So You Want to Start a Hedge Fund? Watch This First

[Music] there are young traders out there who dream of running their own hedge fund right perhaps they're working for citigroup as you once did or morgan stanley as you once did or perhaps they're killing it in meme stocks right holding diamond hands on robin hood pretend what's the advice to anybody who wants to start ahead you gotta have a good memory i mean ronnie mateo was my worked for jim zelter he now runs true mid which is apollo yeah no he worked for albert city and ronnie was a great sales person but they had him doing trading because of politics frankly because the head of sales thought he would get fired if ronnie was in sales um and he blew up as a trader but he's the best salesperson i know and he now runs trumad which is a multi-billion dollar unicorn e-trading platform he's done well that we're investing he's done really well but he made me write down every single trade that we did every day and he would quiz me on the next day and that trained my mind to recognize patterns recognize you know i was always a baseball fan all the baseball statistics were already in my head but remembering each trade so that when patterns happen in markets you can see patterns being repeated again and again and that allows you to move fast if you have that memory built in the other thing is never cost trade don't be attached to any position too much so selling i think what differentiates us again again same thing those that can sell fast and not be emotionally attached to a position not listen to their analysts from the analysts telling them yeah it's down but it's fine management's changing their story for the third time but it's going to be fine because the analyst wants to rent the beta no you have to sell and you can buy it back later if if it turns out that you've re-underwritten and you're right but i would say selling and memory and then the thing that you know we learned from kevin that you watch paul or druckenmiller on tv talking about is slugging percentage and sizing when momentum's in your favor the momentum factor exists in credit the high old market's more of a momentum market whereas ig is more meaner version and when you have that momentum plus the fundamentals in your favor sizing more aggressively is something that i think can be can be learned uh on the memory point it's a good one i think look there's plenty of things we're not good at we both have i think good memories and when we were marketing the fund originally we um we we had uh you know things that we've been involved in in the past on a page and our our i our ir guy was so afraid that someone would ask us about it like let's say someone asked you about this random thing that you did and uh please do please please do and so i think that's that's a skill that's helped us um i think more generally don't set out particularly if you're young to be a manager of investing firm just do well like like this obsession with like goals where am i going wherever my my five year plan get past it be very intellectually honest in your current job don't stay in a current job that your growth curve has flattened if you're young and really try not to blow yourself up so constantly think about the downside constantly think about what happens if i'm wrong but the intellectual honesty to say i was wrong to redo a position to sit down with your pm and say you were wrong is a really important part of growing into ultimately managing a portfolio of positions instead of that single position but i think don't set out to do it and find mentors that are your mentors not for political reasons because that that might be the person that's advantageous for you instead in institutionally find mentors that you can really learn from not just because they're telling you something but through osmosis because a lot of this business is learning through osmosis it's apprenticeship yeah and zoom is hard for that but you know i would add if you're actually closer to it let's say you've had a successful career to place and you're ready to go and you want to do it people who have capital always believe that people who don't have capital can't raise capital so so don't be discouraged if somebody even if they're good intentioned tells you there's you know it's terrible out there you can't raise money you really might maybe you won't but you might be able to and get a lot of pieces of advice about it what in your view are the key ingredients to a successful career in finance curiosity and and it has to come naturally if you are motivated just by hey you can make a lot of money in finance you're usually not going to be successful you need to be the type of person who walks into a supermarket and immediately thinks i wonder what they make on from concentrate versus tropicana right you need to be the type of person who is always thinking about how businesses make money and why they make money and why they do what they do and maybe you're a little obsessed in your own life of wow there's a deal i can have if i cancel my one streaming service for the other one those elements always being focused on inefficiencies and thinking about how companies make money is something that can't be taught and like in any industry if you love it you will you will be you will you have a better chance of succeeding than if you're doing it for the wrong reasons it's hard if you're not super competitive i think because you're going to be surrounded by highly highly competitive people and the politics of being not competitive when everyone else is competitive is difficult and always remember that it's not rational to not be afraid you should be afraid when you're investing if there's an investment opportunity being handed to you it's probably because there's stuff going on and or because like when we were starting a lot of other people have seen that opportunity in past

Channel: Bloomberg Television

Views: 431,540

Keywords: Bloomberg

Id: RMvenf7E-Dg

Length: 5min 28sec (328 seconds)

Published: Wed Sep 22 2021