We have another phenomenal guest joining us on the podcast today. You might know Ted Seides from his famous bet with Warren Buffett or, more recently, from his widely successful Capital Allocators Podcast. Ted is what we would call a classically impressive guy, having studied at both Ivy League frontrunners Yale and Harvard and having founded Protégé Partners, an asset management and advisory firm that specializes in hedge funds. In addition, he has trained under the legendary David Swensen, and together with his experience and training, has become a big name in the investing world. On this episode, he discusses the wealth of knowledge he has gained from David, the criteria for selecting a fund manager and how to approach evaluating the performance of that manager over time. Contrary to the assumptions about his views on index funds, he explains what he believes about them and whether he thinks the market is likely to become saturated. We then get into a conversation about the investment habits of the wealthy, why relationships are so important in this business and why he would not make the same bet again. Don’t miss out on this exciting conversation with Ted Seides!

 


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Key Points From This Episode:

  • What Ted learned from David Swensen and his core beliefs about investing. [0:03:06.0]
  • The foremost criteria when selecting a manager and establishing your beliefs. [0:05:04.0]
  • Why endowment institutions and strategies are only beneficial for a select few. [0:10:59.0]
  • Formulating a hypothesis to measure the outcomes of your manager. [0:13:31.0]
  • Whether retail investors saving for retirement should consider hedge funds. [0:15:46.0]
  • Ted’s bet with Warren Buffett and his actual take on index funds. [0:19:02.0]
  • Fee compression in hedge funds and whether the market can become index saturated. [0:20:12.0] 
  • Why there is still a significant investment in actively managed mutual funds. [0:24:33.0]  
  • Observations about how people invest their money as their wealth increases. [0:26:52.0]
  • The importance of relationships in the world of investing. [0:29:40.0]
  • How the famous bet affected Ted and why he wouldn’t do it again. [0:31:12.0]
  • More about his Capital Allocators Podcast and how it has surprised him. [0:36:39.0]
  • And much more!

 

Tweetables:

“I have always thought that index funds are a terrific tool for most investors. I say most because most investors do not know why they might be beating the market. You have this wonderful opportunity to just join the market and pay next to nothing for it.” — @tseides [0:19:12]

“Most people that have substantial amounts of wealth that weren’t inherited made it by taking a significant risk. Once they make it, they don’t necessarily continue to take significant risk with it.” — @tseides [0:27:48]

 

Links From Today’s Episode:

Rational Reminder Website — https://rationalreminder.ca/

Ted Seides on LinkedIn — https://www.linkedin.com/in/tedseides

Ted Seides on Twitter — https://twitter.com/tseides

Capital Allocators Podcast — https://capitalallocatorspodcast.com/

David Swensen — https://www.yale.edu/about-yale/leadership-organization/david-swensen

Protégé Partners — https://www.protegepartners.com/www5/

Warren Buffett — https://www.forbes.com/profile/warren-buffett/

Charles Ellis — https://www.rebalance360.com/team-member/charley-ellis/

Winning the Loser’s Game on Amazon — https://www.amazon.com/Winning-Losers-Game-6th-Strategies/dp/0071813659

Scott Malpass on LinkedIn — https://www.linkedin.com/in/scott-malpass-2a17ba5

Andrew Golden — https://www.linkedin.com/in/andrew-golden-a7b742

D.E. Shaw — https://www.deshaw.com/

Capital Group — https://www.capitalgroup.com/

Vanguard — https://investor.vanguard.com/corporate-portal/

John Bogle — https://www.investopedia.com/terms/j/john_bogle.asp

Barry Ritholtz — https://ritholtz.com/

 

Download the transcript of this episode here: Rational Reminder Podcast – EP. 61 – Transcript