YouSaid · the spoken record

Steven Romick

lines on the record: 66
first: 2021-07-02
most recent: 2021-07-02
sittings or episodes: 1
sources: podcast

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“or single cell genomics that have developed on the back of having mapped the human genome and now creating new therapeutics outnoting what's been accepted to date or renewable energy solutions that are gradually displacing fossil fuels. Now we've successfully avoided most of the disruptive industries, but that's like growing that our boat didn't sink. It's not supposed to sink. We would have enhanced our performance had we been more willing to pay up at least a multiple turn or two to own some of the better businesses in the world whose paradigms are more win or take all or win or take most. So we didn't buy Amazon. We thought we were doing pretty good by selling our retail out in a more than a decade ago, but we just didn't buy Amazon even though we'd looked at it. We just didn't look at it closely enough and that has to solidly go into the mistake bucket. So that's what I wish I knew 30 years ago.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I really wish I'd better anticipated the world of disruptive change. The technological innovation that has taken place has upended the economics of so many different industries, whether it be online retail, which”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is do well by doing good. I think that one of the things we realize today in the world that it's not an uncomplicated pace. There's a lot of people who've been mistreated over the years, and we can try and make the world a little bit better. So if you can do that while you're investing all the better still.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that I would say the same thing I've related earlier is in terms of having that longer term view, whatever you do, whatever decision you make, make sure that you're making the decisions with a kind of a five to ten year rolling time frame. It's going to allow you to make better decisions today. It's going to you're going to be more willing to absorb some of the bumps in the road today if you understand that you're going to be better off in the future for it. And I would say in addition, do something you enjoy and make sure you're good at it and work really hard. The last thing I would probably leave somebody with is”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“To adapt to changes in the world. I'm spending a lot of time reading about health tech, which includes, I said, med tech and biotech, because I believe that some of the great businesses and fortunes will be created over the next 20 years are going to come out of that. We map the human genome 20 years ago, but it was like identifying the parts to a car for the last couple decades. We've been trying to figure out how the parts of the car work individually and in an integrated fashion. And just now we're really beginning to see some of the fruits of that, and we're going to see a lot more in the future.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“incredibly interesting as well. And sometimes you read the books or I read the books and I kind of what did I learn? What are my takeaways? And like I read Twilight in the Desert twenty years ago and they had the belief that from reading Matt Simmons' book that we were going to have a problem with providing energy to the world because fossil fuels were harder to come by as it relates to oil specifically. And clearly that didn't come to pass. A couple of things have happened since. And so you have to be willing to adapt. We have obviously a big increase in renewables, but you also have the oil sands and tight shelf formations that have created a lot more oil out there than people had expected. Meanwhile, you have also had the rise of, we have the rise of electric vehicles and such that are going to put a crimp in future demand. So look, yeah.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“CEO profiles that would include John Malone, Henry Singleton, Tom Murphy of Capities, Warren Buffett. And it really just reading about these people and what they accomplished historically in their businesses helps them form a view as I speak to managements today. One of my favorite books of all time really is Ron Chernout's book, The Warbrooks, because it's an expansive history of finance and of couple world wars and a Jewish family that made its way from Germany to England to the United States. And I find that.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I mentioned sometimes struggling to get through books, and the reason that's fresh in my mind because sitting on my night table and I'm about three quarters away through it is Walter Eisenson's book, Gene Editor and Jennifer Doudna. And it's just a little bit dense because you really try and, if I'm really trying to understand, I have a whole list of books that are tied to healthcare and health tech, med tech, and the history of biotech. And I'm just trying to gain a better understanding of that as an industry. And so I really enjoy reading nonfiction to try and inform my view of the world. So that's one that I'm reading now, but it's called a codebreaker. But I read a lot of these books that try and inform my view, and that include the outsiders by William Thorbank, which”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I love that. Oh, then you're going to. That's up my alley In addition to being a frustrated surfer, I'm also a frustrated guitarist.