · We Study Billionaires · TIP677: You Can Be a Stock Market Genius w/ Roger Fan · IDENTIFIED FROM THE TRANSCRIPT

  11. “He's a great communicator, and he just breaks things down really simply. And another thing I really like about Joel Greenblatt is he's actually really good at backing investment managers. And so obviously he's a fun manager himself, but he's also, it seems like obviously we're not privy to the overall returns of all the horses that he's backed, but he's backed some famous managers. Michael Burry is one that comes to mind of the big short. Michael Burry just had a phenomenal record at Scion, and I think he's still doing pretty well now, but Michael Burry is up there in terms of fame and one of the best managers that he's ever backed. There's also a guy named Norbert Liu of Punch Card Capital. Norbert Liu is not as famous, but I think Die Hard Value Investors all know Norbert Liu and he really takes the punch card approach that Buffett advocates to heart. I mean, Norbert Liu, if he just pulls 13F or if you just look at the filings, he has really just a handful of positions. And so he”

    2024-11-22 · We Study Billionaires · TIP677: You Can Be a Stock Market Genius w/ Roger Fan · IDENTIFIED FROM THE TRANSCRIPT

  12. “Book, it's just wonderfully written, easy to understand. Anybody can really just grasp the concepts from that book and really apply it to their investing. He's also written other books. Another one that comes to mind is the little book that beats the market. That one is also a great book, really easy to understand. You know, he's got a great sense of humor when he writes. And that book really details his current strategy now, which is buying companies that are cheap and good. So taking the buffet approach. He did extensive backtesting of the strategy and it's been shown to be the S&P 500 quite handily as well. And he's also a phenomenal teacher. If you look at his old Columbia lecture videos, they're really good. I mean, he just explains things so simply that you can just understand what he's saying even though the subject matter is actually quite complex. Like, you know, if you watch the video on options, for example, I mean, you really got to stop and think sometimes, but he really explains it very well.”

    2024-11-22 · We Study Billionaires · TIP677: You Can Be a Stock Market Genius w/ Roger Fan · IDENTIFIED FROM THE TRANSCRIPT

  13. “Yeah, absolutely. I admire Greenblatt for a few reasons. First and foremost, I mean, he's got a phenomenal track record. I mean, the first decade at Gotham, he did 50% returns, and the second decade, he did 30%. And so over two decades, that comes out to 40%. And so even if you take the standard 220 fee, that's a 30% net return. And so some people might say, oh, 30% net, that's, you know, it's okay. Well, keep in mind he didn't employ leverage. He wasn't leveraged for the $1 or 20 to 1. And so it was basically a pure vanilla 30% net return, which is phenomenal. And if you take that relative to the S&P 500, for example, I mean, he just destroyed the market. He's got just a wonderful track record. And one of the best long investors that I know. And second, he's just a phenomenal writer. You talked about the book, you can be a stock market genius. In my opinion, that's his best”

    2024-11-22 · We Study Billionaires · TIP677: You Can Be a Stock Market Genius w/ Roger Fan · IDENTIFIED FROM THE TRANSCRIPT