Discipline and Dry Powder: It Pays to Be Prepared

Published on
April 29th, 2020
36 minutes

Discipline and Dry Powder: It Pays to Be Prepared

The Expert View ·
Featuring Eric Cinnamond

Published on: April 29th, 2020 • Duration: 36 minutes

The last time Eric Cinnamond joined Real Vision, it was January of 2018 and he had just closed down his absolute return fund after a positive year because he thought there was no value to be found. Fast forward to 2019 and Eric opened a new fund, not because the value was there and ready to be bought, but because he wanted to be ready. Now it’s 2020 and we’ve brought him back because the recent sell-off has finally allowed his new fund, Palm Valley Capital, to deploy around 50% of their capital after spending months at over 90% cash. He discusses how he finds value, a few examples of companies he bought in Q1, and the ways that buybacks and the Fed have made it harder than ever to find value. Filmed on April 27, 2020.



  • DG
    Dave G.
    30 April 2020 @ 13:29
    A few names of these companies he's talking about would be awesome.
    • MW
      Max W. | Real Vision
      30 April 2020 @ 17:05
  • EK
    Edward K.
    30 April 2020 @ 14:43
    It was inevitable that value would re-emerge at least as a topic. After a decade of under-performance due to the everything bubble there is bound to be skepticism. I like his focus on companies not beholding to the Fed or banks. These would be survivor companies. Interesting focus on precious metals. Not sure why value necessarily equals small cap.
  • sb
    sandeep b.
    30 April 2020 @ 03:49
    Everything was strong balance sheets, and cash on hand and having patients bla bla bla...and at the end he goes.....well (paraphrasing here) I bought the march lows in my newly formed fund and I dunno....do u wanna ride the monetary policy or do you want to fight the FED....my positions have rebounded. Well, people have been "riding monetary policy and NOT fighting the FED" since the 90s. you're waking up to it now?
  • MW
    Max W. | Real Vision
    29 April 2020 @ 13:21
    Hi Folks, I'm interested to hear why people did or did not like this interview. I conducted the interview and found talking to Eric extremely fun and educational. My intention with the piece was to bring viewers a look at an alternative investment style. Not many long only managers have the wear-with-all or mandate to sit at over 90% cash in the face of a bull market like we saw and even fewer have the stones to buy in the middle of a crash. I thought there was a ton of valuable information in this piece and I'm legitimately confused as to why some people would have downvoted. He's a real money manager with a great track record and skin in the game, he gave insight into a corner of the market we rarely cover and that you won't find most other places, he dropped a few hints on specific names, and he gave a lot of great info on his process. I'm not opening up the floor to vitriol and insults but if you didn't like this piece or any other piece in the future I would appreciate a constructive comment on why you didn't like it so that we can improve our offerings in the future. In this case, I'm lost.
    • TO
      Truls O.
      29 April 2020 @ 13:45
      I loved this interview, to bad i can't invest in it from my broker
    • MW
      Max W. | Real Vision
      29 April 2020 @ 14:14
      Hi Truls, we actually discussed this issue but cut it from the piece to avoid an overly promotional feel. The best thing to do is call your broker. The more calls they get, the more likely it is they will add PVCMX.
    • CB
      C B.
      29 April 2020 @ 14:22
      I don't get the downvotes either. I thought it was insightful and refreshing to hear the first-hand perspective of a money manager who unlike most has the courage to be disciplined and wait for his price.
    • CB
      C B.
      29 April 2020 @ 14:58
      I would add that for anyone who is disappointed that the PM did not name specific stocks, you can easily refer to Palm Valley's quarterly newsletter for a full list of recent buys: https://www.palmvalleycapital.com/fundletter
    • TS
      Tom S.
      29 April 2020 @ 15:23
      I enjoyed the interview. Far from recently ubiquitous mo-mo trading, here's a practitioner of a form of deep value investing sometimes referred to as "alligator investing" (lying in wait, then pouncing when conditions are most advantageous). Thanks Max.W. for this.
    • RM
      Robert M.
      29 April 2020 @ 16:52
      As I posted above, was surprised it wasn't locked. Thought it was a good interview and added Weis to my watch list. As a value guy, like to hear how other value guys are looking at this market.
    • PD
      Patrick D.
      30 April 2020 @ 01:25
      TERRIFIC INTERVIEW!! I was so excited to see Eric on here & that he is back in the game. Value investing is alive & well! He has such conviction in how he invests & never strays from his process. Learning "how" to manage money is essential & hearing how others do it can really help one to grow. He close his fund profitable-that says ALOT. I'd be happy to see more interviews like this one!
