Speaker 1: This is Masters in Business with Barry Ridholts on Boomberg Radio.
Speaker 1: This week on the podcast, I have a special guest.
Speaker 1: His name is Greg Zuckerman. He is a reporter for
Speaker 1: The Wall Street Journal and an author of numerous books.
Speaker 1: The one we spend the better part of two hours
Speaker 1: discussing is the Man who Solved the Market, How Jim
Speaker 1: Simons launched the quant revolution. If you are at all
Speaker 1: interested in so many things Renaissance technologies and Jim Simon's
Speaker 1: quantitative investing, hedge funds, how difficult it is to beat
Speaker 1: the market, and how astonishing the performance of Renaissance technologies
Speaker 1: has been. Let me tease you a little bit. Thirty
Speaker 1: years sixty a year. That is just mind blowing. Nobody
Speaker 1: in the universe comes close. There wasn't anybody who does
Speaker 1: half of that. That's what makes this so just completely
Speaker 1: mind boggling ing. Uh. They are absolutely a unique entity.
Speaker 1: You will find this to be an absolutely fascinating conversation.
Speaker 1: I really enjoyed the book. I plowed through it in
Speaker 1: a day and a half on the beach over the
Speaker 1: holiday weekend, and it's not out until November five, So
Speaker 1: by the time you're hearing this it will be available
Speaker 1: for pre order. All I can say is I enjoyed
Speaker 1: the book and I had a fascinating conversation with Greg,
Speaker 1: and I'm sure you will enjoy it. So, with no
Speaker 1: further ado, my conversation with Greg Zuckerman. This is Masters
Speaker 1: in Business with Very Ridholts on Boomberg Radio. My extra
Speaker 1: special guest this week. I've been looking forward to this
Speaker 1: conversation for a long time. Greg Zuckerman, Wall Street Journal
Speaker 1: reporter and author, two time winner of the Geralds Lobe
Speaker 1: Award for Outstanding Business Reporting. He is the author of
Speaker 1: The Frackers, The Outrageous inside story of the new Billionaire Wildcats,
Speaker 1: and The Greatest Trade Ever, How John Paulson defied Wall
Speaker 1: Street and made history. But his newest and most fascinating
Speaker 1: book is Jim Simons, The man who solved the markets
Speaker 1: and launched a quant revolution. Greg Zuckerman, Welcome to Bloomberg.
Speaker 1: Great to be here. I think I sort of retitled
Speaker 1: the book for you. Um So I'm I'm fascinated by
Speaker 1: Jim Simon's ever since I was a high school student
Speaker 1: applying to Stonybrook Math department, where he turned out to
Speaker 1: be the chairman that plus six annual returns for thirty years.
Speaker 1: Those are just astonishing numbers. What was it that made
Speaker 1: you decide to write a book about the most reclusive
Speaker 1: hedge fund manager ever? So? I've always wanted to. He's
Speaker 1: sort of if you're a financial journalist, and I focused
Speaker 1: on the Bye side to a large extent, there's no
Speaker 1: one more impressive. He's the white whale, isn't he? He
Speaker 1: is the white whale. And yet he's also got this
Speaker 1: mystique about him, part because they're such a secretive firm. Um,
Speaker 1: others have tried. That was part of the allure as well,
Speaker 1: that others had reached out to him, he didn't want
Speaker 1: to work with them. I myself had tried. He didn't
Speaker 1: want to cooperate. Uh. For whatever reason, that created an
Speaker 1: added a level of mystique allure for me. So I
Speaker 1: took the challenge on. So, in pursuit of this, you
Speaker 1: spoke to over forty current and former Renaissance employees. What
Speaker 1: was that like? Well, early on it was quite difficult. Um,
Speaker 1: no one wanted to talk to me. And why was that?
Speaker 1: I know, there's a little bit of paperwork involved as
Speaker 1: to why some people were hesitants to speak with you right.
Speaker 1: So Jim Simmons and his colleagues at the firm have
Speaker 1: everyone signed forty page nondisclosures non competes and they're serious
Speaker 1: about them. Um. I was warned early on, don't waste
Speaker 1: your time, Greg, both by people internally, people that used
Speaker 1: to work there. Simons himself said he wouldn't talk to me.
Speaker 1: It got worse than that. Simon started telling people I
Speaker 1: wanted to talk to not to talk to me, not
Speaker 1: to cooperate with me. Another word, you would set up
Speaker 1: a conversation with someone and he would get wind of
Speaker 1: it and and quash it. Yeah. I had meetings set
Speaker 1: up with senior people in the industry, in the quant world,
Speaker 1: billionaires who you wouldn't think would care what Jean Simon's
Speaker 1: would think, these arrivals of renaissance. And yet right before
Speaker 1: we were supposed to sit down, they said, sorry, I
Speaker 1: can't talk to you, Greg. Jim asked me not to
Speaker 1: the family. It's you describe very much like the mafia. Right. Yes,
Speaker 1: we're competing, but you still are things you don't do.
Speaker 1: And one thing you don't do in the quant world
Speaker 1: is get Jim Simon's upset. So here I was being told,
Speaker 1: don't waste your time, Simon isn't gonna work with you.
Speaker 1: I'm not gonna work with you because Jim asked me
Speaker 1: not to. I had I literally had um my advance
Speaker 1: and not insignificant advance from my publisher on my death
Speaker 1: in my basement in my home in suburban New Jersey,
Speaker 1: and I wouldn't cash it because I wanted the ability
Speaker 1: to hand it back because you were concerned you wouldn't
Speaker 1: be able to get anything done without any cooperation. Right. Um,
Speaker 1: If you talk to my wife, she doesn't. She can
Speaker 1: give you all kinds of conversations where I was whining
Speaker 1: and complaining and just frustrated and concerned that I wouldn't
Speaker 1: be able to pull this thing off. Um. And at
Speaker 1: one point the accounting department from Penguin, they were like,
Speaker 1: what this has in this check? Something's wrong because who what?
Speaker 1: What author doesn't cash a check? You know? We don't
Speaker 1: do so well. What was the turning point where you felt, Oh,
Speaker 1: now I'm starting to at least get a little traction
Speaker 1: with these guys. Right. So I went out to California
Speaker 1: and I spoke to some former colleagues of Simons who
Speaker 1: worked with Jim back in the day, back in the
Speaker 1: eighties and nineties, right, and their story was just too
Speaker 1: fascinating not to do the book and too compelling. I mean,
Speaker 1: these are interesting characters. As a or, you look for
Speaker 1: just colorful color, colorful, intriguing individuals, characters you could write about,
Speaker 1: and they you couldn't do better than these people. They
Speaker 1: um were temperamental, they were high strung, they were fascinating,
Speaker 1: they were smart. They had accomplished all kinds of things
Speaker 1: in academia, and then they took on this challenge of
Speaker 1: trying to conquer the markets. So and there was all
Speaker 1: kinds of intrigue that I wasn't really aware of behind
Speaker 1: the scenes. Um anger, fights, disputes, screaming matches, things that
Speaker 1: you know when you think of a quant and you know, mathematics,
Speaker 1: mathematicians maybe just I did. I didn't really think they
Speaker 1: lend like you and not yes, exactly scientific. Right. So
Speaker 1: when I learned about the early story of Renaissance, and
Speaker 1: it's quite fascinating, I said, you know what, how do
Speaker 1: I not write this book? It was a bit of
Speaker 1: a leap. So I had the early part, but then
Speaker 1: what do I do about the middle of the later
Speaker 1: parts where people. There weren't as many people who had retired,
Speaker 1: who were academics who might speak to me. These are
Speaker 1: more recent types of individuals, some still there. I had
Speaker 1: to I had to work somehow get them to talk.
Speaker 1: So what was the turning point? When did you start
Speaker 1: to have these folks speak with you? When I got
Speaker 1: a good sense for the story? Um, I got some
Speaker 1: people who work there to open up to me. And
Speaker 1: why they spoke to me. I'm as a writer, you're
Speaker 1: never a hundred percent sure. I believe that good stories
Speaker 1: want to come out. And this is a great story.
Speaker 1: This is the greatest financial um investor in modern history.
Speaker 1: Jim Simmons. His firm is the most impressive money making
Speaker 1: operation in Wall Street history. So some of them were proud,
Speaker 1: and some of them actually wanted to share and talk
Speaker 1: to extent that they could, they kind of wouldn't tell me. Usually,
Speaker 1: no secret source came out. Well, it leaked out so
Speaker 1: here and there. So that's my job as a writer.
Speaker 1: You get a little snippet, they drop a little crumb
Speaker 1: here and there. It's my job to kind of put
Speaker 1: it together into some thing of a loafer, at least
Speaker 1: a half a loaf for for the readers, so they
Speaker 1: gave me enough to give me encouragement. Yes, they weren't
Speaker 1: laying out all the algorithms for me, not that I
Speaker 1: would understand a mena or anyway. When when I finally
Speaker 1: and then I finally got Sigmons to speak, so discussed
Speaker 1: that because for the longest time he said, no, I
Speaker 1: want nothing to do with this, so I'm never gonna
Speaker 1: speak to you. How did you finally get him to
Speaker 1: sit down with you? And and how long did you
Speaker 1: talk to him for? So we had and still have
Speaker 1: a complicated relationship. He didn't want the book to be written.
Speaker 1: He still, as of a few months ago, asked, do
Speaker 1: we do I really have to write this book? Um?
Speaker 1: Part of it is the guy makes a billion and
Speaker 1: a half dollars hardly going into the office and doesn't
Speaker 1: want to rock the boat. These are hard working individuals,
Speaker 1: scientists he's hired or helped hire or have joined subsequently,
Speaker 1: and he doesn't want to get them angry. He says,
Speaker 1: he's a generally a pretty good guy, and here they
Speaker 1: are working, slaving away. And if the guy making a
Speaker 1: billion and a half dollars is talent secrets, um, they
Speaker 1: wouldn't be thrilled with him. Um, So he didn't really
Speaker 1: want this book being told. And but at some point
Speaker 1: he got the message that I wasn't going away, and
Speaker 1: he realized I was doing serious research. So I was
Speaker 1: talking to academics he worked with back in the day,
Speaker 1: Um code breakers. He's got this really rich, fascinating life
Speaker 1: even before he got to Renaissance. If he had never
Speaker 1: started Renaissance, he never even invested, he'd still be so
Speaker 1: of ample sub be ample um opportunity to write a book,
Speaker 1: there'd be reason to write about him. So UM. I
Speaker 1: think when he started hearing from these seventy and eight
Speaker 1: year old academics uh, from Princeton and other kinds of
Speaker 1: places he worked with back in the seventies and in
Speaker 1: the sixties, even uh, he got the message I wasn't
Speaker 1: going away, And I think he realized, while better to
Speaker 1: talk to Zuckerman than um not share any perspective in
Speaker 1: a book about him. In his firm, the joke I
Speaker 1: used to hear from people who had Lucked in interviewees
Speaker 1: and other books was well, who do you want to
Speaker 1: shape the story? Do you want do you want to
Speaker 1: shape the narrative or do you want to let your
Speaker 1: competitors and enemies shape the narrative, right, And that's a
Speaker 1: lot of my approach in my day to day writing
Speaker 1: at the Wall Street Journal. UM I called the haircut approach.
