August 2, 2023 • 32 mins
The Gordon Asset Management Podcast welcomes back Ira Carnahan to the show. Ira Carnahan is a portfolio specialist working on the Capital Appreciation Fund at T. Rowe Price Investment Management. We've invited Ira back on to give an update on the T. Rowe Price Capital Appreciation fund and discuss their new Capital Appreciation Equity ETF (TCAF). For more information, please visit troweprice.com.
Please refer to the important disclosures at the end of the podcast.
Outro music compliments of Id Obelus: https://idobelus.bandcamp.com/
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Episode Transcript
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INTRO (00:03):
You are now listening to the Gordon asset management
podcast.
Join us as we take you on ajourney through the enigmatic
world of finance and uncover themysteries of the markets.
Todd Zempel (01:09):
Welcome to the podcast.
This is Todd Zempel.
I Hope you enjoy the intro Iput together today.
All of the voices that youheard were deep fakes, ai
generated voices.
So, if the SEC is listening, no, those were not endorsements.
Those were all fake voices.
(01:30):
At any rate, on the podcasttoday we have a very special
guest, Ira Carnahan.
Ira is a portfolio specialiston the T row price capital
appreciation team and that teamManages one of our favorite
funds called the T row pricecapital appreciation fund.
Now, it's been a little whilesince we had you on the podcast,
(01:53):
Ira, but given some recent newswithin the firm, I thought it
would be timely to invite youback on.
Welcome the podcast, Ira.
Ira (02:03):
Thanks so much, todd, it's.
It's great to be on.
Todd Zempel (02:06):
Absolutely now.
One of the primary reasons wewanted you back on the podcast
is because you recently Reopenedthe T.
Rowe Price Capital Appreciationfund on a limited basis.
Can you explain exactly what'sgoing on there?
Ira (02:22):
We closed the capital appreciation strategy back in
2014 and what we've done muchmore recently is selectively
reopened.
So it's it's still broadlyclosed, but Folks in certain
working with certain advisorsare able to now invest in
strategy, so we're reallyexcited to be able to do that
now.
Todd Zempel (02:43):
Now, naturally, my first question for you is can
you explain what exactly goesinto the thought process behind
closing a fund to new investorsand reopening it, and or
reopening it on a limited basis?
Ira (02:58):
So the key driver in both the closing and the the limited
reopening is what's best forshareholders.
So if you go back to 2014, whenwe closed the strategy, we at
that point were seeing reallysubstantial inflows.
I mean, we're talking, you know,several billion dollars a year,
potentially as we looked outover the next few years and the
(03:21):
pace of inflows was going tomake it tough for us to Invest
the money as well as we'd liketo with that, with that level of
flows, and so the decision wasmade to to close it off because,
you know, again, we didn't wantto do anything that was going
to compromise the returns ofexisting shareholders.
If you kind of fast forward tothe last, the last year plus in
(03:45):
2022, we actually had Modestoutflows.
You know, with the market downso much, a fair number of
investors just naturally Pulledtheir money out of a strategy.
We had a good year butnonetheless, folks with the
market down Pull, pulled moneyout, and so it gave us the
opportunity to to reopen in alimited way.
(04:06):
You know, as I mentioned, it'snot a broad reopening but with
select advisors, we're now along folks to put money back yet
Beautiful, beautiful.
Todd Zempel (04:15):
Well, thank you for that.
Let's take a step back.
So we recorded a prettyprolonged podcast back in 2021
where you really did a deep diveon the strategy.
So for anybody who's interested, I definitely Recommend you go
back and listen to that podcast.
But for the new listeners, canyou just give us a really broad
(04:38):
overview of the T-Row pricecapital appreciation fund and
the objectives and how itoperates?
Ira (04:44):
Sure thing.
So when you think about capitalappreciation, we offer multi
asset investing in the strategy.
So our sort of what we wouldcall neutral or typical
allocation is about 60% of thestrategy in stocks and 40% of
the strategy in bonds and insome cases cash.
(05:05):
So 60-40 split there and we canvary that depending on where
we're seeing the bestopportunity.
So if the stock market is downa whole lot, we may increase the
allocation to stocks and on theother hand, if the stock market
is really warred ahead and wethink it's really highly valued,
we might own less of that instocks.
(05:25):
But that's the starting pointand we're managing the strategy
with three different goals inmind and these goals correspond
to different time horizons.
So over what we would call theshort term, which is a one-year
horizon, our goal is tooutperform the S&P 500 on a
risk-adjusted basis.
And so when I say risk-adjustedbasis, I just mean returns
(05:47):
adjusted for volatility.
And if you look at how we'vedone meeting that goal over 19
of the last 20 years, we'veoutperformed the S&P 500 on a
risk-adjusted basis.
I would hasten to add that inthe one year we did, we were
mighty close, so it was just avery small difference Over the
intermediate term and we thinkof the intermediate term as a
(06:08):
three-year horizon we have whatwe consider the capital
preservation part of our mandate.
So this is a capitalappreciation strategy.
We're very much about growingreturns, but we also want to
protect the downside for ourinvestors and over a three-year
rolling period, we want to, at aminimum, not lose our clients'
(06:29):
money, even if the market'sreally tough.
Now, again, we aspire to do alot better than just not losing
money.
But again, even if the market'sdown a lot, we want to, on a
rolling three-year basis, notlose money.
And again, if you lookhistorically, we've been much
less likely than, say, the S&P500 to have negative returns
over a three-year period.
And then, finally, thelong-term goal and we think of
(06:51):
that as over a full market cyclethat includes both up and down
years we want to deliverequity-like returns, s&p
500-like returns, while takingmuch less risk than the S&P.
And if you look over the tenureof our current portfolio
manager, david Giroud, managingthe strategy, which goes back to
(07:12):
2006, he's returned over 100%of the S&P 500's return while
taking 68% of the S&P 500's risk.
So again, all the return withabout two thirds of the risk.
So those are the threedifferent goals that we're
looking to beat as we'remanaging the strategy day to day
.
Todd Zempel (07:33):
Now, with those goals in mind, to me they really
speak to somebody that issaving for retirement.
Is that who you typically findis investing in this fund?
Ira (07:47):
You know, we have a range of folks in the strategy.
We certainly have a good numberof folks who are retired, who
are approaching retirement, butwe also have younger investors
as well.
I can tell you personally, Ifor years have had all of my
money that's not in T-Row Pricestock has been in this strategy,
and so it can really functionas a single investment for folks
(08:11):
who want to use it that way.
