Legendary Investor Steve Cohen with Glenn Fuhrman: On Investing, Philanthropy and Art

[Applause] good evening hey Glenn so this is gonna inform everything I want to ask you one question to start sure do you like talking more about markets or talking about art well I always say that you know if I go out with somebody in business and they happen to be a collector we spend the first 30 minutes on all right then we get the book the way it works so let's start growing up Steve you grew up in Great Neck I'm gonna Island presumably a relatively middle-class background you grew up in a pretty big family eight kids that's right pretty unusual and tell us what about your family growing up your parents you're right it's a lot of kids and it was a it was a small house and it was a little crazy you know it was a typical suburban family lots of sports my mom was a piano teacher my dad was a dress manufacturer and you know this was a nice place to live it was great now I would have thought that you were kind of a math guy but everybody says you were actually a really good basketball player was that you were kind of first passion well I mean you know I like sports so I played soccer you know I played basketball in the high school team and and you know just like golf and that's what you did you know basically and and and the only season I really didn't play was baseball were you also a very good student from the beginning I was I think was better when I was younger then as I got older into high school then maybe I didn't study as hard and we were playing a lot of poker and it was it was a little basically played poker almost every night which doesn't lend itself to study so now were you like cleaning out your friends was it like a balance there was actually some give-and-take there are a couple good players you always need new money at the card table right so we we did clean up people and then you have to find new people and actually I made nice living doing it so how were you playing like kids games like follow the Queen are you playing real poker like five-card stud we played everything you know like I started out serious and by the end of the night turn into the last stupid game right but did they play hold them back down and you didn't really play play hold him you know it's actually funny I don't I don't know how to play Hold'em we actually had a poker night at my house for the firm a couple weeks ago and must've been like 50 people and so they kind of teach me the rules I'll hold them and I came in second so that wasn't bad now you know you say you weren't as good a student but you must have been a pretty good student if you wanted to go to Wharton and got into Wharton as an undergrad so you were obviously doing well enough to kind of have that it was different than like yeah that's the school I wanted to go to because I was interested in business and if I got in I was going but to give you it like a sense of how serious we were we were playing poker to 5:30 and night you know the night before my SAT okay so you know and because they come from family aid if a your parents long as we were alive it was alright so now were you were you very close to your to your parents or not so much I would say okay you know like when you have you don't get a lot of time with your parents when you have a kids and my mom was a piano teacher she so she taught regularly and did you pick up music at all I know well the funny part is I wanted to play the guitar and she talked me into the accordion and so I'm looking that is a mental image I could yeah I think that'd be cool instead I ended up like lugging this thing around for a couple years you know and you you ended up now you have seven children so did you kind of always say that you were gonna have a lot of kids I mean was that well two wives so you know that's that lends itself to more kids and and yeah so I was laughing at my dad do we know when yet it you know I used to say we'll be thinking and then he started laughing at me later you mentioned you mentioned two wives and it is a it is a beautiful thing that among the many things that you are known for you are known for having a bit of a fairy tale marriage - Alex tell us a little bit about how you met how you fell in love and whether I may be up maybe that maybe it's not accurate but I brought a great girl you know we've been married 26 years never an argument never across were told bless and but she's great and I met her at a dating service I mean and was I'll tell you a funny story like I just had gotten out of my marriage to my first wife and so I'm just getting back in the game and so you go to this place and you send invitations to the person you know dating service before like prehistoric right right and and and so I sent out like 20 invitations and she was the only one to accept now I'm not feeling good about myself leaving and then of knowing it's like what's going on here so but you know I was lucky enough to meet her and she's fantastic it's great it's great now you have pretty close relationships to it with your kids and as a super-intense worker and you know I have an understanding for you pretty much always knowing where the markets are no matter where you are in the world no matter what time of day it is how does that work with also having a good relationship with your children and actually being a present father it's hard it's really hard because you know as you know what we do for a living is is is a you know seven day a week job you're always thinking about it and so you know in some respects you know especially when you have the amount of kids I have and they're from two different families so you got to spend time over here and then time over here and so it's hard and I can't say I was the best father but I know I tried my hardest and you and are your children interested in more art more investing doing something totally on their own well they're all different it's really interesting you know like they're all into different passions one is studying to be an alternative doctor or my son's here tonight he's very involved with cryptocurrency he loves it you know and and I have another son as a film producer and my daughter Sophie Yummie josh is a film producer and Sophie's work with a Larry Gagosian which is a nice segue to your previous interview there you go now now one of you one of your sons goes to Brant went to brown father to parents dream Ivy League school recall the moment when he came to see you in person or over the phone to tell you that he actually had decided to go from Brown to the Marines yeah that was a surprise you know Marone is a pretty liberal place and you don't think that people who come out of there want to go to the military and so I was really surprised and but what I told