Insight
Time of possession and shots on goal most reliably predict soccer victories
“The two most prominent features were time of possession. So if you control the ball, you tend to win. And secondly, shots on goal.”
Insight
Basketball superstars like LeBron James are worth almost any price
“So it's total contrast to like American basketball, where if you have a stud like LeBron James, you almost can't pay him enough.”
Insight
Taking consensus investment views guarantees net underperformance after fees
“If you're just gonna have the mean view on everything, you're gonna get a mean outcome, except when you add in fees, you're gonna underperform.”
Assertion Not publicly verifiable
Galbraith's Sanford Bernstein research launch featured more sell ratings than buys
“So my initial launch report, I had more sells than buys, which was unheard of on Wall Street. And the reason we could do it is we didn't have any corporate finance arm. So they had an investment arm. They had no traditional underwriting arm.”
Insight
Asset managers being wrong for 18 months is functionally mutually exclusive
“Investment horizons have shrunk to the point that running a commercial business and being wrong for 18 months is almost mutually exclusive.”
Assertion Not checkable as stated
Active asset management is doomed in aggregate to underperform by its fees
“In aggregate, the industry is doomed to underperform by the extent of its fees.”
Disclosure
Tufts University endowment will track the performance of fired fund managers
“I'm on the board of Tufts, and I'm chair of the investment committee now, and one of the things I've spent time with Sally on, and we're going to start doing, is actually tracking the performance of people we've redeemed from, to see, in fact, if we're making …”
Assertion Not checkable as stated
Two partners generated 130% of total P&L at Galbraith's startup hedge fund
“If you statistically looked at our performance, We were basically contributing 130% of the P&L, and while that's okay, it's not necessarily a sustainable enterprise, which proved to be quite correct in hindsight.”
Prediction Partly held up
Success Academy Charter Schools aims to educate 100,000 students within a decade
“We're going to have something in the forties in terms of the number of schools, and within the next decade, we'll be
Teaching a 100,000 kids.”
Prediction Not checkable as stated
Galbraith: Narragansett Brewing is budgeted for its first profitable year in 2018
“We're budgeted to have our first profitable year in 2018.”
Insight
Galbraith: Pre-planning downturn living wills reduces family office emotional tension
“So one of the things we introduced, for instance, with Said Holdings is we wanted to introduce kind of a living will, meaning what, how are we going to behave in the next downturn? And actually map out kind of a game plan. Okay. Because it's inevitably going t…”
Assertion Contradicted
Galbraith: Average net cost for a student at Yale is around $24,000
“The average person at Yale is being charged about 24,000 dollars a year.”
Assertion Supported
Galbraith: Families earning under $40,000 pay nothing to attend Yale
“So people making between zero and 40,000 actually pay nothing to go to Yale, right?”
Assertion Supported
Galbraith: All 17 students in Success Academy's inaugural graduating class gained college admission
“This is our first graduating class of success. It's 17 kids, so I got involved 10 years ago. That seventeen's gonna be 5205 hundred within five years. All 17 got into college.”
Insight
Galbraith: Reading The Economist beats following CNBC or The Wall Street Journal
“You know, I come back to what Barton used to say, is you're much better off reading The Economist cover to cover than listening to CNBC or The Wall Street Journal.”
Disclosure
Galbraith acquired Derby County for stadium value after previous owner panicked
“We're like, we're basically buying this team because the seller panicked. He saw the future cash flows of this team imploding, and he said, I'm out of here, and we basically bought the team for what we thought, ah, was the value of the stadium. So we're like, …”
Assertion Partly supported
Winning Championship promotion playoff was worth around £150M to Derby County
“Teams play off, and the winner of this play-in game gets promoted, and it literally would have meant probably a hundred and fifty million pounds to us had they gotten promoted.”
Insight
Galbraith: Working overseas early in finance makes you a better investor
“I do think any young person thinking about a career in finance, if you get a shot to work overseas, do Just A, you get a lot more responsibility, and B, just learning how things are done elsewhere, it can't help but make you a better investor.”
Assertion Partly supported
Rhode Island Governor Gina Raimondo angel-invested in Narragansett Beer's revival
“In fact, the current governor of Rhode Island, Gina Raimondo, another Yaley, Was the angel, and they needed money, and frankly, the angel had overpaid, or the company hadn't delivered as they thought”
Assertion Supported
Narragansett Beer's revenue grew from $87,000 to $15 million under new ownership
“We, when we bought the business, when it was originally bought, It went from, as I said, current dollars of a billion had 87,000 dollars in revenue. I mean, it's just amazing. And today we're up to about fifteen million.”
Assertion Supported
Morgan Stanley fell from 4x book value in 2000 to 0.5x
“I picked up the broker dealers in 99, 98, 99, when they were all the IP ago, you know, and I joined Morgan Stanley when it was trading at about four times book value. And as we well know, it went to, I think it troughed at .5 a book.”
Insight
Writing down investment theses exposes discrepancies with actual portfolio holdings
“Even if you're just, if you're not a portfolio manager or not responsible to outside investors, I would still argue it's worthwhile writing down your thoughts on what you're doing. Because it just clarifies where true north is. And so what I found through the …”
Insight
Distressed debt takes weeks to accumulate due to principal market structure
“Distressed investing, it can take, like, A week or a month to build a position because, you know, it's not an agency market. It's a principal market and the price discovery can be very tricky.”
Assertion Supported
Tufts University's endowment funds only 10% to 13% of its operating budget
“Tufts is unfortunately quite under endowed versus its peers. So we're probably Only 10% of 10 to 13% of the university's operating budget, whereas a Harvard or Yale would be a third.”
