Global Investing Strategies for Uncertain times with Matthew McLennan
05/09/23 • 54 min
Managing Risk in a Volatile Market with Matthew McLennan's Approach
The investment landscape has evolved significantly over the years, and with the uncertainty in the market, it is essential to adapt strategies accordingly to stay ahead of the game. As an investor, you must be open to new opportunities and practice intellectual humility, patience, and flexibility in your strategy. Methods should include differentiated investment approaches and a dedicated focus on long-term returns. Investors can make the mistake of obsessing over near-term economic metrics, including inflation, or striving for perfection in short-term results.
Join our conversation with guest Matthew McLennan as he shares his investment philosophy, risk management strategies for a volatile market, and outlook for the global economy. As co-head of the Global Value team and a portfolio manager of various strategies, Matthew has a wealth of experience in the investment industry. Prior to joining First Eagle, he co-founded and co-managed a focused global equity portfolio for offshore private wealth clients at Goldman Sachs Asset Management in London. He also served as the equity chief investment officer of the investment strategy group for Goldman Sachs' private client business. Learn how to create a high-performance investment portfolio that stands the test of time.
What You Will Learn:
● [00:01] Episode intro and a quick bio of the guest, Matthew McLennan
● [02:55] How Matthew became interested in investing and in pursuing it as a career
● [06:53] Investing landscape and how Matthew has adapted his strategy to stay ahead of the curve
● [08:58] Revolutionizing the traditional ways of handling balance sheets and asset
● [11:45] Matthew's experience with the market and interest rates and how he repositioned
● [19:19] How Matthew has preserved the culture of the First Eagle in the changing market
● [23:38] First Eagle; the use of gold and cash in the portfolio and the strategy behind it
● [28:51] Mistakes investors make in the gold market in inflation and financial repression
● [33:01] How Matthew goes through the decision-making process of holding gold
● [34:44] First Eagle distribution in the world and the opportunities they see outside the US
● [38:41] Where Matthew draws the line for factors that are more complex to a bottom-up analyst
● [41:29] Tips to cultivate the right temperament and build in humility, patience, and flexibility in your strategy
● [44:37] Matthew’s investment time horizon, its nature, and offers in the Market
● [45:50] What Matthew does at First Eagle as an investment portfolio manager
● [49:54] The philosophy of position sizing and the mistake most investors make
● [51:52] What keeps Matthew awake in his investment strategy
● [53:30] Where to learn more about Matthew's strategy and his company
Tune in!
Standout Quotes:
● “Sometimes in life, you have to make all the right mistakes before you chart a more reasoned course.”- Matthew [02:57]
● “Investing when done properly it is all about compounding out at a satisfactory rate of return and avoiding the permanent impairment of capital rather than swinging for the fences.”- Matthew [06:01]
● “Growth is only valuable if it is profitable.”- Matthew [10:32]
● “A lot of good things in life take time; great artists are often recognized after they have painted the
The information presented in this podcast or available on the website is not intended as and shall not be construed as financial advice. This podcast is produced for entertainment value. Investing is inherently risky. And I encourage you to seek financial advice from a professional who is aware of the facts and circumstances of your individual situation.
Managing Risk in a Volatile Market with Matthew McLennan's Approach
The investment landscape has evolved significantly over the years, and with the uncertainty in the market, it is essential to adapt strategies accordingly to stay ahead of the game. As an investor, you must be open to new opportunities and practice intellectual humility, patience, and flexibility in your strategy. Methods should include differentiated investment approaches and a dedicated focus on long-term returns. Investors can make the mistake of obsessing over near-term economic metrics, including inflation, or striving for perfection in short-term results.
Join our conversation with guest Matthew McLennan as he shares his investment philosophy, risk management strategies for a volatile market, and outlook for the global economy. As co-head of the Global Value team and a portfolio manager of various strategies, Matthew has a wealth of experience in the investment industry. Prior to joining First Eagle, he co-founded and co-managed a focused global equity portfolio for offshore private wealth clients at Goldman Sachs Asset Management in London. He also served as the equity chief investment officer of the investment strategy group for Goldman Sachs' private client business. Learn how to create a high-performance investment portfolio that stands the test of time.
