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The Significance of Leverage, Liquidity, and Cash Flow in Investing
This chapter explores the significance of leverage, liquidity, and cash flow in investing. It highlights how understanding and managing these factors can determine the success or failure of investments, and provides insights on evaluating various investment opportunities.
In this rare, in-depth interview, William Green chats with super investor Rick Rieder, who oversees about $2.6 trillion at BlackRock, the world’s largest asset manager. Rick, who probably manages more money than any other investor on Earth, has an enormous range of responsibilities: he’s BlackRock’s chief investment officer of Global Fixed Income, head of the firm’s Global Allocation Investment Team, and chairman of the firm-wide BlackRock investment council. A true titan of the investing world, he recently won Morningstar’s 2023 award for Outstanding Portfolio Manager.
IN THIS EPISODE, YOU’LL LEARN:
00:00 - Intro
05:57 - What Rick Rieder learned from a disastrous early investment.
24:43 - Why he focuses relentlessly on leverage, liquidity, & cashflow.
40:13 - How access to vast amounts of data gives him an edge.
43:27 - How he distinguishes meaningful news from meaningless noise.
49:13 - Why he gets grumpy in bull markets & relishes periods of dislocation.
55:49 - What great investors like Ray Dalio & David Tepper have in common.
57:46 - How Rick views the current economic outlook.
1:03:16 - How to take advantage of the “incredible blessing” of high bond yields.
1:13:31 - How he operates on 4 ½ hours of sleep.
1:16:00 - Why he loves to trade in the middle of the night.
1:19:34 - How he handles extreme levels of stress & responsibility.
1:24:40 - How he’s maintained a happy family life, despite a fanatical work ethic.
1:30:36 - Why his hero is Cal Ripken, the Iron Man of baseball.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
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