And so we've got a large numberof individual investors in the
strategy and again it can beused for, I think, a variety of
different situations.
It's particularly effective ifyou're in a tax shielded account
, because then the gains, thedividends and so forth, you
(08:32):
don't have to pay taxes on themright away.
But again, we have folks whoown it both in taxable and
non-taxable accounts.
Todd Zempel (08:38):
Now moving on to investment management, so there
are multiple camps of investmentmanagers, right?
Some make investment decisionsbased on what's going on in the
broad macro environment top-downdecision makers.
We have others that are morebottom-up, making decisions
based on what's going on withindividual companies or
securities, and then we haveothers that look at both of
(09:02):
those two things.
Where exactly does T.
T-Row Price CapitalAppreciation fall on that
spectrum?
Ira (09:08):
So I would characterize us as primarily in the individual
security selection camp, sobuilding the portfolio from the
bottom up.
If you think about how we spendour time the portfolio
management group on the strategy95% of it is on looking at
individual companies, trying tofind the best ones across all
(09:30):
the different sectors of themarket, and the amount of time
we devote to the individualcompanies and the amount of time
we devote to these kind ofbroader macro questions that
consume much of the businessnews is much, much smaller, and
there are a couple of reasonsfor that.
One is we think we have thegreatest advantage relative to
(09:51):
competitors in individualsecurity selection.
We like to think that we knowour companies better than anyone
other than the legal insiders,the boards of directors and the
company management teams, andwhen we're minimally involved
with the companies we own, wethink that gives us a real
competitive advantage.
I think if you look at folks whofocus mainly on macro investing
(10:13):
, we believe that's just a lotharder to do.
It's also a lot riskier way ofinvesting, in our view.
If you think about it investingin a bunch of individual
companies, we might own 60 or sostocks If we have a good hit
rate, if the majority of thosepicks work out as they do
typically, there's a very goodchance year to year that we're
(10:35):
going to outperform because weget to make so many bets.
Even if you're a good macroinvestor, maybe you have a 60%
chance of being right.
Well, that means you're makingone or two calls a year, you've
got a really high chance ofunderperforming in any given
year.
It's a much less consistent,steady way of trying to make
money.
We think both we have a biggeradvantage competitive advantage
(10:56):
focusing on individualsecurities, and we also think
it's just a lot less risky wayto invest.
Again, we do pay attention tothe macro.
We're aware, if the market isway down, if everyone's just in
the dumps and they're thinkingabout the economy, we're going
to want to lean the other way.
If you go back, for example, to2008, 2009, when we had the
(11:18):
great financial crisis, we tookour equity, our stock exposure,
way up by early 2009 because thebargains were just so
compelling.
Similarly, if you look in 2020,when COVID hit, drove the
market down by a third in amatter of weeks, we again
shifted the portfoliosignificantly to take advantage
of all the negative sentiment.
(11:38):
So there are elements of both,but the biggest piece is going
to be the individual securitieselection.
Todd Zempel (11:45):
So, Ira, you mentioned that the portfolio is
always going to be somewhatbalanced, somewhere around 60%
equity, 40% fixed income.
How much latitude do you havein dialing up or down the equity
exposure based on the currentmarket conditions?
Ira (12:04):
So by prospectus we can't go below 50% equity and
historically we've never gonebelow kind of a mid-50s
percentage, so that would bekind of the lower end At the
high end.
If you go back to the COVIDperiod, we got up into the low
70s percent bit and the mostextreme example in our investing
(12:26):
lifetimes was again in late2008, early 2009,.
And we peaked out briefly atclose to 80% equities when the
market was just super-duper low.
But that was an extreme case.
I think again, normally we'regoing to be operating between
the mid-50s and the low 70s.
Todd Zempel (12:43):
Now, Ira, if you read the Morningstar Analyst
Reports on your fund, there'smultiple references in there to
your contrarian approach andalso that you are growth-focused
, growth-oriented.
To me, if you're contrarian,that typically means you're a
little bit more pessimistic, andif you're growth-oriented, that
(13:05):
means you're more optimistic.
How do you reconcile thecontrarian pessimism and
optimistic growth orientation?
Ira (13:19):
So I think part of the reason that we've had the strong
results that we have is we liketo think taken some of the best
from each of the differentapproaches.
So we're growth investors inthe sense that we are looking
for companies that are generallyhealthy, that are growing their
revenues, improving theirprofitability, generating a lot
(13:40):
of free cash flow.
Those are the characteristicswe like to see.
We like to see companies thatare in industries that have
long-term good prospects.
So those are all things youwould associate with a growth
investor.
But the value piece of what wedo is we care a lot about the
prices that we're paying forthese securities.
(14:00):
So a traditional growth investormight look for the fastest
growing companies and valuationor price is a very secondary
concern.
For us it's a very importantconsideration.
So, basically, what we're doingwhen we're paying securities,
we're looking five years out, soright now 2023,.
We're looking out to 2028 andwe have estimates of what we
(14:23):
believe revenues, earnings andso forth are going to look like
on that five-year horizon forthe different companies that we
own, and we're looking for theones that offer essentially the
best risk-adjusted returns overthe next five years, and so
growth is going to be importantand what they're going to
deliver in 2028, but so is theprice that we pay today, and I
(14:44):
think that operating withelements of both is really
helpful.
We would describe our style aswhat we call GARP, or Growth at
a Reasonable Price, and if youlook over long spans of time,
it's in that garpy piece of themarket that you've had the best
combination of strong returnsand moderate risk.
Todd Zempel (15:08):
Now, Ira, we've had a very strange 18 months in the
market.
Last year, growth was ahorrible place to be.
Broadly speaking, the fixedincome markets had suffered one
of the worst years in history,and then this year we had
extreme pessimism coming intothe year.
Yet the markets have totallyrallied and growth has done very
(15:31):
well.
Can you just walk us throughhow you and the team at T-Rail
Price Capital Appreciationnavigated the last 18 months in
the market?
Sure, thing.
Ira (15:44):
Yeah, it's almost like today is like a mirror image a
year ago.
Really, we have all thisgrowing exuberance today and
again, just almost the exactopposite of what we were seeing
a year or so ago.
So we went into last year, into2022, very conservatively
(16:06):
positioned.
So if you look at how much wehad in stocks, that was at a
below typical level.
If you look at how much we hadin tech stocks in particular, we
were way underweight the techsector going into last year, we
were overweight utilities, whichare kind of the other end of
the spectrum there, and itturned out to be good
(16:27):
positioning.
