Incorporating Long Volatility Exposure in Your Portfolio

My guest today is Kieran Goodwin. Kieran spent over two decades at the frontier of credit investing. During the global financial crisis, he was a Partner and Head of Trading at King Street Capital, which grew from $4 billion to $20 billion while he was there. He then left to start his own credit hedge fund, Panning Capital Management. In our discussion, we cover the state of private credit today, which forms of alpha he’s most skeptical of, and the blend of EQ and IQ necessary for success and investing. Please enjoy my conversation with Kieran 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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Show Notes

(00:03:00) - (First question) - His view of the state of private credit in capital markets

(00:06:56) - The notion of ball washing and why it’s important to understand 

(00:09:04) - What the worst-case domino effects of ball washing could be 

(00:12:21) - Arriving at a place where JP Morgan could borrow so much at the fund level

(00:14:20) - Lessons learned from the worst trade he made 

(00:16:53) - What could happen in the world of private credit in the next few years and how the bigger players tend to benefit 

(00:19:29) - Thoughts on the world of venture capital right now  

(00:21:13) - The time he was at the peak of his power as an investor

(00:24:03) - From being new at something to incredibly successful seemingly overnight

(00:26:42) - What kinds of alpha he believes exists and which ones he’s skeptical about

(00:29:30) - Thoughts on income share agreements 

(00:31:24) - Why there aren’t more initiatives for new talent to trade their student loans for future earnings 

(00:33:13) - The power of EQ over IQ and why it’s important for investor success

(00:35:49) - Whether or not now is a good time to get into the field of capital markets

(00:37:54) - Key tenants to know when learning credit investing specifically 

(00:40:09) - Things people misunderstand about the power of volatility 

(00:42:39) - Ways he managed to stretch his own imagination effectively  

(00:48:06) - The natural inclination to be short volatility 

(00:49:24) - Incorporating long volatility into his portfolio and life  

(00:52:20) - Thoughts on synergy in relationships  

(00:55:48) - Other interesting lessons learned from sports

(00:57:50) - The roles of the multiple coaches that sit in for an NBA team

(00:59:42) - The kindest thing anyone has ever done for him