From left: Nancy Davis, Chief Investment Officer and Managing Partner at Quadratic Capital Management and Renee Yao, Founder and Portfolio Manager at Neo Ivy Capital

The year 2021 started out as unpredictable as ever for investors who thought that things might feel more normal after a pandemic-stricken year.

A small group of retail investors captured the world’s attention when they pounced on a handful of stocks that big, institutional investors had been rooting against. After this episode, the broader stock market continued its stunning recovery from last year’s crash as the pace of COVID-19 vaccinations topped expectations. Then out of nowhere, a little-known family office cost some of the largest investment banks several millions of dollars because of its risky bets.

And over in fixed-income land, everyone except the Federal Reserve is seemingly worried that inflation will rear its ugly head.

To help us make sense of these developments, what they mean, and what might happen next, Insider recently tapped two people who we had named as investing industry transformers: Renee Yao, the founder of Neo Ivy Capital; and Nancy Davis, the chief investment officer of Quadratic Asset Management.

The transcript of that roundtable is featured below.

Insider: Thinking about the past year and how it’s really impacted every market, every person, what are some of the biggest shifts that you’ve observed in your part of the industry from a year ago when we were quite literally at the bottom in terms of the sell-off?.

Nancy Davis: I think these moves seemed to be exasperated by very low levels of liquidity. And I think liquidity is still in a pretty fragile state.

I do think the recovery has been absolutely tremendous. It’s a much faster recovery versus, say, the global financial crisis, how quickly we turned around; and how quick and unified policymakers were really around the world on the central bank side; as well as the combination

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