him is you know I wanted to make sure it wasn't an impulsive decision and so we talked about it and I said do me fit him he was studying political science I said go work for somebody you know in politics go down to Washington work for somebody shaky end up working for a I think Sheldon Whitehouse and and for one year and I said if you still like it you still want to do this you still want to be in the military then I'll support you came to me a year later and said you know I still want to do this I said you know go for it and and and were you on pins and needles for his entire you know kind of career as a Marine or well you know he's actually he was pretty quiet on what he was doing he was in the intelligence area so you didn't really tell me too much but you know he came back he's in good shape and I'm grateful I mean we'll talk a little bit later but you you've become a tremendously generous supporter of military causes and sure I imagine that's directly related to either your son's experiences or things that you've heard because of your son's experiences well you know obviously that was that was the prime motivator I happened to be the chairman of Robin Hood and they had a Veterans Committee and I was a chairman of that and we set up a clinic in New York treating veterans for PTSD and traumatic brain injury and and and and Robin Hood's a local charity so but when I saw what they were doing and obviously motivated by my son's experience I thought why not you know I could take this national and so I was lucky enough to find great people can help me did I couldn't do it by myself and and we've rolled out 12 clinics you know we're treating our goal is to treat 20 to 25 thousand people a year the veterans and their families for free and it's it's going great you know I'm excited by this some of the statistics are pretty harrowing I mean I don't know if this is accurate but I read that more returning soldiers have committed suicide than have died in action yeah well they you know there's a statistic that 22 vets kill themselves every day and so it's it's it's it's sad and and I mean it's amazing to me that you know you always here thank you for your service thank you for your service and but yet these people come back and making the transition to normal life it's not easy especially when you're carrying some of the wound invisible wounds of war and so I thought I could do something there and I actually think we're setting the standard of care for veterans we're actually creating a model that I think you know people generally in the field are pretty impressed by and so it's going well we're gonna roll out of all the clinics in addition we're trying to find a diagnostic to find a biomarker so when someone is you know potentially has PTSD a TBI that we can get them off the battlefield and and be safe as opposed to if they if they or some sort of well if they presenting that way through that through the biomarker diagnostic then you know it's good to know whether you're at war when you're back and so then you can be treated we're jumping are a little bit but one of the things just because you're mentioning biomarkers you've done a lot and you're interested in doing more biotech investing it's that right well I'm doing a lot of private investing and you know I haven't really done much in biotech but you know we do we are I'm financing privately not through the through the hedge fund but through my own financing we've got three verticals running and AI machine learning FinTech and cybersecurity and enterprise and my goal is to build out a complete VC operation and we happen to you know but so far we've I'm surprised how quickly we can get involved in this field and lead deals so which means either one we're but we're you know we're really doing a good job we're really investing in bad deals and we'll find that out and and do you think that your skill set really is the same whether you know being a good investor is the same whether you're deciding to invest in a health care technology company or a venture capital high technology software company or trading a public company stock well I think there's some commonalities but you also you need an expertise like I've set my firm up to have experts in verticals and I did the same thing here in the in the venture in venture capital these people know these spaces so much better than I do now I'm pretty good at grilling them on investments and trying to figure out if if the deals make sense or not so it's a nice working collaboration partnership and in the grilling how would you say the culture of the firm is people scare to you is it more like kind of ask them I bet you they're a little scared I tend to ask probing questions and so it's you know if I'm gonna make a significant investment I'm going to you know I ask them tough questions you know and if you're not prepared then I'm not gonna be happy and that doesn't work very well I mean one of the things on the publish things on the public side is you have PM's that are essentially running their own capital and I assume you'd like to hear they say I want to buy this with my own portfolio or my own capital your people can't really do that on the private side right because that's just your own cap like you could I mean you could allow them in and essentially do have skin in the game because they're getting paid on that and you got to remember that in a public security market you can buy and sell stock in a day when you do a private investment and you know they're devoting years to this type of stuff you know because that's it takes a while to find out whether the investment paid off but not so they have skin in the game and and are the people all integrated or are these like the private people really separate from the public hedge well a private they're separate but everyone we will bring in people when there's a an industry or something that we think we have some expertise in both places there's knowledge sharing across across the firm there's some you know that's developing the goal is to make more more of that sort of cross-fertilization you know that we have quality people all over the firm and you know you want to use their expertise any way you can so so back to Greenwich in Great Neck in high school when you're playing poker before the SATs you say you know poker clearly Great Neck Great Neck clearly poker is a risk/reward kind of a skill that you're developing yes and your father was in business in some capacity right so but actually my grandfather used to play in the 30s you know poke you know games poker games and win or lose 100,000 a night really your grandfather my grandfather yeah Wow so yeah I'm from like a ritzy family it could be in the genes No so that's big money for a grandpa that was big