YouSaid · the spoken record

Simon Lack

lines on the record: 140
first: 2017-03-10
most recent: 2017-03-10
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

“Because it's easy to, you know, you just have the EMP company, the drilling company, and the landowner. I mean, I was in Pennsylvania last year given a presentation, and I met somebody who's got 1% of their property, has some drilling equipment. They're getting a $6,000 monthly check. They're growing corn on the rest of the land. They're happy, right?”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, two years ago, we weren't even thinking about energy independence, and now there's a very real pathway to energy independence over the next five to ten years.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“OPEC took on the American energy sector and they lost. Two years ago, OPEC said, okay, we're going to let the price of oil collapse. We're going to keep pumping, and we're going to crush those shale producers in America, those high-cost producers. And that industry did what the American private sector does so fantastically. Well, they innovated, they found new technologies, productivity enhancements, they found all kinds of ways to bring down their break-even. and OPEC basically conceded defeat in November said we can't do it we just can't afford to keep the price this low and so america today is the swing producer which is amazing it is absolutely amazing so what is it from”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“On natural gas, we were net exporters in November Basically, OPEC took on the American private sector and lost. That's the headline.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, energy infrastructure is pipelines, it's storage assets, it's compressor stations, it's all of the hardware that moves hydrocarbons from under the ground to the consumer who ultimately needs them. And it's just a really, really cool place to be invested because America is heading towards energy independence.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Expenses. It's a great farms in Rolling Hills to the invest in public. Totally. I mean, I have money with Vanguard. My kids are invested with Vanguard. So I think it's full disclosure.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Amazing place. So, yeah, so you go in and I joke with them and I said, you know, I'm glad to see that the only German car in the parking lot was mine, right? Everybody's got a domestic car.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And you know, it's a fascinating company because they asked me to go and give a presentation on the hedge fund mirage a few years ago. And I drove out there to Valley Forge. And they totally. It's a campus. It's like a giant. You might have been there too.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's interesting. So he's saying to be in the top deck all over the long run. Right. If you want to find your way in the top deck,”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“All the time, and yet average in investing is better than if you just get the index return, obviously you're doing better than the average because the average includes people who are always trading and spending money on most people don't.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would think so. It's a good thing. That's absolutely a good thing in terms of wealth creation for their customers. Definitely. That's good. So more of that would be better. And the thing is, in investing, it's very hard to people to accept that I just want to get the average return because average seems like, oh, you know, who wants to be average? That's an answer.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I don't know that clearly Vanguard's growth has been a good thing in terms of people investing in the long run, but that doesn't necessarily mean just because the index funds are big doesn't mean people are not going in and out of them and market timing as well”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Getting shorter and shorter and slower. It's ludicrous. And when you think about it, the whole point of investing is to give yourself the ability to consume more in the future. You need to stay ahead of inflation after taxes. And yet so much of all the media is focused on short-term outperformance, where's the market going tomorrow? And the media presents that because the viewers want that. That's just supply and demand working. But at the same time, it's clearly not the right way to say for the long run. I mean, transaction costs and taxes and... Is have a long term investment plan that doesn't rely on having to figure out where the market's going tomorrow or even next month and stick with that long-term plan”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, they should clearly be taking a much longer term focus on investing than is prevalent today. I mean, it just seems that people are more short-term in focus every year than the year before. So that would be the first thing.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think it's both. There certainly weren't 11,000 funds back there. It's the size of assets most clearly because there's a finite pool of inefficiencies to exploit. But I'm sure the number of funds is a factor as well. But the size of the industry is a bigger problem.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. How could you not ask that question, say, okay, is three trillion dollars the right size for the hedge fund industry? And it's fair enough for investors to say I've analyzed it and I think they can manage up to $5 trillion. And here's why.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, it's definitely the investors and the consultants that help them. And I mean, it's as simple as any investor should force themselves to ask the question, how big should the hedge fund industry be? And how big's too big? And if they don't ask that question, that very sort of fundamental question, they're just not working hard enough.