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I love the etymology of a song. I like reading the Wall Street Journal column that really breaks down the, I forgot what the title of that column is. It comes up quickly.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“be at the Teledynam meeting introduced Henry Singleton and have dinner with him afterwards and talk about his experience investing in Teledyne back in the day. And that really was incredibly educational. And then I remember once he had me, we drove down to Laguna Beach to visit a guy who I'd never heard of. I just couldn't Google somebody back then. And again, I hadn't been in the business that long at this point in time. And I sit down at the lobby bar of the Ritz Hotel down in Laguna Beach, and there's a guy who shows up with an ascot and what seemed like Paisley Pajama Bottoms. And it was, I'd never seen anybody dress like that. And it was Sir John Templeton. And I was able to have tea with Sir John Templeton and listen to his life experiences and talk about investing and to be thrown into that kind of”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, the one person really shaped my career I mentioned earlier is James Nathan goes by Jeff and he was my first boss and he's the one who introduced me to a lot of people early on when I was just starting out in my early 20s where I was able to sit down with his good friend Lee Cooper Man and ask him questions.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't actually listen to a lot of podcasts and I don't do a lot of streaming other than more entertainment related new streaming. I tend to, when I'm in the gym working out on my stationary bike, I do a lot of cycling, I tend to throw on a documentary and something that with subtitles and just kind of watch it. It could be on a host of different topics. I love music and frequently it ends up being something related to that. I spend more time reading nonfiction and trying really drive a lot of throughput there to the best of my ability. I say to the best of my ability, some books just end up being a little bit denser than others and I find myself sometimes struggling through to get onto the next book.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Barry, I'm going to go on record as saying that I'm not going to spend a lot of time determining how big that great white is.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, yeah, they really are in there. And it's disconcerting, I'll compete in ocean swim races once or twice a year. And I remember once watching one of those drone videos of a great white kind of underneath the crowd of swimmers kind of off the South Bay, Hermosa on Manhattan Beach in a race. And I just thought to myself, I'm like, I don't know what I would do myself. I just try and push that out of my mind. I don't care if it's a big, great white or a small great white berry. A great white is a great white. I'm not going to be real thrilled.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, I've got lots of hobbies. I'm a jack of many trades and master of none. I enjoy it. I swam competitively through college. I've always enjoyed the water. I enjoy swimming in a pool, enjoy swimming in the ocean. I used to lifeguard at the beach as a summer job when I was in college and learn to surf. As I said, I'm not very good, but it's nothing like being out there in the water and dolphins swimming around you. It's pretty peaceful and to pick up a wave and maybe have a dolphin riding it with you, which has happened on just one occasion in my life, but I keep trying to repeat that is a pretty beautiful spiritual experience for me. I find it incredibly peaceful. I spend more time now surfing behind a boat on a lake because I don't have to compete for waves. And that's been, you know, it's just a lot of fun.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Investors every time they should learn this, it's the same lesson, right? Is thinking what the world looks like down the road, not what it might look like in the next six months, three months, or even a year or two. But what's it like down the road? I mean, if you're buying a business, you should care about it twice. The day you buy it and the day you sell it. So if you're not going to sell that business for five, ten years, why do you care if the stock goes up or down in the next couple?”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, the same story still applies. It's still in the midst of this. The stock price has moved up from the high 20s to the higher 30s. And the opportunities still exist for that same upside. Nothing's really changed. They're in the process of working through the... Whatever's going to happen regulator or with the fines. We just don't know where it stands today. We're not going to know till we know. But as we look down the road, it's going to be settled, just like I argued before, that people would travel again, people would stay in hotels again, and Marriott would not have an occupancy that was going to be close to zero for a period of time, you're going to end up with a more normal environment for synergy in all its markets in Ohio and Pennsylvania, et cetera.