Kieran Goodwin - Imagination, Volatility, and the Pursuit of Alpha - [Invest Like the Best, EP.331]

My guest today is Kieran Goodwin . Kieran spent over two decades at the frontier of credit investing. During the global financial crisis, he was a Partner and Head of Trading at King Street Capital, which grew from $4 billion to $20 billion while he was there. He then left to start his own credit hedge fund, Panning Capital Management. In our discussion, we cover the state of private credit today, which forms of alpha he’s most skeptical of, and the blend of EQ and IQ necessary for success and investing. Please enjoy my conversation with Kieran Goodwin. Founders Podcast Founders Episode 136 - Estee Lauder Founders Episode 288 - Ralph Lauren For the full show notes, transcript, and links to mentioned content, check out the episode page here . ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 55,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/patrick . ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes . Past guests include Tobi Lutke , Kevin Systrom , Mike Krieger , John Collison , Kat Cole , Marc Andreessen , Matthew Ball , Bill Gurley , Anu Hariharan , Ben Thompson , and many more. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here . Follow us on Twitter: @patrick_oshag | @JoinColossus Show Notes (00:03:00) - (First question) - His view of the state of private credit in capital markets (00:06:56) - The notion of ball washing and why it’s important to understand (00:09:04) - What the worst-case domino effects of ball washing could be (00:12:21) - Arriving at a place where JP Morgan could borrow so much at the fund level (00:14:20) - Lessons learned from the worst trade he made (00:16:53) - What could happen in the world of private credit in the next few years and how the bigger players tend to benefit (00:19:29) - Thoughts on the world of venture capital right now (00:21:13) - The time he was at the peak of his power as an investor (00:24:03) - From being new at something to incredibly successful seemingly overnight (00:26:42) - What kinds of alpha he believes exists and which ones he’s skeptical about (00:29:30) - Thoughts on income share agreements (00:31:24) - Why there aren’t more initiatives for new talent to trade their student loans for future earnings (00:33:13) - The power of EQ over IQ and why it’s important for investor success (00:35:49) - Whether or not now is a good time to get into the field of capital markets (00:37:54) - Key tenants to know when learning credit investing specifically (00:40:09) - Things people misunderstand about the power of volatility (00:42:39) - Ways he managed to stretch his own imagination effectively (00:48:06) - The natural inclination to be short volatility (00:49:24) - Incorporating long volatility into his portfolio and life (00:52:20) - Thoughts on synergy in relationships (00:55:48) - Other interesting lessons learned from sports (00:57:50) - The roles of the multiple coaches that sit in for an NBA team (00:59:42) - The kindest thing anyone has ever done for him