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's really hard, right? So if you want to afford people a hedge fund's the place to do it, so unfortunately the hedge fund industry attracts people who want to do that. So it's not that it's got a lot of crooks, it's just it attracts the crooks.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Really? Just think about this bow. There's enough material to fill a book on frauds of hedge funds. Now, the hedge fund industry is very largely run by honest people. However, if you want to defraud people, you're not going to start a mutual fund because it's impossible to defraud people with a mutual fund. I will say it's impossible.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. And it's an amazing thing. And I think that's from the hedge fund around that quote. But, you know, there's a book called The Hedge Fund Fraud Casebook.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so There's just so many of them. Some of the smartest people in Finance run hedge funds because that's where the money is. That's absolutely right.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, believe it or not, I still have all my hedge fund industry friends and more because of the book. I had a lot of people say to me, Simon, you're right, there's a lot of mediocrity in the business, not my fund, of course, but there's a lot of mediocrity in there. Lake will be gone, absolutely. Everybody else. And so the hedge fund industry is populated by a lot of smart people. And people said, yeah, you know what? You make some good points in the book and so on. And so”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, yes. Yeah, I don't want a hedge fund. Obviously, you can't write the hedge fund, Mirage and run a hedge fund. That wouldn't look too cool.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, you know what, Barry? I don't really blame the hedge fund managers. I blame the investors and the consultants because all the hedge fund manager is doing is saying, I think I've got the best hedge fund. And any business owner is entitled to say that. Hedge fund managers don't walk around saying everybody should have a big hedge fund portfolio. They say, look, I don't know about the industry. I just think I want a great hedge fund. So why do they retain things?”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, the hedge fund returns themselves a kind of mediocre, but they were good enough to raise assets. And it was sharing in the fees that drove our returns from our planet. The performance was okay. It wasn't great, but the fees really boosted our results up better than they would have been otherwise.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So we'd be the first investor in. And so we wanted hedge funds, obviously, that could make money, but that could grow as well. And in that strategy, we made so much more of our return from the economics of the business”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Back in those days, we would put in $25 million in exchange for 25% of the economics of the fund. So, in other words, you”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Economic interest in the GP because we felt at that time that institutions were going to start looking for hedge funds and that was a lot of money. And the business of hedge funds was going to be so much better than being a client of hedge funds. And so that was how we invested. Say that again.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, in the 90s, yeah, in the 90s, yeah, we had some great funds that were doing things that were very obscure at the time. And then when I got into the seeding business, Hedge fund sailing was all about making money from the business of hedge funds. So in 2000”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Some crazy situation. That's extraordinary. But investors overestimate their ability to access funds like that, right? And when they are good, then they make so much money that I need yours.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And then, of course, when they're successful, they don't need your money anymore, right? Because they've paid so much in fees, they start to close and just manage their own money.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Lights flash. Yeah, they make a lot of noise when no food machines pay out, right? So, yeah, there's always going to be hedge funds that are successful, but there's not enough that are reliably successful to justify having 30 or 40 of them.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's true because there's always winners. It's just like in a casino, there's always people that are winning, right? It's very hard to force. That's why the bill.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and you know, Barry, the people who are happiest with their hedge fund investments recognize that a diversified portfolio of 30, 40 hedge funds is never going to be good. The people that are happiest have a couple hedge funds. They have a couple. Maybe they've got Ray Dalio or David Tepper. And they're not relying on hedge funds to solve their underfunded pension problem, right? They're relying on hedge funds to add a little bit of something extra to the portfolio. And those are the intelligent people. And that's not the institutional approach to hedge fund invested, but that's how the people who actually are successful at picking hedge funds do it.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Because of the high water mark. And we didn't make any adjustments to that. So the numbers. No, it's worse than that. It's worse. It's definitely worse than that. And anybody recommending hedge funds should have to justify why with those numbers, it's a good place to put your money.