Dan Rasmussen, Verdad Advisers - A Lot Of These Regime Changes Happen Around Recessions And Crises | #294
In episode 294, we welcome our guest, Dan Rasmussen, founder of Verdad Advisers, a global investment firm that provides a public market alternative to private equity. In today’s episode, we start with an update on Dan’s private equity replication thesis and hear about the rise of private credit in the past few years. Then we dive into his recent paper on emerging markets crisis investing. While buy and hold investors in emerging markets have experienced higher volatility for disappointing returns, Dan believes learning to navigate these EM crises can provide the ability to reap excess returns. He walks us through the differences between global and idiosyncratic crises and what performs best between both debt and equity in each case.
Key Points
- Emerging markets experience crises more frequently than developed markets, with a global crisis offering a compelling investment opportunity in EM equity, especially value stocks, which can provide substantial returns as markets recover.
- Idiosyncratic crises in individual emerging market countries present higher risks and lower chances of equity recovery, making emerging market debt a more attractive investment in these scenarios due to better recovery rates.
- The concept of "negative bubbles," where markets experience significant drops, presents strategic buying opportunities, and investors should be prepared with available capital to invest during these periods for potential high returns.
Chapters
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Transcript
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