Speaker 1: I'm gonna give you a haircut. You can sit still
Speaker 1: or you can move around, but I'm gonna give you
Speaker 1: a haircut. And it's not to say that it's a
Speaker 1: threat in any way. It's being it's just honest, right,
Speaker 1: a little blond, but yeah, And Simon's realized that there's
Speaker 1: something to be said for working with me. But I
Speaker 1: do want to make it clear that he wouldn't share
Speaker 1: UM inside UM secrets, secret sauce, as you describe it.
Speaker 1: So I don't want to suggest that he kind of
Speaker 1: opened the kimono. That was still difficult to the end.
Speaker 1: So it was so we sat down together multiple times
Speaker 1: for how many hours we add it all up was
Speaker 1: over ten hours. Really, that's a lot of Jim Simon's FaceTime.
Speaker 1: It was a lot of time, and the top ranged
Speaker 1: and included his recent life, which is also quite interesting
Speaker 1: what he's trying to do an autism research, science education,
Speaker 1: subsidizing teachers around the city of New York City, UM politics,
Speaker 1: a little bit too. He's a big funder of democratic
Speaker 1: causes and in candidates, so the topics ranged. He was
Speaker 1: generous with his time and though and regarding some of
Speaker 1: those subjects, his early life and his mathematics. A guy
Speaker 1: like me needed help understanding. So I appreciate the help
Speaker 1: he gave me there And in terms of there you
Speaker 1: are you saying Jim Simons tutored you in in mathematics
Speaker 1: to some extent. Yeah, Um, he was quite helpful, because
Speaker 1: I listen, I had a lot of people helping me.
Speaker 1: But he is a professor at heart, and I could
Speaker 1: see him, even though he is objecting to your purpose,
Speaker 1: I could see him kind of saying, no, no, let
Speaker 1: me explain the math here and and bring you along right.
Speaker 1: And part of it is and I've learned this something
Speaker 1: about mathematicians. Uh, little mistakes really bothered them more than
Speaker 1: they do me or people that come from a different perspective.
Speaker 1: So I think it would have just bothered him had
Speaker 1: there been significant um errors in the book, be in
Speaker 1: regard to his early life, other parts of his life.
Speaker 1: And I get that. You know, I would send small sections.
Speaker 1: We don't send large sections, but small sections to various
Speaker 1: top mathematicians, and they would get angry, Greg, this is
Speaker 1: all wrong. How can you write this? It's overstayed as wrong.
Speaker 1: You got you gotta change everything, and you know you're
Speaker 1: taken aback. Early on, I was taken aback. Eventually I
Speaker 1: learned not to be. And then you drill into it
Speaker 1: and I don't know, they're five percent was wrong, but
Speaker 1: those that five percent really bothers them. So I got that.
Speaker 1: So I think, if you're Jim Simons, this guy's writing
Speaker 1: a three fifty page book about you and your life. Um,
Speaker 1: if they were glaring dumb errors, it would have bothered him,
Speaker 1: really would have would have said him, said him off.
Speaker 1: Let's talk a little bit about um, the book and
Speaker 1: what's revealed in it. I've kind of been Jim Simon's
Speaker 1: groupie for a few decades. I think I know about
Speaker 1: everything that was public about him and Renaissance technologies and
Speaker 1: who worked there and there their approaches. But I found
Speaker 1: the book filled with so many surprises and so many
Speaker 1: unknown things in the past. Um, tell us what you
Speaker 1: thought was the most surprising thing you learned, and how
Speaker 1: much of this is fresh new information that was never
Speaker 1: publicly known before. Sure, So I've read everything that's been
Speaker 1: written about Jim and his firm. I've watched every interview
Speaker 1: on YouTube. Are a few here and there. Uh, And
Speaker 1: I would say about nine of what's in my book
Speaker 1: is fresh and new. I think that's about right. I
Speaker 1: felt like almost everything, like every now and then I
Speaker 1: would recognize something. Oh, I kind of knew that, but
Speaker 1: every page it was a new revelation that was something
Speaker 1: previously unknown to me. And as a writer, that's sort
Speaker 1: of why I did it, to learn I didn't know
Speaker 1: enough about this world and about Jim, and each of
Speaker 1: these characters is potentially a book on their own right.
Speaker 1: There were so many. I think that was one surprise.
Speaker 1: There's so many rich characters at their firm. It's not
Speaker 1: sort of Jim and Okay, you hear a Bob Mercer
Speaker 1: and and Peter Brown. Time after time. I ran into fascinating, accomplished, quirky,
Speaker 1: colorful characters. And the other surprise is how hard it
Speaker 1: is to be a quant So you think of these
Speaker 1: guys are mathematicians, they're scientists. You would think that instinctively
Speaker 1: they would want to pursue a quantitative approach, the scientific method.
Speaker 1: That's where they come from. And yet from the beginning
Speaker 1: from Simons and his early colleagues, guys like Lennie Boum,
Speaker 1: Jim Max, Ellen, Burla Camp others, you see that there's
Speaker 1: they're fighting their instinct there. Really their instinct is to
Speaker 1: kind of just trade like you and I do, just
Speaker 1: sort of look at the news and anticipate where the
Speaker 1: world is going and the markets are going. And they
Speaker 1: sometimes fall back into that pattern, even they that was
Speaker 1: shot can. Uh. The early parts of the book describe
Speaker 1: Jim Simons as the derogatory term I use. He's a
Speaker 1: macro tourist. He's like every day trader, watching TV, looking
Speaker 1: for news, trading in and out of stuff, doing good
Speaker 1: some days, losing money the other days. But there's nothing
Speaker 1: special or unique about that. He was every newbie trader,
Speaker 1: wasn't he listen? He had unique approaches what he thought
Speaker 1: were unique approaches. I get into them. At one point
Speaker 1: he consulted with this early economist named Alan Greenspan, and Uh,
Speaker 1: they had different ways. They thought they had an edge,
Speaker 1: but no, they didn't have an edge. Not only that,
Speaker 1: but it tore him up inside and made it literally
Speaker 1: physically made him ill. That he'd come into the office
Speaker 1: just unsure of himself. Um, some days up, some days down.
Speaker 1: They made a lot of money. At one point the
Speaker 1: name gave back a lot of money. They were fallings
Speaker 1: out with different types of people. But it's not just
Speaker 1: early days. Even last year. End of last year. The
Speaker 1: market is loading, as we recall and Q four exactly.
Speaker 1: And Jim Simons and I write the story. I tell
Speaker 1: this anecdote in the book. He's on vacation on his
Speaker 1: huge ship somewhere and he starts panicking about the market
Speaker 1: and he calls his wealth manager. The guy's managing his money.
Speaker 1: I mean, Jim Simmons were twenty three billion dollars, so
Speaker 1: he's quite the portfolio. And he's like, maybe we should
Speaker 1: be buying some insurance here. That's like me panicking in
Speaker 1: the markets down? Hey, should I be selling? Like like,
Speaker 1: that's a big deal. I guess when it's twenty three
Speaker 1: billion dollars, it is a big deal. It is. But
Speaker 1: he's a guy who made his twenty three billion dollars
Speaker 1: on the scientific approach on, not on testing ideas and
Speaker 1: having systematic approach to investing, not on these narratives and
Speaker 1: nervousness and reacting all these behavioral mistakes that we all make.
Speaker 1: He was about to make too. So even an eight
Speaker 1: year old, the genius, the guy who solved the market,
Speaker 1: as I call it, he is apt to um to
Speaker 1: trade like everybody else. And the point being, it's not
Speaker 1: easy being a quant You have to fight your instincts
Speaker 1: to some extent, even when you're a scientist and a mathematician.
Speaker 1: So let's talk about that a sec. In the early
Speaker 1: days when renaissance was starting to become who Who, they
Speaker 1: eventually become their big secret. They were really big data.
Speaker 1: Before big data was a thing, before crisp Ereuters or
Speaker 1: Dow Jones or Bloomberg made commercial database of market prices available,
Speaker 1: they were effectively assembling their own. That was fairly unique,
Speaker 1: wasn't it. That's exactly right, and that was one of
Speaker 1: the early edges. And frankly, they were collecting data when
Speaker 1: no one cared about it, no one saw a need
Speaker 1: for it. This is pre Bloomberg, pre everything else. They
Speaker 1: were going down to the Fed collecting obscure pieces of data,
Speaker 1: economic and other. They were going back in history, so um,
Speaker 1: it was a several years later, but they were collecting
Speaker 1: stuff from like the late eighteen hundreds and they didn't
Speaker 1: really have a purpose for a lot of that data
Speaker 1: at the time. They had this instinct instinct that maybe
Speaker 1: it's because they were scientists, that the more data the better,
Speaker 1: and any kind of data could be helpful and maybe
Speaker 1: not right now, but at some point down the road.
Speaker 1: And yet that gave them a complete advantage because then
Speaker 1: they could test, they could create models, they could do
Speaker 1: scenarios that others couldn't. And the way I like in
Speaker 1: it is too a little bit like if you wanted
Speaker 1: to create a library, Um, how long would it take you? Okay,
Speaker 1: like your public library or local library probably take you,
Speaker 1: I don't know, a few months to collect all the books.
Speaker 1: But what if you wanted to create the Library of Congress.
Speaker 1: It would be pretty impossible. Some of that stuff you
Speaker 1: just can't get your hands. And that's what Renaissance still
Speaker 1: has today and and it does help them. So the
Speaker 1: cost of building that database, and they were fastidious about
Speaker 1: making sure the data was clean and up to date
Speaker 1: and accurate. How to be substantial. The typical hedge fund
Speaker 1: charges too, and twenty two percent management feed of the profits.
Speaker 1: But Simon thought the cost of the database needs to
Speaker 1: be passed along. Two investors. So instead of charging two
Speaker 1: and twenty, he charged brace yourself five and forty four.
Speaker 1: Who the hell would pay that sort of fee when
Speaker 1: you're making a lot of money and LP how will
Speaker 1: have pay that kind of fee? And they their their returns,
Speaker 1: which for the first time ever have been released, because
Speaker 1: it's only always been a rumor. You're appendix one or
Speaker 1: Appendix B, I don't remember which. The end of the book,
Speaker 1: you note since the medallion has averaged annual returns of
Speaker 1: sixty but that's before those five and thirty six or
Speaker 1: five and forty four fees. Afterwards, it's only thirty nine
Speaker 1: point one percent a year for thirty years. Those are
Speaker 1: just eye popping astonishing returns, right uh, and right as
Speaker 1: you suggest, you will pay for those kind of returns.
Speaker 1: You pay almost any feed. They kept raising the fees
Speaker 1: partly to discourage investors from sticking in the funds, and
Speaker 1: eventually they kicked out all the investors. And that's part
Speaker 1: of their secret to that they kept it. They kept
Speaker 1: medallion as they realized it couldn't return these sort of
Speaker 1: numbers beyond what is it, seven billion or eight billion
Speaker 1: dollars seven eight billion a year, So you know, you
Speaker 1: got to give Jim Simons all kinds of credit and
Speaker 1: his colleagues, and they are the greatest modern day investors
Speaker 1: in history. But you also want to um note that
Speaker 1: they didn't they weren't able to grow it, and they
Speaker 1: knew they couldn't grow it beyond what it is right now,
Speaker 1: we're talking about the Medallion Fund ten billion dollars, So
Speaker 1: it's not like they kept growing its fifty billion dollars.
