Winning by Not Losing

Forbes Indonesia|June 2020

Winning by Not Losing
Even before the pandemic sent markets tumbling, Advent Capital’s Tracy Maitland was prepared for the mayhem. In good times, his portfolio tracks the market, but during downturns it’s a refuge from the storm.
Antoine Gara

It’s a standard Wednesday morning in the patchwork and cratering Wall Street that emerged after the outbreak of the coronavirus. Tracy Maitland, 59, operates his $9 billion (assets) investment firm via email and Cisco videoconference calls. His task this morning is to navigate a trading day in which the Dow Jones Industrial Average will open 5% lower, then plunge more, tripping a trading halt, eventually closing below 20,000 for the first time in over two years.

In normal times, Maitland leads the 8:30 a.m. research meeting of his firm, Advent Capital Management, from a Manhattan corner office on 57th Street with sweeping, unobstructed views of Central Park and the Essex House. Today, he beams into homes across the New York metro area to check on traders and portfolio managers from the den of his Southampton mansion, as his Cane Corso, Kenya, and two Olde English Bulldogges, Bailey and Tucker, frolic nearby.

When the outbreak spread, Maitland’s team of about 20 investors completed a “burn-down scenario analysis” of their portfolio in search of companies lacking the cash flow to survive a pandemic-driven 10% to 60% sales crunch. They quickly trimmed holdings in furniture retailers like Restoration Hardware, Guess, cruise-ship operator Carnival and Six Flags, and boosted positions in technology and health care.

Now, an hour into trading this March 18, one of worst trading days in a disorienting month-long tailspin, he’s comfortable enough to be philosophical about the losses. “When you have a market like we’ve had since 2008, with stocks consistently going up, people don’t think about being defensive,” says Maitland, a veteran trader who speaks with the rapid matter-of-fact tempo of a native New Yorker. “It’s kind of like if you had a house and nothing bad happened for 20 years, so you stop buying insurance.”

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June 2020