CMR Interviews: David Abramson On What Prop Trading Firms Are Looking For
Summary
TLDR在这段视频脚本中,Jason Shapiro采访了来自First New York的David Abramson,探讨了自营交易公司寻找什么样的交易员。David拥有丰富的招聘和监管交易员的经验,分享了他对交易员成功和失败的见解。他们讨论了风险管理的重要性,如何识别和培养有潜力的交易员,以及如何建立长期的客户关系。这段对话为那些对交易行业感兴趣的人提供了宝贵的洞察。
Takeaways
- 😀 交易成功与否与风险管理密切相关,理解风险回报比是关键。
- 📈 交易员应该对自己的交易策略和市场有深刻理解,包括市场如何运作以及特定交易为何被持有。
- 💼 风险管理不仅仅是避免亏损,也包括在不利条件下如何保持资本,以待市场条件改善。
- 🎯 交易员应该专注于自己的优势和策略,避免盲目跟风或尝试不适合自己技能的交易方式。
- 🤔 交易员需要诚实地评估自己的长处和短处,对自己的交易表现有清晰的认识,避免自我欺骗。
- 🏆 长期成功的交易员通常低调,不轻易分享自己的交易策略,专注于业务本身而非外在表现。
- 💼 交易员应该将交易视为一项业务,合理管理资金和生活,避免因交易成功而过度消费。
- 📊 交易记录的审查非常重要,需要检查交易员在不同市场条件下的表现,以及他们如何处理波动和亏损。
- 🌐 第一纽约资产管理公司(First New York)拥有一个内部培训项目,通过有经验的合伙人指导年轻交易员,培养他们成为公司的合作伙伴。
- 🏢 第一纽约的办公室环境开放、合作,鼓励不同策略和方法的交易员相互交流和支持。
- 🚀 对于新兴的交易员或资金管理者,重要的是要展示出能够管理风险和产生盈利的能力,即使起初的资本规模较小。
Q & A
什么是第一纽约(First New York)?
-第一纽约是一家大型的自营交易公司,也是美国最成功、历史最悠久的自营交易公司之一。
David Abramson在第一纽约担任什么职位?
-David Abramson在第一纽约担任交易负责人,负责人才招聘,同时也负责对交易者的监控和评估。
Jason Shapiro是谁,他在采访中扮演什么角色?
-Jason Shapiro是Crow Market Report的创始人,他在采访中扮演主持人的角色,与David Abramson进行对话。
Jason Shapiro在采访中提到了哪些关于交易者成功和失败的因素?
-Jason Shapiro提到了风险管理、风险回报比、对市场的理解、风险纪律以及交易者的个性和态度等因素对交易者的成功和失败有重要影响。
David Abramson如何评估潜在的交易者?
-David Abramson会评估潜在交易者的交易策略、风险管理能力、市场理解、以及他们在不同市场条件下的表现。
第一纽约的交易者培训项目是如何运作的?
-第一纽约有一个助理培训项目,合伙人会培训年轻人,帮助他们理解市场、交易策略和风险管理,最终成为公司的交易者或合伙人。
为什么第一纽约不倾向于投资市场中性、贝塔中性或部门中性的策略?
-第一纽约更倾向于有明确方向性的策略,因为市场中性、贝塔中性或部门中性的策略往往需要大量杠杆,且难以在各种市场条件下都表现出色。
第一纽约如何分配资本给外部交易者?
-第一纽约会根据外部交易者的策略、历史表现、风险管理能力以及与公司文化的契合度来分配资本。
在第一纽约,交易者如何展示自己的能力并获得更多的资本分配?
-交易者需要首先证明自己能够稳定地赚钱,然后才能获得更多的资本分配。这需要交易者展现出良好的风险管理和交易策略。
David Abramson对于交易者在第一纽约的初期表现有何期望?
-David Abramson期望交易者在初期能够展示出自己的交易能力,但并不期望他们在第一周、第一个月或第一年就做出惊人的业绩。
第一纽约在选择交易者时,如何平衡他们的长期潜力和短期表现?
-第一纽约会综合考虑交易者的长期潜力和短期表现,通过助理培训项目和其他评估手段,确保交易者能够适应公司的交易文化和风险管理要求。
Jason Shapiro在采访中提到了哪些个人交易哲学?
-Jason Shapiro提到了他的个人交易哲学,包括不随大流、寻找与众不同的交易机会、理解风险参数以及保持谦逊和诚实。
第一纽约在评估交易者时,会考虑哪些非交易因素?
-第一纽约在评估交易者时,会考虑他们的个人品质、生活态度、对金钱的看法以及他们是否能够诚实地面对自己的优点和缺点。
为什么第一纽约不倾向于投资那些刚刚起步、没有管理资产的新兴经理?
-第一纽约更倾向于投资那些有成功记录、能够展示稳定盈利能力的经理,而不是那些刚刚起步、没有管理资产的新兴经理。
Jason Shapiro如何描述他在第一纽约的交易经历?
-Jason Shapiro描述他在第一纽约的交易经历是积极的,他强调了公司的风险管理哲学、对交易者的支持以及公司的合作环境。
在第一纽约,交易者如何与公司的利益保持一致?
-在第一纽约,交易者通过展示他们的交易能力、风险管理技巧以及对公司文化的适应性,与公司的利益保持一致。
David Abramson如何看待交易行业中的困难和挑战?