money that was what was his business he was a mattress manufacturer Wow yeah so when you were doing this what were you what was your vision what did you think you would do after worden did you have an idea that you would go into the market so do you think you go into some sort of a corporate if I was gonna be in the markets I mean I used to I mean I'll just tell one story I mean I mean I didn't do it class a lot at Penn what I used to do is go down to the local brokerage firm and I would stand outside no matter what the weather was and big glass and watched the the ticker tape go across and so I'd be out there every day and eventually they invited me in to sit with the brokers and so like literally they just saw this guy outside look at it every day reading that kid in and you bring him in see after every day for us so in fact I'll take a step further that at that you know getting involved in looking at the markets and looking at the ticker tape starting I was 12 13 years old because there was a precursor to CNBC and he's to be on market hours so I obviously had to go to school but when I was on vacation and and maybe I'd miss a day at school I just watch it all day long and there was a local brokerage firm that was downtown in downtown Great Neck and they'd have a front row theater seat tonight every chance I get you know during the summer whatever I'd go down there and sit there and actually got a job next to the brokerage firm so I could then go in and and and see what's going on Wow yeah so while you were Wharton and you're looking at a cat ape were you making money as a true as an investor yeah actually in I'll tell you another ridiculous story my father puts my tuition in my checking account at the beginning of the year so what do I do with it I don't pay the tuition I'm trading it and I didn't make any money but didn't lose any money and I went to get to my diploma at the end of the year and they they said we'll give it to you be nice if you pass and so were there they were there no painful learning lessons in that in that period did you kind of get killed on it on a position oh yeah what was it something that you remember that you really learned about trading you're buying options and some energy company or something and you know betting on some exploratory well nothing that will end up and this was just on your own or what you had like a little friend warden got to remember that you know these guys are ready I went to warden I wasn't doing any of this well we were we were and there was a group you know my fraternity and we literally sit there every day read every paper we could and that's what we did you know I I got more I learned more from reading The Wall Street Journal and other publications and I did actually in the classes that I took specifically on the markets and and when you graduated from Wharton you went to gruntal yes which was not the most well known firm but not Goldman Sachs or Morgan Stanley was that something specific you were targeting was there something about grunt ole that you liked and then there's some kind of well-known story about your first day on the job when he tells about that and simply of that my one of my best friends brothers best friend was running the option arbitrage department at this firm so he was the guy started and he brought me in as a second I was using him as a broker during college so I was a little nepotism going on there and so I came in first day I made money they had me doing arbitrage you know buying stock buying puts and then the markets were a lot more inefficient and it was easy to make money and and so I did that and I mean they paid me like 12 grand a year to start which it wasn't a lot of money even this is in the 70 this was 78 okay and then by the end of you know I graduated early December 77 and within a couple months I'm telling my buddies ago yeah I think I'm gonna make a hundred grand this year because you know that I'm doing well I can see what they're you can almost play poker for one night with your grandfather exactly maybe one night I would have liked that I don't know and then by the end of the year I think I'm gonna make a million dollars a year which is real money in 1978 I'm 21 years old 22 Wow and that's where it started and they gave me a lot of rope I mean and so how long did you stay there and then what what were you just like I gotta go do my own thing now I mean was it just I was there 14 years which is you know a long time but it was a great situation and and but I eventually outgrew it and I wanted to do something more and left gruntal after 14 years and you just started si si what was the vision what were you gonna do different than any other firm out there at that time well I mean the vision was to do what I was doing at grunt all just do it bigger and you know I already had a team in place I was already hiring people to trade money outside of me so the essentially the inference that the business model was already established and then you know what I needed was more money to keep building it and so I had no idea we started with 20 million dollars I put up half the money and I had no idea what it would turn into if you had asked me that question in 1992 I said 100 and that'd be amazing you know so it's but it just shows you they've just keep going you know there's not a lot of people that have been able to transition from being not just a great investor but clearly also a great entrepreneur a great manager and a great business builder me how many employees do you have right now I have about fourteen hundred yeah I mean to oversee 1,400 people and I know everyone's name yeah it's a lot of people let's say you get you got to build an organization that's that's a different skill set I've always had good people help me run the bit but you're still trading every day you still have a book and you still are in their trading I'm still trading every day that really does differentiate you from most of the other firms that are of your you know of your scale and size a lot of the people like you that used to be you have transitioned to being really more CEOs you were the one that's really still there and it probably affects recruiting and people that want to be trading next to the boss as opposed to just working and reporting to the boss it's a recruiting you know people want to know that you know I'm still interested in the markets I teach them they can they can you know talk to me to ask questions I'm in the middle of phlegm right in the middle of the floor so you know I'm not sitting in some office someplace by myself for me I'm right there I'm very accessible and the intensity you can keep this going I mean just you know I mean 62 is and still feeling pretty good you know 10 years from now I told somebody if