Tech obviously got hit reallyhard over the course of 2022.
Utilities, even though not thesexiest sector, ended up doing
quite well for most of the year.
And so you know, given thecontrarian strain to what we do,
as tech got beaten down reallyhard, we gradually went from
being way underweight tech tomoving to modestly overweight
(16:48):
and with utilities, we went frombeing way overweight to
modestly underweight, you know,by the end of the year.
So again, we're constantly kindof looking for ways to move
against the consensus.
I mean, the reality is, ifyou're investing with everyone
else, just doing the same thingas everyone else, you can't
outperform, so you have tothoughtfully be contrarian, and
(17:10):
that's certainly what we triedto do last year.
I think you know this year therewas great pessimism about what
might be ahead, near certainty.
We were going to have, you know, recession if you were to
listen to the commentators.
And you know our view is that,you know, few things are certain
in the investing world and whena really strong consensus has
(17:31):
emerged that something is goingto happen, we're going to want
to tend to lean the other way.
So we were overweight equities,you know, coming into this year
and again, that's turned out tobe a good call.
Now, you know, if you look atany individual security, it
would have been hard to predictthat some of them would have
taken off as much as they have.
You know, todd, you mentionedthe AI phenomenon and we believe
(17:54):
AI is for real.
But you look at some of thestocks, I mean it seems to have
moved all the tech stocks up.
You know we're not of the viewthat all of them are going to be
equal beneficiaries of this.
So I think it's been a littlebit indiscriminate and again,
we've tried to try to allow forthat in our positioning.
Todd Zempel (18:13):
Now, ira, when I log into Morningstar as of July
2023, if I'm looking at the fund, it shows that the price to
earnings ratio, price to salesratio both are a little bit
higher than the category average.
If we're looking over thehorizon and we are seeing some
(18:33):
potential storm clouds slowingeconomic indicators, is that
higher valuation cause forconcern in your mind?
Ira (18:43):
So I think we have been.
If you were to look at ourequity exposure, you know, as a
percentage of the whole strategyover the course of this year
there's been a gradual downwardtrend there and I think it's
fair to characterize that asgradually taking off risk.
Some of the statistics you'llsee online, like with
(19:05):
Morningstar, showing that theprice to earnings ratio of our
holdings versus the marketappears.
This can be a little tricky tointerpret because you know when
we own a stock it's typicallybecause we believe the earnings
estimates of the consensus orthe street are too low.
So if you were to look at ourown estimates, you know the
(19:26):
price to earnings ratio wouldactually be below that of our
peers or below that of themarket.
So those are based on consensusestimates.
Our own estimates would suggestwe're getting, you know, paying
lower valuations than thatwould say.
But yeah, I know, I think asthe market has moved up, you
know we see less near termupside for sure and I think
(19:47):
actually you see a little bitbetter value or increasingly
good value on the fixed incomeside.
Todd Zempel (19:53):
Well, speaking of the fixed income side, can you
walk us through how theportfolio is positioned there?
Ira (20:00):
So if you, you know, if we kind of go back again kind of
brief history here to 2022, wewere very conservatively
positioned in terms of interestrate exposure going into 2022.
So, you know, kind of anacademic measure of how
sensitive your portfolio is tomoves and interest rates would
(20:23):
be the duration of the fixedincome portfolio.
And our duration was very shortgoing into 2022, much, much
shorter than our peers.
And what that meant in practicewas that, as interest rates
went up substantially, we fareda lot better than most other
fixed income investors becausewe just didn't have the same
(20:44):
interest rate vulnerability.
You know, I think again, kindof going back to the beginning
of 2022, our view was that, youknow, interest rates just didn't
have much room to go downfurther.
They certainly had a lot ofroom to go up and so the risks
were just kind of skewed pretty,pretty dramatically at that
point.
It's a lot more balanced rightnow.
You know, interest rates havegone up a lot and so we've
(21:05):
gradually taken up the duration,the interest rate exposure of
our portfolio.
So we've gone from about again,a year and a half fixed income
duration to now about three anda half years, still shorter than
our peers, but it's definitelylonger.
If you look at the particulartypes of assets we own in fixed
income, there's been some shiftsthere.
(21:26):
So, going back to the start of2022, we were very heavy in
leveraged loans or bank loans,which are adjustable rate
securities which, again, aren'tgoing to be hurt in the same way
if interest rates move around.
Today we've trimmed some ofthose holdings.
We still have a significantallocation there, but it's less
than it was.
(21:46):
And we've increased ourexposure to treasuries.
You know, at start of 2022, wehad none.
Today we have about 10% of theportfolio and 10-year treasuries
, and then we also have a littlebit higher exposure in high
yield bonds, which have, youknow, a set interest rate to
kind of lock in some of thehigher rates that we're seeing
today.
So you know, kind of roughlyspeaking, our fixed income
(22:09):
allocation is roughly, you know,kind of one-third treasuries,
one-third high yield bonds andone-third leveraged or bank
loans.
Todd Zempel (22:19):
Now, ira, one of the other interesting things
happening at T-Row price is theaddition of several new ETFs,
and one of them is TCAF T-C-A-F,the T-Row Price Capital
Appreciation Equity Fund.
Can you walk us through whatthat fund is?
Ira (22:35):
Thank you, Sure, so it's the full title Capital
Appreciation Equity ETF, and soyou'll notice in the title of
equity.
So this is 100% equity ETF, incontrast to capital appreciation
which is, as we talked about,60% equity, 40% fixed.
(22:56):
So that's one importantdifference.
The goal of the CapitalAppreciation Equity ETF is
basically to give our investorssuperior alternative to S&P 500
index products, whether they beindex funds or ETFs.
We, instead of owning 500 names, like the S&P index fund does,
(23:19):
or ETF, we're going to own 100names and we've chosen what we
believe, what David Giroux, thelead portfolio manager in the
rest of the Capital AppreciationTeam, believe are the best
long-term companies, long-termstock investments for the
portfolio, and we've chosen 100.
And essentially we've eliminatedthe companies that we believe
(23:42):
can't grow very fast over time,that are in industries that are
going to face longer-termchallenges, companies that don't
have what we think are strongmanagement teams, companies that
don't generate a lot of cashflow, companies that have poor
capital allocation, don't do agood job of investing their cash
flow.