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Industry returns. Oh, well, so for that, and it was done very, very conservatively because we assumed, for example, that all hedge funds were charging incentive fees, and then they all stopped after the financial crisis when some still were. So we didn't adjust for survivor bias, which obeyed the numbers worse.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and I mean, it's all based on public data. I mean, anybody can figure this out. You just take the assets under management for the industry, assume 2 and 20, the returns are public. And so that alone.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, not even close. And they went through the financial crisis with that bet, right? This bet was done before 2008. So he had the whole collapse in stocks as well as part of that.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, that's absolutely right. And there's an interesting thing about how you should use hedge funds because hedge fund returns on average are poor. So generally, if you're investing in an asset class, you want diversification, right? That's the only free lunch. But that's assuming that the asset class has an average return that you want. Now, because with hedge funds, you don't want the average return, diversification is going to make it more likely that you get the average. The only way to be a hedge fund investor and be successful is to be good at picking funds.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And you know what, when you hear this term sophisticated institutional investor, I'm telling you, public pension plans are some of the least sophisticated people I've ever met.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that's true. But, you know, the high net worth investors are generally smart people because you have to be smart to get rich. Not always. You can be lucky, right? But they're not the big attention investors today. No, they're not.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's amazing, isn't it? It's astonished. And for an industry that used to call itself the absolute return industry, I mean, AR magazine is called that because of the industry it covers. But hedge funds, of course, over time moved the goalposts or the consultants moved the goalpost because it was an absolute return because obviously they lost a huge amount in 2008. And then it was relative return, but then their relative returns have also been pretty bad. So now it's an uncorrelated return that you're looking for. And they are uncorrelated because they're pretty bad and they're worse than most other things you can invest in. So they just got too big. I mean, the industry showed that at a trillion dollars, there's enough opportunities to generate attractive returns. And you go above a trillion dollars, there aren't. And it's a form of sort of cognitive dissence by investors that they don't recognize this, driven in part by the consultants and the accounting trimming that we discuss.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's because of the negative effect of compounding. It's sort of like if you imagine a security goes up by 10%, so you buy a security at $100 goes up by 10%, $110, if it goes down by 10%, it goes to $99. So it's gone up and down by 10%, but you're a dollar worse off. That's what compounding does”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, there's no way that anybody achieves their investment objectives with two or three times levered ETS. And in fact, they're designed, if you read through the perspectives, it tells you that they're designed to eventually go to zero. Because”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And the New York Stock Exchange renting out space for service to reduce latency. Is clearly not in the public interest. I mean, I think the New York Stock Exchange should be utility. It should never have been converted into a for profit entity anyway.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“A human-driven order. I mean, if a human was doing what these algorithms are doing, it would be illegal. And so clearly they shouldn't be allowed to do that.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, it's a very complex topic. I thought Michael Lewis wrote a fantastic book about that with Flashpoint. I mean, he's a terrific writer anyway. But there may be some liquidity benefits from high-frequency trading, but the fact that it's, in many cases, based on faster access to the markets and using connectivity and fiber optics to beat you to the price, I mean, Michael Lewis goes through the example of essentially front running, HFT algorithms front running.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, annuities generally are terrible because once you're in, you can't get out And you can't see what the fees are, right? It's not even visible to you what the fees are, and there's exit costs if you want to cancel it and you can't see what the return is going to be relative to the index. So there are whole products. And of course, the people who issue annuities are just investing your money in stocks and bonds to create that return, taking out several points of fees in the process.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“No counterparty risk because there'll be three to five points of fees that are taken out that are very hard to discern After you've done the transaction. And so almost anything you can do with a structured note, you could do more cheaply elsewhere.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So structured notes are basically securities that give you exposure to the return on an asset class generally with some barrier or some protection against losing more than a certain amount of money. And, of course, structured notes are created by Wall Street banks issuing them and then hedging the risk out generally with options. And so you can always create the same exposure yourself with options if you want to and you know how to do it. No counterparts.”
2017-03-10 · Masters in Business · Interview With Simon Lack: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source