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From French Literature Major to 'Queen of Alternatives': An Interview With TV Anchor Deirdre Bolton

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The financial television star's newest show debuts today on Fox Business Network.

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On this, the final day of a decidedly difficult first quarter for the Dow (INDEXDJX:.DJI), many on Wall Street are understandably itching to branch out beyond basic blue chips. As such, a new show from Fox Business Network arrives at an auspicious moment. Risk and Reward With Deirdre Bolton debuts at 1:00 p.m. EDT and analyzes all aspects of the burgeoning alternative-investment landscape. Bolton, long considered an expert in this category, spent several years as a Bloomberg television anchor before being hired by Fox. There she joins Maria Bartiromo, another prominent recent capture, as the channel takes on CNBC in earnest. Returning to a station where our own Hoofy and Boo once blazed a trail, I recently had the opportunity to interview her.

I'm always amazed by the endlessly varied career paths of prominent people on Wall Street. For instance, Carl Icahn studied philosophy at Princeton, where his thesis was "The Problem of Formulating an Adequate Explication of the Empiricist Criterion of Meaning"! You have an equally interesting humanities background. How did someone who earned a dual English and French literature degree at the University of Iowa end up in high finance?

Deirdre Bolton: It was a twisted path, but the elements that remained in common included reading and processing a large amount of material, selecting the salient points, and communicating them in context. Even in finance, my editorial skills were honed on the institutional equity sales desk; the more efficiently I expressed my point of view, the better our desk did. It was good training.

You began as an on-air business anchor in 1999, the greatest year in Nasdaq (INDEXNASDAQ:.IXIC) history. What would you say are the most profound changes that money and the markets have undergone in the intervening decade and a half?

"Skepticism" and "trust" are two words that immediately come to mind. The year 2000 followed 1999, and a lot of paper millionaires ended up with nothing in a 12-month period. There's more skepticism about what works on paper and how that may translate to real market conditions. Most in the technology community tell me that this moment in tech is different because budding companies are more focused on strategy than they were in 1999. Many who had businesses in 1999 -- and those investing in them -- are a lot more skeptical now than they were then.

The past decade also brought the credit crisis in 2008-2009, and that wiped out a lot of personal and institutional wealth. That moment was a reset for a lot of people I know. There's also less trust in paper currencies and in the systems that govern their value. On my new show Risk and Reward With Deirdre Bolton, we'll have numerous guests who are investors in Bitcoin platforms and talk about the reasons why they're compelled to invest in a new way to value a good or a service. On the show, we'll also talk about the rise in value of hard assets: gold, art, collectibles, real estate; for many, these assets are a good hedge against the value of paper money.
 
In addition to being labeled "The Iron Lady," Margaret Thatcher was known as "TINA" ("There Is No Alternative"). You, however, prove otherwise, having been called "The Queen of Alternatives." Your new show will analyze these investments, which are often viewed as a bit esoteric by the average investor. What do they involve, exactly?

Everything beyond long-only stocks and bonds are alternatives. It's a big universe and getting bigger. Bonds are yielding almost nothing, stocks are arguably fully valued or close to being fully valued, investors need more choices. The nontraditional strategies that big institutional investors have used for decades are finally available to mainstream, smaller investors. Hedge fund strategies wrapped in mutual funds are one of the best examples of small investor-friendly alt packages. On the show, I'll cover dozens of these new choices, including energy, private equity, venture capital, and infrastructure; long-short, absolute return, and "event-driven" funds; and farmland, timber, water, and art. I'm inviting the best thinkers in these fields on set with me, as well as guests with practical know-how. I want to give viewers access to the best of both worlds: theory and practice.
 
When I think of private equity, it's invariably larger-than-life, swashbuckling billionaires that come to mind. Leon Black of Apollo Global (NYSE:APO) rose to fame in the go-go '80s at Drexel Burnham, where he hobnobbed with junk bond king Michael Milken. (With some spare cash in 2012, Black bought Edvard Munch's "The Scream" for a record $119.9 million at Sotheby's (NYSE:BID)). Blackstone Group's (NYSE:BX) Stephen Schwarzman made headlines with a lavish 60th-birthday bash in 2007. And, of course, Kohlberg Kravis Roberts (NYSE:KKR) will always be indelibly associated with the antics immortalized in Barbarians at the Gate. Is there a way for individual investors who aren't quite in that tax bracket, and perhaps a bit more risk-averse, to play the space, which by all accounts is booming at the moment?

PE has been a tough area for regular investors to participate in, but that's changing. Aside from an investor's choice to buy stock in Blackstone, Apollo, or Carlyle (NASDAQ:CG), there will be more ways to invest in the future. More "registered private" offerings are being developed; they allow investors to invest in big-name PE funds with as little as $50,000.
 
Based on the experts and industry insiders you talk to, are there any areas of alternative investments that offer particularly compelling value right now?

MLPs (master limited partnerships) come up in discussion a lot. You can invest in energy infrastructure and get higher income than investment-grade bonds. For people who want a steady stream of income and have been disappointed by what their bond funds have paid out, MLPs are a good choice. You can participate in almost any point on the time line of drilling and extracting natural gas. If you want to invest in the drilling stage, you can; if you want to invest in building pipelines, you can. Almost every point along the time line needs investment capital. As one successful investor reminds me: MLPs are exposed to interest-rate risk like every other yielding product, so when the Fed raises rates, some investors may want a rate hedge, Treasuries, swap payers, etc.
 