So we've taken out what webelieve are the inferior
(24:06):
companies and the S&P 500,narrowed it down to what we
think are the 100 best and we'regoing to own that in this ETF
and it'll be just started abouta month ago, but it's a low
turnover strategy.
We'll have turnover in the 5%to 10% range of year Because of
(24:26):
the ETF wrapper.
It'll obviously be highly taxefficient.
We'll even have a little bitlower dividend yield than the
S&P, so that'll improve the taxefficiency even further relative
to an S&P index.
And I think if you just look atthe historical performance of
our equity investments in thecapital appreciation strategy
(24:48):
since David Giroux took over in2006, we've outperformed the S&P
equities by about 4% points ayear, a little bit over that.
And if we have even a portionof that, a good portion of that,
in this strategy, which wethink we will, it should offer
great returns with great taxefficiency and a very low
expense ratio as well.
Todd Zempel (25:09):
Now with this ETF, how are the individual positions
weighted?
Are we to think of this as asmart beta type play, where the
positions are just driven by thealgorithm, or is this truly
actively managed, where you guysat the helm are determining the
weighting of the underlyingholdings?
Ira (25:29):
No, this is actively managed.
So we've chosen again what wethink are the 100 best long-term
names.
They're not equally weighted.
They're going to be weightedbased on somewhat on their size,
but more significantly based onhow much we believe they can
offer in terms of outperformanceand moderate risk.
(25:52):
So there'll be substantialdifference in weightings across
the 100 holdings.
Todd Zempel (25:58):
Now for Current clients that are in love with
the T-Rail Price CapitalAppreciation Fund.
Can they think of this new ETF,TCAF, as just the equity
component of the broader T.
Rowe Price Capital AppreciationFund?
How should they think aboutthis?
Ira (26:18):
I think that if you compare the ETF to the Capital
Appreciation Fund, it'ssubstantially different because
it's all equities.
As a result, you would expectit to have higher volatility
than a fund that's 60-40.
You would also expect it tohave, along with that, somewhat
(26:39):
higher volatility, also somewhathigher returns, given that it's
all equities but it's an allequity product.
So that's an importantdifference.
If you compare it just to theequity sleeve of the Capital
Appreciation Strategy, it'll bea lot more similar.
It is more names it's 100 namesversus 50 or so in the Capital
Appreciation Strategy's equitysleeve.
(27:01):
We'll also have lower turnoverroughly 5% to 10% turnover
versus more like 50% turnover inthe Capital Appreciation Equity
Sleeve.
Of course, the reality is youcan't buy the Capital
Appreciation Equity Sleeve Ifyou want to have just the equity
exposure with a CapitalAppreciation Approach.
This is a go-to product.
We see this product again.
(27:24):
It'll have, I think, differentappeals to different investors.
I think our biggest focus isoffering what we believe is a
great alternative to atraditional S&P 500 index funds
that owns some great companiesbut also owns what we would view
as some pretty inferiorcompanies.
Todd Zempel (27:41):
Now, with the advance of this T-Rail Price
Capital Appreciation Equity Fund, are we to expect sometime in
the future to have a T-RailPrice Capital Appreciation Fixed
Income Fund as well?
Ira (27:54):
No, I think for a number of reasons, that would be tricky
to do in an ETF format.
Really, the demand has beenwhen we've talked to clients
over the years has been more onthe can we get an equity
strategy?
Todd Zempel (28:11):
Well, Ira, we've talked about the new ETF, we've
talked about the mutual fund.
Let's take a step back and talkbig picture.
There's a lot of news going on,a lot of conflicting data out
there in the economy.
From where you sit, you, aswell as David Jarreau, the
(28:33):
portfolio manager for the T-RailPrice Capital Appreciation Fund
do you have an opinion onwhether or not the US will see a
recession here in the near term?
Ira (28:45):
I think David's view is that we will likely avoid a
recession, but we may have one.
But if we do have, I think theimportant thing is that if we do
have one, we're not talkingabout, in our view, a massive,
really ugly recession.
We all think of 0809.
We certainly don't see a repeatof anything like that.
(29:06):
So it'll be more of a gardenvariety type recession.
If we have one.
If you're a long-term investor,you've got that five-year
horizon, as we do.
That's the kind of thing youcan almost look through, Because
we're just periodically goingto have recessions.
That's reality.
If we have one isn't going tobe the trajectory-altering
(29:29):
situation that we had in 0809.
So I think we're much morefocused on where we're seeing
the best values as opposed totrying to thread the needle.
Will we or will we not have arecession?
I think we're in the camp.
We're pretty comfortable.
It won't be a severe win if wehave one.
Todd Zempel (29:47):
Got it, Ira.
Thank you so much.
Really appreciate your timetoday.
Was there anything that wedidn't touch on that you think
is important to share with ourlisteners?
Ira (29:59):
I think, todd, just one thing I would add about capital
appreciation is that we do havethis big focus always have on
controlling risk.
If you look at our performanceversus the markets over time,
again it's been quite good.
It tends to be particularlygood, though, when the market
gets rougher, when it gets morevolatile, when things get
(30:20):
tougher.
If you look at how much theequity market has advanced so
far this year, our view would beit's unlikely to continue to be
vertical here.
So again, if things do get alittle tougher, a little
choppier, this is a strategythat should do especially well.
So we think there's never a badtime to invest in the capital
(30:44):
appreciation strategy.
Again, it's had great resultsover time.
But particularly when themarkets up a lot, that risk
protection that we offer can be,I think, extra valuable.
Todd Zempel (30:53):
I totally agree.
Well, Ira, thanks again forjoining us on the podcast today.
I really appreciate it.
Ira (31:00):
No, it was great.
Thanks so much for having me.
Todd Zempel (31:03):
If you'd like to learn more about T-Row Price,
capital appreciation or any oftheir other investment offerings
, please do not hesitate tovisit their website TRowePrice.
com, or reach out to us atWealthQB.
com.
INTRO (31:21):
Thanks for listening.
If you enjoyed the show, besure to click subscribe.
Gordon Asset Management LLC isa registered investment advisor.
For more information about ourfirm, please visit wealthqubcom.
Todd Zempel (31:35):
The information in this podcast is presented for
educational and entertainmentpurposes only and is subject to
change without notice.
INTRO (31:42):
Opinions expressed are those of the participants and
don't necessarily reflect thoseof Gordon Asset Management LLC
its producers, hosts or guests.
Information presented shouldnot be construed as tax, legal
or investment advice or arecommendation or solicitation
for the sale of any product orstrategy.