-David Abramson认为交易是一个非常困难的行业,需要交易者有强烈的风险意识、对市场的深刻理解以及良好的个人品质。
Outlines
🎙️ 采访背景及人物介绍
本段落介绍了Jason Shapiro主持的CMR访谈节目,特别提到了对David Abramson的采访。David是First New York的代表,该公司是美国最大、最成功的自营交易公司之一。David负责面试、招聘和监控交易员。由于视频质量不佳,仅提供音频内容。Jason强调了David在挑选和培养交易员方面的丰富经验,并希望观众能从访谈中获得有价值的信息。
📈 风险管理与交易哲学
Jason和David讨论了风险管理的重要性,强调了风险回报比和交易纪律的必要性。David提到了他们公司如何通过小额分配来降低风险,并等待市场条件成熟。他们还讨论了市场趋势和交易策略的适应性,以及如何根据市场情况调整交易规模。David分享了他对市场中立策略的看法,以及他们公司倾向于寻找具有明确方向性倾向的交易者。
💼 交易员的培养与发展
David介绍了First New York的助理培训计划,该计划通过资深合伙人指导年轻人,帮助他们理解市场动态和交易流程。这种培训不仅有助于培养新的交易伙伴,也增强了公司内部的团队精神和归属感。通过这个计划,公司已经培养出多名成功的交易伙伴,他们通过自己的努力和公司的分享利润政策获得了丰厚的回报。
🤝 合作与资本分配
本段讨论了First New York与内部和外部交易者合作的方式。公司内部有约85至90名交易者管理不同资产类别的资金,同时还有约25个独立管理账户由外部交易者管理。David解释了他们如何寻找具有特定优势和方向性倾向的交易者,以及他们对市场中性、贝塔中性等策略的看法。
🚀 交易员的成长与资本获取
David分享了他对交易员成长和资本获取的看法,强调了从小规模开始、逐步展示能力的重要性。他提到,如果交易员能够证明自己的能力,公司会更愿意增加资本分配。他还提到了公司对新兴经理的支持,以及他们如何寻找有潜力的年轻企业家。
🛠️ 交易员的自我认知与风险管理
在本段中,David和Jason讨论了交易员如何通过诚实地评估自己的长处和短处来提高交易技能。David强调了自我认知在风险管理中的重要性,并分享了他如何评估交易员的策略和业绩。他们还讨论了交易员在不同市场条件下的表现,以及如何识别和剔除表现不佳的策略。
🏆 成功交易员的特质
David分享了他对成功交易员特质的看法,包括对自己诚实、专注于交易过程而非金钱结果、以及保持谦逊和现实的生活态度。他通过讲述一些个人经历和观察,强调了成功交易员通常不会过分炫耀自己的成功,而是专注于持续改进和风险控制。
🌐 交易环境与文化
最后一段讨论了First New York的交易环境和公司文化。David描述了一个开放、合作的工作环境,交易员们可以自由地分享想法和策略。他还提到了公司对交易员个人生活的尊重,以及如何通过建立正确的合作伙伴关系和风险管理来支持交易员的成功。
Mindmap
Keywords
💡做市商
💡风险管理
💡对冲基金
💡市场中性
💡交易员
💡资本配置
💡业绩报酬
💡市场趋势
💡交易策略
💡资金管理
💡交易心态
Highlights
采访了David Abramson,First New York的资深人士,探讨了自营交易公司寻找的特质。
First New York是美国最大、最成功的自营交易公司之一,拥有悠久的历史。
David Abramson负责面试、招聘和监控交易员,对交易员的成功与失败有深入见解。
强调了风险管理和风险回报的重要性,以及长期视角的必要性。
讨论了如何通过小规模分配和GMV来降低风险。
提到了市场中性、贝塔中性等策略不是First New York的首选。
First New York倾向于寻找具有方向性倾向和最佳结构的交易策略。
强调了交易员需要有清晰的自我认识,了解自己的强项和弱点。
讨论了First New York的助理培训计划,培养新的交易伙伴。
First New York的交易员和合作伙伴之间的合作和支持环境。
提到了交易员在First New York的资本增长路径,从小规模开始逐步扩大。
讨论了如何识别和评估潜在交易员的业绩记录。
强调了交易员需要有长期视角,不应期望立即成功。
First New York倾向于与那些有正确心态和对风险有深刻理解的交易员合作。
讨论了交易员如何通过展示稳定的盈利能力来获得更多的资本分配。
强调了交易员在First New York的办公室环境中的合作和支持。
提到了First New York的资本分配策略,以及如何与交易员的利益保持一致。
讨论了交易员如何通过诚实和真实的自我评估来提高交易表现。
强调了交易不仅仅是为了金钱,而是一个需要长期投入和纪律的业务。
讨论了First New York如何选择和培养有潜力的新兴交易员。
First New York的办公室文化和交易员之间的互动。
强调了交易员需要有正确的心态,专注于交易过程而非物质回报。
讨论了First New York如何评估交易员的长期表现和风险管理能力。
提到了First New York对交易员的期望,包括诚实、透明和对风险的理解。
总结了交易员在First New York成功的关键因素,包括正确的心态和风险管理。
Transcripts
[Music]
welcome to CMR interviews by Jason
Shapiro in today's episode Jason
interviews David Abramson from first New
York on what prop trading firms are
looking for to learn more about Jason
and David check the episode notes in the
description hi so this week we did a
interview with David Abramson um from
first New York which is one of if not
the largest prop firm and most
successful prop firms um in America
they've been around for a long time and
and they are very successful and and
David um is the guy who really
interviews and hires and and does a lot
of the monitoring for the people who
trade money there so the video as it
turned out came out very grainy for
whatever reason so we're just going to
put the audio up but I would really
suggest listening to this I think
there's a lot of value added here okay
thanks and I hope everyone has a has a
good week okay hello today is feary 20th
Tuesday February 20th 2024 I'm Jason
shapir with Crow Market report.com and
today we're really lucky because we have
DAV Abramson speaking with us and David
works at uh first New York asset
management is that
right investment advisers first New York
investment advisers which is to my
knowledge at least one of the largest
and oldest and most successful uh
proprietary in the country I manage
money for these guys I have been
managing money for them I don't know if
we're going on seven years or something
like that already six or seven years the
pandemic yeah that was before the P yeah
yeah and I gota that uh these guys are
great and I think people that noo I
don't say that about a lot of people and
I've had many discussions David runs and
I hope I say this right but he does the
hiring of of who is going to manage
money for them and has done that for a
long time and therefore has seen God
knows how many multiple hundreds if not
not thousand of Traders come through
there that he has interviewed that he
has hired that he has not hired that he
has fired and he now but he also
monitors what they're doing uh p&l wise
riskwise and is very involved with that
so he has a lot of experience in
watching Traders succeed and fail and we
have sat and had many about that very
topic and I always said so interesting
because I thought that his Viewpoint is
so good that I wanted to do an interview
so David what welcome thank you Jason
tell me where I was wrong tell me what
exactly what you do there and how long
been doing it and how many Traders and
all that stuff I would say I have been
doing it now
for seven eight years in this capacity I
my title is head of trading head of
talent acquisition but I do do the
things that you mentioned plus a few
other things I'd like to not bit on
camera um at the end of the day you
pretty accurate in regards to the
thousands and thousands
of portfolio managers Traders PMS
analysts onetick ponies all types of
approaches strategies risk regimes and
markets we see thousands of people a
year can't say easily what we do like
easier for me to tell you the things
that we don't look for but we'll get
into that as we talk a little bit more
about what we look for and how we do it
I essentially work with uh two other
members of our investment committee the
chief risk officer of the firm and the
CEO and the two of us with the help of
two analysts on the risk team are able
to dive through most strategies and
really peel back the proverbial onion to
figure out most people's approach the
way they think the markets
need the risk regimes they like the
places they struggle and then we go from
there cool and I'll just add as much uh
analysis as they do into this if I
recall my interview which I had taken
about a year and a half off of trading
and wented to sort of semi- retirement
and then when I decided to come back I
was in David and they gave me money and
I think lasted about three minutes
because he asked me how I trade I said I
try to figure out what everybody else is
doing and I go the opposite and he just
laughed and said okay you're