What You Will Learn:
● [00:01] Episode intro and a quick bio of the guest, Matthew McLennan
● [02:55] How Matthew became interested in investing and in pursuing it as a career
● [06:53] Investing landscape and how Matthew has adapted his strategy to stay ahead of the curve
● [08:58] Revolutionizing the traditional ways of handling balance sheets and asset
● [11:45] Matthew's experience with the market and interest rates and how he repositioned
● [19:19] How Matthew has preserved the culture of the First Eagle in the changing market
● [23:38] First Eagle; the use of gold and cash in the portfolio and the strategy behind it
● [28:51] Mistakes investors make in the gold market in inflation and financial repression
● [33:01] How Matthew goes through the decision-making process of holding gold
● [34:44] First Eagle distribution in the world and the opportunities they see outside the US
● [38:41] Where Matthew draws the line for factors that are more complex to a bottom-up analyst
● [41:29] Tips to cultivate the right temperament and build in humility, patience, and flexibility in your strategy
● [44:37] Matthew’s investment time horizon, its nature, and offers in the Market
● [45:50] What Matthew does at First Eagle as an investment portfolio manager
● [49:54] The philosophy of position sizing and the mistake most investors make
● [51:52] What keeps Matthew awake in his investment strategy
● [53:30] Where to learn more about Matthew's strategy and his company
Tune in!
Standout Quotes:
● “Sometimes in life, you have to make all the right mistakes before you chart a more reasoned course.”- Matthew [02:57]
● “Investing when done properly it is all about compounding out at a satisfactory rate of return and avoiding the permanent impairment of capital rather than swinging for the fences.”- Matthew [06:01]
● “Growth is only valuable if it is profitable.”- Matthew [10:32]
● “A lot of good things in life take time; great artists are often recognized after they have painted the
The information presented in this podcast or available on the website is not intended as and shall not be construed as financial advice. This podcast is produced for entertainment value. Investing is inherently risky. And I encourage you to seek financial advice from a professional who is aware of the facts and circumstances of your individual situation.
Previous Episode
Ryan Myers on Quantitative Investing
Fundamental and Quantitative Research Strategies for Investing with Ryan Myers
One of the benefits to investing is the range of research driven approaches that investors can employ towards making their investment decisions. After careful study and practice, investors often choose between or may even blend fundamental and quantitative strategies. Both fundamental and quantitative strategies incorporate a substantial use and analysis financial data, but fundamental approaches delve much further into the qualitative aspects of the company, including management quality, competitive positioning, capital allocation decisions and often an estimation of a firm’s intrinsic value. Conversely, quantitative strategies remain considerably more numbers driven regarding both investment selection and portfolio management. While some observers may believe quantitative investing overlooks important qualitative elements, proponents of the quantitative discipline can point to a dispassionate investment process that removes emotion and the pitfalls of human persuasion. In reality, both approaches work, and astute investors often incorporate elements from both fundamental and quantitative strategies into their approach.
Ryan Myers, a Portfolio Manager at Causeway Capital Management, joins us to talk more about these strategies for investing in global small-cap equities. Mr. Myers is a quantitative portfolio manager at Causeway. He joined the firm in June 2013 and has been a portfolio manager since January 2021. His responsibilities include alpha research, stock selection, and portfolio construction. Mr. Myers earned a BA, magna cum laude, in economics from Harvard University, where he was elected to Phi Beta Kappa. He earned an MBA from the Stanford Graduate School of Business, where he was an Arjay Miller Scholar. Mr. Myers currently serves on the Board of Trustees of the Yosemite Conservancy, an organization dedicated to supporting projects and programs that preserve Yosemite National Park and enrich the visitor experience.