Investors are encouraged toseek advice from qualified
professionals to determinewhether any information
presented may be suitable fortheir specific situation.
(32:04):
Investments involve risks.
Neither Gordon Asset ManagementLLC nor its podcast
participants shall be liable forlosses resulting from decisions
based on information orviewpoints presented on this
podcast.
You are now listening to the Gordon asset management
podcast.
Join us as we take you on ajourney through the enigmatic
world of finance and uncover themysteries of the markets.
Todd Zempel (01:09):
Welcome to the podcast.
This is Todd Zempel.
I Hope you enjoy the intro Iput together today.
All of the voices that youheard were deep fakes, ai
generated voices.
So, if the SEC is listening, no, those were not endorsements.
Those were all fake voices.
(01:30):
At any rate, on the podcasttoday we have a very special
guest, Ira Carnahan.
Ira is a portfolio specialiston the T row price capital
appreciation team and that teamManages one of our favorite
funds called the T row pricecapital appreciation fund.
Now, it's been a little whilesince we had you on the podcast,
(01:53):
Ira, but given some recent newswithin the firm, I thought it
would be timely to invite youback on.
Welcome the podcast, Ira.
Ira (02:03):
Thanks so much, todd, it's.
It's great to be on.
Todd Zempel (02:06):
Absolutely now.
One of the primary reasons wewanted you back on the podcast
is because you recently Reopenedthe T.
Rowe Price Capital Appreciationfund on a limited basis.
Can you explain exactly what'sgoing on there?
Ira (02:22):
We closed the capital appreciation strategy back in
2014 and what we've done muchmore recently is selectively
reopened.
So it's it's still broadlyclosed, but Folks in certain
working with certain advisorsare able to now invest in
strategy, so we're reallyexcited to be able to do that
now.
Todd Zempel (02:43):
Now, naturally, my first question for you is can
you explain what exactly goesinto the thought process behind
closing a fund to new investorsand reopening it, and or
reopening it on a limited basis?
Ira (02:58):
So the key driver in both the closing and the the limited
reopening is what's best forshareholders.
So if you go back to 2014, whenwe closed the strategy, we at
that point were seeing reallysubstantial inflows.
I mean, we're talking, you know,several billion dollars a year,
potentially as we looked outover the next few years and the
(03:21):
pace of inflows was going tomake it tough for us to Invest
the money as well as we'd liketo with that, with that level of
flows, and so the decision wasmade to to close it off because,
you know, again, we didn't wantto do anything that was going
to compromise the returns ofexisting shareholders.
If you kind of fast forward tothe last, the last year plus in
(03:45):
2022, we actually had Modestoutflows.
You know, with the market downso much, a fair number of
investors just naturally Pulledtheir money out of a strategy.
We had a good year butnonetheless, folks with the
market down Pull, pulled moneyout, and so it gave us the
opportunity to to reopen in alimited way.
(04:06):
You know, as I mentioned, it'snot a broad reopening but with
select advisors, we're now along folks to put money back yet
Beautiful, beautiful.
Todd Zempel (04:15):
Well, thank you for that.
Let's take a step back.
So we recorded a prettyprolonged podcast back in 2021
where you really did a deep diveon the strategy.
So for anybody who's interested, I definitely Recommend you go
back and listen to that podcast.
But for the new listeners, canyou just give us a really broad
(04:38):
overview of the T-Row pricecapital appreciation fund and
the objectives and how itoperates?
Ira (04:44):
Sure thing.
So when you think about capitalappreciation, we offer multi
asset investing in the strategy.
So our sort of what we wouldcall neutral or typical
allocation is about 60% of thestrategy in stocks and 40% of
the strategy in bonds and insome cases cash.
(05:05):
So 60-40 split there and we canvary that depending on where
we're seeing the bestopportunity.
So if the stock market is downa whole lot, we may increase the
allocation to stocks and on theother hand, if the stock market
is really warred ahead and wethink it's really highly valued,
we might own less of that instocks.
(05:25):
But that's the starting pointand we're managing the strategy
with three different goals inmind and these goals correspond
to different time horizons.
So over what we would call theshort term, which is a one-year
horizon, our goal is tooutperform the S&P 500 on a
risk-adjusted basis.
And so when I say risk-adjustedbasis, I just mean returns
(05:47):
adjusted for volatility.
And if you look at how we'vedone meeting that goal over 19
of the last 20 years, we'veoutperformed the S&P 500 on a
risk-adjusted basis.
I would hasten to add that inthe one year we did, we were
mighty close, so it was just avery small difference Over the
intermediate term and we thinkof the intermediate term as a
(06:08):
three-year horizon we have whatwe consider the capital
preservation part of our mandate.
So this is a capitalappreciation strategy.
We're very much about growingreturns, but we also want to
protect the downside for ourinvestors and over a three-year
rolling period, we want to, at aminimum, not lose our clients'
(06:29):
money, even if the market'sreally tough.
Now, again, we aspire to do alot better than just not losing
money.
But again, even if the market'sdown a lot, we want to, on a
rolling three-year basis, notlose money.
And again, if you lookhistorically, we've been much
less likely than, say, the S&P500 to have negative returns
over a three-year period.
And then, finally, thelong-term goal and we think of
(06:51):
that as over a full market cyclethat includes both up and down
years we want to deliverequity-like returns, s&p
500-like returns, while takingmuch less risk than the S&P.
And if you look over the tenureof our current portfolio
manager, david Giroud, managingthe strategy, which goes back to
(07:12):
2006, he's returned over 100%of the S&P 500's return while
taking 68% of the S&P 500's risk.
So again, all the return withabout two thirds of the risk.
So those are the threedifferent goals that we're
looking to beat as we'remanaging the strategy day to day
.
Todd Zempel (07:33):
Now, with those goals in mind, to me they really
speak to somebody that issaving for retirement.
Is that who you typically findis investing in this fund?
Ira (07:47):
You know, we have a range of folks in the strategy.
We certainly have a good numberof folks who are retired, who
are approaching retirement, butwe also have younger investors
as well.
I can tell you personally, Ifor years have had all of my
money that's not in T-Row Pricestock has been in this strategy,
and so it can really functionas a single investment for folks
(08:11):
who want to use it that way.
And so we've got a large numberof individual investors in the
strategy and again it can beused for, I think, a variety of
different situations.
It's particularly effective ifyou're in a tax shielded account
, because then the gains, thedividends and so forth, you
(08:32):
don't have to pay taxes on themright away.
