Talk Your Book: Matching Longs with Shorts

Dec 9, 2024

Mick Rasmussen, a Portfolio Manager at Wasatch Global Investors specializing in small and mid-cap strategies, shares his insights on constructing effective long/short portfolios. He discusses the key factors that differentiate successful long and short positions, emphasizing the importance of management quality and fundamentals. The conversation also touches on the complexities of stock picking in bear markets and the need for cognitive flexibility in volatile environments. Rasmussen highlights the unique challenges and opportunities in small-cap investing.

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INSIGHT

Long-Short Mindset

Long-short investing requires a balanced mindset, integrating optimism and pessimism.
It demands cognitive dissonance management, unlike long-only or fixed-income strategies.

INSIGHT

Wasatch's Approach

Wasatch's long-short strategy leverages their strength in fundamental, bottom-up small-cap investing.
It aims to mitigate risks associated with small-cap growth style, like market fluctuations and sector biases.

INSIGHT

Directional Long-Short

The fund operates as a directional long-short fund, not market neutral.
It targets a 0.5 beta over a full market cycle, prioritizing risk-adjusted returns (Sharpe ratio).

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On this episode of Animal Spirits: Talk Your Book, Michael Batnick and Ben Carlson are joined by Mick Rasmussen, Portfolio Manager at Wasatch Global Investors, to discuss how to construct a long/short portfolio, factors that make a good long vs a good short, how often the portfolio turns over, stock picking within small cap growth, and much more!

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Ben Carlson’s A Wealth of Common Sense

Michael Batnick’s The Irrelevant Investor

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This podcast episode is sponsored by Wasatch Global Investors. The Compound Media, Incorporated, an affiliate of Ritholtz Wealth Management, has received compensation, a flat fee, for featuring Mick Rasmussen, Portfolio Manager at Wasatch Global Investors, in this discussion. This compensation creates a conflict of interest, as it creates an incentive to present Wasatch Global Investors favorably. We encourage listeners to consider this information when evaluating the content presented. As of 9/30/24, Wasatch does not own any shares of Tesla and GameStop.

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