Join Chairman Mike Milken as he sits down with some of the founders who have shaped financial markets for decades. The panel will both look back at what many consider now the new normal of excess liquidity as well as outline what years of experience can tell you about the current crossroads. As the years of search-for-yield are coming to an end, how will markets have to adjust the way they think about risk? Can you prepare the youngest market participants—many of whom haven’t seen a recession in their professional life—for the inevitable? Ultimately, if you had to pick just one asset class in 2019, which and why?
- Michael Milken – Chairman, Milken Institute
Seth Klarman: Investors Always Need A Strategy To Guide Them
"Many investors lack a strategy that equips them to deal with a rise in volatility and declining markets," Seth Klarman told his audience in a speech at MIT in 2012. Q3 2020 hedge fund letters, conferences and more Klarman was talking about the benefits of having a strategy, such as value investing, to provide a Read More
- Jonathan Coslet – Chief Investment Officer, TPG Global
- John Danhakl Managing Partner, Leonard Green & Partners, L.P.
- Mitchell Julis Co-Founder, Co-Chairman and Co-CEO, Canyon Partners, LLC
- Brian Sheth – Co-Founder and President, Vista Equity Partners
- Steven Tananbaum – Founding Partner and Chief Investment Officer, GoldenTree Asset Management LP
John Danhakl: Buying Barnes & Noble After The Crash
We have a we're having our conference tomorrow and I pulled a couple of slides. So actually if we could start with my slide 12 I think it is and this will sort of give you some a sense. But just to give you our art our track record we've been doing this 30 years on a green and partners we over that period of time we've raised seven funds. Each one of those funds has or will return two times the money that was invested or better. We've have about a 35 percent gross return plus or minus and after fees etc. It's something the 20s and I think. The point that I would sort of point to first is the last one which is we earn our income from the deals that work and we learn from the deals we learn the business and the deals that don't work. So one of the great advantages that we have actually made the panelists up here have as we started at Drexel Burnham and director of the great thing about working at Drexel Burnham. In addition to sort of learning about debt was the rhythm so the rhythm of the private equity industry is slow. If you've been in it for five or six years you've done two or three deals and you don't even know if they've worked. So the question is how do you learn the business. Well Drexel we were closing a deal a month. We were the financing. There were other folks who were doing the deals but the that that that rhythm essentially sort of showed us what worked and what didn't work. I think the thing that it's taught us is what our business is and the most important is the first part which is public markets date they're investments we Mary our investments. And to give you an example of that if you buy Barnes & Noble after the crash you could have made money on it for a period of time. Had we bought Barnes & Noble after the crash we would would have lost everything. So the rhythm of the. So are our investments are made over a slow period over a long period of time. The advantages of being in the public market there's lots of things to look at. They have six thousand opportunities we get to look at them one at a time. And the most important lessons that we've learned are here. Our next point what you buy is more important than the multiple you pay. I have never seen price make a bad deal a good deal. Ever. And truthfully I've never seen price make a good deal a bad deal I've seen price make a good deal kind of a mediocre deal but if if all of the transactions we do either end up in the Great or mediocre camp we're going to do just fine. So that's why we've done as well as we so.
John I. There's one or two more I mean just Mike touched on. I'm on that list that you had up there and one is there's no muss to deal. I know I used to tell the emanate department constantly where they got paid if you did a deal. Have you ever seen a deal you didn't like. OK so if you are a customer or I'm going to finance it there's plenty of deals we don't like. And what do you mean by there's no deal. There's no muss steal.
Well it's again that's sort of the benefits of experience over you know will cause a youth and energy. Young people want to get things done. And what happens is they end up target focused. You're you're in something and a little bit more starts to be OK. I've invested a year in this deal. I think I understand it well enough. Another 5 percent isn't gonna gonna hurt and it will get a lot of a lot of our younger people. You know this is the one this is when you got to do what I've just sort of learned. Now it isn't the one. There was another deal. The key is avoiding making mistakes. And really that's that's kind of the point that that that that particular point addressed.
Now Mitch we've talked over the years about a I coming in.
We've looked here at passive versus active management markets and machines and as you know when I went to Wall Street I could calculate yields in my head by going from base tend to base to back to base 10 and then the machine appeared called a calculator. And that advantage was gone. OK I could remember you know millions of trades and then a machine appeared. It was the computer and my advantage was gone.
How do you see yourself competing markets machine going the future.
So that's a key question for value investors when you're looking at low cost index products ETF. You're dealing with machine learning A.I. you know what's what's the. Part of the market that.