But again, we have folks whoown it both in taxable and
non-taxable accounts.
Todd Zempel (08:38):
Now moving on to investment management, so there
are multiple camps of investmentmanagers, right?
Some make investment decisionsbased on what's going on in the
broad macro environment top-downdecision makers.
We have others that are morebottom-up, making decisions
based on what's going on withindividual companies or
securities, and then we haveothers that look at both of
(09:02):
those two things.
Where exactly does T.
T-Row Price CapitalAppreciation fall on that
spectrum?
Ira (09:08):
So I would characterize us as primarily in the individual
security selection camp, sobuilding the portfolio from the
bottom up.
If you think about how we spendour time the portfolio
management group on the strategy95% of it is on looking at
individual companies, trying tofind the best ones across all
(09:30):
the different sectors of themarket, and the amount of time
we devote to the individualcompanies and the amount of time
we devote to these kind ofbroader macro questions that
consume much of the businessnews is much, much smaller, and
there are a couple of reasonsfor that.
One is we think we have thegreatest advantage relative to
(09:51):
competitors in individualsecurity selection.
We like to think that we knowour companies better than anyone
other than the legal insiders,the boards of directors and the
company management teams, andwhen we're minimally involved
with the companies we own, wethink that gives us a real
competitive advantage.
I think if you look at folks whofocus mainly on macro investing
(10:13):
, we believe that's just a lotharder to do.
It's also a lot riskier way ofinvesting, in our view.
If you think about it investingin a bunch of individual
companies, we might own 60 or sostocks If we have a good hit
rate, if the majority of thosepicks work out as they do
typically, there's a very goodchance year to year that we're
(10:35):
going to outperform because weget to make so many bets.
Even if you're a good macroinvestor, maybe you have a 60%
chance of being right.
Well, that means you're makingone or two calls a year, you've
got a really high chance ofunderperforming in any given
year.
It's a much less consistent,steady way of trying to make
money.
We think both we have a biggeradvantage competitive advantage
(10:56):
focusing on individualsecurities, and we also think
it's just a lot less risky wayto invest.
Again, we do pay attention tothe macro.
We're aware, if the market isway down, if everyone's just in
the dumps and they're thinkingabout the economy, we're going
to want to lean the other way.
If you go back, for example, to2008, 2009, when we had the
(11:18):
great financial crisis, we tookour equity, our stock exposure,
way up by early 2009 because thebargains were just so
compelling.
Similarly, if you look in 2020,when COVID hit, drove the
market down by a third in amatter of weeks, we again
shifted the portfoliosignificantly to take advantage
of all the negative sentiment.
(11:38):
So there are elements of both,but the biggest piece is going
to be the individual securitieselection.
Todd Zempel (11:45):
So, Ira, you mentioned that the portfolio is
always going to be somewhatbalanced, somewhere around 60%
equity, 40% fixed income.
How much latitude do you havein dialing up or down the equity
exposure based on the currentmarket conditions?
Ira (12:04):
So by prospectus we can't go below 50% equity and
historically we've never gonebelow kind of a mid-50s
percentage, so that would bekind of the lower end At the
high end.
If you go back to the COVIDperiod, we got up into the low
70s percent bit and the mostextreme example in our investing
(12:26):
lifetimes was again in late2008, early 2009,.
And we peaked out briefly atclose to 80% equities when the
market was just super-duper low.
But that was an extreme case.
I think again, normally we'regoing to be operating between
the mid-50s and the low 70s.
Todd Zempel (12:43):
Now, Ira, if you read the Morningstar Analyst
Reports on your fund, there'smultiple references in there to
your contrarian approach andalso that you are growth-focused
, growth-oriented.
To me, if you're contrarian,that typically means you're a
little bit more pessimistic, andif you're growth-oriented, that
(13:05):
means you're more optimistic.
How do you reconcile thecontrarian pessimism and
optimistic growth orientation?
Ira (13:19):
So I think part of the reason that we've had the strong
results that we have is we liketo think taken some of the best
from each of the differentapproaches.
So we're growth investors inthe sense that we are looking
for companies that are generallyhealthy, that are growing their
revenues, improving theirprofitability, generating a lot
(13:40):
of free cash flow.
Those are the characteristicswe like to see.
We like to see companies thatare in industries that have
long-term good prospects.
So those are all things youwould associate with a growth
investor.
But the value piece of what wedo is we care a lot about the
prices that we're paying forthese securities.
(14:00):
So a traditional growth investormight look for the fastest
growing companies and valuationor price is a very secondary
concern.
For us it's a very importantconsideration.
So, basically, what we're doingwhen we're paying securities,
we're looking five years out, soright now 2023,.
We're looking out to 2028 andwe have estimates of what we
(14:23):
believe revenues, earnings andso forth are going to look like
on that five-year horizon forthe different companies that we
own, and we're looking for theones that offer essentially the
best risk-adjusted returns overthe next five years, and so
growth is going to be importantand what they're going to
deliver in 2028, but so is theprice that we pay today, and I
(14:44):
think that operating withelements of both is really
helpful.
We would describe our style aswhat we call GARP, or Growth at
a Reasonable Price, and if youlook over long spans of time,
it's in that garpy piece of themarket that you've had the best
combination of strong returnsand moderate risk.
Todd Zempel (15:08):
Now, Ira, we've had a very strange 18 months in the
market.
Last year, growth was ahorrible place to be.
Broadly speaking, the fixedincome markets had suffered one
of the worst years in history,and then this year we had
extreme pessimism coming intothe year.
Yet the markets have totallyrallied and growth has done very
(15:31):
well.
Can you just walk us throughhow you and the team at T-Rail
Price Capital Appreciationnavigated the last 18 months in
the market?
Sure, thing.
Ira (15:44):
Yeah, it's almost like today is like a mirror image a
year ago.
Really, we have all thisgrowing exuberance today and
again, just almost the exactopposite of what we were seeing
a year or so ago.
So we went into last year, into2022, very conservatively
(16:06):
positioned.
So if you look at how much wehad in stocks, that was at a
below typical level.
If you look at how much we hadin tech stocks in particular, we
were way underweight the techsector going into last year, we
were overweight utilities, whichare kind of the other end of
the spectrum there, and itturned out to be good
(16:27):
positioning.
Tech obviously got hit reallyhard over the course of 2022.
Utilities, even though not thesexiest sector, ended up doing
quite well for most of the year.