Speaker 1: They knew they could not get those kinds of returns
Speaker 1: and and they currently keep the Medallion funds or actually
Speaker 1: it's been that way for fifteen twenty years. Is that
Speaker 1: about right for just Simon's and the employees of Renaissance, right,
Speaker 1: Which is a wonderful way of keeping talent, recruiting in retention. Yeah,
Speaker 1: you don't even have to pay people there. I mean,
Speaker 1: they do pay nicely, but just the ability to invest
Speaker 1: in Medallion retains top talent. It also makes them so
Speaker 1: wealthy quite frankly, that a lot of these guys when
Speaker 1: they leave, and the few women they're working there, when
Speaker 1: they leave, they're not going to another Wall Street firm.
Speaker 1: They've made so much money, they're doing philanthropy, They're going
Speaker 1: back to academia other interesting things. So it's a it's
Speaker 1: a great way to retain talent, and it's also a
Speaker 1: great way to make sure people aren't gonna quit and
Speaker 1: start rivals. So let's talk a little bit about one
Speaker 1: of the most significant people in the book other than
Speaker 1: Jim Simons, and that would be Bob Mercer. He uh.
Speaker 1: By the time he joins Renaissance, Simmons has figured out
Speaker 1: how to trade bonds, how to trade currencies, how to
Speaker 1: trade commodities, but he hasn't cracked equities. So Renaissance is
Speaker 1: a small, unimportant firm generating some nice returns, helping to
Speaker 1: make Simon's conventionally rich, not a billionaire, but rich. But
Speaker 1: Mercer comes along, how important to see to the Renaissance story.
Speaker 1: That's exactly right. So around nine Renaissance was okay, middling
Speaker 1: kind of firm, respected by those who knew it. Most
Speaker 1: people had no clue who they were. They were doing
Speaker 1: nicely as you suggest, in commodities and currencies, uh futures,
Speaker 1: but couldn't make it happen in equities. And for some
Speaker 1: of the people internally that was fine. They were getting
Speaker 1: wealthy who cares, but no scale, no influence. No, they
Speaker 1: don't leave a mark on Wall Street. And that's what
Speaker 1: Simon's wanted. You want to leave a mark on the
Speaker 1: world broadly and make a lot of money use that money.
Speaker 1: And you couldn't do that unless they could crack equities because,
Speaker 1: as we know, um equities, you can manage much more
Speaker 1: money um in the in the equity world and relative
Speaker 1: to the other types of world's fixed income in commodities, etcetera.
Speaker 1: So they were frustrating, and there were a bunch of
Speaker 1: turning points within the Renaissance story. They almost fell apart
Speaker 1: a number of times, more than I would have expected.
Speaker 1: That's another kind of surprise from my research. There were
Speaker 1: several times where they really it was it was touch
Speaker 1: and go whether they would keep going or not. So
Speaker 1: there were people within the firm and said give it up, Jim,
Speaker 1: stop trying to figure out equities. And they almost gave
Speaker 1: it up. And then this guy's you suggest. Bob Mercer
Speaker 1: came along and Peter Brown to speech recognition experts from IBM,
Speaker 1: and they built an improved equities trading system, much improved.
Speaker 1: The engineering that technologies was much better. They combined all
Speaker 1: kinds of different signals and factors into one system, which
Speaker 1: is one of their great advantages too, as opposed to
Speaker 1: different models. A lot of different quant firms have multiple
Speaker 1: different models. They have one system and it's hard to
Speaker 1: pull that off. And that's what it took somebody like
Speaker 1: Bomb Mercer to figure that out. So so one of
Speaker 1: the things we haven't talked about, it would be important
Speaker 1: to bring this up. Simmons isn't recruiting people from Wall Street.
Speaker 1: He's not rating Morgan Stanley or Goldman Sachs. He's rating
Speaker 1: the IBM Watson team. He's rating academic math and computer
Speaker 1: science and physics department. He's taking former ns A codebreakers
Speaker 1: and hiring them. This is not the usual team of
Speaker 1: wool Street whiz kids. These are really brilliant scientists, academicians
Speaker 1: and others, but no one is coming out of of
Speaker 1: Lower Manhattan. They're They're really a different cud, aren't they, Barry.
Speaker 1: That speaks to the paradox of the whole Jim Simons
Speaker 1: and Renaissance story. The very people who figured out the market,
Speaker 1: who conquered the market are pretty much the last people
Speaker 1: you would have expected, because they were people that didn't
Speaker 1: know anything about the market. It's about you didn't know
Speaker 1: the white investing, not only that some of them were
Speaker 1: aren't even capitalists internally when you talk to them. So
Speaker 1: let's let's let's stick with that issue. We'll come back
Speaker 1: to the academic nature. I'm kind of fascinated by Bob Mercer.
Speaker 1: The uxtaposition with him is, here's a guy who by
Speaker 1: all measures, brilliant, rational, completely mellow and even tempered, just
Speaker 1: a data driven mathematician professionally. But then I guess that's
Speaker 1: his uh Dr Jekyl. But the Mr Hyde is his
Speaker 1: personality when it comes to his personal politics is the
Speaker 1: polar opposite. He's a wild eyed conspiracy theorist. He trolls
Speaker 1: the other Renaissance Technology employees. Simons is a big democrat.
Speaker 1: A lot of the other academics at Renaissance are certainly
Speaker 1: left of center, if not Democrats, or or even further left.
Speaker 1: How does Bob Mercer play in that environment? Yeah, so,
Speaker 1: Bob Mercer as a scientist who demanded internally that everyone
Speaker 1: stick to the scientific method, and it's a data driven firm.
Speaker 1: Everything has to be approved ever, no intuition exactly. And yet,
Speaker 1: as you suggest, when it comes to his personal beliefs,
Speaker 1: he believes every insane conspiracy theory out there. It's so
Speaker 1: shocking compared to who he is professionally. What I'm really
Speaker 1: trying to emphasize is how different personally his beliefs are. Yeah,
Speaker 1: I mean, everything he argues against doing professionally he does personally.
Speaker 1: It seems just so odd. He demands proof when it
Speaker 1: comes to work and not so much outside of work.
Speaker 1: I mean, for a long time he was treated as
Speaker 1: a curiosity within Renaissance. He again to go into the
Speaker 1: lunch room get under people's skin by talking, by sharing
Speaker 1: some of these conspiracy theories about Hillary or somebody else,
Speaker 1: and people weren't sure internally whether he really believed in
Speaker 1: it or not. He was the boss, they didn't want
Speaker 1: to challenge him too much, so for a while they
Speaker 1: didn't take him seriously. They didn't think they needed to.
Speaker 1: And then lo and behold as he as the firm
Speaker 1: grew and he became a multi billionaire, they realized that
Speaker 1: he was funding all kinds of causes that many people,
Speaker 1: if not most people at Renaissance are really uncomfortable with,
Speaker 1: unhappy about, and they were they were stuck. They don't
Speaker 1: know what to do. We're talking about everything from Brexit.
Speaker 1: He was helpful in terms of Brexit. Bright bart he
Speaker 1: was funding bright bart Um and then he got behind
Speaker 1: the Trump campaign. He's the one who put Kelly Anne
Speaker 1: Conway and Steve Bannon in the Trump campaign. And one
Speaker 1: can argue, and people have said that there may not
Speaker 1: have been a Trump presidency were it not for this guy,
Speaker 1: Bob Mercer, which made everyone internally uncomfortable. And and let's
Speaker 1: set the stage for that. It's August of two thousand
Speaker 1: and sixteen. The Trump campaign is in the midst of imploding.
Speaker 1: There have been a series of scandals. Back when scandals
Speaker 1: actually resonated, the whole Access Hollywood tape comes out. I mean,
Speaker 1: the Trump campaign was circling the drain before Robert Mercer
Speaker 1: stepped in with a few handpicked people and a little
Speaker 1: bit of cash. Right. So what happened was Bob Mur's daughter,
Speaker 1: Rebecca Mercer, who kind of runs the political side of
Speaker 1: things in the family, she ran up to to Trump
Speaker 1: at an event campaign event and say you better turn
Speaker 1: things around or else we're done. And they've been funding
Speaker 1: him financially. First they were Cruise, they were backing Take Cruise,
Speaker 1: and they after a lunch between Avanca and Rebecca Mercer.
Speaker 1: The Mercers switched gears and also CRUs lost. He got
Speaker 1: out of the race. Then they switched gears. They became
Speaker 1: one of the top funders. I think that they eventually
Speaker 1: hime the top funder for for Trump. Sobca Rebecca Mercer
Speaker 1: runs up to Donald Trump at an event says you're
Speaker 1: gonna lose unless you drastically change things, and Trump kind
Speaker 1: of acknowledge. He's like, yeah, what do I do? And
Speaker 1: Rebecca said, You've got to work with this guy, Steve Bannon.
Speaker 1: So Steve in Trump's like, all right, I'll meet with him.
Speaker 1: So Steve Bennon goes out to the the country club
Speaker 1: in New Jersey to talk to Trump, has to wait
Speaker 1: through Trump goes through a couple of hot dogs, Um
Speaker 1: ice cream Sunday, Um, plays golf and and you know,
Speaker 1: Bannon's waiting and waiting, and finally he gets an audience
Speaker 1: with Trump and he lays out strategically what he should
Speaker 1: be doing, and Trump listens to him. To his credit
Speaker 1: and the rest of this history. So if we're not
Speaker 1: for Rebecca Mercer and Bob Mercer, it's not clear Trump
Speaker 1: would have won. I can't get a good read on
Speaker 1: Rebecca Mercer in the book. She's really very minor character
Speaker 1: relative to all these other scientists. Who is she and
Speaker 1: and and what was she doing before the election. So
Speaker 1: Rebecca Mercer, like her father, is very conservative. Rebecca homeschools
Speaker 1: her children and believes in small government, low taxation, hates
Speaker 1: the Clintons like Bob Mercer um and but they also
Speaker 1: believe in data. And they also believe in the fact
Speaker 1: that they got really frustrated with mainstream Republicans and they
Speaker 1: didn't think anybody was going to shake things up like
Speaker 1: they thought it should be shaking up. And frankly, as
Speaker 1: an outsider, as a writer, I look at these two
Speaker 1: bowl and I see too that people that never really
Speaker 1: contributed to broader society. It's not like I volunteered their
Speaker 1: time to do something to run to support to fund
Speaker 1: um broader society. By Mercer spent his whole life trying
Speaker 1: to make money, or was first first trying to do
Speaker 1: science and then trying to do to make money. Is
Speaker 1: nothing wrong with that, But then all of a sudden
Speaker 1: he becomes he and his daughter become the ones who
Speaker 1: really have such a remarkable shift on society, on you
Speaker 1: and I I I find that a little distasteful. Frankly, Now,
Speaker 1: weren't they though, on a bunch of philanthropic boards in
Speaker 1: the Museum and Natural History in New York and elsewhere?
Speaker 1: But they had to be throwing some money around. Yes,
Speaker 1: that that was That was pre election though, wasn't it. Uh,
Speaker 1: that's a good question, Wenkley, go on the board. I mean,
Speaker 1: come back to that, because it was only after the
Speaker 1: election that the pressure started coming up to put Wait,
Speaker 1: he's a climate denialist and he's on the board of
Speaker 1: the Natural Museum of Is is she on? Am my? Confusing?
