Meet Nevada's John Bogle: How A $60B Investor Mastered The Art Of Saying No | Steve Edmundson
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- Опубліковано 27 вер 2024
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Today's guest is Steve Edmundson, the Chief Investment Officer of the Public Employees’ Retirement System of Nevada, which manages over $60 billion.
As pension funds continue to hire more employees, pay more and more fees and build more complex portfolios, Steve is an outlier for his approach that emphasizes simplicity over complexity. He’s one of two investment professionals on staff and has indexed 100% of all publicly traded asset classes. I love it!
Steve talks about the culture that allows this model to work and shares some thoughts on the rise of private markets and the impact of higher interest rates.
The late Jack Bogle had a quote that applies well to Steve & Nevada PERS: “Don’t do something, just stand there!”.
To see links or read the transcript of the episode, visit us at mebfaber.com/2...
(0:15) - Welcome to our guest, Steve Edmundson
(2:18) - An overview of Nevada PERS $60b+ pension
(6:52) - Focusing on indexing and low fees
(10:37) - Framework for adding additional asset classes
(14:25) - Adding additional asset classes
(16:11) - Steve’s take on the rise in allocations to private equity and private real estate
(29:19) - Why the Nevada Model has been successful
(33:18) - How the higher interest rate environment impacts pension plans
(40:05) - Steve’s most controversial opinion
(41:03) - Steve’s most memorable investment
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No esg / net zero lecture? How refreshing. Nevada public ee’s are lucky to have you, Steve.
Great interview, Meb.
sharp guy, people dismiss it as simple but true sme genius is simplifying complex problems, thank you!
Appreciate this look into the industry and how small to medium funds think of allocation. Thanks Meb
Awesome interview, Meb. Really great message from your guest.
PE has added returns and diminished vol (as long as we don’t mark to market and discount for illiquidity🤣). This fella has obviously had an amazing run, and he has forgotten more about portfolio management than I will ever know. That said, if I were him, I would retire right now and accept whatever lump sum buyout is available to the fund he has successfully managed.
As someone that was index funds my whole life, I started to take more calculated risk ten years ago jumping into things that I knew and had conviction in (finance/tech). I put 40% in Bitcoin, apple, Amazon, Tesla Nvidia in 2013. It's paid off like crazy. Today that allocation is 99% of port because of gains. You can play it safe but take calculated risk especially if you feel strongly about it.
The hard part is that you are very much the needle in the haystack. For every one of you there’s thousands who went all-in on companies or sectors that didn’t pan out - either total return or timing. I knew an old guy that worked for GE and had all of his money there. Worked great until September of 2000 and lost 80% by 2009. GE didn’t recover the price until this year - and he didn’t live long enough to see it.
The question now: could you take some money today and replicate the same success with a new crop of active selections?
U.S. Treasuries are no longer a portfolio diversifier. In fact, the 10-year now trades at a discount to investment grade bonds. In ten years, USTs will be relegated to junk bond status.
I feel like public markets are better than private if others are more informed than you are
He is pretty smart! He is pretty much using 80 /20 principle.
What 's a "non Social Security state"?
~2:42 mark: "if you're a Public Employee you are a participant in the Nevada retirement system we're a non-social Security State so we are the the primary source of retirement income for for all the public employees"
Certain pension benefit contracts are negotiated to be funded “in lieu of Social Security”. For example, some police unions structure deals where they do not pay into or receive Social Security. Instead, they only pay into their police pension. The pension benefit must be at least as generous as Social Security.
@@libertatem_semper Thank you Libertatem!
Meb Meb Meb, he gave you a big hint, telling you he made very few changes over the years, and usually 5% or more, meaningful ones. I kept waiting for you to ask him to list out all of them over the past 20 years, and why, probably just a dozen or so.