H that's why we've gotten along ever
since because he got right away what I
was saying and the reason he got right
away what I was saying I believe I like
the believe it's because he's seen so
many traders in trading and he knows
that the vast majority are going to not
succeed many reasons and therefore to
make a market so to speak to those
Traders maybe will succeed I think that
was the thought process but so I'll tell
you it last a little bit more than three
minutes yeah but a good understanding
the way you run risk was really the the
sealer for me in regards to it's okay to
think contrarian but I've watched plenty
of people with a contrarian opinion get
carried out behind the proverbial
Woodshed they don't understand risk
parameters and how to control that
contrarian tendency to want to pound
your chest and say I'm right everybody
else is
wrong correct correct which is why well
first of all I always say don't be
contran price be contrarian
participation being contrarian price
everybody wants to be contrarian but
what is contrarian right and being
contrarian price I think you agree we'll
get you carried
out you know you could have been contrar
in price on the video for the last 12
months and you just uh and I'm had guys
that were trying to do that even that I
think is fine right if that's what you
want to be but must the's making a new
high then stop shorting it you know just
must have the risk discipline must have
a reason to be there must have the
discipline $100 to make four right
exactly risk for to make a
100 good sounds a sounds a little better
to me yeah that's good and I think
that's
exactly as I always said I think that's
exactly the point with all of this right
it's all about risk management and it's
all about risk return over time and
understanding what that
means right absolutely so what else can
you tell me I would also tell you single
greatest risk mitigator for us is also
so the size of the allocations and the
gmv very important to little riskier
strategy little smaller allocation and
that's the single greatest risk
mitigator on the planet is to get
smaller in size and deal with whatever
conditions are presented and wait for
your Catalyst wait for your event wait
for your strategy your plan to play out
because you got to live to fight another
day we could talk about analogies all
day long but
you gota you you gotta plan to open your
doors tomorrow can't do that without
risk discipline be around long enough to
we say yeah and better to be lucky than
good and know when whatever is that you
do that it doesn't oh you know that
particular thing doesn't always work
works sometimes and and when it's not
working you know mitigate your risk my
contrarian stuff this has not been the
year for that are right we're until what
mid-February this has not been the year
for that you can see it in in all the
numbers Trend following is crying this
year all these all these strategies
pretty much are crushing it this year
trying to fade TRS this year has just
been a horrible horrible way to try to
live I've been fortunate that I really
haven't had signal to fade that many
Trends so therefore I haven't really
lost you know any money and I think that
that's fine if I cannot lose money while
Trends and everything are ripping then
will have be around for when friends end
and hopefully catch them and get that
and I think D it as an allocator to
me understands that which is so
important for me for my CLI to
understand you know it's so easy
everybody just wants to make money all
the time just go make money and that's
kind of the first New York thing in a
way is like if you make money they're
good with you okay he doesn't call me up
and like hey why'd you have this trade
on that doesn't fit into what you told
you know he doesn't you know just make
money but we understand you will lose
sometimes just keep that small and and
that's good it's almost like they look
at it that easily to me it's a lot of
common sense and over thought but the
truth of the matter is is that there are
times in the market you're going to make
money your strategy is going to pan out
and those are the times that you should
play and be involved and and there are
times when it doesn't work and those are
the times they have to step away one of
the reasons why as a firm we don't run
any outside capitals we don't want to
feel the pressure to put money in the
market or at risk when it shouldn't be
there and we feel the same way with our
managers and our Traders our thought
process is use the capital when you
should not because you can and when you
should is what aligns with your risk
thought process what align strategy and
what aligns with where your strength is
and if your strength isn't trading
options because you have no idea about
the K and what it means and that the
mark options market makers rule the
world you shouldn't be trading options
and and that's the way we think about it
you have a skill set use it and one of
my favorites is we all remember I'm a
humongous Sports guy with huge Sports
analogies and we all remember when
Michael Jordan went to play baseball it
really didn't work out that well stick
with your skill set and your strategy
and use your risk discipline and over
time you'll make money or you maybe you
shouldn't be in the business Amen to
that Amen to that there's such a
pressure all the time to just make money
right in particular I think well with
including the people who you because for
the most part they don't make money
unless they make money right they're
getting paid a nice percentage of what
they make we we don't pay when we uh
allocate internally externally we're not
payers of management fees we don't want
to pay people to put money in the market
we want to pay people money to take
money out of the market and share it
with them so we're fond admirers of
higher performance bonuses than most
firms and we're fond admirers of zero on
a performance basis I I don't want to
pay for someone's infrastructure I don't
want to pay for someone's poor real
estate thought process or need to hire a
team of analysts I want to pay for Alpha
and I'll share more of the profits with
those that know how to generate it and
it yeah and uh it's funny because when I
came
back I took that thought process to
