Invest Like the Best with Patrick O'Shaughnessy Dan Rasmussen – Investing Through a Crisis - [Invest Like the Best, EP.163]
Mar 16, 2020
Dan Rasmussen, Partner at Verdad Capital, is a quantitative investment expert who shares invaluable insights about navigating market crises. He discusses his recent study on crisis investing, revealing that predictability often increases during downturns. Dan explains how crises impact bonds, geography, and asset positioning, challenging traditional index investing. He emphasizes a blended factor approach and the significance of momentum, advocating for data-driven strategies that identify opportunities amidst market panic.
AI Snips
Chapters
Transcript
Episode notes
Predictability of Markets
- Bull markets are unpredictable, driven by unique factors like SaaS or commodities.
- Bear markets, however, share similarities, making them more predictable for analysis.
Impact of Crises on Returns
- During economic booms, poor valuations or low-quality stocks can be salvaged by easy money or acquisitions.
- Conversely, crises emphasize profitability and cash flow, doubling returns for sound businesses.
Bond Strategies in Crises
- Avoid reaching for yield in good markets; focus on the double-B bond territory.
- In crises, judiciously consider higher-yielding bonds from larger companies, especially in high-yield or single-B space.