YouSaid · the spoken record

Thomas Wagner

lines on the record: 134
first: 2023-07-14
most recent: 2023-07-14
sittings or episodes: 1
sources: podcast

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“And what it tells you is that when companies start to run into problems, that isn't necessarily the low. And there's two types of businesses that run into distress. There are businesses that are over levered or mismanaged at a point in time. And then there are companies that have a flawed business model or somehow on the wrong side of secular change. Those last two categories are really dangerous, really dangerous.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, or put slightly differently. When a company becomes distressed, let's say that that's the line of demarcation, say, 70 cents on the dollar on the debt. That date forward on average, the ultimate value of that security is lower.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, there's a lot of examples like that over time. And I think there's one thing as it relates to distressed investing, which is a smaller component of what we do now than it was in the early days. But this has always resonated with me. Credit Suisse had an index for high yield, they had an index for investment grade, loans. And one of the indices they had that no one ever really talked about was the distressed debt index. The distressed debt index has a negative long-run return”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Only thing that matters how much cash flow can generate in the future. That's it Any investment, that's all that matters. And I'm sure we'll get into some of the other things we're doing. But at the end of the day, you want to think about what is the inherent value of this business, meaning how much cash flow can this business generate. There are different ways to value different businesses, luxury assets as an example, are valued very differently than infrastructure assets or boring assets in mining, let's say, where the risks are very different. But at the end of the day, there's some basis on how much cash they generate.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“And sold for pennies. Pennies. And Metrimedia, great example. You know, they had the valuable assets in the cities. But they weren't as valuable as the cost of installation. And it's one of the reasons why I think in distressed investing, one of the worst mistakes you can make is how much money was spent on the assets that you may be acquiring in distress. It's irrelevant. It doesn't matter. What is it really worth?”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't believe me. It is now. There's so many hundreds of names banging around in this small brain of mine. Once that hard drive fills up and flows. Yeah, something else has to give way. But with a lot of the companies in that time, they were building capacity that was unneeded. Technology was advancing to the point where we didn't need as much fiber laid.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“10 cents. 10 cents on the dollar are very valuable. The MCI bonds were very valuable. If I remember, they got as low as the 20s or low 30s. And the recoveries were quite high. People say that it was an accounting fraud. It was in the sense that they were misrepresenting the facts, but the information was there. As is the case in many of these situations, if you dug deep enough, you could figure out relatively quickly what was going on. But there were a lot of companies that were over-levered and perhaps overpromoted, but where there was real underlying value. Enron, as another great example, another huge opportunity at that point in time, less so with some of the telecom names. Really? Well, you know, you had a lot of businesses, you know, one that”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“360 input. Yeah, constant, and my second command, if you will, to trade on the trading desk, it was now a very successful manager of a hedge fund. And he and I joke about it to this day and how crazy that day was. And so I that stands out just because of the enormity of the surprise in the market for a single name. And the bonds in that company fell. 50, 60, 70 points depending on which bond flavor it was, meaning which duration bond instantaneously. And you're talking about wiping out billions and billions of dollars of capital. And it was just a huge shock to the market. So those are two of many days that really stand out in my mind.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't know how many hundreds of people. And because of what had happened, the person trading that name became the center of attention. So everyone was looking at whether the price of those World Kanbans were going up or down or who was buying, who was selling, what kind of size was trading. It was an incredibly intense period, but it was probably the most enjoyable 36 hours of my professional career because it was just so exciting.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“And it was the most profitable day of trading I'd ever had. No kidding. And it was the busiest day I'd ever had. It was literally, you know, on a trading floor with...”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. And it was sort of a theme across. Market that really stands out to me even today, where for the first day nobody was really, unless they had to, no one was selling. And that really, really stands out for me because, you know, we all lost, you know, a lot of friends that day. And so that was an incredibly memorable moment. I'd say the other one that really stands out as well was the day that WorldCom fell as a result of a report that was put out on a competing network. And, you know, I had been at work early that morning. We traded until, you know, normal time. And the news hit just after the close. And I ended up trading until midnight, went home, slept for a couple of hours. I was back at my seat at like 3.30 or 4 o'clock in the morning and I traded that following night until 8.30 in the evening. Wow.