build my company all the people that I
ended up
I ran money for first new y probably for
like three years before I then went and
took outside
money and all my fee structure became
zero and because of that very idea right
they don't get pissed at me if uh I'm
not doing any because they're not paying
me any kind of monthly management fee
right I'll get a higher back end if I
make money and I'm happy to do that and
my expenses are very low so I can do
that but yeah it doesn't pressure me
it's just one of those you have like
surround yourself in your life to me to
make sure that you can follow these
rules and that helps me a lot I don't
feel the pressure to have to trade
because no one's calling me up being
like what the hell we're % you know a
year and you haven't made a trade in six
weeks or something you know what I mean
it's like okay well you're not paying me
anything to so you know you're paying me
to wait essentially for for the lwh
hanging fruit and you know recently
certainly the last four or five months
I've had the least amount of that I've
ever had and career right I mean you see
it David I'm barely trading and what can
I do you know what I mean if it's not
there it's not there you know the worst
thing you could do is to force it right
so I don't feel the need to force it
because I'm not getting paid of
management Fe so I think that that makes
sense and I get it and I I kind of
really that was ingrained in my brain
when I started managing money for for
you guys um because it's just it's just
so true it it it helps me so
psychologically as a Trader to not take
management fi I also think and not for
all so I don't want this isn't a brush
for a broad stroke comment but I also
think it's a little indicative of what
someone's thought process is in the
beginning of a running or building a
hedge fund or an asset management
businesses are you in asset Gathering
business or are you in the p&l business
and you tend to see those that think
about construct things one way and those
that think about asset gather build the
orc chart and hire all the phds and it's
a very different thought process and it
it steers us in a couple directions as
well yeah I should have been in the
asset gather
[Laughter]
business guys out there doing it that's
for sure I took I certainly took the
wrong road man I actually have to
freaking make money to make money these
guys just you know they do nothing right
not they don't they don't do nothing but
there's a lot of them out there that
we've seen that uh that don't do very
much no they're very good marketers yeah
which I'm not so there you go a little
bit of a talking head lately a little
different I'm a talking head but I'm not
a very good marketer but fortunately I
don't need to be because uh I'm not
looking at raise assets I have enough
assets so yeah neither are we please no
marketing no this isn't that's not what
we do we don't want any customers I
don't want somebody calling me up ask
not long this or short that or nope
thank you we have a very very good
partnership internally with some really
risk tolerant individuals and it's
they're all Partners within the firm and
it's it's all and it's great
conversations and and a good
understanding of making money good smart
trades and losing money on good smart
trades helpful and that's you know like
you said when you surround yourself with
like-minded individuals it's very
helpful and trying to accomplish what
you want to accomplish there's a couple
things that I've always what you talked
about um and maybe you could expand that
but this idea of like you like people
that come to come in and I know this is
hard for somebody like right out of
college or something like that but you
like people to come in and like they
don't need to make money for a year or
two years you know can you expand on
that one a little bit yeah for so one of
the things that you said for we've been
around for a long time this is coming up
on four decades and and one of the ways
that we've grown organically over the
years is we have a very
proven and tested assistant training
program where we have Partners in The
Firm that are essentially desk heads or
se you know not we don't have any sector
specific individuals but there might be
a couple of pillars within the domestic
Equity Group and a couple within the
International Group and they're very
good at what they do and they're
invested in the firm and they therefore
bring on assistance young people read
research and and do work and and
understand charts and understand what
makes markets move and how we operat so
that after a Trader hits the screen what
happens and what goes on and why certain
trades are held at certain Prime Brokers
and cers asset classes are better
serviced elsewhere and just a general
understanding for what goes on in the
market and and she's training this
person and we pay them a salary and we
offer them benefits and we're not risk
with this person but we're trying to
acclimate them to our thought process
which is event driven Catalyst type
shorter term ter swing trading and this
partner trains this person and takes
them under their wing because they want
to turn him into a producer and a
partner in the firm and and and also
have them be another set of eyes and
ears generating thoughts and markets and
and coming up with good risk-reward
trades which is what we look for and
that program has produced
3540 additional Partners over the years
and it's just fantastic because it
creates a certain amount of camaraderie
and Endearment and it also creates a
little ownership to a central nervous
system that you want to contribute to
and you want to be a part of and it's
worked over the years where we've
created and have partners that have been
there since the late 80s early 90s that
have been made multi-millionaires
through the partnership through their
own trading and the partnership
involvement which you know we're fond
admirers of shareing profits that's for
sure hold on I was thinking of the other
one and I know we can I'll I'll say this
out loud Jason not to age myself but I
went through the training program I
worked for one of the partners in The
Firm right about the time when the
internet was coming on I actually had to
