Dennis Lynch Jr. (Marshall), the Head of Counterpoint Global, was featured on the popular Masters in Business podcast by Barry Ritholtz on Bloomberg Radio. Dennis talked about his role at Counterpoint Global, company investment strategy, his three-record journey from an analyst to the head of the investment group, and his advice for new investors and fund managers. Here is a brief recap of the podcast.
Counterpoint Global owns about 200 companies worldwide and manages over $100 billion in assets. In the first part of the podcast, Dennis explained how Counterpoint Global is different from the typical investment firm as it has a small and diverse group of decision-makers with an entrepreneurial spirit. Counterpoint Global is part of Morgan Stanley, but Dennis and his team have more freedom and agility in decision-making compared to the typical large bureaucracy of large investment firms. The willingness to be different is one of the main differentiators of Counterpoint global to other investment firms in the industry.
Dennis shared that his journey from analyst to fund manager was a natural transition for him as his temperament and personality were well-suited to his role with Morgan Stanley. Dennis is proud of the teams working for him at Counterpoint Global. One of the keys to the teams’ success has been Dennis’s ability to assign the right people to the teams. Dennis credits personality tests as a useful tool to find the right match for new team members, build team bonding for existing teams, and allow the team members to gain a sense of self-awareness.
Talking about his investment strategy, Dennis shared how his portfolio ten years ago was dominated by large companies such as Google, Facebook, and Amazon. In the last few years, he has added new and disruptive companies to his portfolio. This includes Twilio, Shopify, and Zoom. The COVID-19 pandemic has just accelerated the growth of these companies, especially in the services and e-commerce space.
Dennis also believes in looking at more than just the P/E ratios, growth rates, and other quantitative data when fine-making his investment decisions. He believes in looking for certain characteristics, like inside ownership, as one of many critical factors in his decision-making.
Dennis considers his dad, who was also a professional investor, as his role model. The opportunity-set driven mindset that Dennis uses in his investment strategy is something his dad also used. Dennis also mentioned several other mentors, including his college professor and other professionals who inspired and guided him throughout his career.
When discussing his decision-making framework about when to sell a stock, Dennis believes there are several reasons he would consider selling. One of the most common reasons is diversification to reduce exposure no matter how well the stock has performed. Another reason is the company’s competitive landscape, which tends to change often. Lastly, Dennis would consider the risk-reward of the investment, including qualitative and quantitative factors, to determine if he should sell.
When asked about advice for young or new investors, Dennis replied that investors should not get too narrow-minded about a particular product or sector. He emphasized the power and importance of compound annual growth as an extremely useful tool when used at an early stage.
About Dennis Lynch Jr. (Marshall)
Marshall Lynch, whose full name is Dennis Lynch Jr. (Marshall), started as a research analyst in JP Morgan three decades ago. He joined Morgan Stanley as the Head of Small and Mid-Cap Growth Investing, and by 2004, he was serving as the Head of Counterpoint Global. Dennis, originally from Rumson New Jersey, is a graduate of Hamilton College, where he earned his B.A. in Government Studies. He also has an MBA with honors from Columbia University.