I'm still sitting there it's someone got a gun and shoot me so the firm evolved quite dramatically I mean at the beginning you were known as a very short-term trader you were incredibly arbitrage in situations whether it was a pure arbitrage or just you thought the stock was cheap and then it got back to fair value and you know you were happy to take advantage of it you really have morphed into a much longer-term more patient investor still you're not one Buffett but you're still your you're everyone's about me that's true so talk a little bit about how you've evolved the firm and just kind of how your view on investing is different today even you yourself said it's more efficient today so it's a little bit different yeah well when I was at gruntal when I started the firm we didn't have any analysts but we were doing I was doing everything just looking at the tape and trying to figure out just by you essentially pattern recognition right and but that wasn't scalable so then I start hiring analysts and PM's and building what I would say is the precursor to to what I have today which is a fundamentally driven firm and it was a lot less crowd at the hedge fund industry 20 years ago and and there was a I started in 1992 there was a bull market from 1992 to the year 2000 the SP was up almost every year 20% so it was incredibly easy and and there wasn't a lot of competition so our returns are great and and and I think I kind of snuck up on people because I think there was a different model sort of the tiger model and maybe the macro model with George Soros and and so this was a different was a trading model and and then people started saying what's going on here and they started copying which is you know typical business you know you know excess margins get competed away and so the returns that we generated in that period we still take really nice returns the next ten years after that but was definitely last time running more money and and it's much more complicated business and and the thing I take great pride in is that you know I kept changing the business even when we were doing well I kept trying to change the business to where I think it was gonna go next I'm doing it again today well if you're not changing you're dying there's no you know if you know I rest on your laurels you're you know the games going to pass you by now one of the kind of buzz words today and the big difference is about investing today is the use of data how do you guys use data at point 72 how do you differentiate the data you're getting and how are you using the data differently than anybody else well you know data is we consider it a tool and it's one tool amongst many that one can use to you know look at companies and try to figure out trends and so I've devoted a lot of resources to it because I do think you a sometimes a real-time look relatively real-time look at what's going on in in in companies and what's going on sectors it's tough to do it takes you we must have 50 people doing it you know from a standpoint of data cleaning from you know structuring the data and and so there are a lot of firms doing this and but just just maybe give an example cuz some people in the audience may not be familiar but yeah the type of maybe credit card data or you know shopping center analysis some satellite images of cars in the parking lot so everyone it's all saddled it isn't all companies generate data and so right you know there are firms that have credit card data and they'll sell it to you and they're not selling people I'm not I don't know the person's credit card it's more of a generalized data set but you can see trends and trends from a week ago two weeks ago and and so it gives you an idea what's going on in the economy now yeah it comes in a very unstructured format and it doesn't come in like easily so you can look at it and try to figure out you know try to try to get some you know knowledge on what the trends are so it takes a lot of work to work with it and I actually think it's gotten to the point now where the easy stuff has been commoditized and you really have to what we call you need to interrogate the data you have to get down into the data I'll give you one example McDonald's is running a beta test of some new product and they're doing it in Houston Texas so if you know the zip codes and the you know you can see what's going on there and if it's successful you can probably extrapolate that they're going to roll this out to the rest of the country and so you're sort of real-time trying to figure out what their next move is going to be and they may not do it who knows right but it gives you like an inkling that you know this is something that's going on that's the potential differentiator and that company how many people worked at the firm in 2016 where's the family office 1100 yeah so you know you you had this incredibly successful business you know the firm had this situation with the SEC the firm a dissent happen the firm made a settlement you you never were involved yourself individually and so for four years you're running your own money is a family office now I'm from the perspective that that's the be-all and end-all to run a family office there's nothing better than that so why not show you when it's done why did you want to come back why did you want to come back and run other people's money well you know I never it never bothered me having other people's money because I had a lot of my own money in it so in some respects it is a family office and I have outside investors also and so frankly we couldn't grow you know there's only so much capital I had to devote to the business and I had lots of ideas and lots of things I wanted to do and grow our international business you know grow our Qantas and things like that and so they just made sense to bring in outside capital and it was actually not hard I mean I I only did like 10 15 meetings it was really easy I made one trip overseas to one client my staff did an amazing job and we've raised probably I don't know five billion something that so fairly quickly so our last transition a little bit to talk about art for a second take us back what was the what do you view as the first work of art that you bought it was a focused picture which is a period around 1905 1906 very colourful very pleasing to the eye think of Franz Marc or something I like a mark Albert mark a okay a very beautiful beech French beach scene and you just stumbled upon it or like how did you come to that I was taken into a gallery in Paris and showing this work and I had people in my firm who are collecting one was collecting Contemporary Art another person was collecting the old masters I thought the old masters were mad and love that seemed a little kind of how I'll soon from that