Speaker 1: Who's on which board? Rebecca was on the board of
Speaker 1: Natural um boar of of Museum and National History in
Speaker 1: New York, But she's also a climate denial Yes, Mercer
Speaker 1: is a climate denialist. Um. They he believes that nuclear
Speaker 1: war may not be as harmful as we all believe.
Speaker 1: Less should get past the radioactive cloud. It's really not
Speaker 1: that bad. That's the argument. There you go. Um again,
Speaker 1: not based on science. There's like some stray he picked
Speaker 1: up on some stray he sees on a stray scientific
Speaker 1: paper that was since discredited. Um, which is again goes
Speaker 1: back to the irony that a guy who demands science
Speaker 1: when it comes to his day to day work, when
Speaker 1: it comes to his personal outside interests, he's less demanding.
Speaker 1: And and then the other question that's so interesting is
Speaker 1: how is Robert Mercer forced to step down as CEO
Speaker 1: at Renaissance Technologies and and what is his role currently.
Speaker 1: So Bob Mercer was at Renaissance throughout the campaign through
Speaker 1: the election, and many internally were unhappy about that, but
Speaker 1: not everyone. Others thought he was a good leader. He
Speaker 1: formed a really impressive partnership with a guy named Peter Brown.
Speaker 1: Peter Brown is tempestuous, He's always got great, crazy, interesting ideas.
Speaker 1: Some work, some don't, and Bob Mercer was the calm
Speaker 1: one that was being in the yang and they worked
Speaker 1: really well together. So internally some people were like, what
Speaker 1: do we do here? Our CEO is still doing a
Speaker 1: great job, We're still making six a year in the market.
Speaker 1: But for the destroying democracy thing, he's fantastic and society
Speaker 1: potentially um and even Jim Simons was was torn. So
Speaker 1: Jim Simons was the largest, one of the largest funders
Speaker 1: of Hillary Clinton and his top employee, he Bob Mercer,
Speaker 1: was the top funder for for Donald Trump, so he
Speaker 1: was in a bind. Jim Simons, he couldn't fire his
Speaker 1: employee for his political beliefs, and he also liked him.
Speaker 1: He likes some one individual basis. And to Simon's credit,
Speaker 1: he says in the book, who am I to tell
Speaker 1: him how to spend his own money? It's not my
Speaker 1: decision exactly. And many were torn internally, but it got
Speaker 1: to the point where morale was being affected and they
Speaker 1: were worried about their ability to recruit. And that's the
Speaker 1: lifeblood for that of that place. What what about outside investors?
Speaker 1: A lot of big institutions are not especially happy with Trump.
Speaker 1: How were they dealing with Bob Mercer as CEO of Renaissance.
Speaker 1: So by then, um they had started a few outside
Speaker 1: hedge funds for institutions and others. They still had them dwing,
Speaker 1: which is only for internal employees. But right by the
Speaker 1: time the election, they had outside investors and many were unhappy.
Speaker 1: But that said, the returns were still really good. So
Speaker 1: it wasn't clear to me that how many we're really
Speaker 1: gonna pull out over Bob Mercer's politics. The bigger issue
Speaker 1: is that they were worried about their ability to keep
Speaker 1: attracting talent, and that's what they worry about. That is
Speaker 1: their biggest concern because they're not competing necessarily with PDT
Speaker 1: and two Sigma only, they're also competing with Google and Facebook.
Speaker 1: These are scientists who could go work somewhere else, and
Speaker 1: they were concerned about their ability to keep recruiting them.
Speaker 1: And at some point Jim Simons said, Bob, we've got
Speaker 1: to talk. And I talked about that scene. I described
Speaker 1: that scene in the book, and it was difficult for
Speaker 1: both of them. Bomb Mercer was effectively told to step down,
Speaker 1: and Jim Simons was telling his old friends who who
Speaker 1: helped make him a multibillionaire, that he could no longer
Speaker 1: help run the firm. The secret source of anything is
Speaker 1: that ability to attract incredible talent from all manner of
Speaker 1: of academia and technology and science, isn't it. They have
Speaker 1: a lot of sauces that are secret and impressive. Um
Speaker 1: the collaborative. They're much more collaborative than most firms. They
Speaker 1: don't try to predict where the market is going. It's
Speaker 1: all relationships. It's groups of stocks versus groups of stocks.
Speaker 1: Four thousand or so long, four thousands or so short UM.
Speaker 1: They have many but among the most impressive. Most impressive
Speaker 1: things about that firm is they still can recruit almost
Speaker 1: any one for any area, and they get superstars from
Speaker 1: academia and other places. Quite fascinating. One of the things
Speaker 1: I found so fascinating from the book that I did
Speaker 1: not previously put together in my head but should have,
Speaker 1: but the book made it clear. Jim Simons is really
Speaker 1: an outstanding builder of teams. He was deputy director at
Speaker 1: the subdivision of the UM National Security Agency Code Group.
Speaker 1: I'm I'm during a blank on their name c RD,
Speaker 1: it was called at the time CRD. Then at sunny
Speaker 1: Stony Brook, he takes what was essentially a modest state
Speaker 1: school in New York, builds it into a powerhouse mathematics department,
Speaker 1: like a world class math department, filled with Nobel laureates
Speaker 1: and others. And then at Renaissance he builds another spectacular team.
Speaker 1: Is it fair describe to describe him as an architect
Speaker 1: more than anything? I think that's fair, So listen. Jim
Speaker 1: Simons has his faults. UM, He's not a perfect individual,
Speaker 1: but he's quite impressive in his ability to both do
Speaker 1: the math and the science, and when he wants through
Speaker 1: a needs two. He can do the algorithms, but more
Speaker 1: importantly his ability to manage talents. And someone internally said
Speaker 1: to me, Greg, it's not his genius, but his ability
Speaker 1: to manage genius, which is not easy to do. It's
Speaker 1: really not easy. And you think about these really quirky personalities,
Speaker 1: which really jumps out of you. I think when you
Speaker 1: read the book, how many unusual, odd headstrong, um stubborn
Speaker 1: um top top scientists they've hired, and you know they're
Speaker 1: pretty wealthy. They could leave and go somewhere else, and
Speaker 1: he was able to create this incentive for them to
Speaker 1: stay and work together. Not just stay there, but they
Speaker 1: work together. And like you suggest, you can see that
Speaker 1: pattern early on in his career. He was great as
Speaker 1: a department chair at keeping people happy, all the different
Speaker 1: personalities and kind of thing. Or you can't really force
Speaker 1: someone who's a professor to do what what you'd like
Speaker 1: them to do. You've got to create incentives. And that's
Speaker 1: exactly what he's done at Renaissance. And I think in
Speaker 1: some ways you can learn management skills from him as
Speaker 1: much as you can learn how to create algorithms. So
Speaker 1: one of the interesting parts of the development of Renaissance
Speaker 1: was um what took place in the mid nineties. So
Speaker 1: he's uh, Mercer and Brown, Peter Brown are working on
Speaker 1: the equities portion. Uh, and they're not making a whole
Speaker 1: lot of progress. It's expensive, it's time consuming, and it's
Speaker 1: simply not delivering the sort of returns that everybody has
Speaker 1: hoped for. And so in Simon says to Brown and Mercer, quote,
Speaker 1: get your system to work in the next six months,
Speaker 1: or I'm pulling the plug unquote. How close was the
Speaker 1: entire equities portion of Renaissance to um never becoming what
Speaker 1: it became. Oh, it was very close. And one has
Speaker 1: to also call or remember or note that Jim Simons
Speaker 1: had remarkable patience. So he has this optimism that most
Speaker 1: most people don't share. He encourages his people. People were
Speaker 1: giving up internally about trying to figure out equities. People
Speaker 1: were saying, it's a waste of our resources. Stopped distracting us,
Speaker 1: and Simmons kept encouraging his team. And yet, as you know,
Speaker 1: even he was at his wits end and ready to
Speaker 1: move on and gave his employees, his staff, Bomb Mercer
Speaker 1: and Peter Brown a matter of months to figure it
Speaker 1: out because they had tried and failed over and over again,
Speaker 1: and there was a quirk, there was um, there was
Speaker 1: an error in the code. There was an error in
Speaker 1: the code that a guy named David Magerman, who's colorful,
Speaker 1: and you have to tell so, so let's I was
Speaker 1: fascinated by that part of the book. So everything seems
Speaker 1: to make sense substractly, but it's losing money. It's not
Speaker 1: making money. And one day one of the more junior
Speaker 1: guys decides to literally go through the algorithm, him through
Speaker 1: the actual lines of code, line by line by line
Speaker 1: by line, and ultimately finds an error where one of
Speaker 1: the SMP prices is fixed, meaning it's supposed to update
Speaker 1: automatically and it doesn't. It's a it's an entry number
Speaker 1: instead of a variable that pulls the data inaccurately. That's
Speaker 1: exactly right. So this guy, David Maggerman, was had just
Speaker 1: been hired a few years earlier from IBM. Early on
Speaker 1: he got some had some accomplishments, and got some respect internally,
Speaker 1: but then he blew it. He made a series of
Speaker 1: dumb error's mistakes. Basically, he was doing things he should
Speaker 1: have been doing. At one point he almost pulled the
Speaker 1: plug on the whole system. It was embarrassing. He was embarrassed.
Speaker 1: He was close to getting h really getting pushed out
Speaker 1: of there. And he's the one who said, you know what,
Speaker 1: maybe I can look at this system and find what
Speaker 1: the bug is. And as you suggest, there was it
Speaker 1: was static. They were there, it wasn't updating, and the
Speaker 1: system wasn't updating incorporating the new way SMP five hundred prices,
Speaker 1: which sort of you know, it's a surprise in itself.
Speaker 1: You think of these top giants in science, they should
Speaker 1: have made this kind of dumb mistake and thousands of
Speaker 1: lines of code. Those mistakes happen, right, Yeah, but you
Speaker 1: think a Renaissance and Medallion and Jim Simmons, and who
Speaker 1: are they? They're like you and I, or at least
Speaker 1: not like this was before they became Renaissance. This was
Speaker 1: really when they were also rents. Yes, but you know
Speaker 1: it also is a reminder that even the giants make
Speaker 1: dumb right. And yes, so magerman Um picked up on
Speaker 1: the mistake. Internally, he finally got some respect because he
Speaker 1: brought her over to bomb Mercer and it was Mercer's math.
Speaker 1: He kind of got it wrong, and he kind of
Speaker 1: to to his credit by Mercer, there's some appealing aspects
Speaker 1: to his personality as well. He said he owned up
Speaker 1: to it and said, yeah, I screwed this up. Let's
Speaker 1: fix it, and they're off to the races. It Literally,
Speaker 1: as soon as that's fixed, the things becomes a money
Speaker 1: printing machine. It's remarkable. And they went from managing Medallion
Speaker 1: was about eight hundred million dollars or so at the time,
Speaker 1: and Equities was like thirty four million dollars to ten
Speaker 1: billion dollars of the greatest hedge fund in man's mankind
Speaker 1: modern financial history. So there was a small, tiny error
Speaker 1: that he picked up on and the rest is history.
Speaker 1: So other firms that are in the quant space, like
Speaker 1: d E. Shaw, they had a big head start over Renaissance.
