Invest Like The Best
Episode 163 Investing Through a Crisis
Invest Like The Best

Episode 163: Investing Through a Crisis

Invest Like The Best

Episode 163

Investing Through a Crisis

Dan is the founder of Verdad Capital, a global asset manager. We cover Verdad's study on investing during periods of market crisis, what does and doesn't work during and after periods of market panic, and his thoughts on the current COVID crisis.

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[00:01:54] – (First question) – What he sees in the markets today given the atmosphere right now

[00:04:26] – An overview of their study - Crisis Investing: How to Maximize Return During Market Panics

[00:08:38] – How things get more predictable during a crisis

[00:11:15] – The length of these crises and assets they focused on

[00:12:40] – What happens to bonds and credit during these times

[00:15:50] – Geography of crises

[00:18:14] – How does this impact the philosophy of index-only investing

[00:20:40] – Positioning of value in this market

[00:27:50] – Lessons from other crises

[00:32:21] – Importance of a blended factor approach

[00:35:44] – Role of momentum

[00:38:10] – What else he is paying attention to during this crisis

Investing Through a Crisis

Introduction

Patrick
My guest this morning is Dan Rasmussen of Verdad Capital. Like me, Dan and his firm focus on quantitative research. Just a month ago, before the COVID crisis hit markets, they completed and published a study on investing during periods of market crisis, which is the topic of this conversation. We discuss what works and what doesn't, during and after acute periods of panic in markets. I think you'll find it extremely informative. Because Dan's firm and my own share many beliefs about investing and conduct similar flavors of research, I try to offer devil's advocate questions throughout. Please enjoy.

State of Financial Markets

Dan, great talking to you. Great to do this on short notice. I really appreciate it. I think a great place to start, given your area of focus and specialty, would just be on the lay of the land, what you've seen thus far in parts of the market that you focus on in your portfolios. And then, I want to go pretty deep into a study you put out not that long ago about investing through periods of crisis and really take it piece-by-piece to share with the audience the lessons that you learned, I think, in a two-year research project. So this was not some reactive thing in response to COVID, but a long, careful study that you and your team have put together. So maybe you could begin with the lay of the land. And then, we'll dive into the research.

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