first purchase did you really get the kind of I'm now a collector and really get into the like I didn't know pretty quickly you know I mean you know I tell me once I commit to something I tend to go out hard and I went out of heart I mean you know and it was that moment where they weren't there wasn't a ton of competition so I was getting offered a lot of great things and this is great works by dead artists or this is contemporary right off the bat this was a generally impressionist of Modern Art so maybe it was one or two people and so what was the transition because you really now more of a contemporary collector no well I do I do I run the gamut you know I bought an impressionist picture you know earlier this year mm-hmm so I think most of it is post-war and contemporary today but I will go back for something I like and on the contemporary side do you enjoy going to studios and meeting artists is that something you have the time and the ability to do I wish I could do it more you know because it's really cool getting into the studio and talking to the artists a lot of times you look at pictures you don't have context mm-hmm and once you get context and you kind understand why someone was doing something I bought I bought a Robert Indiana and it said eat die right and you're looking at go what is that and what it turned out was the artist his mother on it on his deathbed on her deathbed said did you eat and then he and she died okay like you know that's the story behind it now it it may not be a good story but alright at least you have context like what this is because it made no sense otherwise all right tell us tell us a good studio like a really good studio visit you've had recently that was really memorable to you recently years well I'll tell you one I did which was cool in 2006 I was in damien hirst studio in england and we did a spin painting together which was much I don't know if he's done that with other people but I'm sure he has but you know so that I have a feeling that work is not worth as much as his work and you and so you made it with him yeah I made it wasn't you poured the paint or the paint the thing it's like you know like well spin art things it was essential that was a big thing it was essentially a commission like you were buying the piece I wasn't commissioning anything you didn't even buy that piece alright so let's just do it and he gave it to me right that's cool well that when you're getting gifts from things so alright tell us the story of one of the most famous works you've bought is the Picasso LaRue from Steve Wynn sure it took a couple of tries so it's pretty spectacular painting but talk about the first time you tried to buy it and what happened and then how it came back around yeah I was shown this painting it was obviously a phenomenal painting and and and I'd seen it look for years he headed in the Bellagio Gallery and just gorgeous picture and he decided to sell it I did for it and I bought it and I get a call I bought it on a Tuesday I get a call Wednesday night from the dealer saying you're not gonna believe this yeah I know what's going on he goes Steve Wynn just put his elbow through the picture I go come on that's ridiculous yes and and sure enough you know he doesn't see very well and and and what was really interesting later on is that there were multiple people there when it happened Barbara Walters was there Nora Ephron was there and Nick Pileggi David Boies was there all there what had happened I've seen him all telling me about this later on and I said it was really like they just sat there stunned and and he was like kept talking oh you know I did that whatever and and and so they actually sent it to New York and I inspected it and I would say there's this it wasn't a big hole but it was a you know obvious obvious hole and and you know for that type of money he tried to buy anything at all so you know if there's a hole you maybe you get it for a little less but so and so but they fixed it it was they called him - surgery and and he ended up keeping it and he promised me if you ever sold it he would offer you know give me first shot and they decided to sell it in two thousand two thousand twelve or more money well a little bit more money not a ton more right and I bought it yeah that was that amazing and then more recently you bought an incredible Lichtenstein for 165 million dollars and that price is not correct okay from this one a correct I appreciate that from aggie gun and I want to start rumors a spectacular piece when when you're dealing in a work of that magnitude is it the same thing as buying something for two million dollars how is it differently buying this cup you know it's you know obvious it's a lot of money and and you're gonna be you can't be flipping me it can be flipping but you know I take it serious and I want to make sure that it's something I really want and and for that that type of money and and you don't want to make a mistake and so you know these are big decisions and and you don't make a lot of them over time you make some and and and so you think about it and but then you you know just look at it and you go my god this is an amazing amazing thing see that's the problem this is such a nasty habit okay like this is what's you and you know because you collect and and you know it's just the collectors mindset when they see something they love they want it and and you know and and money is important but you know it's it's it's special now in that situation Aggie took much of the 150 million or so she proceeds that she got and started this criminal justice reform movement was that a relevant do you even know about that or for you it was really just you wanted the picture and that's something that asked me to donate to write so I mean you know I'd I have my charities and Yantra P she has hers and you know you can't buy it usually can't buy away my futures are down Danny I'll be right back I gotta sell summer you can't buy a great piece of art unless you have a great collector selling it right I mean you got to get lucky you got to be in the right place at the right time and and there's more competition than ever for great things today and how many how often is somebody calling you with a masterpiece and and how many people are even allowed to call you I mean do you have like a handful of dealers that they really have a direct line to you or how does it work you know the art world's fairly small it's not a big place and so people who transact in that arena is pretty small and you know who they are and so I have relationships with them and I'm sure they have lots of clients so they don't have to offer it to me I'm sure they're offering it to you know lots of things to lots of different people so I get offered maybe