  • JE
    J E.
    30 April 2020 @ 01:18
    I’m assuming, since this makes perfect 100% rational sense, that Max’s strategy will be the next victim of Jerome Powell.
  • MT
    Mark T.
    29 April 2020 @ 23:33
    After seeing Max many times now in the past week, really curious about that poster over his right shoulder. Is that an android? Is it related to RV? Maybe we can get a close up or a background story about the poster.
    • MW
      Max W. | Real Vision
      29 April 2020 @ 23:51
      It is a poster of Milton where parts of his face is made up of a collage of RV employees. A bit of mise-en-scène from the production department.
  • CB
    Chris B.
    29 April 2020 @ 14:54
    Where have the "trade Ideas" segments gone? Philosophies and theses are great but an actionable idea every once in a while would be better. RV has had on several technical analysts in the past and I'd like to see them formally put in the guest rotation.
    • RM
      Robert M.
      29 April 2020 @ 16:49
      Since the launch of the Pro product, the quality of the videos on "Essential" have declined. Wasn't sure if it was due to access to interviews due to virus, but believe most of those trade ideas are moving off this level. Was actually surprised that this video was not locked and thought it was helpful for today's environment. But outside of the daily briefings, which are great, the value of the "Essential" product has declined. Totally appreciate that RV needs to make money on this service, but walking the fence on which videos fall into Essential and which fall into Pro. Before my next renewal, will need to decide to upgrade or drop the service all together.
    • MW
      Max W. | Real Vision
      29 April 2020 @ 17:31
      We still have actionable content on the essential tier but it is within the broader interviews and is not the outright goal of any of our formats. You will usually find it in the "Expert View" format. Recent examples include Harris Kupperman and Warren Pies on tankers and energy, and Arthur Hyde on uranium. The "Trade Ideas" and "Technical Trader" formats were cut. The subscriber base voted with their time. As a percentage of our base viewers simply did not watch those formats enough to justify continuing to produce them and they did not bring in new customers at the rate of other pieces. A large majority of our customers were simply not interested. The trades available on pro were never on essential/old RV and compare with what was available to Macro Insiders subscribers in the past. A few of the faces you may recognize from "Trade Ideas" or "Technical Trader" have made their way to the plus tier as the live format is a good fit for them.
    • SR
      Shawn R.
      29 April 2020 @ 20:08
      Agreed! I am getting better plays off of the free podcast Macro Voices than RV right now. What happened to all the inputs from Raoul? I'm rethinking the renewal here...
    • AR
      Al R.
      29 April 2020 @ 23:40
      I agree that the quality of "Essential" videos have declined, wont be renewing if it continues like this.
  • KF
    Kenneth F.
    29 April 2020 @ 23:07
    I'm long AMARK because of a report I read from Palm Valley. FD Its too small for most to buy.
    • KF
      Kenneth F.
      29 April 2020 @ 23:10
      This was a great read by Eric. He was prepared. https://www.palmvalleycapital.com/post/bubble-survivor-season-3
  • OC
    Otto C.
    29 April 2020 @ 23:06
    I like the general discussions but some of them get too deep into personal historical anecdotes. Trade ideas is one of the main reasons why I like RV.
  • DM
    Dominic M.
    29 April 2020 @ 22:54
    Great discussion - thanks to Mr. Cinnamond.
  • SB
    Sunny B.
    29 April 2020 @ 22:01
    I believe there would be value in communicating the best way to use RV. In my mind it's a general research tool (80%) that is sprinkled with trade ideas (20%). The ROI for me has been that I don't have to do all the research on my own.
  • TS
    Troels S.
    29 April 2020 @ 09:53
    it makes sence what he is saying about the buyback, the problem is that many of these companies will not go bankrupt because of all the aid that fed is providing through MMT. I wonder if they will ever stop this vicious cycle, at some point we have to change this mess..
    • TM
      The-First-James M.
      29 April 2020 @ 15:21
      Not until after the mess has become so large and dire, that it is no longer possible to patch over with money printing any more.
  • RM
    Richard M.
    29 April 2020 @ 14:53
    Great interview! Really like Eric's perspective on investing. Will definitely check out Palm Valley Capital fund (although I don't think the bottom is in yet so will only watch it for now - but if that turns out to be the case, it will allow Eric to pick up more high quality names at even lower prices which will be very good for the fund!).