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Multiple that gets attached to that. So as we triangulated these other finds and the multiple, we kind of looked at that maybe the fines in the beans someplace 150 to $400 million. Now remember, I just said that the business declined $13 billion, maybe $10 to $11 billion adjusted relative to the utility index. So even in a worst case scenario of a billion dollars, it's still just one-tenth of what the stock price declined that had been seen by its shareholders or borne by its shareholders. And so we felt pretty comfortable”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“That would just to basically means about $10 to $11 billion of value was taken out adjusted for the decline in those utility indices. And so our work was really centered on two things, like one, how good is the business, and two, what might the penalties be. And so the work that we did on the business in conversations with competitors, industry experts, and utility analysts gave us a comfort level that the business was as advertised as good as we thought it was. And then with respect to the fine that was likely to occur, we felt it would end up being manageable. So there were federal sentencing guidelines that are fairly formulaic. And so we used history as a precedent in looking at lots of different finds that have been paid in the past. And there's a base case fine, and then there's a culpability.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“20 times earnings thereabouts. But this company last year have got some bad news. In Q1 of 2020, a percentage got caught up in a bribery scandal that alleged illegal campaign contributions totally around $60 million to the former Ohio Speaker of the House in the hopes of passing a bill that provided some subsidies for nuclear business that they don't even own anymore. And as a result, how the government might or in the regulators might come at them, it causes stock to drop by almost half from the February 2020 high. And that cleaves off about $13 billion of market value. And if you were to adjust it for the decline in utility index, because that had gone down at that point down about 8% as well along with the coming down with the pay.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Distribution utility with one of the largest networks in the US, I mean six million customers across five states starting Ohio and kind of moving east towards the Mid Atlantic. Now it's core utility business is better than average, which to us can be determined as a higher than average ROE. It's got more regulated transmission distribution assets rather than the more risky business of non-regulated independent power production. And for the most part, they're in regulator friendly states with lower than average competition. So we also look at the utility industry just as an idea, just as a construct, because we think there should be underlying demand for increase transmission and grid modernization over the next number of years. But the utility industry is the index trades about 19.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's more developed economies, though there's some emerging markets in it. It's not any one company or one industry specifically. There's just there's a host of different businesses that we own outside the United States. There's some businesses that we own inside the U.S. that are less economically sensitive as well that make their way into the portfolio that, again, I'll give you an example of a more commercial opportunity we've owned for since last year. And it didn't go down because of the pandemic. It went down for idiosyncratic reasons. Anytime I mentioned idea, I don't want it to suggest this is our favorite idea or the only idea. This is just to be meant to be emblematic of philosophy and process. But we own for synergy, which is a pure play regulated transmission.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And the stock is not so horribly expensive. It certainly isn't as cheap as it was when an adjusted basis we bought it back in 11. It was in the early low rather teens multiple adjusted earnings. But companies were comfortable owning through this.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Made by economists for just the coming year for what GDP was going to be. They're rarely rights. Somebody gets a right, but nobody's right consistently, and sometimes they're wildly wrong. And you look at people like Alan Greenspan, who didn't think that we were in a recession in the early part of the, you know, or Bernanke. They didn't expect the great financial crisis. These things weren't anticipated. We don't hang our hat on listening to them or trying to anticipate what might be a lot of things might be. More things might be than will be. And so we just try and put our heads down and believe that, you know what? Down the road, that Google's still going to be a good business. And we're not paying even today at current prices if you adjust for the cash, you adjust for their non-earning assets, their moonshots.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the world is certainly trying to do that. We hear first specific advisors know we can't anticipate. We just try and create a portfolio that's robust to multiple outcomes, that doesn't go too hard one direction or another, believing that we really have the capability of identifying what the macro environment will look like prospectively. There's just way too many moving parts. I mean, if you put me in a room with John Maynard Keynes, I'm going to come out of Keynesian economist. I'm going to be a believer. Same with put me in there with a monetary as a supply side or whatever. It's just there's these guys have all the arguments down. And I'm just not well versed enough and I don't believe that anybody really has that capability. In fact, if you were to go back and look at the projection,”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Deflationary path to inflation, that could be the way we get there where the knee-jerk response is to continue to print more, borrow more, and stimulate with a wanton disregard for the future ramifications of what it might mean to fiat currencies or the economies or inflation down the road. But looking for that near-term bump as these policymakers and academics are really thinking about what's happening right now as they seek to be re-elected or reappointed. So we don't know what's going to happen, but we create a range of outcomes and we think that as we look at them, it's more appropriate to be more invested than not if you're looking out where the world's going to be five, ten years hence.