once twice a year max you know I don't buy everything that's offered - right and you do sell sometimes so haha what makes you sell something how does that process work well I mean as a collector you can't own everything right I mean you got to make choices and sometimes you're selling to because you're upgrading your collection sometimes you're selling things to buy something else you know you're sort of deciding from one reason or another you can live without that work and and there's something you want more and you have to have sensitivity if it's a living artist if the dealer you know will be upset I mean do you worry about that or not - most of stuff I'm sensitive to that because I you know I value the relationships I have with the people I work with and I don't want an artist mad at me because I sold something that he thought I was going to keep and so it's now in my mind it's not worth it to burn a relationship and so and I don't think that way so if I just saw every once in a while I will sell something and I'll tell them and I'll give it back to the dealer and say you you know you sell it and do it the right way and maybe I'm sacrificing some profit by doing it that way but that you know it to me it's the right way to do it now you're viewed as one of the greatest traders in the history of Wall Street you have this Abell sensibility and a natural gift maybe for how to trade securities and how to manage investments do you have to battle some inclinations sometimes when it comes to art that oh man I know this is the time to sell this but you know it's just you can't treat art the same way the other thing or it's different you know I'm even thinking from like oh how do I trade this and make money that buy because I love it and and I'm doing it for different reasons I was lucky enough to buy things and they went up in value but if they can go up in value would have been fine and and that's the way I do things you know like I'm not this is not a business for me there's a hobby I mean I got a business and I do that over there have you ever done the math as you know has the return on your art collection been better or worse or you know how do you have an idea how it's been I haven't done the return analysis I can tell you that in general I mean you know the status of your art goes up five six percent a year you know maybe I bet you've done better than that well I probably dumb yeah you know but but it also wasn't because I I bought great things but I also bought it at a time where the market was it's been a bull market mm-hmm and you know in a bull market that you know anybody can make money and you know long as you're putting money to work so is there something about your collection that makes it a Steve Cohen collection is there anything that's consistent across as opposed to just a bunch of really great works you know I I like bold works yeah I tend to like things that are like in yet a little bit in your face my Francis Bacon is it's like that the Queen woman's like that you know they're incredible pictures but they're strong pictures and and I tend to like abstract a lot and they tend to the best painters tend to be fierce painters you know they tend to be really strong and how they they they go about their work now what about next steps with the art collection I mean a lot of people have opened their own spaces Glenn stone just expanded with materials and Emily rails collection and obviously everybody in Miami and is is there an interest at some point and having a Steve Kohn place to have some of your collection that's a tough one I don't know cuz you know you know in the area we live there's only MoMA the Whitney the mat you know you've got some pretty stiff you go you got a lot of art sitting in this area so you know perhaps down the road it's not a major driver for me now yeah some point I guess I got to think about what I'm gonna do with this stuff you know I mean I'm I'm sure my daughter would love some of it but itself and and but you know it's I'll figure it out and it's collecting something that you do it all with the kids or with Alex or I'm doing other Sofie now a little bit and she's working Larry Gagosian and and has gotten into the art world and seems to be enjoying it I think the other ones are you know they have their own things that they like to do and and nor it's not one of them all right cool let's get to a couple of questions on the index cards a couple of other things though billions watch billions what is that is that a good show I watched it the first season I mean it's a composite of multiple people did they call you an advance and like give you any kind of heads though they wanted to talk to me and I didn't do it I know other people did it but I didn't do it you know and and I can remember being in les moonves's house and was apologizing to me already I said come on les relax you know it's it's a composite of a lot of people and and but I'll tell you one funny story with that you know I was in China looking at private companies about a year ago and I'm talking and see if every CFO one of the picture with me because they wanted to bring it to the wife and say that's the billions there you go I mean in general do you have a problem like protecting your privacy is that something that's an issue or not really for you well I don't know what that means protecting your privacy there is no privacy anymore you know I get stuff written about me every day every the day you know and it's tends to be secession sensationalized and that's just the way it is you know that's that's the world we live in today there's nothing you can do about it so you can't let it bother you interesting good good philosophy all right let's see about some of these questions you can't ask you can't ask that that's the one question I didn't want to answer now it's what do you think of cryptocurrency I feel like that's like you know let let everyone talks about cryptocurrency what do I think I think it's it's dicey right now I think the use case is still to be outside of Bitcoin which is you know some people believe it and some people don't my son certainly believes in crypto but the use cases are still still being developed and at some point the blockchain is gonna really matter question is can you make money off the blockchain and I don't know the answer to that do you think they'll ever use blockchain or any other technology to carve up bits of paintings and sell 0.01% of the Picasa yes or something that's the other day that some crypto company wants to do that in real estelle with and Novogratz wants to do that so everyone I've heard that one to a hundred times you know securitization of pictures and selling piece I doubt it I don't think you know you want to talk about arts pretty illiquid