Gina Sanchez

What it tells portfolio managers is how their portfolios respond to different, to different

economic events and what happens when they happen in succession right so while people understand how their portfolio might act when interest rates rise.

What we do is we help them understand what is the exact set of conditions that will lead to the worst performance that they will have and so what combination of events and that's really where we don't have to predict the event we don't have to predict that the pandemic will happen we just simply have to predict that oil prices will go up.

um that interest rates will go up and that the Fed balance sheet will start to retrench that tends to be a death blow to a number of portfolios it doesn't matter what caused it and so I think a lot of people try to focus on the crystal ballishness of it we're not in the business of focusing on the crystal ball we're just basically trying to say whatever event happens if you get a series of events this is the combination that you want to be aware of right

On the flip side, if you're investing for growth, you know, so if we're looking at deal by deal investments into a venture portfolio or PE portfolio, we look for the series of attributes or aspects that will lead to outsized performance.

And so, you know, this goes in both directions.

It actually handles both tails.

And so it sells in both markets, but in those down markets, when people are getting really nervous, sometimes you have to reset expectations and say, Hey,

If interest rates are rising, and that may not be the case anymore, but it was for the last year, and the Fed balance sheet is not expanding, our expectations have to be lower.

So let's reset your expectations so that you don't terminate us, even if we're doing really well as a manager.

Right.

Yeah, but let's take that crazy example that you've just put out.

Well, what would naturally happen?

You'd have a natural fall in e-commerce almost immediately.

That fall in e-commerce is going to result in at least a temporary fall in profitability.

Depending on how long that outage happens, that temporary fall in productivity could actually manifest into other elements like a fall in labor.

So you could see labor cuts, right?

You could see wages.

And we can tell you how your portfolio will act in those.

So it isn't about guessing the event.