Why This Top 1% Fund Manager Lost No Sleep Over the Election

Many investors, like most Americans, have been fixated on the political drama of this year’s presidential election. But when it comes to picking stocks, Jamie Cuellar has kept his eye on the longer term. He’s the manager of the Buffalo Small Cap Fund, which has outperformed 99% of peers in 2020 as well as over the past one, three and five years, according to data compiled by Bloomberg. 

Cuellar joins the latest episode of the “What Goes Up” podcast to discuss the election, his fund’s strategy, and why small companies are still an opportunity for active fund managers to show their value in a climate that’s more and more dominated by passive and smart-beta strategies. Bloomberg Executive Editor Chris Nagi also joins the show to discuss markets. Some highlights of the conversation: 

“The way we invest, with our process, it really kind of depends on the underlying long-term trends that we see that are really impacting the companies that we invest in. And that's not going to change, regardless of who's in the White House, or how much controversy there is in politics going on at the time.”

“We've identified 26 long-term trends that we think are going to underlie the secular growth opportunities that we'd like to invest in. So these are things like corporate outsourcing, increasing demand for communications, bandwidth, e-commerce, stuff like that. And generally, these are long term trends … I think about them being here for at least three to five years before they can kind of be considered a trend for us. It really keeps us out of really deep cyclical companies.”

©2020 Bloomberg L.P.

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