already you're gonna make even more liquid by owning the left part of the clip or in the picture who's gonna know so I don't I'll tell you what might work though you know and I've had conversations the the idea of creating digital images as opposed to and owning the image as opposed to I've written that sounded more you know but everybody can just make a digital image that's right that's right but you know it still could be right you know if you own but if you own that particular image unique image that might be interesting so all right this question is which investor do you most admire I would say at least my contemporaries I would say Stan Druckenmiller is the real deal you know whenever you talk to him you get insights and thoughts that you don't hear any other place a lot of us are synthesizing a lot of a lot of people's thoughts and putting him you know into you know figuring out you know what we think is important what isn't he's creating those thoughts that's pretty impressive and he decided not to take any more outside money he was happy he gave up his you know firm and decided to go a different way and unless I works for him no all right next question is please name two or three emerging artists you are interested in I want needs wow person is gonna hold me I'm wrong that guy's coming back I really like I think is really great first Fisher he's merging I'm not gonna let you get away with merging god I'll give you a big gap below words Fisher before we have to get down to tour merging that's really interesting the only out Marcus am I like him he's okay you know I think Jen guize pretty good mm-hmm you know I think she's interesting those pictures are really nice to look at it happens to be mark Rowe chance ex-wife one wife out of the ex-wife and you know nothing crazy you know I'm not finding a lot of art today that I'm going crazy for mm-hmm you know it tends to be you know sort of similar type artists that you and I both know mm-hmm you know the you know and frankly you know my time is so stretched I don't Rashid Johnson I think he's an interesting artist in Brooklyn I like him a lot I think he's doing great work all right a member of his fan club in the front room is this the beginning of a bear market and if not now when do the Bears start that's a tough question because we're in a weird situation like I I don't think any of us have seen a set of facts that we were we're seeing today where there's a stimulus with unemployment at 3.7 percent and wages are starting to go up which means the feds going to lean against that and the markets starting to get worried that one the stimulus is going to roll off so we're seeing Piku shootings and and at the same time employment is still pretty strong and and wages going up and feds primary mission is to fight inflation or potential inflation so we have this kind of box that the markets are in and how it plays out it's hard to know it's going to play out I mean if the economy continues to grow wages are going to continue to go up and if that's gonna continue to tighten and normally that's how a cycle ends and the question is do they take their foot off the gas and give it you know oils down a little bit so you know 20 you know 15 20 dollars over the last month so that helps inflation and so you could you can come up with scenarios because of dollars strong that the Fed decides to you know pause and maybe the markets get a breather here but ultimately I think that cycle is going to happen and and so we're definitely late cycle and so at some point we're going to add to our bear market it's gonna happen I don't know next year and a half maybe two this is another market question how do you determine inflection points versus a dead cat bounce well you know that's that's you know that's what we get paid to do which get paid to figure out what's going on and try to figure out why stocks to move in the way they're moving and you know a lot of that has to do with doing really solid work I mean you mean you can get a financial crash we saw that in 87 but most of the time the reasons markets go down is because the economy you know turns bad and so I have 150 analysts are monitoring thousands of companies and so you know from from that you can get a sense of what's going on these companies are things slowing and they you know they they talk to invest and they report their earnings and they they there are transcripts and stuff that you can read and in addition we have our own data that we follow and see if things are changing and you can start to build you know a picture of what's really going on the economy but you know there's a there's a lot of variables but so for right now you still are pretty comfortable with the market market goes down 600 yesterday you're more buyers I'm not comfortable I'm not on I'm a compliment uncomfortable I'm sort of in the middle I can come up with a scenario where we go up first and go back down again I can come up with a scenario with the Fed pauses the economy's still growing two and a half percent day next year which isn't bad and the markets hang in there so I don't think you know sometimes it's not that easy okay I don't think the returns over the next two years gonna be very good I think they're if they're if the market hangs in there they're just gonna be marginal returns mm-hmm but you're still investing every day long short you know so we're on both sides of the market and so we you know and hopefully in a normal world we can make money on the upside we can make it on the downside got it okay this question is what was your worst investment ever oh my god tell you a funny story I was I was long a health care company and we had a massive position they missed you know I don't know lost a hundred million dollars or something this was in 2002 which at that time was a decent madam you know percent of our cat you know there's a big loss relative to our capital and my wife is taking pictures at home that night and she's got me putting on this costume and I'm like and I am livid and I turned to the photographers say you got five minutes and that's it I'm out of here and because that was a miserable day but you know let's see you're gonna have bad day so you stick around long enough you're gonna have bad days and an art question how do you view the recent Banksy stunts I thought was cool you know like you know people get so serious about art you know or it could be fun right and and do you collect any banking I don't you know but I'm bet you my kids will and and so I thought was cool and the person who bought it probably got lucky there and and on something that has a story behind it do you think Banksy was the seller I have no idea yeah I've no idea I do okay you can tell us what's your view I'm am reviewing what's your