Kelly Granat
speaker
261 appearances
1 recordings
1 series
first heard Mar 2025
last heard Mar 2025
Kelly Granat’s voice in public audio — every appearance, attributed to the second.
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Appearances
I mean, certainly the funds flows of the last bunch of years would tell you that active management is undervalued relative to our understanding and execution of that value, right? The move to passive, this idea that like, just own the mag seven and I can do that myself and why do I need you has become a little bit of a cocktail party chatter at this point.
And we are obviously huge believers in active management and huge believers in the value of doing fundamental analytical work on companies and not indexing. And that the premium for that is undervalued relative to its worth.
And I think, you know, part of what makes that, I think, a difficult conversation right now is the short-term orientation of the market and how it takes, you know, we're focused on compounding over a very long period of time, right? We are the largest single investor in our fund. A third of the assets is internal capital.
So what I wake up every day really excited to do is compound my money alongside of our LPs, right? I think that's a pretty compelling proposition to a potential client for our firm. And that doesn't happen in a day or a week or a month. And my investment underwriting doesn't tie to that time horizon, right? And so we want to be judged over years, not quarters.
And we're increasingly in a market that is evaluated by forget quarters, weeks, and months per the pods conversation earlier. And a lot of pods, you know, if you don't put up, you know, we laugh at the activity in the market in the last few days of every month. Because if you're not having a bad month, you're going to get your capital yanked. So you take risk, right?
Or you have to de-gross or these activities. This never existed, right? Five or 10 years ago. But this is the market forces at work. And so Again, great for us long-term investors. I want to lean in when they're leaning out and vice versa. But the value of doing that and the benefit of that capability takes time to reveal itself and isn't going to show itself in a quarter or a year.
And I think that's what the market's missing.
I mean, you have inside of these shops 20, 30, 40 desks or pads, as they call them, covering a sector, right? And they all look at the same data and they sit in the same meetings and on the same calls. And of course they talk to each other because you have a peer network sitting inside your own firm.
And so often, and I have never worked at a pub, but have several friends who have, still do, and have come out of there, you know, you can see how everyone's lined up. And you'll have 20, 25 books, long a stock, into a print of a quarterly earnings estimate and a quarterly conference call.
And the numbers come out and it was better, but it wasn't better enough because the whisper number, the data was suggesting they were going to beat by three points and then only beat by two points. And so the stock's actually going to sell off, right? The game of you hand me an earnings release and I'll tell you what the stock's going to do
was actually a fundamental game that we were pretty good at a decade ago. Now it's like, coin toss. What's the setup? You tell me. What's the whisper number? How are the pods lined up? Are they long? Are they short? Because that's going to dictate the trading action the day of.
And the opening market reaction versus what happens over the course of the day is everyone's covering the short because it was bad, but it wasn't worse. And that's like, this is what happens all the time. And so that requires different muscles from us in terms of how we position ourselves and respond to that. But I think that's what is happening.
And these people are on, they have draw down limits of where they can draw down on a monthly or quarterly basis. Their capital gets pulled and that's the lives they lead. And so what you see in market action in terms of reactions to events is a function of those incentives and those structures.
So the summer after my freshman year of college, I taught tennis at a camp in Florida and there was a golf camp at the same resort. And I became friendly with the golf pro and we'd meet after I was done teaching for the day. And he taught me how to play golf that summer, which I don't play anymore, but I did at the time.
And at the end of the summer, the last night we had dinner together before I went back to school. And he said to me, can I tell you something? And he was probably, I was 18 and he was 32. And he said, you know, you are so driven and you're so intense. And I just can tell that like, I'm super excited to follow your life because it's going to be really interesting is my sense.
He said, but you're also an incredibly soulful person and your relationships clearly matter to you. He said, so my piece of advice for you would be figure out who in your life matters to you, figure out what matters to them, and then show up for them in all the ways that matter to them. And that will be a rewarding life for you.
Because he's like, I think he got the professional part down, which was super sweet. And so I take that to heart and work hard. really hard on relationships and the people that show up for me to be there for them, for the things and for the people that matter for them.
Making sure it's mutual. I think relationships change, people's lives change. I think you recognize, I just turned 50, that some friendships and relationships that have duration in your life are more a function of circumstance and you wouldn't necessarily choose some of those relationships today.
And the ones that are the inverse of that, that have the duration and are still the most meaningful are the most valuable. And so it's the concentration theory of both investing in your highest and best ideas and the concentration theory of just the people who, are incredibly meaningful to you because they've seen you grow up and seen you grow and change.
But then also the last piece or the postscript would be leaving room for new because new, I think, helps us all grow. And we're different than we were when I certainly am when I was 20. And the new is the reflection of like who you meet and connect with today, which wouldn't be the same thing as it was 30 years ago. So.
Showing 241–260 of 261 · page 13 of 14
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