Speaker 1: What was it about Jim Simons that allowed him to
Speaker 1: catch up to people like David Shaw? There are a
Speaker 1: lot of things they do better. Renaissance does a lot
Speaker 1: of things better than everybody else. There's a certain urgency
Speaker 1: within the firm that you feel when you're there and
Speaker 1: you talk to people that you don't really necessarily get elsewhere.
Speaker 1: There's a collaboration that you see internally. One model that
Speaker 1: other firms don't share. There's a sense of humility. They
Speaker 1: don't um They don't take too much risk. They pull
Speaker 1: back risk during crisis, when things are are even internally
Speaker 1: when people are saying heads put on more risk, they
Speaker 1: generally speaking pull back. They use leverage. They use heavy leverage.
Speaker 1: People don't really focus on how much leverage. But they
Speaker 1: are a ten billion fund that can get over a
Speaker 1: hundred billion dollars when they see the opportunities. Um, I
Speaker 1: could go on and on. They really have the best
Speaker 1: trading ability to see what their impact on the overall
Speaker 1: market is, meaning they have the ability to execute trades
Speaker 1: without moving prices. That and they know when they'll move
Speaker 1: the prices and when they won't, so they can play
Speaker 1: with their signals and try to make them uh and
Speaker 1: try to make sure their activity isn't picked up on
Speaker 1: by rivals. They have some signals that they are internally
Speaker 1: are proud of and think people aren't aware of. And
Speaker 1: and there's sophisticate stuff where these are mathematical relationships. And
Speaker 1: it's one thing that one thing I think everyone should
Speaker 1: realize that it's not like they've got some secret sauce
Speaker 1: about you know, when IBM goes up every day. These
Speaker 1: are mathematical relationships between groups of stocks and and their
Speaker 1: relationship to indexes, relationships to each other, relationships to factors.
Speaker 1: It's complex, complicated stuff, um, but they have certain unique
Speaker 1: insights that others don't. Just like seeing the world just
Speaker 1: a little bit with a better um with glasses when
Speaker 1: everybody else isn't isn't wearing them. They can see things
Speaker 1: that others can quite interesting. There's a quote from one
Speaker 1: of the researchers. Am I pronouncing this right? Panific? I
Speaker 1: love this quote. Quote. Our entire premise was that human
Speaker 1: actors will react the way humans did in the past,
Speaker 1: and we have learned to take advantage of that. How
Speaker 1: much of that is reflected in their algorithms? Yes, so
Speaker 1: almost all of what they do is based on predictive
Speaker 1: models that incorporate historic returns, historic moves in the market,
Speaker 1: and they could be recent returns, they could be from
Speaker 1: the late eight They don't usually use those, but they're
Speaker 1: there if they want them to. So they've gotten the
Speaker 1: better data, and it's cleaner than other people, and they
Speaker 1: were cleaning it way before anybody else, and they cared
Speaker 1: about this stuff more. But right, the genius of renaissance
Speaker 1: is that we as investors, our behavior is somewhat repetitive,
Speaker 1: and it maybe and it rhymes. Now, it's not clear
Speaker 1: going forward whether that will continue. So things have changed.
Speaker 1: We've got as we all know, um, passive investing is changing,
Speaker 1: is dominating the market. Active investors don't play the same
Speaker 1: role factor investing, etcetera. So will Medallion's models. Will renaissances
Speaker 1: models continue to trounce the market even internally. They're not
Speaker 1: sure and most of what they they're doing, they're not
Speaker 1: high frequency traders. They're not long term investors. But they'll
Speaker 1: buy and sell almost a pair, trade in groups of
Speaker 1: stocks and hold it for days or weeks. That's pretty
Speaker 1: that's a good way to look at it. Generally speak
Speaker 1: on average is about a two day holding period, but
Speaker 1: they'll get two weeks too. They'll do fast trading. They'll
Speaker 1: do what looks like high frequency but really isn't. In
Speaker 1: that they're doing that usually to break up their trade,
Speaker 1: so the rapid fire within seconds. But they're not in
Speaker 1: and out necessarily. No, they're not flashboys. Their medium frequency
Speaker 1: is what people call it in the industry. They frankly,
Speaker 1: their technology is good, but it's not great. You would
Speaker 1: think they would have the best of everything, and they
Speaker 1: sort of poke fon it at each other internally that
Speaker 1: they've got good technology, but it's not cutting edge necessary.
Speaker 1: They're not co locating and all that kind of stuff.
Speaker 1: Well they don't have to though. They're not sniffing out
Speaker 1: other trades and front running them. They're executing their own strategies.
Speaker 1: That's exactly right. So people do get them confused with
Speaker 1: kind of the flashboys. But yeah, generally speaking about two
Speaker 1: days or so as a holding period, And and we
Speaker 1: talked about in the early days, Jim Simons was sort
Speaker 1: of a macro tourist. He still occasionally overrides the system.
Speaker 1: Tell us about when that happens and and why does
Speaker 1: he think his flawed human instinctual judgment is better than
Speaker 1: the system. It is unusually a little bit surprising. They
Speaker 1: generally speaking never override their models, and they take they
Speaker 1: never can. We generally speak exactly in times of crisis.
Speaker 1: The firm will pull back when they're not sure, when
Speaker 1: they're worried, and that's part of that humility. So they
Speaker 1: don't have this arrogance that our models will survive. The
Speaker 1: ltc M kind of things. They're not. They're not you
Speaker 1: know John mary um Weather and that team at all. Right,
Speaker 1: they get scared like you and I. And even though
Speaker 1: internally there are people that say, don't ever mess at
Speaker 1: the models. People like Simons. He doesn't run things day
Speaker 1: to day. But in terms of crisis I describe in
Speaker 1: the book there were there's panic. There was panic. They're
Speaker 1: like any other kind of trading firm. And in those
Speaker 1: kind of times he overruled his colleagues and he said, yes,
Speaker 1: we'll probably make money here if we stick with our models,
Speaker 1: but I'm worried about surviving. And if you think about it,
Speaker 1: they also borrow a lot of money, so they've got lenders,
Speaker 1: banks and others, and those banks get nervous if they
Speaker 1: pull back on them. That will affect things. So Simon's
Speaker 1: that's part of Simon's his genius that again he can
Speaker 1: manage really well too, and and and deal with investors
Speaker 1: and borrowers as well. How much leverage do they use,
Speaker 1: It depends. It ranges if they're excited about the market
Speaker 1: and opportunities if they're not. But they can do ten
Speaker 1: times or even more. It depends what opportunities and times
Speaker 1: sounds like a lot. Long term capital management was a
Speaker 1: hundred x. The big Wall Street banks in in the
Speaker 1: sub prime era were fort x, so ten x almost
Speaker 1: sounds modest. Also, you gotta remember they're long and short
Speaker 1: all the time. Everything is hedged, and they're long again
Speaker 1: about four thousand and short about four thousand on average equities.
Speaker 1: So them leveraging up is not like you and I
Speaker 1: going along Microsoft and leveraging up. It's it's different. It's
Speaker 1: pretty balanced than the odds are against anything untoward happening.
Speaker 1: And the thing to remember about renaissance is they only
Speaker 1: get right barely more than fifty of the time, and
Speaker 1: they're aware of that. So on the one hand, their
Speaker 1: sharp ratio is crazy great, which allows them to leverage
Speaker 1: up and borrow this money, and it's pretty impressive in
Speaker 1: its own right, but also as a reminder, they realize
Speaker 1: they're they're not they're not hitting home runs every single day.
Speaker 1: It's like a casino. They're making small amounts all the time,
Speaker 1: quite quite interest in and it's sort of laughable today.
Speaker 1: But you listed in the book a number of fairly
Speaker 1: famous UH investors and hedge fund managers today who in
Speaker 1: the early days of renaissance. Jim Simons went saying, Hey,
Speaker 1: I'm raising this fund and I'd like to have you
Speaker 1: being an investor, and they pretty much across the board
Speaker 1: said no, left him out of the office. Bruce Covernor
Speaker 1: pulled Tutor Jones, who else famously said not to Simon's
Speaker 1: Donald Sussman is the key one. Donald Sussman is one
Speaker 1: of the most respected investors on Wall Straight. He backed
Speaker 1: the Shaw, He's backed a lot of um famous investors
Speaker 1: over the years, and he's a really well impressive guy
Speaker 1: in his own right, got a great track record. And
Speaker 1: Simmons came to him, hat in hand saying I think
Speaker 1: I've got it, I think I've figured it out. I'd
Speaker 1: like some backing from you. And it wasn't that Sussman disagreed.
Speaker 1: It wasn't that he was necessary really skeptical of Jim Simons,
Speaker 1: but he had already invested in d SHAW. I didn't
Speaker 1: want to invest in a competitor, and there wasn't much
Speaker 1: of a track record at that point. Is really when
Speaker 1: they decided to go all in on quantitative investing UM,
Speaker 1: using big data, using algorithms as opposed to using some
Speaker 1: of the instinctive intuition type trading, and so there wasn't
Speaker 1: much of a track record in when Jim Simons went
Speaker 1: to speak to Donald sssman, So you can't blame him
Speaker 1: too much. But yeah, there were a number of pretty
Speaker 1: well respected investors I talked about in the book who
Speaker 1: had an opportunity to invest in Medallion and passed on it.
Speaker 1: And then a few years later, or maybe it's fifteen
Speaker 1: years later, Simmons goes to the outside Medallion investors and says, hey,
Speaker 1: thanks for the capital, but here, we're gonna give this
Speaker 1: back to you. We we can't use it anymore. What
Speaker 1: a What was the thinking there? And be what was
Speaker 1: the reaction of the investors. They must have been pretty
Speaker 1: you know, stunt. So they again have these remarkable models
Speaker 1: that allow them to know how much they can make
Speaker 1: in certain size, how much they impact the market, pretty sophisticated,
Speaker 1: and they realized that a ten billion or more they're
Speaker 1: going to really not be able to have those kind
Speaker 1: of returns. Now, you and I would probably say fine,
Speaker 1: instead of being up sixty six percent a year, will
Speaker 1: be up thirty five percent a year, and we'll grow this,
Speaker 1: say U m here and make the money. But no,
Speaker 1: they wanted this hedge funds to be just for them
Speaker 1: and to have these outstanding, remarkable returns. So they proceeded
Speaker 1: to kick, as you suggest, kick their LPs out, kick
Speaker 1: their investors out. And they were not happy. They weren't
Speaker 1: they weren't thrilled. Some of them said, you know, I
Speaker 1: stuck with you, Jim, through the difficult times, and here
Speaker 1: you are kicking me out. And he kicked out his
Speaker 1: friends too. He kicked everybody out, really, and he basically
Speaker 1: was just a little cold. You know, Jim Simmons is
Speaker 1: uh an fascinating guy. He's a scientist, he cares about society,
Speaker 1: he's a huge philanthropist, um does all kinds of really
Speaker 1: interesting things in education and science. He also really really
Speaker 1: loves money and he as a tool for what it
Speaker 1: can do, or just loves it. Let's not go overboard here.
Speaker 1: Look for an academic that it comes across that he
Speaker 1: is much more motivated by accumulating cash than the typical academy.
Speaker 1: Oh my god, it's no comparison. Quite honestly. He always
Speaker 1: had one foot in the world of academia and one
Speaker 1: foot out. He was always doing businesses and they're quite interesting.