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“We think that with the way Stewards of Capital at the sovereign level have been acting in the last number of years really to a great degree since the Great Financial Crisis that's going on that people hope that the academics, if it all figured out that they're going to engineer this soft landing and be able to control the inflation in a way and drive growth at the same time that is going to all end perfectly. And things tend not to be quite so perfect out there in the world. We've learned to expect the unexpected and we don't know what is going to happen. We don't know whether there'll be inflation or how much inflation there might end up being. We think that there's reasonable prospects of it certainly. But might there be a”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I've never really thought about LA affecting my worldview until you just asked that question. I do think that just in general, the world has gotten smaller because of the information that's available at your fingertips across the Internet. And so that certainly has made it easier. But living in Los Angeles, I don't know has affected my worldview to any great degree. I don't know if I would think differently if I was living in Chicago or New York. I haven't really thought about a barrier to be honest of how my view has been impacted by living here.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, yes, we do own some privates in the portfolio, but they're very small because we're a public fund and we are responsible for returning capital to our investors when they want it back. But on occasion, we make investments in certain private investments and opportunities, you know, epic games is an example. We also have various private credit in the positions in the portfolio that we've made over the years in the last decade. We've put 800 million or so out in private credit that have delivered returns of give or take 14% to the fund. These are secured first lien asset-based loans that are something different that not a lot of mutual funds do. Again, I don't want to suggest that this are the engines of the portfolio. These are investments that end up under the purchase.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Was feared that their advertising business was going to be impaired, which is bulk of the revenues, was going to be impaired because of a recession as the world was beginning to unwind as what was happening in Cyprus was infecting Europe and Greece and the rest of Europe. And the stock traded down. Facebook traded down a few years back because of the Cambridge Analytica scandal and people were worried about it, its business prospects. And that allowed us entry into two very good businesses that we've owned ever since.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, to us in traditional value investments are often mediocre cyclical businesses that were temporarily out of favor and offer to message the opportunity to return to more normal earnings. But many of those businesses have been disrupted by new technologies and didn't offer the margin of safety they once did. So we're very mindful of whatever we own. It really does have to be growing. It doesn't have to have go-go growth. We own a couple cement companies that have global franchises that we think cement's going to be here for a long time. Now they're not go growth businesses, certainly. But those are businesses that we think that offer attractive risk adjusted returns over the next number of years. And you mentioned Google and Facebook, but even those investments were initiated at points in time when there was bad news surrounding them. Google back in 2011 when there”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think that there's a problem with style boxes because we don't make a great distinction between growth and value. Show me the growth investor that argues what they bought isn't a value. But then also you can just take a company that trades, call it 40 times earnings, but if it's growing 30% a year for the next five years, at the end of that five-year period, it's what trading 10, 11 times earnings are about. So to us, value investing is just to invest with an appropriate margin of safety. Buying a business or an asset at a discount.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Experts and so forth. And then we'll go about our financial models. And our models don't suggest what might happen in the coming quarter or even 2022. But over the next few years, we want to have a view as to what this business might look like in a low base and high case. And we want the investment in that business, that equity, that we're going to be buying in that business to be attractive in the base case and have that upside optionality in the high case and not get too badly in the low case. So we really try and create these boundaries, these governors, as we look at each of the individual investments in the portfolio.