Consider All Risks: Lessons from Scott Minerd

“Never hire an optimistic bond fund manager”

That’s the advice that Scott Minerd always gave. I’ve covered Scott, the 63-year-old bond investing giant who died this week of a heart attack, for the nine years I’ve worked at Bloomberg. The big lesson I took from him wasn’t about making big, bold calls -- but the importance of risk management.

Investing in bonds isn’t like investing in equities, where you typically assess the upside of any given wager. No, bonds are different.

The big idea is not to lose money wherever possible. That’s why optimism would fail you. A bond investor’s secret is to see every possible way a bet can go wrong, and when Minerd knew the risk, he was ready to make a bold call.

At the very bottom, in March 2020, he deployed about $7 billion into credit markets in a big bet that the Federal Reserve would buoy the riskiest debts. And he was right.

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• Sachin Khajuria, a former Apollo partner who now runs Achilles Management, holds forth on private credit opportunity and the outlook for distress.
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• Profile of Jamie Dimon, by Bloomberg’s Hannah Levitt

This is my last missive of 2022. I'm signing off, taking a break, and coming in swinging for 2023. As always, your tips and opinions are welcome at [email protected]. It's been a true pleasure to report for you, and can't wait to come back and start up all over again. Happy holidays to you and yours!!!