Putting Passive Flows to Work in a Portfolio
Real Vision viewers should be well acquainted with Mike Green’s research into how big passive funds are responsible for many of the “distasteful” dynamics that have perplexed and enraged market participants over the last few years, but they may still be wondering how they can actually use this in constructing a portfolio. In this interview, Green sits down with up and coming hedge fund manager Dan McMurtrie of Tyro Partners to discuss how Dan has managed to successfully implement this research into his portfolio construction and security selection process. They also discuss the power of doing favors, McMurtrie’s unconventional path to building his fund, and how he has used twitter and good old-fashioned happy hours to develop an incredible network of mentors and colleagues. Dan McMurtrie can be found on a twitter @supermugatu and Mike Green can be found @profplum99. Filmed on October 26, 2020. Key Learnings: Investors need to think about who the next marginal buyer is going to be to drive a stock higher, and although this doesn’t mean that fundamentals and technicals should be ignored, increasingly flows need to be considered when thinking about security selection. This can result in “distasteful” decisions that go against long held beliefs about value and what should drive the price of a security.