leave the firm for the afternoon and go
meet the Cable Guy to install the AOL
dialup so that he could from home back
in the day and you've watched this
business change over the years and that
you know our assistants don't go home to
meet the bment anymore but our
assistants do dig in and and listen to
research reports and listen to
conference calls and read 10ks and to
really understand what makes markets
move and stocks
move how many people would you say
approximately at least are managing
money for the firm right now both and I
know you have internal guys who only
manage
first and then you have some external
people like me who manage first New York
money and possibly some other money so
we have
about
8590 internal proprietary allocation
spanning asset classes from domestic
equities to International equities to
macro to
Commodities and we have about 25
separately managed accounts allocations
to external managers like yourself that
may run other pools of capital they have
their own compliance and infrastructure
and operations and either transact
directly onto our balance sheet or send
us an end- day file and we share some
profits in them we're we're admirers of
the emerging manager those that are
spinning out doing their thing we
like um good proven stories and we like
young entrepreneurs and that's what we
look for in the external world and the
internal world how would you say it
breaks up if you could say approximately
in terms of doing long short Equity how
many people are doing whatever you know
one thing I love that he always
talk one of my faite
David he tells me how like all these
people come in here with these um algo
systems that are completely Market
neutral long short and he just
automatically tells them thanks but no
thanks we don't
allocate enough capital for a market
neutral beta neutral sector neutral
Factor neutral I'm trying to make a
quarter of a basis point each month and
make 4% a year and hope somebody levers
me up in the background and I get the
share in that too that that doesn't work
for us we tend to like a best type of
construct and a little bit more of a
directional t tilt it doesn't you know
we don't like long only we don't like
short only and we don't like Market
neutral beta neutral sector neutral
Factory there's a lot of Market real
estate in between those extremes and
that's what we tend to look for and
because we tend to share
per the humongous hedge funds that get
the pass through all their
expenses we all at a little bit smaller
lines and managers can do the math those
no that are they're a little bit
capacity constrained they may be a
little nichy in what they do and that
might be a better construct for them and
you know it depends It's Different
Strokes for different Folks at our firm
you know if a manager like yourself
wants to go on vacation for a week and
shut it
down say God bless good luck have fun
and for us it's very different you know
it's not the like you mentioned before
the need to manage the capital and
therefore it's a little bit of a
different environment a little bit of a
different manager with a little bit of a
different thought process now yeah I am
that's not to say that if that guy
showed up with the market neutral beta
neutral sector neutral Factor neutral
strategy and it made a lot of money that
I wouldn't take a deeper dive but most
make a lot of money and need a lot of
Leverage and we're not that's not the
way we do things I don't know how
everything neutral all the time quite
frankly can make a lot of
money I mean other words I know you
agree with this because you say at the
middle time you got to take a bed at
some
point you know I mean and it might be
wrong and that's fine you always say
we're in the risk management business
right we're in the risk business you've
said that to me you know you take a bet
and if it's wrong then cut it lose a
little bit it's fine right and live to
fight another deck right the other thing
I have uh come to learn about your firm
which I also love you know people come
in and this happen and the payout is
pretty high over there right one of the
highest out there um if not the highest
out there and they come in and they
start doing the numbers in their head
and they just trade big and they just
want to make that quick Buck um and what
I have told people as you know that
either introduced to the firm or that I
knew that were joining The
Firm go slow okay because these dudes
take a long term view of this okay when
I started for example I hope I can talk
about this David but when I started with
first New York listen I had worked at a
pretty large hedge fund for a number of
years I managed up to like $600 million
at one point okay and when I left there
I had started my own firm and I was
managing like $250 million at my own
firm right and then I took time off and
um found that I wanted to get back into
it and I spoke with David they gave
me a stop loss of about
$200,000 and if um if we just back into
the math if my big draw down is 5% right
that's $4 million under management in my
eyes right so I had to go from 600
million 250 Milli to Imaging $4 million
and a lot of guys can't handle that
right because their egos are so big
right oh I don't manage four million but
I didn't care right because I just
wanted to manage money and what I
learned
was W with David as I believe is the
exact right way to do it if you show
that you can make money then there's
money that they can then reallocate to
you right you make money they up it
because now you're playing with house
money so to speak right and that's what
I tell all the people you know that when
they join this this firm and they manage
money for this firm like dude whatever
you're about to do you know cut it in
half or or or cut it in a third or cut
it in a quarter okay and just go a year
and show these guys that you can make it
doesn't matter how much just show them
that you can make money because they got
plenty of assets toate and once you
become their friend and show them that
you know what you're doing then you can
go and make money and I think that such
an important concept for everybody right
if you're trading your own account right
go slow I know you want to get rich this
year I I I know we all do okay but go
