"Catch-Up With David": with Goldman Sachs' Sharmin Mossavar-Rahmani

2019 Market Outlook & Performance

• Base Case Return Forecast: The firm set a 9% return forecast for 2019, a target already achieved early in the year.
• Strategic Recommendation: Advised clients to remain invested and avoid panic during market drops; this strategy has "worked out quite well."
• US Market Outperformance: US equities have outperformed other developed and emerging markets over a 10-year window.
• Core Theme: "American preeminence" remains a foundational strategy, driving strategic overweighting toward US assets.

Drivers of American Preeminence

• Institutional Strength: Cited as a permanent factor, including the rule of law, protection of property rights, strong private sector investment, and innovation.
• Political Structure: Highlighted checks and balances and term limits as safeguards against long-term authoritarianism (e.g., preventing a 30-year leadership tenure).
• Demographics: The US holds the best demographic profile among developed economies and outperforms most emerging markets.
• China Comparison: China's current demographics are described as worse than Japan's in 1990; dependency ratios are cited as unattractive despite the two-child policy shift.
• Historical Precedent: Current geopolitical tensions, such as demands for NATO allies to pay more, are framed as non-unprecedented, echoing President Kennedy's 1960s stance when the US bore 73% of the cost.
• Federal Reserve Interactions: Historical context notes that presidents, including Ronald Reagan and Jim Baker, have frequently commented on Fed policy without causing systemic disruption.

External Risks & Forward-Looking Statements

• Primary Threat: The firm identifies the evolution of the US-China relationship as the most significant external risk to American preeminence.
• Nature of Risk: Concerns focus on potential accidents driven by overconfidence in leadership regarding military, economic, and geopolitical spheres.
• Global Impact: The decline of US preeminence is characterized as detrimental to the entire global economy.
• Resilience: The US is described as resilient to internal shocks (e.g., September 11) due to historical endurance.

Personal Biography & Career Path

• Background: Born in England, raised in Turkey and Iran; father served as a diplomat.
• Iran Experience: Graduated from engineering school in California after the Iranian revolution; noted that despite societal conservatism, women maintain high educational levels (50% in engineering) and innovation persists despite sanctions.
• Entry into Finance: Entered the sector by chance in the late 1970s/early 1980s when the energy market collapsed; leveraged a mathematical engineering background in optimization to transition into finance.
• Tenure: Member of the Goldman Sachs Quarter Century Club; recognized as one of the firm's most senior women.

Client Relations & Philanthropy

• Client Profile: Described as smart, well-informed, successful, and often philanthropic.
• Specific Interaction: Cited Danny Abrams (a 90s investor and peace advocate) as a favorite client due to his focus on the Middle East and philanthropy.
• Philanthropic Focus:
  • Princeton: Co-funded the Center for Iranian and Persian Gulf Studies to improve American foreign policy understanding.
  • Harvard: Supports the Business and Government Center, facilitating the pipeline between business and public service.
  • Healthcare: Active involvement with New York-Presbyterian Hospital.
• Information Gathering: Maintains a habit of reading physical newspapers to ensure broad perspective and avoid algorithmic news filter bubbles.