Edward Altman, NYU - We Had More Billion Dollar Bankruptcies In 2020 As Of September Of This Year Than Any Year Ever | #267

The Meb Faber Show - Better Investing

The Idea Farm

Business, Investing, Management

4.7 • 938 Ratings

🗓️ 25 November 2020

⏱️ 54 minutes

🔗️ Recording | iTunes | RSS

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Summary

In episode 267, we welcome our guest, Edward Altman, professor at the Stern School of Business at NYU. In today’s episode, we’re talking corporate bankruptcy, high yield bonds and credit risk analysis. We talk to Professor Altman about the Altman Z-Score Model, which he created in 1968 to predict bankruptcies. He discusses the record high debt levels companies had at the end of 2019 right before COVID hit the U.S. and what he’s seen this year with a large number of billion dollar bankruptcies. He also touches on the jump in the rate of zombie companies around the world. As we start to wind down, Professor Altman explains why he is bullish on high quality junk bonds and why the happiest moment of his career was testifying in front of Congress in 2008 advocating bankruptcy for GM. All this and more in episode 267 with NYU’s Edward Altman. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome to the Medfavor Show, where the focus is on helping you grow and preserve your wealth.
0:11.0	Join us as we discuss the craft of investing and
0:13.5	uncover new and profitable ideas all to help you grow wealthier and wiser.
0:17.2	Better investing starts here.
0:18.8	Matt Faber is the co-founder and chief investment officer at Cambria Investment Management.
0:23.3	Did it industry regulations, he will not discuss any of Cambria's funds on this podcast.
0:27.2	All opinions expressed by podcast participants are solely their own opinions and do not reflect the opinion of
0:31.2	Cambria Investment or its affiliates. For more information opinion of Cambria Investment Management or its affiliates.
0:33.0	For more information, visit Cambria Investments.com.
0:39.0	Hey friends, another great show for you today.
0:42.0	Our guest is a professor at the Stern School of
0:45.1	Business at NYU and one of the preeminent experts on corporate bankruptcy,
0:49.4	high-yield bonds, and credit risk analysis. In today's episode we learned how our guests created a model to
0:56.4	predict bankruptcies way back in 1968 called the Z-score when computing power was a bit lacking.
1:03.8	The model was evolved over time, but it's still widely used this day.
1:07.4	We get into the record high debt levels companies had at the end of 2019, right before COVID hit the
1:12.1	U.S. And what our guest is seeing this year
1:14.3	with a large number of billion dollar bankruptcies so far. We chat about the jump
1:18.7	and the rate of zombie companies around the world and our guest goes on to explain
1:22.2	why he's bullish on
1:23.1	high-quality junk bonds and why the happiest moment of his career was
1:26.6	testifying in front of Congress in 2008 advocating bankruptcy for GM.
	...

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