slow take time prove
yourself that you can make money and
then start to up the size yeah we we
tell everybody we don't expect anyone to
pull a rabbit out of their hat in the
first week the first month the first
quarter of the first year you're right
the longer you have access to Capital
the more good situations you can put
yourself in and the more money you can
make and it's not about the elevator
conversation about what your a
it's about at the end of the year what
kind of money you make and how you make
the money and do you keep the money and
for us we tell everybody in the
beginning exactly that one of
the largest e and principles at the firm
is the risk that we take in the
beginning with someone we're very very
disciplined when someone walks in the
door that listen we're going to risk x
with you and until we make X you know
we're not stepping on the gas and we're
knocking up the allocation but our
conation is going to become common sense
at that point if it's working and you're
making money you're going to come and
you're going to knock on somebody's door
myself or the chief risk off hey things
are working uh I'm seeing the ball can I
can I have access to a little more
capital and you're gonna ask the
question and the answer is going to be
yes sir because it's working and if it's
not working guess who's not knocking and
that's the way we think about it so
common sense spin it around am I'm gonna
come to you J and say hey hey hey give
me all of your capital on day one we've
never rubbed two nickels together I've
never made you a quarter you have no
idea how I think how I act under
pressure give me access to your balance
sheet and I need X and I say okay here's
X and you say no no no I need 100 times
x I say sorry that doesn't work around
here yeah I need 100 times x too don't
we all need 100 times x yeah so do I
show me what you got first and then we
can talk yeah I crack my jokes all the
time and you know me I am a little bit
of a wise ass I say when we come and we
sit down and it makes sense I'm then
moving to St Louis because it's Missouri
and Missouri is the show me state and
show me why I should give you more
capital and show me that you know how to
handle risk and show me that you
understand different risk regimes and
show me you understand your strengths
and your weaknesses and communicate with
us and let us understand how did
micromanaging get involved in every
trade no way know how but I want to make
sure you're thinking clearly I want to
make sure you're seeing the ball and I
want to make sure that our interests
remain aligned it's just such way about
all of this stuff whether you're
allocating Capital like David is or
whether you're just trading your own
Capital such the right way to think
about this stuff and that's why they're
so successful you know what I mean when
not don't joke that it's common sense
but it's not that common well they say
common sense is not that
right but like again I want to reiterate
we're talking to somebody here that it
works what they're doing Works we're
we're successful at what we do from
Trading you know it's expensive to
operate a firm with multiple PBS in this
St and multiple venues and staff and all
the infrastructure to support it
but perspective we do pretty
well and I I really believe it's because
of these princip these exact principles
that that that you're speaking of right
so learn from people have been
successful okay the these guys have been
extremely successful and this is in my
view why it's not because necessarily
David has this magic ability to pick the
greatest traders that have ever lived
okay he did find one of course
but he he doesn't have this magical
ability to to pick the greatest traders
that ever lived it doesn't really even
exist right but he does have the ability
to use this common sense to understand
right risk reward right and I'll tell
you the rest of my team good Chief risk
officer is unbelievable when it comes to
derivatives and understanding volatility
and understanding people's understanding
of those assets and the way they move
and the they think about them and the
way they think about risk which to us is
you know first second and third
important things and we also have a
really young on the team that is a
phenomenal thinker and a quer and a
Quant and to watch eviscerate wannabe
quants who Quant I just play one on TV
it's fun at times
and entertaining what do you do about
the fact that always say this but the
vast majority of the people that walk in
there looking for Capital must be shown
a track
record right nobody out there I always
say like nobody's out
there with a negative track record going
give me Capital right so everybody's out
there that can show a positive you know
return how do you decipher well when we
look at track records we look for and
not a secret SAU we look for those that
make money in different markets and what
happens in different months and what
type of regimes this was an ugly month
this was a positive month did they do
this month how did they do that month we
look at dailies we look at Daily
volatility within portfolios to see how
people act we watch people sometimes
take poor performance out strategies
it's omitted from a from a strategy Oh
by error and it's pretty easy to find
some of these things if you're diligent
in looking you know it's we do little
background checks on people and some of
the things that come up are pretty
telling about where where they are in in
in life and at the end of the day there
everybody makes mistakes everybody has
hups but it's for us it's really about
the person about where they are in life
about how they're operating about it's a
a total picture and we have a really
good crew that that's really good at the
different components of deciphering that
what else can you tell everybody that
will make them a better Trader over time
what because you've seen so many people
succeed and fail I tella it's funny that
you say I wrote it down a couple notes
and and for me it's really about listen
I joke around with a lot of people and I
ask the question you have a mirror in
your house do you in front of it and are
you real with what you see there you
know some people lie to themselves it's
like The Gambler who goes to Vegas and