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's really a function of price and risk and reward that will dictate which direction we go for these evergreens versus more commercial opportunities. But we try every day to try to know the better businesses in the world and own them should the ever trade down for one reason or another. We'll be there to pick them up. And what we also own is lesser quality but still growing businesses if their stock prices offer attractive upside relative to the downside. And then we have our debt investments where all we care about is getting our principal back in maturity, but also generating equity return along the way. That really speaks to more to our philosophy and then our process is guided by thoughtful research of the underlying opportunity as we really try to ascertain the value of the business or the asset. And that's guided by a lot of reading, many conversations with management competitors.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we invest across the capital structure with this goal of delivering attractive risk adjusted returns, so we'll own stocks, stress and distress corporate bonds and private credit, the occasional preferred stock, et cetera. When it comes to stocks, we'll loan both the more commercial and the evergreens. That is the commercial called the dollar bills traditional discount. And those companies whose businesses, on the other hand, that are more evergreenly better a decade from now.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“When we consider what the alternatives are, stocks still make more sense. Now we are finding more opportunities outside the United States, and we think that there's better opportunity in businesses that are domiciled on foreign shores. And so our portfolio of equities has tilted in the last couple years more overseas than it has been or has ever been historically position size about doubled from a few years back for that which we found outside the US. And now 40 plus percent of our portfolio is dumbiciled elsewhere.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“This time. But why do we stay invested? Because again, the alternative isn't great, and we think that we're going to get good rates of return over the next number of years from this portfolio of assets that we own. That doesn't mean that they're not going to, stocks aren't going to trade down in the interim. They very well might. But when we look at the way the government has printed governments or sovereigns, printed money, and as I pointed out earlier, just the amount of debt that's been created, we just think that you could tilt towards an environment where it's more inflationary and rates could remain lower for longer because the government imperative is to keep them as low as debt interest expenses, low as it can be, which means keeping rates as low as possible. At any point in time, the system can, governments can lose control of it.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, there's no question that things have gotten pricier. And you're not getting any kind of yield there. We kind of think of that as more as return free risk. The high yield part of the market or the investment grade part of the corporate debt market just isn't attractive. And we wish it was. We took a little bit of capital to work in the space last year, but the opportunity didn't exist for very long. And so much of that corporate debt is not only lower yielding, but it's also relatively weak covenants to a lot of that debt. So more of the leverage tilts towards the borrower in a way from the lender. And so we look today in that same situation existed. Yields are lower still. And it begs the question, and I think it's a fair question, why would you be as invested or slightly less invested in fairness, but that's more noise in the portfolio than we were last year?”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“They left more of this speaking to clients to me, which I had the history with them and allowed them to a greater degree focus more on the portfolio and not have the static from having clients whisper in your ear, the portfolio is going down. I'm scared. What are we going to do? What are you going to do? What am I going to do? It insulates them from hearing the visceral reactions of the investors. And so I took more of that on the front line. Because you have to be a good investor. You really do have to have, as we discussed, that longer-term focus and find ways to minimize the static in your life. And so that's how we operated together, the three of us.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“We had lots of conversations about this internally amongst my partners. And probably the most grounded of the three of us I would give a hat tip to my partner, Mark Landecker, who really was the most centered of us. I'm not going to tell you that it wasn't disconcerting watching the stock prices drop as they did, even after having lived through multiple downturns.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“No, we didn't. We took 10 points to the capital and put that to work and the market rallied from there. And put it all to work. In hindsight, obviously, one wishes they had. But we didn't know how long that opportunism exists. We wanted to make sure we continue to have the ability to buy down.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're being negatively impacted by the baby out with the bathwater as well. So we own in the portfolio and their position is that grew within the portfolio while we were when the market was going down. Companies like Facebook and Alphabet, et cetera.