And so you know, given thecontrarian strain to what we do,
as tech got beaten down reallyhard, we gradually went from
being way underweight tech tomoving to modestly overweight
(16:48):
and with utilities, we went frombeing way overweight to
modestly underweight, you know,by the end of the year.
So again, we're constantly kindof looking for ways to move
against the consensus.
I mean, the reality is, ifyou're investing with everyone
else, just doing the same thingas everyone else, you can't
outperform, so you have tothoughtfully be contrarian, and
(17:10):
that's certainly what we triedto do last year.
I think you know this year therewas great pessimism about what
might be ahead, near certainty.
We were going to have, you know, recession if you were to
listen to the commentators.
And you know our view is that,you know, few things are certain
in the investing world and whena really strong consensus has
(17:31):
emerged that something is goingto happen, we're going to want
to tend to lean the other way.
So we were overweight equities,you know, coming into this year
and again, that's turned out tobe a good call.
Now, you know, if you look atany individual security, it
would have been hard to predictthat some of them would have
taken off as much as they have.
You know, todd, you mentionedthe AI phenomenon and we believe
(17:54):
AI is for real.
But you look at some of thestocks, I mean it seems to have
moved all the tech stocks up.
You know we're not of the viewthat all of them are going to be
equal beneficiaries of this.
So I think it's been a littlebit indiscriminate and again,
we've tried to try to allow forthat in our positioning.
Todd Zempel (18:13):
Now, ira, when I log into Morningstar as of July
2023, if I'm looking at the fund, it shows that the price to
earnings ratio, price to salesratio both are a little bit
higher than the category average.
If we're looking over thehorizon and we are seeing some
(18:33):
potential storm clouds slowingeconomic indicators, is that
higher valuation cause forconcern in your mind?
Ira (18:43):
So I think we have been.
If you were to look at ourequity exposure, you know, as a
percentage of the whole strategyover the course of this year
there's been a gradual downwardtrend there and I think it's
fair to characterize that asgradually taking off risk.
Some of the statistics you'llsee online, like with
(19:05):
Morningstar, showing that theprice to earnings ratio of our
holdings versus the marketappears.
This can be a little tricky tointerpret because you know when
we own a stock it's typicallybecause we believe the earnings
estimates of the consensus orthe street are too low.
So if you were to look at ourown estimates, you know the
(19:26):
price to earnings ratio wouldactually be below that of our
peers or below that of themarket.
So those are based on consensusestimates.
Our own estimates would suggestwe're getting, you know, paying
lower valuations than thatwould say.
But yeah, I know, I think asthe market has moved up, you
know we see less near termupside for sure and I think
(19:47):
actually you see a little bitbetter value or increasingly
good value on the fixed incomeside.
Todd Zempel (19:53):
Well, speaking of the fixed income side, can you
walk us through how theportfolio is positioned there?
Ira (20:00):
So if you, you know, if we kind of go back again kind of
brief history here to 2022, wewere very conservatively
positioned in terms of interestrate exposure going into 2022.
So, you know, kind of anacademic measure of how
sensitive your portfolio is tomoves and interest rates would
(20:23):
be the duration of the fixedincome portfolio.
And our duration was very shortgoing into 2022, much, much
shorter than our peers.
And what that meant in practicewas that, as interest rates
went up substantially, we fareda lot better than most other
fixed income investors becausewe just didn't have the same
(20:44):
interest rate vulnerability.
You know, I think again, kindof going back to the beginning
of 2022, our view was that, youknow, interest rates just didn't
have much room to go downfurther.
They certainly had a lot ofroom to go up and so the risks
were just kind of skewed pretty,pretty dramatically at that
point.
It's a lot more balanced rightnow.
You know, interest rates havegone up a lot and so we've
(21:05):
gradually taken up the duration,the interest rate exposure of
our portfolio.
So we've gone from about again,a year and a half fixed income
duration to now about three anda half years, still shorter than
our peers, but it's definitelylonger.
If you look at the particulartypes of assets we own in fixed
income, there's been some shiftsthere.
(21:26):
So, going back to the start of2022, we were very heavy in
leveraged loans or bank loans,which are adjustable rate
securities which, again, aren'tgoing to be hurt in the same way
if interest rates move around.
Today we've trimmed some ofthose holdings.
We still have a significantallocation there, but it's less
than it was.
(21:46):
And we've increased ourexposure to treasuries.
You know, at start of 2022, wehad none.
Today we have about 10% of theportfolio and 10-year treasuries
, and then we also have a littlebit higher exposure in high
yield bonds, which have, youknow, a set interest rate to
kind of lock in some of thehigher rates that we're seeing
today.
So you know, kind of roughlyspeaking, our fixed income
(22:09):
allocation is roughly, you know,kind of one-third treasuries,
one-third high yield bonds andone-third leveraged or bank
loans.
Todd Zempel (22:19):
Now, ira, one of the other interesting things
happening at T-Row price is theaddition of several new ETFs,
and one of them is TCAF T-C-A-F,the T-Row Price Capital
Appreciation Equity Fund.
Can you walk us through whatthat fund is?
Ira (22:35):
Thank you, Sure, so it's the full title Capital
Appreciation Equity ETF, and soyou'll notice in the title of
equity.
So this is 100% equity ETF, incontrast to capital appreciation
which is, as we talked about,60% equity, 40% fixed.
(22:56):
So that's one importantdifference.
The goal of the CapitalAppreciation Equity ETF is
basically to give our investorssuperior alternative to S&P 500
index products, whether they beindex funds or ETFs.
We, instead of owning 500 names, like the S&P index fund does,
(23:19):
or ETF, we're going to own 100names and we've chosen what we
believe, what David Giroux, thelead portfolio manager in the
rest of the Capital AppreciationTeam, believe are the best
long-term companies, long-termstock investments for the
portfolio, and we've chosen 100.
And essentially we've eliminatedthe companies that we believe
(23:42):
can't grow very fast over time,that are in industries that are
going to face longer-termchallenges, companies that don't
have what we think are strongmanagement teams, companies that
don't generate a lot of cashflow, companies that have poor
capital allocation, don't do agood job of investing their cash
flow.
So we've taken out what webelieve are the inferior
(24:06):
companies and the S&P 500,narrowed it down to what we
think are the 100 best and we'regoing to own that in this ETF
and it'll be just started abouta month ago, but it's a low
turnover strategy.
We'll have turnover in the 5%to 10% range of year Because of
(24:26):
the ETF wrapper.
It'll obviously be highly taxefficient.