always wins we know that doesn't exist
we've all been
there the casinos aren't getting bigger
and bigger because we always win right
and at the end of the day it's it's
those that are really real with what
their strengths and weaknesses are there
are some people that are just really
terrible at trading Futures and
get emotional about it like no and you
have to take out the bad things and have
to expand on the good things and those
that are honest and look at themselves
and know who they are and know what
they're good at and what they're poor at
it it's it helps to make a very
difficult business a little bit easier
if you're candid with yourself and not
that guy who says every time I go to
Vegas
I from from another perspective it's you
know for us are successful at what you
do and how you do it and do you like to
talk about
it it's it's indicative of those that
have success don't really talk about it
one they don't really want to share
their strategies they don't really want
to tell people what they're doing that's
successful and they're not records
they're not talking about how much money
they manage and talking about how much
they make and it it's they keep life in
check they keep what they do in check
and they understand that this is a
business it's not I'm not a gambler not
Mama doesn't need a new pair of shoes
I'm running a business and and that's
other things that are really important
you know you
don't you don't make 10,000 and buy the
million doll house you make a million
and buy the1 th house those are the
things that make you make smart
decisions running the business of life
well helps running the business of
trading well and those are the things
that we look
for I'm getting chills on that one
because know that's things that I uh not
only that I I do but I pound into I try
to pound into people you know I always
say the only uh the only Ferrari I've
ever had is uh my partner bought me
which is right here that's better than
Ferrari I've never had yeah I'll tell
you this Jay not to tell tricks not to
tell anything but emerging manager spins
out of one of the big firms has had a
lot of economic success building his own
firm that's dying for me to get on a
train to go to Greenwich to see the
really really nice off East and meet his
team of five analysts and meet his coo
and meet his chief marketer and he
doesn't have $1 under management yet I'm
apprehensive to allocate to but the guy
who FES Jeff Blue from Dallas and has a
geographical advantage down in the oil
and gas industry and slept on his
cousin's couch in Queens and rode the
train in the morning to meet me is my
guy because he's thinking about the fact
that I want to get to the Mountaintop
I'm not there yet and I can't I'm not
portraying that I'm there he walked in
he was sweating he got lost he may a
culprit and said I stay in Queen's on my
on my cousin's couch he thought it was a
terrible thing I fell in love he still
manages money for us today yeah that's
uh that sounds like the Story of My Life
um I got I have people tell me all I
have people comment to all the time you
know about stuff like that you know why
don't you drive a NIC car why don't you
B your house why you know why don't you
do this why don't you do that you don't
get it man you know you don't get it and
and because of the way I came up too
right um which is that I started with
zero Blew out a few times learned what
that felt like um I learned those
lessons as we've talked about many times
I I
don't I don't spend money man I I don't
care how much I make like
vacation I have a good year okay I'll
take my family and you know whatever
we'll fly business class or whatever and
and have a nice vacation but other than
that I got no interest
in buying a new house buying a new car I
mean once to buy a new car because I run
my cars into the ground but you're
talking about every 10 years I'll buy a
you know a new car but I I think it's so
true and it's all I want did a video
about that guys were making fun of the
chair that I sit in because it had like
a huge rip in it it was all messed up
and I never thought twice about right
and truthfully part of my chair was like
metal piece was coming out and digging
into my ass and I never thought guys
were laughing at me and making fun of me
and I did a whole video about it I was
like look it's a mindset okay it never
even occurred to me to buy can I afford
a new chair I mean what's a new chair
cost a couple hundred dollars
fortunately not would I can afford that
but it never even occurred to me right
and then I went and I did one after that
but the truth is that's got to be the
thought process and people say it all
the time it's not about the money it's
about the process I have to tell you
that U one of the most successful
traders in The Firm runs our aventuro
office and he's International Trader
he's phenomenal risk taker he runs a
very very risk discipline approach and
strategy trains assistants all the
times pandemic hits the whole world
moves to South Florida I start meeting
interview in people that have migrated
down there and they looking for a home
and I sent a few of them into the office
and one of the guys comes back he's whoa
whoa I can't work at that office I'm
like how come he's
like Boston microwave there's a the
chairs are a little
tattered and and if I could tell you how
successful this guy is that runs that
office which I would never it's
remarkable to me that that was what was
important to this guy you know that that
I didn't have a leather couch in the
foyer it's just not a Trader it's it's
just not a Trader a Trader could give a
flying crap about any of that
right correct I believe and I came from
the world I didn't come from the world I
once got into the world of the the large
hedge fund and
the what do they call the things that
they all wear the vests you know with
the name of the firm on there and all
that stuff um I was scared to put on a
fleece today because I figured you were
gonna
comment about it you got the fny flee is
are going I never but I figured you were
gonna give me a hard time no matter what
I was weird yeah um I I was part of that
world for for a number of years and
um that again why I love first new first
of all the office of first New York in
