Dan Rasmussen

Everything Dan Rasmussen said on any show that made the record, most notable first. Each card names its show and opens the statement there.

CAPITAL ALLOCATORS Opinion

Bridgewater is an elite academic department run by a cult leader

“Bridgewater is like, take MIT and Harvard's economics department and Stanford and Caltech's comp sci department and have them run by a cult leader and shift that all together, and you've got Bridgewater.”

Dan Rasmussen Feb 17, 2020 ▶ 9:58 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Opinion

Private credit funds offer 8x leverage covenant-lite loans to hide defaults

“And they basically start buying market share by offering the riskiest loans. So they're offering unit tranche, eight times debt to EBITDA loans with no covenants, and basically because they don't want to show their LPs that any of their loans have defaulted, T…”

Dan Rasmussen Feb 17, 2020 ▶ 19:25 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Prediction Not checkable as stated

25% to 30% of LBOs would go bankrupt in a normal recession

“And so much of private equity today of LBOs is single B or triple C type quality, that I would say 25 to 30% of LBOs would go bankrupt in a normal business cycle, normal recession with normal levels of delinquency.”

Dan Rasmussen Feb 17, 2020 ▶ 21:58 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Prediction Not checkable as stated

Private equity will likely enter an extend-and-pretend zombie state

“There's this extend and pretend zombie type behavior where the money that you put into private equity never blows up, but you never get it back, you know. And I think that's probably the most likely scenario”

Dan Rasmussen Feb 17, 2020 ▶ 22:56 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Opinion

US private equity multiples are distorted and significantly overpriced

“Now I think private markets are much more expensive than public markets, and you can see this with the venture-backed stuff like WeWork. Private markets say it's worth seventy-five billion. Public markets say it's worthless. You can see it in the deal multiple…”

Dan Rasmussen Feb 17, 2020 ▶ 24:09 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Assertion Supported

CEO pedigree and elite education do not predict stock returns

“Turns out that going to business school empirically does not mean that your stock price does better. Turns out working at an investment bank or top tier consulting firm has no impact on the stock price of the company that you run. Turns out that your track rec…”

Dan Rasmussen Feb 17, 2020 ▶ 35:03 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Opinion

Distressed debt returns during crises have historically been disappointing

“Distressed debt doesn't do all that well. Everybody says, oh, the thing I want to do in the next crisis is buy a lot of distressed debt. Well, we have a simple rule at Verdad on both the equity side and the credit side, which don't buy things that go bankrupt.…”

Dan Rasmussen Feb 17, 2020 ▶ 54:53 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Assertion Supported

Private equity historically made most of its profits below 7x EBITDA

“First, it said that private equity had made the majority of its money in deals done at less than seven times EBITDA.”

Dan Rasmussen Feb 17, 2020 ▶ 12:15 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Insight

Heavy LBO debt prevents compounding businesses from reinvesting for growth

“Because a firm that has eight X debt to EBITDA, that is taking out all of its excess free cash flow to pay interest, can't reinvest for growth. So why buy a compounder and lever it up? In theory, you should have much higher return opportunities other than payi…”

Dan Rasmussen Feb 17, 2020 ▶ 15:07 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Assertion Not checkable as stated

A growing share of PE LBOs cannot cover interest from cash flow

“From people I've talked to in the industry, and this is purely anecdotal, I don't have data to support this, but an increasingly large percentage of private equity LBOs are facing what they would call, quote unquote, liquidity problems. What is a liquidity pro…”

Dan Rasmussen Feb 17, 2020 ▶ 20:01 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Assertion Partly supported

Energy PE funds avoided marking down 2013-2015 vintages despite sector collapse

“Energy private equity is fascinating, because 2013, 14, and 15 vintages of energy private equity funds, when oil prices drop 70%, they've started to rebound a little bit, a huge drop in oil prices, S&P small cap energy down 70 or 80%, peak to trough, 90 plus p…”

Dan Rasmussen Feb 17, 2020 ▶ 22:27 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Assertion Not checkable as stated

Japanese corporate bankruptcy is effectively eliminated by government policy

“And the reason you don't need anything fancy in Japan is that nothing goes bankrupt. So the Japanese government basically has eliminated bankruptcy for corporations, so you don't need any risk controls.”

Dan Rasmussen Feb 17, 2020 ▶ 32:29 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Opinion

Executive compensation should not be tied to share price

“And this is more of a political point, but I don't think that executive compensation should be tied to share price. Because the share price is so volatile, and so wild, and it doesn't look like from this data that who the CEO is, is having much of an impact on…”

Dan Rasmussen Feb 17, 2020 ▶ 35:48 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Assertion Supported

Middle-tier high-yield bonds deliver the highest expected credit returns

“And the long-term empirical research actually finds that that stuff, the sort of Goldilocks of the bond market, does better. That it actually has the highest expected returns.”