Collectibles are a field that I find especially intriguing. On Valentine's Day, the Wall Street Journal ran an excellent article ("Pushing the Envelope: A Storied Stamp May Fetch $10 Million") about an 1856 British Guiana one-cent magenta that's expected to break the bank at auction. Legend has it that when this one-of-a-kind item was unexpectedly discovered to have a hitherto-unknown twin, New York tycoon Arthur Hind promptly bought it for a king's ransom. Whereupon he immediately proceeded to burn this priceless piece of philately with a cigar match in front of the seller so that the existing example he already owned would skyrocket in value! From historic stamps to high-end art to vintage Romanée-Conti Burgundy -- do upscale collectibles offer potential promise?   

Most experts -- from wine, art, and sports memorabilia collectors to people who invest in jewelry and antique cars -- will tell investors to do it for the pleasure of the hobby and not as an investment. That said, Christie's and Sotheby's have had record sales these past 12 months. Collectors of Patek Philippe watches have fetched record prices. On my show, we'll have numerous guest investors in hard assets. Some do it as a hobby that pays; others see it as a good hedge against the value of paper money.   
 
Hedge funds, a key alternative investment, have a decidedly spotty recent record relative to the S&P 500 (INDEXSP:.INX), even as many high-profile managers continue to make billions. Any thoughts?

Most hedge funds dedicate a portion of their assets to protecting the downside; it's a kind of insurance policy. Not all funds will keep up with stocks during a sustained bull run -- but over time the hedged approach wins out, because it loses far less than long-only strategies in big downturns (less than half as much in 2008, for example). That's the main reason so much institutional money is in them, despite the fee structure and down years. 

There are 9,000 funds in the world, so not all are great standouts, but to speak about "average" performance of any field is misleading. A good friend sums it up this way: You don't take the average date to dinner, you take your date, so choose well! 
 
You've interviewed many prominent people over the years, from Bill Ackman to Billie Jean King. Who would you say was your toughest and/or most illuminating subject?

It's funny that you mention Billie Jean King. She's one of my all-time favorite interviews and someone I was really excited to meet. I love being able to speak with athletes because so many of the same themes that are important in business are important in sports: competition, focus, discipline, drive, sacrifice, and true leadership. Billie Jean King told me that she was picked by her peer group to be a leader, not the other way around, and that sense of responsibility contributed to the longevity of her career. It stuck with me because it showed the dynamic of leadership as service, versus the idea of someone who just grabs more. She gave me and viewers insight into long-term thinking versus short-term thinking. It works in sports careers and in business careers.
 
In high school, the highlight of my Friday night was turning on PBS, where the funny, punny Louis Rukeyser would keep me company with his Wall $treet Week. (What can I tell you -- I wasn't one of the cool kids!) My Saturday morning ritual revolved around reading the late, great Alan Abelson in Barron's. Oliver Stone's Wall Street, which came out in my freshman year at college, inspired me to work in the industry, as did Michael Lewis's Liar's Poker, published when I was a junior. (Ironically, Stone and Lewis each intended their offerings to dissuade people from financial careers, unaware that they'd elicit the exact opposite effect.) What people, or works, most influenced you to move into your current calling?

I loved watching Louis Rukeyser and his program, too! You're not alone. There are many who tell me that is exactly the kind of program that's missing on TV. Maybe I can inject a bit of his style into my show! As TV journalists go, the late Tim Russert is still the model of an interviewer. I would watch Christiane Amanpour any hour of any day. In sports, I'll never forget Bob Costas managing one of the toughest interviews possible in his sit-down with Jerry Sandusky. Those are some of the TV journalists I admire. As for the people who have most influenced me personally, they're not household names. They come from a range of fields and backgrounds, but they all have certain characteristics in common: They double down and push themselves harder to get through rough patches; they're all competitive, either at or near the top of their respective fields, in part because of their abilities and in part because they work harder than everyone else around them.
 
What would you say is your proudest journalistic "scoop" or exposé?

I don't practice "gotcha journalism." I'm privy to a lot of close-to-the-vest information about numerous businesses, and that information is often woven into conversation. I'm more interested in strategy, how successful people think, how they make decisions that make themselves and their investors money. When they make mistakes with their businesses, I want to know what they learned. On my new show, we're asking all of our guests to tell us point-blank their biggest business failure and what they learned from it. I've already taped some of the interviews and there are some pretty interesting answers.
 
The financial news landscape is constantly shifting, be it online, in print, or on the air. How do you see it continuing to evolve in the future?

Like every other business, media is changing. Mobile consumption is certainly a big theme. Personally, I tend to consume all from a tablet or a smartphone, even when I'm home. The age-old maxim "content is king" stands for me. As a consumer, if I'm interested in the content of an article, an interview, seeing a photo, I will find it. 
 
Any advice for aspiring business writers and reporters? 

Develop a beat, find your passion or area of specialty (in my case, alts!). The best reporters I know are beat reporters: They eat and sleep the field they cover, they make it their business to know everyone in the field they're covering -- the deals they've done, the terms, their track records, anything and everything that fills out the picture of how those sector leaders think.
 
Lastly, is there a nugget you can offer our readers -- something surprising that isn't widely known about you?

I was a competitive swimmer when I was younger and took the sport very seriously. The long hours of training for a payoff of about a minute per race was a good expectation-setter!
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No positions in stocks mentioned.
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