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Pages are singed. And then we all know what transpired thereafter. We had sadly a front row seat to everything that occurred after the first plane went in. And then the markets afterwards were obviously heavily disrupted. Our country was heavily disrupted. But I remember getting on the phone the first day the markets reopened with the first phone call was from Fidelity. They said, you know, buyers only today.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“And four nights a week we were out to dinner, you know entertaining customers, getting to know them, talking about the markets. And that was an incredible education for me. So in addition to being surrounded by great people who work all day, I'm now out with folks that would become the Titans of the credit markets that were in the early days or midway through the founding of their businesses and talking about the markets. It was a really valuable set of experiences for me. So those things definitely stand out. But I think when I think about the markets at that point in time, Being 9 11. And we were on the trading floor. And I distinctly recall seeing a piece of paper floating by our window at 85 Broad Street and then turning to my colleague and saying, some of those”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm in for a ride, and sure enough it was. You know, we had a lot of late nights. Equally, I was also trying to become acquainted with the people that were my customers, who are the asset managers both on mutual funds, insurance companies, hedge funds, private equity firms that were our counterparties. And so I spent a lot of time going out. There was a gentleman who ran sales that literally introduced me to everybody in the industry.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“And I'm like, wow, it's really noisy in here. And I look around and 90% of the people are still at their desk at 6.30 at night. And I thought to myself, oh boy, I'm in a different environment. And people, you know, they worked hard and they worked late. And in positions where you didn't often see that, meaning a lot of folks on a trading desk get up and walk out, you know, 30 minutes, 60 minutes after the market's closed. This was a group of people that were sticking around and continuing to work. And that really resonated with me. And I was like, oh my gosh, this is going to be a whole different experience.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I'll start with sort of my first impression. I get credit suis is a hardworking but also a, you know, a kind of a collegial, fun living group of people. And I get to Goldman. And I was at that time, I was a subscriber to when you're the junior person on the desk or the institution you first went in. So I'd be at my desk at 6.45 in the morning typically. And I remember the first day I'm there and it's dark outside because it's mid fall”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Environment to become an expert in a particular industry. I'm very, very fortunate to have been able to work in that environment with those people, really enormously talented individuals.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Just under eight years, so I left in early 2008. And my experience there, you know, similar to my experience at Credit Suisse, was really fantastic. And it was driven by the people around me. When we go back and look at the team that we had assembled in the early 2000s and the Goldman Sachs distressed trading desk, an extraordinary number of those folks went on to become partners and founders of very successful multibillion dollar asset management firms. It's a pretty unparalleled track record for a group of professionals that were together at one time. And for me, that was incredibly valuable. I was surrounded by people that were more experienced than I, that were, in my mind, smarter than I and were every bit as motivated. And that's a great...”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“And no one gets laid off when everything's going well. So I had a lot of job security. So for my early days, it was a risk-averse way of being in the capital markets”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know, here's the reality of distressed investing. Whenever there's a period of time in the markets where there's upheaval, it creates opportunity. And for me, I was not somebody that grew up in a financially comfortable environment. And so I think I was drawn to being involved in companies that were experiencing difficulty. There's also the reality of being in that seat on the sellside working with a bank is when the markets are really disrupted is when banks usually lay people off. Not their distrust team”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“That were priced as if they were going out of business or would liquidate. And as we all know, most companies that go into bankruptcy don't liquidate. They don't go away. They just restructure their balance sheet. And if they're smart, they restructure their operations as well to fix the issues that ultimately led them getting into bankruptcy.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, most companies that end up in distress are very levered at the outset. So they have a sub-investment grade or junk or high yield rating, depending on what terminology you want to use. And those are the companies that are most likely to face severe financial stress because they have the biggest stock of debt. They have the least financial flexibility. But there are companies, and this was particularly true in the early days of my career, that go from investment grade right into distress. And there are a variety of reasons why that occurred in the early 2000s. But that, for me, was an area where I gained exposure to really marquee companies.