We'll even have a little bitlower dividend yield than the
S&P, so that'll improve the taxefficiency even further relative
to an S&P index.
And I think if you just look atthe historical performance of
our equity investments in thecapital appreciation strategy
(24:48):
since David Giroux took over in2006, we've outperformed the S&P
equities by about 4% points ayear, a little bit over that.
And if we have even a portionof that, a good portion of that,
in this strategy, which wethink we will, it should offer
great returns with great taxefficiency and a very low
expense ratio as well.
Todd Zempel (25:09):
Now with this ETF, how are the individual positions
weighted?
Are we to think of this as asmart beta type play, where the
positions are just driven by thealgorithm, or is this truly
actively managed, where you guysat the helm are determining the
weighting of the underlyingholdings?
Ira (25:29):
No, this is actively managed.
So we've chosen again what wethink are the 100 best long-term
names.
They're not equally weighted.
They're going to be weightedbased on somewhat on their size,
but more significantly based onhow much we believe they can
offer in terms of outperformanceand moderate risk.
(25:52):
So there'll be substantialdifference in weightings across
the 100 holdings.
Todd Zempel (25:58):
Now for Current clients that are in love with
the T-Rail Price CapitalAppreciation Fund.
Can they think of this new ETF,TCAF, as just the equity
component of the broader T.
Rowe Price Capital AppreciationFund?
How should they think aboutthis?
Ira (26:18):
I think that if you compare the ETF to the Capital
Appreciation Fund, it'ssubstantially different because
it's all equities.
As a result, you would expectit to have higher volatility
than a fund that's 60-40.
You would also expect it tohave, along with that, somewhat
(26:39):
higher volatility, also somewhathigher returns, given that it's
all equities but it's an allequity product.
So that's an importantdifference.
If you compare it just to theequity sleeve of the Capital
Appreciation Strategy, it'll bea lot more similar.
It is more names it's 100 namesversus 50 or so in the Capital
Appreciation Strategy's equitysleeve.
(27:01):
We'll also have lower turnoverroughly 5% to 10% turnover
versus more like 50% turnover inthe Capital Appreciation Equity
Sleeve.
Of course, the reality is youcan't buy the Capital
Appreciation Equity Sleeve Ifyou want to have just the equity
exposure with a CapitalAppreciation Approach.
This is a go-to product.
We see this product again.
(27:24):
It'll have, I think, differentappeals to different investors.
I think our biggest focus isoffering what we believe is a
great alternative to atraditional S&P 500 index funds
that owns some great companiesbut also owns what we would view
as some pretty inferiorcompanies.
Todd Zempel (27:41):
Now, with the advance of this T-Rail Price
Capital Appreciation Equity Fund, are we to expect sometime in
the future to have a T-RailPrice Capital Appreciation Fixed
Income Fund as well?
Ira (27:54):
No, I think for a number of reasons, that would be tricky
to do in an ETF format.
Really, the demand has beenwhen we've talked to clients
over the years has been more onthe can we get an equity
strategy?
Todd Zempel (28:11):
Well, Ira, we've talked about the new ETF, we've
talked about the mutual fund.
Let's take a step back and talkbig picture.
There's a lot of news going on,a lot of conflicting data out
there in the economy.
From where you sit, you, aswell as David Jarreau, the
(28:33):
portfolio manager for the T-RailPrice Capital Appreciation Fund
do you have an opinion onwhether or not the US will see a
recession here in the near term?
Ira (28:45):
I think David's view is that we will likely avoid a
recession, but we may have one.
But if we do have, I think theimportant thing is that if we do
have one, we're not talkingabout, in our view, a massive,
really ugly recession.
We all think of 0809.
We certainly don't see a repeatof anything like that.
(29:06):
So it'll be more of a gardenvariety type recession.
If we have one.
If you're a long-term investor,you've got that five-year
horizon, as we do.
That's the kind of thing youcan almost look through, Because
we're just periodically goingto have recessions.
That's reality.
If we have one isn't going tobe the trajectory-altering
(29:29):
situation that we had in 0809.
So I think we're much morefocused on where we're seeing
the best values as opposed totrying to thread the needle.
Will we or will we not have arecession?
I think we're in the camp.
We're pretty comfortable.
It won't be a severe win if wehave one.
Todd Zempel (29:47):
Got it, Ira.
Thank you so much.
Really appreciate your timetoday.
Was there anything that wedidn't touch on that you think
is important to share with ourlisteners?
Ira (29:59):
I think, todd, just one thing I would add about capital
appreciation is that we do havethis big focus always have on
controlling risk.
If you look at our performanceversus the markets over time,
again it's been quite good.
It tends to be particularlygood, though, when the market
gets rougher, when it gets morevolatile, when things get
(30:20):
tougher.
If you look at how much theequity market has advanced so
far this year, our view would beit's unlikely to continue to be
vertical here.
So again, if things do get alittle tougher, a little
choppier, this is a strategythat should do especially well.
So we think there's never a badtime to invest in the capital
(30:44):
appreciation strategy.
Again, it's had great resultsover time.
But particularly when themarkets up a lot, that risk
protection that we offer can be,I think, extra valuable.
Todd Zempel (30:53):
I totally agree.
Well, Ira, thanks again forjoining us on the podcast today.
I really appreciate it.
Ira (31:00):
No, it was great.
Thanks so much for having me.
Todd Zempel (31:03):
If you'd like to learn more about T-Row Price,
capital appreciation or any oftheir other investment offerings
, please do not hesitate tovisit their website TRowePrice.
com, or reach out to us atWealthQB.
com.
INTRO (31:21):
Thanks for listening.
If you enjoyed the show, besure to click subscribe.
Gordon Asset Management LLC isa registered investment advisor.
For more information about ourfirm, please visit wealthqubcom.
Todd Zempel (31:35):
The information in this podcast is presented for
educational and entertainmentpurposes only and is subject to
change without notice.
INTRO (31:42):
Opinions expressed are those of the participants and
don't necessarily reflect thoseof Gordon Asset Management LLC
its producers, hosts or guests.
Information presented shouldnot be construed as tax, legal
or investment advice or arecommendation or solicitation
for the sale of any product orstrategy.
Investors are encouraged toseek advice from qualified
professionals to determinewhether any information
presented may be suitable fortheir specific situation.
(32:04):
Investments involve risks.
Neither Gordon Asset ManagementLLC nor its podcast
participants shall be liable forlosses resulting from decisions
based on information orviewpoints presented on this
podcast.
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