ValueWalk’s Raul Panganiban interviews Kevin Smith, CFA, Founder, CEO, and CIO and Tavi Costa, Partner and Portfolio Manager at Crescat Capital. In this part, Tavi and Kevin discuss the opportunities in the medical space, opportunities for a macro and value approach and Crescat’s YouTube channel. Check out the full interview on ValueWalk Premium.
Q2 2020 hedge fund letters, conferences and more
Raul Panganiban: I agree that I feel the office space will hopefully be better or more efficient when they start not utilising them as much because we don't need it as much. But yeah, my sister, she is finishing her last quarter of med school. And one of the developments during the crisis was immediately switching to telemedicine. So in regards to the medical space, do you see opportunities there and where they will be switching or adopting more digital strategies for their approach?
Kevin Smith: Absolutely. And that that's a theme that we need to dive deeper into with that aspect of it. But But in general, I do have to say that one of our long themes and it's been a very successful theme here recently, especially, especially as our genomic revolution theme and with, you know, with the operation warp speed money or going to, towards developing a vaccine. We've had a number of biotech stocks that that that we've been long that have have done extremely well in this market, you know, companies like regeneron and Gailey added that score extremely well, in our model to begin with, but also beneficiaries of the money being spent to develop corona treatments. And then we've gotten into some of the vaccine related companies as well. And, again, it's similar to the gold space where we we actually have a number of experts within the industry that we can go to, to, to that happened to be clients. One's a one's a, an organic chemist, and the another is a as a as a microbiologist, and you know that our helping us to, to just, you know, to figure out which companies we really should be investing in. So we've had, on the long side, we've had this, this nk, the net West, stock and, and moderna, for instance, that, that, that our two scientists that they're recommending that we get because they don't otherwise score well in our model like Kellyanne and regeneron, and Amgen, which we own two, on Pfizer and Merck and so on. And I have to say that in general, you know, if, when we talk about economic growth and coming out of this recession, and you know, when you have a world that's been so indebted, after all these years of Keynesian fiscal monetary policy that has just led to more and more debt zombification of the, of the of the economy, when you look to the New when you look to what what can really bring a the world into a new growth phase, it's always some kind of technology or innovation. And, you know if there is any technology or innovation that is going to have a major growth impact, you know, I think genomic this genomic revolution macro theme of ours, which is long theme, has a lot of potential to to be one of those technology so but but now, even during the downturn, you farm you know, pharmaceutical stocks traditionally are defensive, long and there's a lot of value today, right there where you can be long, some of these stocks through this recession even so that's something that's working there.
Raul Panganiban: And I'm with you at the genomics and as a biochem major, I am very biassed towards this space. Yeah, so just want to know, both your guys's closing thoughts.
Kevin Smith: Go ahead, Tavi.
Tavi Costa: Closing thoughts? Well, I think that goes back to or excitement about the three themes. It gives us another window here to buy the dollar and also being able to, to short market here again, I think certainly feels like February again here. Given this euphoric bullish narrative out there, valuations look incredibly appealing and frothy for, in our view, and anyways, in terms of the gold space, we couldn't be also more excited about partnering with, with Quinton and having him helping us to really find a lot of this valuable opportunities in in the world, in a lot of regions that scene with a lot of prolific projects of explorations and gold Silver. So I think that that's we're excited also about, about growing the business, I think I think there's a lot of opportunities for a macro and value approach going forward. I think a lot of people in my view are wrong for saying that, you know, this is not a scenario where fundamentals matter and macro matters anymore. I think it's quite the opposite. And I think it's gonna, you know, the next two to three years is going to be very important for for allocators to look for managers that are that are that are very good at figuring that out and using models and in ways of investment processes that can lead them to good performance by being ahead of what's going what's probably going to unfold with the business cycle.
Kevin Smith: So I second all all of that. Certainly, and I would just say to conclude steak, stay tuned for more information coming on especially on Tavi and my Twitter feed when it comes to our upcoming series of videos that we're going to be putting out on our activist strategy in the gold exploration space.
Tavi Costa: Hopefully this week still.
Raul Panganiban: Yeah. Very nice. The, the YouTube channel is that Crescat Capital?
Tavi Costa: Yeah, actually, I'm working on that. So it's gonna be Crescat Capital has a YouTube channel. I also have a YouTube channel myself, but our goal is to grow that following based in that, follower base in that in that account as well. So we'll be linking the two but yeah, if anybody's search for Crescat Capital on YouTube, there will be a channel but there's also a lot of videos from Kevin and I from other channels in YouTube that have recorded interviews with us, so yeah.
Raul Panganiban: Yeah. Kevin and Tavi , I just wanted to thank you again for coming on the show and sharing all your again.
Kevin Smith: Thank you, Raul.
Tavi Costa: Thank you, Raul. Always a pleasure talking to you. Thanks again for having us.