Speaker 1: I read about him in the book. He pursued trading
Speaker 1: and business, not full time, and it never really worked
Speaker 1: out completely, but he always had his outside interest. So yeah,
Speaker 1: he always really was focused on getting rich and he
Speaker 1: wanted to change the world with that money. But he
Speaker 1: also just playing like getting wealthy. So here they were
Speaker 1: with staring at the possibility of seeing the return slow down,
Speaker 1: and he said, I'd rather kick out my investors than
Speaker 1: risk the possibility of our returns. Uh dropping. And you
Speaker 1: described earlier lots of colorful characters in the book, Simmons
Speaker 1: is really one of the most colorful characters of everybody.
Speaker 1: He's a chain smoking two packs of Merits a day.
Speaker 1: There's a hilarious story about a group of institutional investors
Speaker 1: from a healthcare company that are there for some um,
Speaker 1: just kicking guitars to give Renaissance money. And there's also
Speaker 1: a birthday kick involved. Tell that story. Sure, that's the
Speaker 1: Robert Wood Johnson Foundation there, dedicated to public health, and
Speaker 1: they came by Renaissances Long Island Offices to talk about
Speaker 1: investing in Reef. That's one of their outside funds. This
Speaker 1: was early on when they were raising money for it.
Speaker 1: They were impressed. They were having a nice launch. People
Speaker 1: around the table. Simon's comes in to finish off the sale.
Speaker 1: Everyone's all excited. The salesman at Renaissance can see their commissions.
Speaker 1: They can imagine how much they're gonna be making from
Speaker 1: this big investment. And Simmons, as you suggest, is change smoking.
Speaker 1: He doesn't care. He doesn't care. He's smoked, always a
Speaker 1: cigarette in his hand. And he's also, you know, almost
Speaker 1: eighty two, so it hasn't really impacted his life. So
Speaker 1: he's in this meeting and Simons looks around the no ashtras.
Speaker 1: He's looking for an ash tray, but he needs to
Speaker 1: ash somewhere, and he sees this big fancy cake that
Speaker 1: have been wheeled in uh to to to end the dinner,
Speaker 1: to the lunch, and everyone's gonna have a piece of it.
Speaker 1: So he reaches over and he sticks his cigarette deep
Speaker 1: into that cake and he's Jim time. He just gets
Speaker 1: up and raves goodbye, and that thing is sizzling as
Speaker 1: he exits the room, and everyone just looking at each other.
Speaker 1: And the Renaissance salesman are just um dumbfounded, apoplectic because
Speaker 1: they've lost their commission. They're sure these are this is
Speaker 1: the Robert Johnson Foundation dedicated to public health. So obviously
Speaker 1: this guy just ashed and a sizzling vanilla cake right
Speaker 1: in front of them. They're not gonna write a check.
Speaker 1: But they did nonetheless speak for themselves, right. And in
Speaker 1: the book, I was shocked to read this. Someone says
Speaker 1: to Simon's your scientists, don't you know about the dangers
Speaker 1: of smoking? What was his response? He said to them,
Speaker 1: it's not clear. This his tongue in cheek. It probably wasn't.
Speaker 1: But he researched his genes and according to his his work,
Speaker 1: his research, he was is one of these unique people
Speaker 1: that can actually withstand um, all the chain smoking that
Speaker 1: he does, he inflicts on his body. He claims his
Speaker 1: predisposition is to not get lung cancer. Genetically, he has
Speaker 1: the lucky whatever it is gene that that means you
Speaker 1: can smoke without ill effects. Yes, and he fooling himself
Speaker 1: a little bit like bom Mercer with his pseudo signs
Speaker 1: outside of the office. Um. And that's one thing that's
Speaker 1: kind of jumped out in the book, that these guys
Speaker 1: are like you and I in so many ways. They've
Speaker 1: got their foibles and they get emotional Um. In their lives,
Speaker 1: and they get fights with their wives and scream matches
Speaker 1: with their colleagues. And Jim Simmons, yes, has convinced himself
Speaker 1: that he won't be impacted by smoking in it into
Speaker 1: his credit. It hasn't impacted him, so you know, once
Speaker 1: again he may be right. Uh, Greg, can you stick
Speaker 1: around a bit? I have a bunch more questions. Happy,
Speaker 1: We have been speaking with Greg Zuckerman, author of the
Speaker 1: Man Who Solved the Market? How Jim Simon's launched the
Speaker 1: quant revolution. If you enjoy this conversation, be sure and
Speaker 1: come back for our podcast extras. Will we keep the
Speaker 1: tape rolling and continue discussing all things renaissance technologies related.
Speaker 1: You can find that at iTunes, Google podcast, Stitcher, Spotify,
Speaker 1: wherever your finer podcasts are sold. We love your comments,
Speaker 1: feedback and suggestions. You can write to us at m
Speaker 1: IB podcast at Bloomberg dot net or give us a
Speaker 1: review over at Apple iTunes. Check out my weekly column
Speaker 1: on Bloomberg dot com. Sign up for my daily reads
Speaker 1: at Rid Halts dot com. Follow me on Twitter at
Speaker 1: Rid Halts. I'm Barry Retults. You're listening to Masters in
Speaker 1: Business Radio. Welcome to the podcast. Greg, thank you so
Speaker 1: much for doing this. I have to tell you I
Speaker 1: really really enjoyed the book, not just because I'm a
Speaker 1: you know, fascinated by Renaissance and I've had a handful
Speaker 1: of dealings with Jim Simon's without his involvement. He he no,
Speaker 1: I have never met, but um, when I was a
Speaker 1: high school student trying to figure out where to go
Speaker 1: to school, like towards Stony Brook, and there goes the
Speaker 1: outgoing math uh department chairman. If you would have met him,
Speaker 1: you would never have given him a penny. The joke
Speaker 1: about all these people who passed on him. He had
Speaker 1: the scruffy beard and you know, yellow fingers from nobody.
Speaker 1: I could see how people wouldn't have taken him seriously.
Speaker 1: But I have to tell you why I um. And
Speaker 1: there's a funny story that I can't verify about the
Speaker 1: alumni department. It's Stony Brook. Um. I can't even share
Speaker 1: publicly because I don't know if it's true, but if
Speaker 1: it is, it's pretty hilarious. I really enjoyed the book.
Speaker 1: I normally take a ton of notes, and the books
Speaker 1: are always marked up and underlined and with post its,
Speaker 1: and oh, here's the question, and here's the topic. There
Speaker 1: really is zero writing in the book because I read
Speaker 1: it like a thriller. It's a fascinating tale about really
Speaker 1: an amazing story with really interesting people. You did really
Speaker 1: nice job on this, um, thank you. What What was
Speaker 1: the process like writing this? This gotta be quite quite
Speaker 1: a monstrousity to put together. It's hard, the hard thing
Speaker 1: I ever did in my life. Really, I could. I
Speaker 1: could totally see that the challenges We're getting people to talk,
Speaker 1: and even when they started talking, understanding what they were
Speaker 1: telling me, and I'm not a math guy, I had
Speaker 1: to understand this is a different language quant to some extent,
Speaker 1: and even at that point, trying to make it into
Speaker 1: a narrative, as you suggest, I tried to appeal. I
Speaker 1: want to try to appeal to everyone, um, the quantity
Speaker 1: type people, mathematicians, scientists, but also just the average nonfiction readers.
Speaker 1: I did. There were there were a few times where
Speaker 1: I'm working all night in my basement and I hear
Speaker 1: some sound upstairs and I'm like, oh, my kids left
Speaker 1: the TV on again, And then I go up to
Speaker 1: turn it off and there's no TV on. Then I
Speaker 1: realized that sound, those sounds are the birds getting up
Speaker 1: in the morning, went through the night. And part of
Speaker 1: it is because I was fascinated by the story myself,
Speaker 1: and these characters are interesting and intriguing and what they accomplished,
Speaker 1: and the challenges they overcame, and the drama behind the
Speaker 1: scenes that I wasn't aware of. So it was the
Speaker 1: hardest thing ever did, but also it was rewarding and
Speaker 1: fascinating to me in the In the early phases of this,
Speaker 1: did you ever reach a point where you said, uh,
Speaker 1: this is just going now, where I have to pull
Speaker 1: the plug on this? Many times? I came close too
Speaker 1: many times? He really, Yeah. I mean I wasn't close
Speaker 1: to given up, but I couldn't figure out how I
Speaker 1: was going to make it happen. And then I would
Speaker 1: have a breakthrough. Someone would be kind enough to share
Speaker 1: with me and and talk to me. Maybe would maybe
Speaker 1: be on the record, maybe it wouldn't, but that would
Speaker 1: keep me going now, would give me encouragement and deal
Speaker 1: with all the people slamming the door on my face subsequently,
Speaker 1: because then there'll be somebody kind enough to to share
Speaker 1: right after that. When you spoke to people off the record,
Speaker 1: how do you use that if you're telling somebody. I'm
Speaker 1: not gonna quote you. I'm not going to use this.
Speaker 1: How do you work that into the story. Does it
Speaker 1: just give you enough background? Or what do you do
Speaker 1: with off the record um conversations and with Simon's on
Speaker 1: or off the record with you? Right? So I don't
Speaker 1: do off the record. Off the record the way we
Speaker 1: define at the Wall Street Journal means you can't use
Speaker 1: that information. But I was up front with with all
Speaker 1: these people and saying, I'd like to use your information
Speaker 1: on background, meaning use it, right, but I won't name you,
Speaker 1: won't quote you, won't cite you. And I um, I said,
Speaker 1: you know, I've been around a little bit, so I
Speaker 1: have a certain reputation. And I said, I'm not gonna
Speaker 1: burn you. There's no incentive for me to burn you.
Speaker 1: I'm not gonna name you. I'm not gonna tell anybody
Speaker 1: Rento Science that we're talking. UM. So I got people
Speaker 1: sufficiently comfortable, and Jim Simons was pretty darn open and
Speaker 1: frank and transparent. I have to tell you about what
Speaker 1: he wanted to speak about. Again, I want to make
Speaker 1: clear that he wasn't opening the kimono and telling me
Speaker 1: all his signals. I had to get that stuff on
Speaker 1: my own, uh and his and how he dealt with
Speaker 1: certain things, and the setbacks and the narrative and the
Speaker 1: drama behind the scenes. But he was quite cooperative about
Speaker 1: other things, and I have to thank them for that.
Speaker 1: So the early cancelations, the Cosa Nostra, Simon's don't say
Speaker 1: anything after you speak with Simmons? Do you circle back
Speaker 1: with the early cancelors And were they a little more
Speaker 1: open at that point? No, they still wouldn't talk to me.
Speaker 1: So I had to keep even after Simon says, all right,
Speaker 1: I'll finally talk to you. You know why there because
Speaker 1: they were even concerned about the possibility that Jim might
Speaker 1: get angry with him. Oh yeah, well you say that
Speaker 1: Jim is talking to you about How do I know
Speaker 1: that's true? Jim? Yeah, But it just got too busy.
Speaker 1: This guy's it's got a lot going on, and you're
Speaker 1: not gonna call him up and say, can I talk
Speaker 1: to Greg? Already? Did you told me I can't talk
Speaker 1: to Greg? But now can I talk to Greg? It
Speaker 1: wasn't worth their while. So I had to keep finding
Speaker 1: other people and and quite honestly, a lot of the
Speaker 1: people early on at the firm and in his life
Speaker 1: were old and um, and you're eighty something, You're like,
Speaker 1: I'll say, who I what I want to who I
Speaker 1: want one. They've accomplished a lot in their own right.
