Invest Like The Best
Episode 332 Know the Names
Invest Like The Best

Episode 332: Know the Names

Invest Like The Best

Episode 332

Know the Names

Scott Goodwin is the co-founder and managing partner of Diameter Capital Partners. We cover the major thematic differences between the 2010s and 2020s, the importance of speed, and the role of imagination in credit investing.

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(00:03:07) - (First question) - Comparing the investing themes of the ‘10s to the ‘20s

(00:04:59) - The skillset differences between investing in equity versus credit 

(00:06:28) - Why Carvana’s stock plummeted and thoughts on the destruction of value

(00:07:33) - General overview of credit cycles and what they are  

(00:15:42) - Opportunities come from knowing the names well enough 

(00:19:17) - Making substantial decisions in a matter of minutes as a credit investor 

(00:22:23) - How he thinks about the evolution of sourcing alpha in credit markets

(00:27:37) - Why so many institutional capital pools have fewer credit managers  

(00:29:19) - The value unlock of being the right size as a firm

(00:31:08) - His childhood and the unique aspects of it that set him apart 

(00:37:28) - Lessons learned early on about running an investment firm

(00:43:34) - The role imagination plays in credit investing 

(00:46:35) - How weekly breakfasts lead to an investing partnership

(00:50:51) - What Tracy Fenton has done for Diameter 

(00:53:05) - Things that should change about investing firms writ large  

(00:57:09) - Calling balls and strikes and how his team learns and works together 

(00:59:37) - Why he’s motivated more by failure than success

(01:00:54) - Where he finds the most joy in his investing process  

(01:04:07) - Non-negotiable attributes he’d look for when investing in other GPs

(01:05:22) - New variables that have his attention in the current market 

(01:08:27) - What feels like unfinished business to him

(01:09:43) - His reaction to everything going on today in real estate 

(01:10:52) - The kindest thing anyone has ever done for him

Know the Names

Introduction

Patrick
My guest this week is Scott Goodwin. Scott is the Co-Founder and Managing Partner of Diameter Capital Partners, which he started as a credit hedge fund in 2017 and has expanded into a $13 billion investment firm that covers all credit markets.

Scott spent the first 8 years of his career at Citi, where he rose to head of high-yield trading before moving to Anchorage Capital in 2010 where he led the global trading desk. Scott is one of my favorite examples of the joke I used to make about the show when I said it should be called, "This is Who You're Up Against." He's one of the sharpest investors I know, and I'm sure you'll see why. Please enjoy my great discussion with Scott Goodwin.

Investing Themes of the 2010s and 2020s

Patrick
All right, Scott, maybe an appropriate place to start would be to compare what you think of as the theme of the 2010s with what you think the theme will be of the 2020s across investing really at large.

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