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, we bought a number of businesses in the travel industry, including bookings.com and Marriott. We bought businesses that were impacted by directly by COVID. We added to some of our financial services businesses. AIG gave as an example that we felt that would certainly get through to the other side. And we added businesses that last year where people were capitulating because the consumer was going to be weak, businesses like Richmont, for example. And then we also took advantage of other businesses that were less cyclical, that had the opportunity to perform well regardless of what the economy was doing, but were just, we're...”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, I didn't know. I mean, I mean, just full disclosure. We had no idea it was going to be short or long. I mean, that article you referenced in the New York Times was, you know, as you stated, we're thinking about where the world's going to be down the road five to seven years. I didn't know how long this was going to last. But if I invest trying to anticipate what's going to happen in the next few months, six months, year, whatever the case may be, My off the ball are teams off the ball and not allow us to buy things we otherwise might buy. We'd always find some reason that it might be a little bit cheaper.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Than a ladder. People tend to vote with their feet, and this goes back to that volatility argument, that people get a little panicked at these points in times. And we just tried to be thoughtful and act rationally. And at the end of the day, if we do the right thing, the business will take care of itself, whether it will be smaller or we're larger. It's not going to change what we do every day when we come in here. And it's not going to change our lives. So it's very important for us to always be mindful of what the world will look like five to seven years down the road and make sure that we have analyzed the businesses that we own or the assets we're buying, the bonds that we're buying well, such that we have invested with some kind of margin of safety. And we've tried to anticipate downside. Downside not just mark to markets that might occur, which are far less important, but really considering what the absolute”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“The pushback from some people was your portfolio took a mark. We didn't expect it to take a mark like it has. And so we're going to go and give our money to somebody else. That was pushed back from some. On the other hand, we had those investors who increased their capital commitment to us and decided that what we were doing was the right thing because they did buy into the argument you just made that, hey, these guys have been doing this a long time. They've lived through various cycles. They lived through the internet bubble. They lived through junk bond blow-ups in the early 2000s with the Worldcoms were there and were able to take advantage. They lived through the great financial crisis and these guys know what they're doing. I'd rather them do it than somebody else. And so we did have fortunately those people as well. On the other hand, there were more of the former administration.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm sorry, at 80, as it dropped down another 20, 25% from there, again, as I said, was discomforting, but at the same time, you look where it is today, where it's 140 plus, we clearly weren't wrong, but it took a mark at that point in time as it took a lot of those businesses down with it. So we took advantage of the opportunities at that point in time and increased our invested exposure by about 10 percentage points and pulled down some of that cash you were referencing.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“that many of these businesses we own, it was just a blip. It was just a price at a point in time with fear hitting the market. And it wasn't that these businesses weren't going to do well once we got through to the other side. Businesses like AIG are going to be fine. It's businesses like Marriott, whose business has truly stopped and we were buying Marriott as the stock was coming down. And you buy a stock at 80 and then it goes into the 60s. It's not, again, the most comfortable thing to watch happen. But we were very confident that as we got through the pandemic, people once again would travel. They would get on airplanes. They would go to hotels and a company like Marriott that is more asset-like than some other hotel businesses would perform quite well. So buying something at 60.”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, but it was some of the businesses that we owned were people throughout for dead for a period of time. We own companies like AIG that started the year at around 50 at the end of 2019 going into 20, it peaked mid-50s. And intraday in the third, fourth week of March 2020, it was trading down at under $17 a share with book value being up closer to where the price was at the beginning of the year. So huge, huge discount, and people believed that the company was clearly on its way out of existence. We didn't believe that. And we had took the opportunity to increase our position. But it was still, I mean, it admittedly discomforting at that point in time, not only for us, because who likes to see their Stocks drop that much, but certainly for our investor base. But at the end of the day, we understood that”
2021-07-02 · Masters in Business · Steven Romick on Portfolio Investments (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source