view on the China TMT space is our Alibaba like companies taking over I mean that's an interesting situation because I was over I told you before I was over in China last year I met with $0.10 I met with JD I met with a bunch of company large companies and you get blown away by by what's going on over there and the only risk is the government when you talk to people in China you talk to entrepreneurs they acknowledge that the government can take all their assets at any time and that's a little bizarre and what's happened this years the government's really started cracking down you know whatever reason that a fear and a control or whatever their motivations are on these large companies so I thought it was weird that you have this incredible entrepreneurial spirit in China you know partnered with a communist Society you know which is bizarre it's not you know when you go to you go to college and take economics that doesn't seem to fit yet it was coexisting but we've seen this year where the government has taken a heavier hand and so but these are the clear winners I think the government likes these large companies where they can control the information and sort of be in partnership with these companies and so yeah I think Alibaba is a winner you know now the only question is will the government allow them to keep the money or you can make the same thing about Amazon Google and Facebook political risk there is probably the biggest risk right now well I mean they're under pressure too obviously from both sides Republicans and Democrats the Republicans don't like the fact that they think that companies are biased against them and Democrats don't like the privacy issues so there's not a lot of fans for or social media companies you know in the world today in politics but you can make an argument that they're going to regulate them and obviously that would constrain them to some degree but also prevent other people from entering their business becomes the barriers of entry become tougher so they become more entrenched so we'll see how that plays out but in the long run I don't think it's even if they were regulated somewhat you know if they broke them up or something as something else I actually think of they'll benefit in the long run so this question just has to do with the overall market you talked about the inefficiencies in the markets in the 70s being an opportunity there's obviously less low-hanging fruit so to speak in the public markets today yeah is that just something that's changed obviously a lot of people are moving to index funds hedge funds are closing most people value managers in particular have been underperforming for half a decade what do you see the future of public asset management versus indexes it's it's a trend that you know I don't know when it's going to break and if it ever breaks I mean it's obviously people who I've decided just as you know an investing is in other areas you know to make make things low-cost and spend very little of it on their investments used to be a broker with charge you know big commissions and you know listen my hedge fund charts a big fee and and still charges a decent-sized fee and and and so it's now you know we get compared to the SP sometimes and I think that's not a fair comparison because we're long short the S&P is long I mean that's there long stocks and so in in certain markets will outperform and when the markets in a bull market the S&P I perform my investors are looking for a certain you know safety of capital in addition to earning a decent return and so you know I'm marketing to a different group and and but to your point about hedge funds are closing and people are going to index investing versus active investing I think that's trending I don't think it's gonna go away and so when we see it on a daily basis where the liquidity in the markets and not what they used to be yeah so you know and so that forces us to change what we do so let's see what lies ahead for you now you're back in business you got a giant firm again you know you've got this great art collection you got a great family you strike me as a guy that sets goals and achieves them and moves to new goals what are some of the goals left to achieve for you well you know it's a good question I mean I'm trying to rebuild my firm right now and think about things not just from a fundamental point of view from a quantitative point of view I do a lot of these salon dinners where I invite well we usually pick a topic and invite the experts we did one recently in quantum computing and you know that's coming down the pike over the next few years I come on a computer can theoretically calculate stuff that you know thousands of times faster than the best computer exists today well you can imagine with that type of compute power what you could potentially do and so and the type of people who have the ability to create software and and and program in the markets are going to have a distinct advantage and so it's important for me to know these things and figure out ok how am I say if this coming down the pike how am I gonna take advantage of it and how am I gonna hire the people we're gonna help me do this and but you know that's the nature of the world the world keeps changing and if you want to stay in this business you got to keep changing you got to keep adapting you got to keep up on what's going on or else you're gonna be out of business and if there any other there are any big goals that you have or ambitions outside of your work well I like to live a long time good you know I mean you know I want to enjoy my family and and you know there's no doubt philanthropy is becoming a more important part of my life and and welcome you know obviously that'll grow and I got a great life I mean I could pinch myself I feel really blessed and so you know I just want to have fun meet interesting people and and you know look back and go wow that was that was that was awesome no better way to end then right there thank you all for coming Steve thank you very much [Applause] you

Channel: 92nd Street Y

Views: 104,093

Rating: 4.7310925 out of 5

Keywords: 92Y, 92nd Street Y, Steve Cohen, Glenn Fuhrman, Investing, Philanthropy, Art, Point72, MSD Capital, The FLAG Art Foundation, finance, investors, financial, investment advisor

Id: OYY10LsoL8Q

Length: 57min 33sec (3453 seconds)

Published: Wed Nov 21 2018

Reddit Comments

[u/DullHorror]

Christ, if the sound Hannibal Lecter makes talking about fava beans was a person, it would be this fuckface

[u/X-Omnissiah-X]

I cringe hard reading the comments.

[u/hssteffler]

They’re watching the way we think, yeah we can shit talk them but let’s start anylizing the way they thing. One of his sons was really into crypto? Sounds like a connection right….