My guest today is Karen Karniol-Tambour, Partner and Co-CIO for Sustainability at Bridgewater Associates. You will quickly understand why Ray Dalio described Karen as a “vacuum cleaner of learning” - our conversation covered a variety of market themes, and Karen goes deep on each of them. We touch on inflation, monetary policy, currencies, retail investors, ESG, and how each of these levers has become more important for investors to understand. Karen has a rare skill for making complex ideas seem simple, and I love the frameworks she uses to deconstruct big, important issues. She does such a good job of explaining what’s changed, why it matters, and what to do about it. I hope you enjoy my great conversation with Karen Karniol-Tambour.
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[00:03:39] - [First question] - How Bridgewater invests and the experiences that led her there
[00:06:47] - What working with Daniel Kahneman felt like and learning his perspective
[00:08:09] - An example of holding herself to accumulating and stress testing data
[00:10:17] - Important variables to consider when seeking returns in large-scale bets
[00:14:18] - What we should be thinking about in terms of inflation as we look to the future
[00:20:07] - How she thinks about inflation and how she defines it
[00:22:57] - Relevant asset classes that can protect or help diversify against inflation
[00:26:14] - What still largely confuses her about inflation and its many facets
[00:28:05] - Her philosophy and model for understanding the system of currency
[00:33:21] - How investors should think about the US dollar
[00:35:50] - Whether or not owning an unhedged global equity index gives you currency exposure
[00:37:07] - The fundamental nature of equity markets and household balance sheets
[00:41:37] - Ways the growing wave of retail investors will impact prices and returns
[00:43:53] - How she’s evolved her valuation approach given our new investor landscape
[00:45:43] - The good and bad roles ESG might play for investors going forward
[00:50:36] - Potential concerns around the growing trend of ESG writ large
[00:53:51] - Thoughts on the 60/40 portfolio and whether or not it’s still worth using
[00:55:32] - Designing a default diversified portfolio in light of markets today
[00:57:45] - Aspects of the global market economy today people should be talking about more
[01:01:15] - Ways she investigates a new topic and how it has evolved over time
[01:04:14] - Variables that matter in investment teams and company cultures
[01:06:53] - How she would approach cryptocurrency and what’s interesting about them
[01:09:08] - A rosey and gloomy take of what the world could look like in a decade
[01:12:37] - The kindest thing that anyone has ever done for her