Capital Allocators Monthly - August 2020
Announcements and Gratitudes
* Morgan Housel, The Psychology of Money. Here we go! Morgan’s first book releases next week. It’s a fantastic read and will be a best-seller. I couldn’t leave it buried at the bottom of the email.
* i3: iConnections Impact & Inclusion week. The creators of Funds 4 Food are at it again, bringing together the industry for a cap intro event to promote impact and inclusion.
* Premium Content. and one more pitch for our expanding premium content offering. The annual subscription includes all transcripts, weekly Behind the Episode emails, and virtual live gatherings with special guests. Click here to subscribe.
Reading (Ordered by reading time: tweets first, books last, and blog posts and articles in between)
“The cure for anything is salt water — sweat, tears, or the sea.” – Isak Dinesen
1. After the pandemic. Jeremy Grantham once said of the financial crisis, “In the short term we learn a lot, in the medium term a little, in the long term, nothing at all.” I suspect (75% chance) the same will hold true of this pandemic. In due time, we will revert to similar patterns of work and life with changes only on the margin. Comedian Jerry Seinfeld believes that NYC will bounce back. I’m long Seinfeld, short Altucher on this one. And Bloomberg writes about returning to the office.
2. Leading-edge manager sourcing. Kudos to Seth Alexander and his team at MIT for innovating on manager sourcing through new forms of media. They’ve advertised interest on Patrick O’Shaughnessy’s podcast and in this piece, team member Joel Cohen cracks open a door to thousands of small funds. Having sat in a seat screening small funds for a dozen-plus years, I don’t envy the volume of email that Joel is about to find flooding his inbox.
3. Government encroaching on endowments. I remember a time when no one paid attention to the investment activities of endowments. That past is gone. Congressmen Emanuel Cleaver and Joe Kennedy sent this inquiry on diversity to the top 25 endowments. Somewhat more dubiously, the State Department called on endowments to consider divesting from China.
4. Seth Klarman’s thoughts during the pandemic. I’ve been fortunate to receive Baupost’s annual letters for a long time. Reading Seth’s clarity of thought on value investing in times of market tumult is refreshing. Whitney Tilson posted his latest quarterly letter, coming at one of those key moments in financial history.
5. Morgan Housel, The Psychology of Money. It really is worth listing twice.
Episode 151: Diversity, Equity & Inclusion 1: Jacob Walthour – A Blueprint for Change Jake discusses his history in the business, unconscious bias, and his landmark lawsuit.
Episode 152: Diversity, Equity & Inclusion: Awareness and Action 2: Kim Lew – The Opportunity and Challenge Kim tackles issues of diversity from her experience and in her role as CIO.
Episode 153: Diversity, Equity & Inclusion: Awareness and Action 3: Shundrawn Thomas – Leading the Way. Shundrawn describes how he led Northern Trust Asset Management to become one of the most diverse teams in the industry.
Episode 154: Diversity, Equity & Inclusion: Awareness and Action 4: Joel Wittenberg – A Prescription for the Future. Joel discusses how Kellogg became an anti-racist organization and how he is sharing the game plan with asset managers.
Special Episode: Introducing Invisible Forces. Jefferies hosts this clever podcast that discusses the things we don’t see that will change the way we work and live over the next five years.
For those interested in taking action on diversity, have a look at AIMA’s guide for sound practices in a firm, AIMA/Albourne’s diversity DDQ, and Caissa’s scholarship program. If you get really serious, reach out to connect with Joel Wittenberg.
Best of the Rest
The Rewatchables on Caddyshack and Back to the Future. Talk about memories (rip it Strummer, Gooch, Opus, Mully and KP). I don’t know two movies my high school buddies and I knew better, and Bill Simmons just crushes these. We never once asked the question of why Judge Smails’ boat was so small!
Have a good one,