New York which I go to what once a year
twice a year if I'm in New York I come
in I say hi to you I hang out a little
bit right um it's awesome
but it's it looks nothing like a hedge
fund office it's just one huge open
floor with desks for people to sit at
computers for people to look at and
trade off of right I me I think they
have like a little maybe a little snack
bar or something like that but you know
there's none of this like everybody gets
you know this is what we had at the
hedge funds everybody gets to order free
lunch every day and there's this huge
like spreads coming in all the time and
you know
it's just about that right it's about
sit down here here's your desk here's a
desk for you here's a whatever you need
manufa and manufacture a living and make
money man that's it that's it that's no
one wear a suit you know what I mean no
one has to wear any I've seen guys in
there in a t-shirt you know no one cares
about any of that crap so shorts and
t-shirt we tell them we should wear that
to the office we try to be a little B a
little business casual you tend to come
in test test the parameters but you're a
visitor we're good with that but that
that for us the office is a is a pretty
collegial environment with all kinds and
all strategies and all approaches and
it's collaborative because we're all
there's a lot of partners that trade in
the office that come in every day that
have come in through the pandemic that
still enjoy that listen everybody misses
a piece of research everybody doesn't
read a chart or or everybody reads A
report and either maybe just pulls and
the things that work for their thought
process or their strategy and everybody
needs a little smack in the face every
now and then about some thought process
and it's good to be in an environment
where people give a about you and
how you work and what comes out and your
product and your production because your
success is their success so it's a real
collaborative environment that doesn't
have happen at a lot of
places no it's true I um I don't go in
there I've managing money know six or
seven years I've been in there maybe
five times um but I was in whenever that
was six months ago or something like
that had a few hours to waste I was in
New York I had something to do later and
I had a few hours and you know I they
hooked me up with a computer and I was
able to sit do my thing and I did start
talking to some of the people that were
sitting around me who I've never met
before I don't know any of the people in
there trading I know zero of them and
it's true I sat there and spoke with a
few of them and super guys super cool
people super open-minded to different
ideas you know some who were in the
middle of struggling some who were in
the middle of doing well but honest
about that how many guys do you meet
that say that you meet him the first
time how you doing oh man it's been a
year I mean I'm not checking his p&
say what he wants to me I'm not going
over to you and saying hey how's this
guy doing you know what I mean he can
say whatever he wants to me and that's
what the one guy said I'm having a
here right off the bat I respect him yep
because no one says that no one says
that nope nope nope nope nope nope nope
nope nope nope
nope some guys always go to Vegas and
win yeah I ain't one of
them I don't go to I'm too cheap me
either me either I have too many kids
and too many bills that's right well
that's awesome David any any last
thoughts well that's it for me today I
um enjoy having a conversation with you
always we'll always talk more metrics
and the way we think and the way we feel
my absolute pleasure awesome well I
appreciate your time David and I
appreciate everything you guys are you
and you guys are great I love it I've
never uh I don't want I don't want to
say I've never had a better client
because I have some other clients that
will listen to this but you are one of
the good ones let me put it you that way
and there are people that I have not
taken money from because I don't I'm
fortunate that I'm in a position where I
can do that but Ah that's a good one
that's the note we end on difficult
business difficult people in a difficult
business it just gets in your head
they'll get in your head this game is
hard enough correct I mean and you think
that it's not going to matter and blah
blah blah it freaking matters when I had
my CTA after I left my hedge fund I had
to take in whatever clients I could get
because I went in there and I had five
people working for me and the office and
the computers and the whole thing and
all that stuff and everybody works for
me wants to make a million dollars a
year I had to take in whatever clients I
could get and that's why I closed it
down and quit after three or four years
because I couldn't take it man these
guys would call me up you know what I
mean I have a bad week or whatever and
not even a bad week just something with
in my expectations maybe call me up tell
me I suck what the hell are you doing
blah it doesn't work it doesn't work you
know what I mean it just doesn't work um
and I learned that lesson important the
right Partners the right risk Partners
important to understand what goes into
it how hard it is and what the input and
output has to be it is very very
difficult very difficult have a lot of
respect for those that manage money and
do it well let's say that again this
game is
extremely
difficult I'll I'll now I'm GNA
officially end on this notice we all
know one of the most difficult
businesses on the is the restaurant
business with a success rate in the low
single digits our business success rate
is not that far behind low single digit
sounds about right to me which is why
as always I suggest don't trade fade
find the other 98% and just take the
opposite side it's the easiest freaking
way to make money to me because they're
all going to lose money so anyway end on
that note David as always thank you so
much you're you're you're a gentleman
and a scholar my pleasure sir thanks for
having me always enjoy it have a great
night all right we'll talk to you soon
byebye subscribe to the crowded market
report YouTube channel for more CMR
interviews and other content from
Jason
[Music]
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