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, there was a group of people that had had that job and went on to some spectacular success. I mean, you know, the likes of David Tepper and John Kolach and John Savits, who's there, the person that hired me. And it was a really impressive group of people that had run that desk prior to my arrival. And it was very alluring to think about trading in companies that were facing their worst moment.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“I was a regular way high yield trader. And I was happy at Credit Suisse. I thought I had my own trading book. I was thrilled. I loved the team that I worked with there. I mean, really, to this day, I remain very friendly with a lot of those folks. I felt very fortunate to be on that team. But two things happened. One, Credit Suisse bought DLJ And I had to interview to keep my job, which thankfully I did. And two, you know, I had an opportunity to meet with the folks at Goldman and the distressed debt trading desk at Goldman had a particularly colorful lineage.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Stay there. So I was at Credit Suisse. I guess you could say I started just after my internship finished. When I received a call from somebody at Goldman Sachs on their desk that I had met and cajoled me into coming in to interview for a spot on the distressed debt trading desk.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Because I was not in a position where I could rely on outside sources for income. And two, it was direct experience. And I was a career changer. I went back to business school to prosecute my path of moving from public accounting into the capital markets. So I needed the degree. I needed the transition period. And that allowed me the ability to gain a lot of experience directly that I felt I needed to have a leg up and ultimately get a job, which fortunately I did.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“The rush default. And it was really when I was an intern at Credit Suisse, it was a highly volatile environment. We were expecting offers in the fall and none were really forthcoming in the areas where I wanted to work, which was in the high yield department and the sales and trading desk. And so I had a mentor on the desk who was a few years ahead of me and said, why don't you start coming in and doing research for me on the side? You know, we'll pay you some nominal sum. I mean, I don't know, it wasn't minimum wage, but it wasn't a lot more than that. And once I was in the door, I was there every moment I wasn't in class. And so I was doing 30, 40 hours a week on the desk doing research. One, I needed the money.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know, I think Lot of times in life, you're faced with a situation where if you're trying to achieve your objective, you have to find a path irrespective of what sacrifices you have to make to allow you to attain that objective And when I was in business school from 97 to 99, we had kind of a hiccup in the markets in the fall of 98. I recruit for a long-term capital.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“And I got into my junior year, and I just really didn't like it. And we had a career day. And everybody who came in was miserable in their jobs. And I was like, what am I torturing myself for? My friends are having a blast in college. I'm studying all the time. And I had a bit of an epiphany that perhaps, you know, if I didn't love it, there was a better path. And so I switched to accounting. Because the most successful person I knew directly was my uncle who was a partner in a public accounting firm. And I looked at him and said, there's a guy that did well with this. I'll give it a shot.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that's probably right. Most guys and gals who get into the business of working at a hedge fund, never mind founding and running one, I think there's a pretty typical track where their finance majors at top schools, they work at an investment bank or an advisory bank, sometimes at a law firm, and then they make their way into the investing realm. Mine, you know, I started in a much more boring capacity. And I ended up in public accounting for a variety of reasons. I started. My college career as an engineering major mechanical engineer”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“No. And it was a great doing accounting and being a CPA had its benefits. You learn the language of business and you learn how to operate in a business environment. There were a lot of great takeaways from that experience. But at that point in time, I think I recognized something else was drawing me.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“So there's some upside there. It was indeed. And I said, what is this business that this gentleman is in? And how do I get involved? I am with you.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Posts Magellan funds. Exactly. And. He had a sizable amount of money under management and hard clothes his vehicle. And in his first 14 months, if I remember correctly, his gross return was $120%.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I started as a certified public accountant and one of the early engagements that I was tasked with was in the space of asset management. And I recall doing the audit on Jeffrey Vinnick's very first year as a hedge fund manager.”
2023-07-14 · Masters in Business · Thomas Wagner on Sports Investing With Tom Brady · IDENTIFIED FROM THE TRANSCRIPT · source