What You Will Learn:
● [00:01] Episode intro and a quick bio of the guest, Ryan Myers
● [02:45] Ryan’s role at Causeway Capital Management
● [03:23] His backstory and what led him to the investing career path
● [05:44] Ryan’s views on the current international small-cap equities
● [11:31] How the rising interest rates in the US are affecting the international markets
● [17:07] Macro and micro factors Ryan and his company pay attention to before investing
● [23:52] Number of stocks in the stock universe
● [27:18] Factors Ryan uses to weigh on the international stocks to invest
● [32:40] Number of stocks in the Causeway Capital Management portfolio
● [35:30] How the quantitative team sorts the stock companies selected for investment
● [41:59] The meaning and causes of rebalancing portfolio in investments
● [44:30] Why quantitative investing needs to be evolutionary
● [47:15] The use of machine learning and AI to influence portfolio decisions
● [52:25] Ryan’s competitive advantage to the quantitative approach to small caps
● [59:24] What keeps Ryan awake in this investment strategy
● [01:01:12] Call to action and ending the show
Website: https://www.causewaycap.com
Linkedin: https://www.linkedin.com/in/
The information presented in this podcast or available on the website is not intended as and shall not be construed as financial advice. This podcast is produced for entertainment value. Investing is inherently risky. And I encourage you to seek financial advice from a professional who is aware of the facts and circumstances of your individual situation.
Next Episode
Timeless Thoughts on Life & Investing with Arnold Van Den Berg
In an environment where the dollar's value is volatile and inflation is on the rise, investors face challenges but should stay vigilant in their search for opportunities. History has shown that equities remain a durable long-term strategy given their ability to grow their earnings and cash flows over time. Investors willing to search more broadly in the equity markets should not be surprised to discover compelling opportunities in these uncertain times, but they must be prepared to consider stocks that are temporarily unpopular. Join our conversation with Arnold Van Den Berg, a long-time investor with a proven, yet hard-earned skill to overcome adversity in both life and in the markets. During our discussion, Arnold shares his gripping life journey and experience as a Holocaust Survivor, as well as his later development as an investor. Along the way, he also shares with us his views on current investment opportunities, and his concerns regarding the market. Arnold began his career in investments in 1968 as the US stock market was experiencing its worst decline since the Great Depression. Arnold spent these difficult years studying Wall Street, the markets, and various investment philosophies and ultimately concluded that the managers who used a value-based investment strategy protected their customers' capital better and provided more consistent investment results than managers using other investment strategies. In September of 1974, Arnold started his own investment advisory business, Century Management, and uses a value investment approach. From humble beginnings, Arnold learned early on what it means to work hard, sacrifice, and help others. It is this spirit of service that has shaped the way he lives his life and runs his business.
[03:37] Arnold's background and his experience as a Holocaust Survivor
[25:06] Lessons from Arnold's father’s story on a death march on focus and thought control
[32:57] How Arnold transitioned to a career in investing and how he applied his skills
[58:16] Investment principles and how they apply to Arnold's strategy as an investor
[01:02:52] How Arnold is investing in natural gas and why it is a lucrative space for investor
[01:08:27] What is concerning Arnold today about the future of the US dollar
[01:15:11] Debt-equity and inflation rate compared to the 70s and Arnold's resource article
[01:17:50] Arnold’s recommendation on how investors can protect themselves from inflation
“When you focus the mind and control it, you can do many things that you never believed that you could, the mind creates its own energy by focusing.”- Arnold [27:43]
“The most important thing is not what you eat. It is not what you think. It is not what you do. It is what you believe; and what you believe focuses the subconscious mind and creates it.”- Arnold [30:04]
“If your principles are more important than your life, you sacrifice your life for your principles; if your life is more important than your principles, you sacrifice your principles. You have to develop a philosophy that you can live with that creates character and integrity so that no matter what you are faced with you are not going to sacrifice your principles.”- Arnold [45:31]
“The real inflation doesn't come from just printing money, it comes when the dollar collapses and you have to pay more for everything.” - Arnold [75:33]
“When the dollar is going down and you’ve got inflation, the way you invest is you buy assets, you don't buy equities.” - Arnold [78:09]
The information presented in this podcast or available on the website is not intended as and shall not be construed as financial advice. This podcast is produced for entertainment value. Investing is inherently risky. And I encourage you to seek financial advice from a professional who is aware of the facts and circumstances of your individual situation.
Investing the Templeton Way - Global Investing Strategies for Uncertain times with Matthew McLennan
Transcript
Templeton & Phillips Capital Management Podcast featuring Matt McLennan
1
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Hi, my name is Lauren Templeton and you are listening to investing the Templeton Way.
2
00:00:06,520 --> 00:00:11,040
This podcast is for anyone interested in learning more about investing.
3
00:00:11,040 --> 00:00:16,160
In this podcast I will be interviewing some of the greatest minds from the investment
If you like this episode you’ll love
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