Speaker 1: I mean, these these are scientists that are big names,
Speaker 1: hollid names, and some of these fields. It's harder. You
Speaker 1: have to you have to focus on the fact that,
Speaker 1: even setting aside when it came to Wall Street and investing,
Speaker 1: these people are really accomplished in their own right. So
Speaker 1: they're proud of what they've done. And some of these
Speaker 1: people don't mind talking. Huh that that's really that's really
Speaker 1: quite fascinating. UM. I have a quibble with you. Is
Speaker 1: Jim Simons really the man who solved the markets? Or
Speaker 1: is he the guy who just figured out, here's how
Speaker 1: to apply mathematics as a way to extract profits from
Speaker 1: the markets. I didn't get the sense that he figured
Speaker 1: out the markets. The markets are just an a means
Speaker 1: to an end for him. Yeah, to the extent that
Speaker 1: he's um recorded these remarkable to that extent he saw
Speaker 1: the market. But right, there's no hidden understanding that jumps
Speaker 1: out of you that he knows that you and I
Speaker 1: don't know he's as flum mixed by the day to
Speaker 1: day moves as anyone else. What he does and his
Speaker 1: his colleagues really UM do understand is that what impacts
Speaker 1: prices is a lot more than you and I are
Speaker 1: aware of. Now They've got whole levels of factors that
Speaker 1: aren't included in the a q R s and the
Speaker 1: stuff that you can buy off the shelf, etcetera. So
Speaker 1: they are they have a better understanding of the market,
Speaker 1: I would argue than anyone else, But maybe it's overstated
Speaker 1: to say they completely solved it. So the other thing
Speaker 1: that I thought was really intriguing UM in the book
Speaker 1: is despite these guys making boat tons of money, just
Speaker 1: so much compared to what they would have made had
Speaker 1: they stayed either IBM or Academia, they're making four and
Speaker 1: five and ten x plus whatever the Medallion Fund is
Speaker 1: strowing off some of the um squabbles about money, especially
Speaker 1: in the later history of the firm. So I described
Speaker 1: the firm as having four phases. The early macro tourism phase,
Speaker 1: then there's a later phase where they figure out um
Speaker 1: how to trade currencies, commodities and futures uh, and then
Speaker 1: when Mercer and Brown cracked the equity code is the
Speaker 1: third phase, and then the fourth phase they started bringing
Speaker 1: a lot of UM Russian computer scientists and other UM academicians.
Speaker 1: This like fourth generation of of the company really degenerates
Speaker 1: into this petty, jealous, backbiting envy to the point where
Speaker 1: a bunch of them go to Simon's and say, you're
Speaker 1: making too much money. We demand some of it. How
Speaker 1: the hell did does anyone get away with that? Yeah,
Speaker 1: they were people telling Jim Simmons he made too much money.
Speaker 1: There were people saying he should step down. There were
Speaker 1: people it was something of a coup. They tried to
Speaker 1: how does he not just say you you and you
Speaker 1: you're fired. Go back to making nine dollars as a
Speaker 1: teaching assistant. Because I keep coming back to the point
Speaker 1: that Jim Simmons loves money, and they were really valued employees,
Speaker 1: so they could have been jerks, but he gets past that,
Speaker 1: and he's a great manager. He wasn't insulted by that. Listen,
Speaker 1: if you're gonna hire some of the top scientists in
Speaker 1: the world, you're gonna get the personalities that come with that,
Speaker 1: and he embraced that, so he wasn't insulted. He doesn't
Speaker 1: take himself so seriously, and he actually gave back some
Speaker 1: equity and he and he said, maybe you guys are
Speaker 1: right and I'm talking too much of a cut. And
Speaker 1: I give him credit for that. So it was amazing.
Speaker 1: In the book, I'm like, I just don't know, because
Speaker 1: normally employees like that are so cancerous they could destroy
Speaker 1: a company with the sort of petty, envious jealousies that
Speaker 1: that you described in the book. I found that to
Speaker 1: be just completely shocking. Um and his I guess he
Speaker 1: resolved in a way that was pretty uh, pretty reasonable. Yeah. Um.
Speaker 1: He again has a great instinct when it comes to people.
Speaker 1: So it's not he's not just like this um quant
Speaker 1: uh focused on money and numbers and algorithms. He understands
Speaker 1: people and what what drives them. And he thought he
Speaker 1: could work with some of the people leading the coup. Yes,
Speaker 1: they were headstrong and tempestuous and difficult, but they had
Speaker 1: potential as managers and he was right. He actually created
Speaker 1: he turned them into pretty good managers. So, for for
Speaker 1: whatever reason, he's got these talents on both sides the equation.
Speaker 1: So who's running Renaissance Technologies Now, it's not Jim Simon's
Speaker 1: the CEO, and it's not Robert Mercer who's running the
Speaker 1: day to day. It's Peter Brown, who's a former IBM
Speaker 1: scientists just to work closely with Mercer and was considered
Speaker 1: the more wild of the two. Yes, and when he
Speaker 1: took over, when Bob Mercer stepped down, people internally were
Speaker 1: concerned because, as I said, Peter Brown is a little
Speaker 1: bit tempestuous and gets emotional sometimes. I describe a couple
Speaker 1: of scenes in my book where he panicked, he got nervous,
Speaker 1: and he got scared. This was years ago, and he
Speaker 1: learned from those lessons, and later on when main market difficulties,
Speaker 1: he didn't react that same way. But people worried about
Speaker 1: Peter Brown taking over. And to his credit, he's aware
Speaker 1: of his flaws and his weaknesses, and he's been leaning
Speaker 1: and we're talking the last few years, last couple of years,
Speaker 1: he's been leaning on his colleagues, his senior colleagues, much
Speaker 1: more than anyone had expected, and it's worked out nicely.
Speaker 1: I imagine Brown is Mercer without the politics, um at
Speaker 1: least in actuality, because he's still working closely with Mercer. Yeah,
Speaker 1: but very different person now. Um, Bob Mercer is this
Speaker 1: cool customer. You don't really can't read him. Even his
Speaker 1: colleagues don't really understand. He's so on emotional. They don't
Speaker 1: stand where he stands on certain issues. You do not
Speaker 1: wonder when it comes to Peter Brown. So in some
Speaker 1: ways they offset each other. They worked really melded, and
Speaker 1: they messed really well together. And what is Jim Simon's
Speaker 1: doing today day to day at Renaissance? So he barely
Speaker 1: goes in the office and yet he makes about a
Speaker 1: billion and a half dollars a year gig. Yeah, but
Speaker 1: really he's But it's not to say he's not very
Speaker 1: hard at work. He runs a foundation and it's really active.
Speaker 1: One of the biggest supporters of science in the country.
Speaker 1: They're very active when it comes to things like autism research,
Speaker 1: and they're cutting edge the back all kinds of cutting
Speaker 1: edge approaches. Um he supports, he funds. He he subsidizes
Speaker 1: the salaries of high school math and science teachers in
Speaker 1: New York City, ten thousand of them because he doesn't
Speaker 1: want so many leaving. What does that to subsidize, Well,
Speaker 1: it depends how many each year, but oh yeah, it's huge,
Speaker 1: like millions of dollars. I mean, he's worth twenty three
Speaker 1: billion dollars. But to his credit, he's on the cutting
Speaker 1: edge of all kinds of different approaches when it comes
Speaker 1: to science education. UM. They published Planta, which is a
Speaker 1: basic fundamental science and mathematics magazine, which really who else
Speaker 1: covers that sort of stuff. And he's also trying to
Speaker 1: subsidize the work, and he isn't subsidizing the work of
Speaker 1: scientists trying to get at the beginning of life and
Speaker 1: how this world began, in the first moments of our existence,
Speaker 1: of this universe existence. UM. They're trying to build out
Speaker 1: in Chile a UM all kind of massive array exactly
Speaker 1: of of ability to see, UM, go back in history
Speaker 1: and see through the massive telescopes to see what happened.
Speaker 1: So he's on the cutting edge of all kinds of
Speaker 1: different science, and he's just as focused on that as
Speaker 1: he was trying to crank out the sixty six percent
Speaker 1: returns at at the Medallion Fund. The current theory of
Speaker 1: the Big Bang is under assault because some of it
Speaker 1: doesn't seem to work, and some of the work that
Speaker 1: Simon's is doing is to try and figure out if
Speaker 1: not the Big Bang, then then how did the universe
Speaker 1: come into existence? Simons himself isn't a believer in the
Speaker 1: Big Bang, and yet he's funding efforts to test if
Speaker 1: it actually there's some proof to it, because deep down
Speaker 1: inside he's a scientist. And show me the day to
Speaker 1: show me the evidence, and if you can't disprove it,
Speaker 1: then that's the best we have to work with, right
Speaker 1: The Renaissance story, that Jim Simon story really is a
Speaker 1: story about the scientific method. If you think about society
Speaker 1: today and you think about the White House, it's all
Speaker 1: about narratives. And if you think about Wall Street to
Speaker 1: Pharaos and we work and people get carried away with
Speaker 1: the narrative and it leads to problems. It leads to
Speaker 1: real issues. Whereas there's something that he said, I I've
Speaker 1: become a believer in the scientific method, where it's about data,
Speaker 1: it's about proof, and this that is to me one
Speaker 1: of the lessons of the Renaissance. Jim Simon's story quite
Speaker 1: quite fascinating. So we only have you for a finite
Speaker 1: amount of time. Let's jump to our favorite questions. We
Speaker 1: ask this of all of our guests, sort of our
Speaker 1: speed rounds. Tell us the first car you ever owned
Speaker 1: you're making model. Never owned a car at least, grew
Speaker 1: up in Providence, Rhode Allen outside of my dad, taught
Speaker 1: at Brown University. Nothing really going on. The most exciting
Speaker 1: thing was we walked to campus, my high school friends
Speaker 1: and I and try to hit on girls and usually unsuccessfully.
Speaker 1: So that required legs and not automobiles. So yeah, I
Speaker 1: didn't really have a car. What's the most important thing
Speaker 1: people don't know about, Greg Dockerman. I've got this separate
Speaker 1: life where I write books for young people with my
Speaker 1: two sons. So we wrote two books called Rising Above,
Speaker 1: where we've interviewed sports stars who overcame challenges in their
Speaker 1: youth racism, sexual abuse, um, physical abuse, all kinds of
Speaker 1: different emotional and other types of challenges, and we asked
Speaker 1: them how they did it, and to us it was
Speaker 1: really inspirational and we share those stories in our books.
Speaker 1: Tell us who your early mentors were in the field
Speaker 1: of journalism. Uh? Yeah, so I never really had great mentors,
Speaker 1: quite frank, have had a series of bad bosses early
Speaker 1: in my life before gaming. No, now, my my must
Speaker 1: a great early on. I'm talking so early on, I wasn't.
Speaker 1: I stumbled into this profession. Oh really, what were the
Speaker 1: original plans? I was gonna go work on Wall Street.
