Making Markets Adam Abbas: Navigating the Credit Markets - [Making Markets, EP.50]
Nov 29, 2024
Adam Abbas, Portfolio Manager and Head of Fixed Income at Oakmark, dives deep into the world of credit markets. He shares valuable lessons from the TMT sector and the impact of zero interest rates on investing. The conversation touches on the evolving landscape of fixed income, including the rise of private credit and potential future defaults. Adam also discusses strategic insights for high yield investments, emphasizing the delicate balance the Fed must maintain amid economic challenges. This engaging discussion is a must-listen for anyone interested in fixed income strategies.
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Apple 401k Bet
- In 2009, Adam Abbas invested his entire 401k in Apple based on his conviction in their superior product and ecosystem.
- This contrarian bet stemmed from his analysis of BlackBerry, highlighting the importance of independent thinking.
Importance of Downside Analysis
- True judgment is tested when a sector faces difficulties, not when it's performing well.
- Adam's experience in the TMT sector during the 2008 crisis underscored the importance of assessing downside risk and recovery potential.
Impact of ZERP on Credit Markets
- Zero interest rates (ZERP) suppressed tail risk and prevented large-scale default events.
- This led to the creation of "zombie companies" that survived due to easy monetary policy.