Navigating Capital Dynamics

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 their global trading desk. Scott is one of my favorite examples of the joke I used to make about this 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.

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For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

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Show Notes

(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  

(00:31:08) - 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