Dan Rasmussen Feb 17, 2020 ▶ 44:46 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Insight

When a stock rallies but bonds fall, the bond market is right

“Let's look at trailing price momentum for the bonds and the stocks, and let's look at things where the stock went way up and the bonds went down. Who's right? Turns out, in those cases, that the bond market's right. The stock should come down.”

Dan Rasmussen Feb 17, 2020 ▶ 45:48 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Insight

The best time to buy small-cap value is after worst trailing returns

“The best time to buy small value is when it's had the worst trailing returns.”

Dan Rasmussen Feb 17, 2020 ▶ 48:13 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Assertion Not checkable as stated

Simple quantitative models have 8x the statistical power during recessions

“Simple quantitative models tend to have about eight times the level of statistical power during recessions than during times of economic growth.”

Dan Rasmussen Feb 17, 2020 ▶ 53:04 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Insight

High-yield spreads blowing past 600 bps marks a prime equity entry

“When high-yield spreads blow out past six, that's as good a time of any to start dumping money into equities.”

Dan Rasmussen Feb 17, 2020 ▶ 58:46 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Insight

Most investors are story-driven rather than rule-testing

“And I find that that's actually relatively rare in investing. I think a lot of people are very story driven, and they're very idiosyncratic driven, so they're bottoms up, quote unquote. And they don't say, well, I'm gonna do X, but would X if it were applied a…”

Dan Rasmussen Feb 17, 2020 ▶ 7:02 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Assertion Not checkable as stated

Nobody can accurately forecast corporate earnings despite widespread industry efforts

“Kahneman directly talks, for example, about earnings forecasts. He says, look, there's a huge amount of work done in earnings forecasts. Nobody can forecast earnings. People keep trying.”

Dan Rasmussen Feb 17, 2020 ▶ 9:25 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Insight

Predicting corporate growth over one to five years is nearly impossible

“Not only is it impossible to predict, it's just wildly volatile. You can have a company you thought was gonna grow 15% that declines, and that's very common. Doesn't matter if you're forecasting one year away, three years away, or five years away, it's all rea…”

Dan Rasmussen Feb 17, 2020 ▶ 14:18 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Insight

Engineering and predicting top-line revenue growth is impossible for PE

“You can't predict revenue growth, and it's really hard to control it. Wish we could, and if it were possible, there'd be a class at Harvard Business School, how to drive revenue growth, okay? It's just impossible and unpredictable, and maybe you get things rig…”

Dan Rasmussen Feb 17, 2020 ▶ 16:05 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Opinion

Cheap LBO opportunities exist in Europe and Asia, but not the US

“Now, I think in Europe or in Asia, I think there are still cheap LBO opportunities, right? So a firm like Bain or Blackstone, they're still seeing opportunities to do really attractive buyouts ex-U.S. But within the U.S., you can't.”

Dan Rasmussen Feb 17, 2020 ▶ 23:55 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

CAPITAL ALLOCATORS Opinion

Credit rating agencies effectively forecast corporate bankruptcies

“The credit ratings agencies do a darn good job at forecasting which companies are likely to go bankrupt.”

Dan Rasmussen Feb 17, 2020 ▶ 27:19 Dan Rasmussen – Private Equity Risk and Public Equity Opportunity at Verdad Advisers (First Meeting, EP.15)

Show 11statements(11 left)

The other half of the tape: Dan Rasmussen's own voice is left out of every number here. Other people bring the name up 12 times in 4 episodes across the shows. 2 statements on the record name them. every mention, with the transcript →

Who brings them up most Kip McDaniel 8Ted Seides 2Michael Mauboussin 1Hayden Brain 1

Statements about Dan Rasmussen, by other people (2)

CAPITAL ALLOCATORS Assertion Supported

Mauboussin: Equities rebound strongly three months after a 20% market drawdown

“After a drawdown of 20% in the S&P 500, you wait three months. So now from the beginning of March through early June, and then you get involved. And then they looked at small cap and large cap value, small cap and large cap growth. And what they found essentia…”

Michael Mauboussin Mar 23, 2020 ▶ 25:50 Michael Mauboussin – Consilient Observations in a Crisis (Capital Allocators, EP.127)

CAPITAL ALLOCATORS Assertion Not checkable as stated

Dan Rasmussen's Verdad Advisors interview was the most downloaded in 2020

“And the most downloaded show of 2020, it was first meeting episode 15, Dan Rasmussen, Private Equity Risk and Public Equity Opportunity at Verdad Advisors.”

Ted Seides Dec 28, 2020 ▶ 19:52 Ted Seides - Capital Allocators Year in Review (Capital Allocators, EP.170)

Every mention by year

One line per show, most statements first. The link opens Dan's full record on that show: the calibration, argument clarity, speaking style and every statement made there.

Show	Role there	Eps	Statements	Record
CAPITAL ALLOCATORSLEDGER	Founder and Portfolio Manager, Verdad Advisers	1	35	75% 6/8	full record on Capital Allocators →