Our March for the Fallen Podcast

Before leaving for Fort Indiantown Gap, three fellow marchers joined me at Wharton for an interview and podcast: Preston McSwain, CIO and Founder of Fiduciary Wealth Partners, Adam Butler, CIO at ReSolve Asset Management, and Andrew Miller, CIO at Miller Financial Management.

The March for the Fallen (#MFTF) is an event hosted by the Pennsylvania Army for soldiers who have passed defending our country since 9/11. The march is a reminder for us all that our country’s freedom is not free— and Wesley Gray of Alpha Architect has motivated a large swath of finance twitter to join forces and support the families of these soldiers by marching 28 miles in their honor. This event has quickly become an annual tradition and we expect the numbers to keep multiplying.

Our fellow marcher Eric Balchunas described the finance group of participants at the #MFTF as approximately 75-80% of ‘fintwit’ that matters – so if you count yourself in the other 20-25% -- we hope to see you there next year.

My wife Bonnie joined WisdomTree’s crew this year without training outside of her regular yoga classes and she marched the full 28 miles. This is a testament to how watching two little girls keeps you active on your feet all day, but also the benefits of yoga and a determined mindset. I am telling this mostly to help motivate more of you who don’t think you have time to train for the march next year—it is possible to accomplish without more than regular exercise—particularly core power yoga.

Matt Wagner, one of my WisdomTree colleagues who joined us on the march this year, also had little training leading up to the event. He felt the camaraderie of our crew was what allowed him to make it all the way to the cheers of encouragement that greet you at the finish line—yes there was still an extremely dedicated group providing support to marchers even if you finish 3 hours after Wes. Among many of the reassurances we offered each other that our inadequate training would be enough, Bonnie reminded us of one of the sayings in yoga that is “you can do any pose for just 60 seconds”—we extended that logic throughout the day to anyone can put up with walking just another mile, and there was never a consideration of giving up. The collective resolve and support of a group is an extremely powerful thing, and we could only imagine what that spirit must be like within an army unit.  

Butler’s team from ReSolve Asset management brought 10 people to the march – fully two-thirds of his team – throwing down a challenge for us all to beat next year.

A few of the highlights from our podcast discussion:

• Our discussion contrasted McSwain’s ‘keep it simple to deliver peace of mind’ approach with Butler’s approach which could be described on the other end of spectrum -- complex portfolio optimizations.

• Miller discussed his work on stock/bond correlations and how bonds are thought to diversify stocks but where that can breakdown is with unexpected changes in inflation expectations. In the 1970s and 1980s—when inflation shocked higher, the correlations were much higher.

• Crisis Alpha for bonds? When stocks fell more than 5% in a month, it was the income component of bonds that helped provide cushion and less so their price return component in Miller’s research

• Betting Like Buffett: McSwain described a bet he wants to make on whether a leveraged small cap strategy can beat the returns to the 10 largest private equity funds raised this year. McSwain wondered aloud whether the ‘silence is deafening’ in terms of lack of private equity investors who have taken him up on this bet. McSwain said he will donate proceeds to the same charities as Buffett did in his bet against Ted Seides for the S&P 500 versus hedge funds and he hoped Buffett was listening – interestingly enough, Ted Seides who took the hedge fund side of the Buffett bet was on the march for the second year in a row.  Let’s see if we can help McSwain find some challengers who will take the private equity side of the bet.

• How to protect from drawdowns and minimize portfolio risk: Miller has published a paper on strategies that can help retirees preserve 4% withdrawal rates and the role managed futures strategies can play for this goal – something covered by Miller and Butler.