CEO and CIO at Morgan Creek Capital Management
Record Date: 5/30/17
Today I spoke to a man that originally went pre-med in college and then went on to business school. He was first involved in insurance as a bond manager, then became an equity manager for an equity firm. He went back to his alma mater Notre Dame to work in the endowment management office then went on to work at USC in their endowment management office. Today he is the CEO & CIO of Morgan Creek Capital Management, his name is Mark Yusko.
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Mark and I spoke a lot about managing risk and the importance of being able to move on from bad trades. Mark explains the current over valuation of equities and compares the time of the 1929 when Herbert Hoover was president to that of Donald Trumps presidency.
I asked Mark why there’s so much talk about Europe being a safe place to invest right now. We then talked about emerging markets and why Mark thinks they are a great investment right now because in the long run their growth is faster than their PE.
I asked Mark about the chances of a recession and when a recession may hit the US. We discussed the business cycle and why Mark thinks were at the tail end of it. Finally Mark gave us his outlook on Oil and how it will have an impact on earnings.
I had a lot of fun speaking with Mark, not only because he’s knowledgeable and a good guy, but he holds nothing back with his views. I love his passion for the markets. Thank you all for listening and please enjoy this episode.
- He discusses the concept of managing risk, and moving on from bad positions. The average player focuses on the last play, the great players focus on the next play.
- He explains current over valuation of equities and the market. Say’s we’re reliving the same as the 30’s. Bigger the bubble, bigger the crash.
- Makes a case on why Europe is a safer place to invest right now. Also, why the euro is kept cheap on purpose. Emerging markets are going to be the best investment because their growth is faster than their P/E’s in the long run.
- Says that the chances of a recession are closer than we think. We’re at the tail end of the business cycle. Could see s&p rally to 2800.
- His outlook on oil and it’s correlation on s and p earnings. He thinks oil is lower for longer.
- He believes long treasuries will outperform spx. Deflation, debt, and demographics.
- How has your trading evolved?
- Appreciation for risk management. I used to think about money, now it’s risk. Also, I’ve let the knife hit the ground instead of trying to catch it.
- The moment trading just clicked for you?
- First time I watched something go to 0. I learned to admit that I’m wrong. You don’t have to make the money back the same way you lost it. Move on…
- 1 source you spend your time on?
- Twitter, I read a lot. Raoul Paul . 13 D research.
- Favorite Book About Trading:
- The Tao Jones Averages. Goodspeed. Also, The Great Boom Ahead 1993.
- Favorite Movie About Trading:
- Best Advice Ever Received About Trading:
- Invest w/out emotion. Be analytical. Follow your process.
- Advice to Give to Others About Trading:
- Get a good mentor. Focus on deliberate practice.
- If you weren’t a trader you’d be what?
- Fly fishing or skiing guide.
- “Preserving capital isn’t about returns, it’s about diversifying and managing risk…” 3:00
- “Investing and trading is first and foremost managing risk. Don’t allow a bad position to go against you…” 4:00
- “Markets get to a point where they become self fulfilling. In this environment, you need to raise cash as things move away from fair value…” 14:00