Speaker 1: I was reading books like Adam Smith and Ray Dirk's
Speaker 1: You just got Ray Dirk's vaguely familiar. He had this
Speaker 1: famous case. It went to Supreme court. He was an
Speaker 1: insurance analyst who UM were shorting and and it was
Speaker 1: a famous case, went Supreme court and he won, and
Speaker 1: he left an impression on me with a book. I
Speaker 1: was buying barrens as. At a young age in camp,
Speaker 1: I was trading stocks. Um, I was a guy was
Speaker 1: gonna go work on Wall Street. And I didn't really
Speaker 1: do any summer kind of job. I was working in
Speaker 1: camps and I didn't have an experience, didn't know any mine.
Speaker 1: My dad was an academic, and I graduated and it
Speaker 1: did well, went to Brandon's University, did well, and I
Speaker 1: couldn't even get an interview on Wall Street. Was nine.
Speaker 1: It was after the market had crashed a couple years earlier,
Speaker 1: and um, I stumbled around. I start some some businesses
Speaker 1: and some work, some didn't. And then I went in
Speaker 1: one day and interviewed to be a financial journalist. I'm like, wait,
Speaker 1: I love writing and I love Wall Street They're gonna
Speaker 1: pay me to write about Wall Street? How great is that? So?
Speaker 1: What writers influenced the way you think about writing, either
Speaker 1: articles or books? So James Stewart first and foremost, Um, everything,
Speaker 1: he's long standing Wall Street Journal reporter, right, and then
Speaker 1: then he went he's at the New York Times. Now
Speaker 1: book author Um Danna Thieves. He wrote a book called
Speaker 1: Follow the Story, which is about writing. And I've read
Speaker 1: and reread that book numerous times, so that guides me. Um.
Speaker 1: There's a editor at the Journal named Mike sikon Alfie
Speaker 1: who I've learned a lot from. He's an investigative editor.
Speaker 1: He had we had a Poulterer a package that we
Speaker 1: won this past year, and he was the editor of
Speaker 1: that group and he has left a big influence on me.
Speaker 1: Since you mentioned a couple of books, tell us about
Speaker 1: your favorite books. What do you enjoy to read Wolf
Speaker 1: Street related or not when you're not researching your own books? Oh? So,
Speaker 1: Paul Auster, Philip Roth, you know the fiction there? Give
Speaker 1: us some titles. When you say Philip Roth, I immediately
Speaker 1: think of Portnoy's Complaint. But what else do you read?
Speaker 1: You know? American pastoral is great? Um, there's really nothing
Speaker 1: much that from him that I don't love and and
Speaker 1: won't read. Um. I'm reading Patti Smith right now, her
Speaker 1: autobiography Kids. Yeah, all right, that's them reading the earlier one.
Speaker 1: But she's brilliant in her own right, Um. Catch her
Speaker 1: in the Ride at a young age left a huge
Speaker 1: influence in me in terms of being an outsider. And
Speaker 1: that's what as a journalist I see myself. My job
Speaker 1: is to kind of polke halls and look at the
Speaker 1: foibles and mistakes and and and accomplishments of others people
Speaker 1: in the world of finance. That's sort of my position
Speaker 1: in some ways. I saw myself in that character, the
Speaker 1: holding coffeil character to some extent. What was the first
Speaker 1: author you mentioned before, Philip Paul Auster. Paul Auster's fiction
Speaker 1: writer who's brilliant in his own way. He's got gets
Speaker 1: into some give us a book to Uh. Brooklyn Diary
Speaker 1: is a good one. He's so many Brooklyn, All right,
Speaker 1: well we'll go with that. Tell us about a time
Speaker 1: you failed and what you learned from the experience. So many. So.
Speaker 1: I got a tip that there was a guy who
Speaker 1: was running a fraud named Bernie Madoff, and that was
Speaker 1: probably two thousand and three. Al right, so there was
Speaker 1: already the Baron story, but nobody really picked up on
Speaker 1: it in a big way. Exactly right when did that?
Speaker 1: Maybe two one? And good source for the tip. It
Speaker 1: was a good source in the industry, but didn't have
Speaker 1: firsthand knowledge. So I started making some calls and it
Speaker 1: was early in the process. I got a call from
Speaker 1: Bernie madoffs right hand person, and they said, he here,
Speaker 1: are you making calls on Bernie? Why don't you come
Speaker 1: in and meet with him? And I was torn. At
Speaker 1: that point. I hadn't done enough research, so I said,
Speaker 1: I want to meet Bernie, but let's do it in
Speaker 1: a week or two. Well, Greg, he travels a there
Speaker 1: aren't gonna be many opportunities. If our you, I'd really
Speaker 1: take advantage. So I went in met with Bernie. Was
Speaker 1: he charming? He was charming, but not convincing. I asked
Speaker 1: him a series of tough questions. I came out of
Speaker 1: it unconvinced that it was legit, but I thought he
Speaker 1: was front running. I didn't think it was a complete fraud,
Speaker 1: not a ponzi, but he was. Because they were a
Speaker 1: legitimate trading operation, weren't they right, and I thought they
Speaker 1: were front running that legitimate trading and that's how you
Speaker 1: get the smooth returns. And I wasn't the only one
Speaker 1: on Wall Street who had that thought. And that's no excuse.
Speaker 1: I should have pursued that story and I blew it.
Speaker 1: I should have kept working on it. So what was
Speaker 1: the lesson? The lesson is to keep pushing and and
Speaker 1: if you've got an instinct, and to keep pursue it.
Speaker 1: And you listen, some of my best stories, quite frankly,
Speaker 1: are those that editors were luke warm on and I
Speaker 1: kind of kept going at it. You know. UM, give
Speaker 1: us an example. I wrote. I wrote a front page story.
Speaker 1: It became a front page story about John Paulson and
Speaker 1: his tremendous trade, uh the sun probably trade. And people
Speaker 1: internally were kind of like, well, um, he must have cheated.
Speaker 1: There's no ray he could have done it in a
Speaker 1: legitimate way. Um. I I wrote it. I broke the
Speaker 1: story on the London Whale. And even internally they're like
Speaker 1: Jamie Diamond, JP Morrigan, there's no way they could have
Speaker 1: that kind of embrace that kind of risk. Um. I
Speaker 1: did a story about a family, about a brother of
Speaker 1: a of a woman in cancer FitzGeralds who died on
Speaker 1: nine eleven, and I wanted to tell the story of
Speaker 1: how he wanted to tell the story how his his
Speaker 1: sister died on nine eleven. And I started researching, and
Speaker 1: people like you're never gonna find out exactly how she died.
Speaker 1: And you know what, you work hard enough, and that's
Speaker 1: the lesson. Sometimes you can actually piece things together. All right.
Speaker 1: So let's go back to our our speed round. Um,
Speaker 1: what do you do for fun when you're not researching
Speaker 1: and writing books? What what do you do to kick
Speaker 1: back and relax? I obsess over the New York Yankees
Speaker 1: with my son Eli, and play a lot of sports.
Speaker 1: So I'm on a softball team, I'm on a basketball team. Um,
Speaker 1: still playing basketball? Yeah, not as well as I used to.
Speaker 1: I've learned to come off the bench. It's been humbling. Yeah,
Speaker 1: I'm a short, Like forty is where that all goes
Speaker 1: to hell, right at the point where you have a
Speaker 1: good run, workout and you're kind of happy about that.
Speaker 1: But I'm pretty competitive, so you listen. If I can contribute,
Speaker 1: then I'm proud. At this point, I don't need to
Speaker 1: start and dominate like I was a quick, good past,
Speaker 1: first point guard back in the day. And if I
Speaker 1: can come off the bench and help, that's fine. Today
Speaker 1: that that's kind of kind of fun. Let's talk about
Speaker 1: journalism a little bit. What are you most optimistic about today?
Speaker 1: And what are you most pessimistic about? I'll start with
Speaker 1: the most pessimistic. It's an easy question, right, I guess
Speaker 1: it's a difficult time in some ways for journalists. We're
Speaker 1: in a time where it's more, um, it's open season
Speaker 1: some extent. You can criticize, you can be opening your
Speaker 1: your criticism. So I wrote a story about Jeff Gunlack
Speaker 1: a couple of years ago, Double Line fastest growing mutual
Speaker 1: funds UM ever, two hundred billion dollars um, the new
Speaker 1: bond Kings. People don't know who he is. And my
Speaker 1: story was sort of obvious. It was they had piqued
Speaker 1: in a m they lost some money. People were coming out.
Speaker 1: It wasn't like a flood of money, and the returns
Speaker 1: were good, but they're no longer great. And I wrote
Speaker 1: the story and they were. They came back hard at me,
Speaker 1: both privately and publicly. So he gets on this conference
Speaker 1: call and he starts insulting me, he calls. He says, um,
Speaker 1: um mother zucker. He calls me publicly mother mother Zucker.
Speaker 1: It was kind of amusing. Yeah, I kinda like, yeah,
Speaker 1: I gotta like that. Um So, so there won't be
Speaker 1: the greatest bond trader ever. The man who solved the
Speaker 1: bond markets not coming anytime. So through that book, sure,
Speaker 1: if he does something special, I have a new challenge.
Speaker 1: I like the challenge. Um but I do think there's
Speaker 1: a new freedom that people have again not just on
Speaker 1: Wall Street but in society, to be critical of the
Speaker 1: media and and and me included. The flip side is
Speaker 1: there's a new appreciation to there's a new appreciation of
Speaker 1: what we do. And I sense that as well. Readership
Speaker 1: is up both at the Wall Street Journal where I am,
Speaker 1: and elsewhere Washington Post, New York Times, all the Atlantic,
Speaker 1: New York or all their subscriptions are through the roof
Speaker 1: because they've been covering the new new thing, which is
Speaker 1: the Trump administration calling journalists the enemy of the people.
Speaker 1: And and to some extent, he's right. We are going
Speaker 1: to miss him. He brings news, He creates news every
Speaker 1: single day. It's exhausting, it's emotionally draining for us but
Speaker 1: it does sell papers and we are going to miss that.
Speaker 1: So we had an interesting conversation about politics and the election,
Speaker 1: and a bunch of people were talking about what could
Speaker 1: lead to Trump losing his reelection campaign, and my position
Speaker 1: was Trump fatigue. You know, I was praying after the election,
Speaker 1: all right, now that's over, we can get back to normal.
Speaker 1: I think it's used exhausting. People just want to get
Speaker 1: back to normal. It's it's never ending, and it's too much. Yes,
Speaker 1: whether you agree with it or disagree with it, it's like,
Speaker 1: you know what I'd like to go through a day
Speaker 1: where the president is not three front page stories every day. Yeah.
Speaker 1: The question is do people feel that way in the
Speaker 1: swing states? And in our country it's Pennsylvania and Ohio,
Speaker 1: basically even Ohio. I don't think. I think Trump's got Ohio. Florida, Pennsylvania, Wisconsin,
Speaker 1: and Michigan are going the other way. It's Pennsylvania, Ohio,
Speaker 1: and I'm sure maybe a toss up at this point, small,
Speaker 1: but it doesn't mean it's But if you look at
Speaker 1: he won three states by seventy seven thousand votes and
Speaker 1: that put him over the top. So whatever we talk
Speaker 1: about nationally is a relevant. How how those three states
Speaker 1: going to vote? That's Pennsylvania, Ohio, Florida, plus Michigan and Wisconsin.
Speaker 1: The real question to me is if he loses, what
Speaker 1: does he do and what happens? Um does he leave
Speaker 1: and what happens with Oh no, So my wife is
Speaker 1: in the same camp as you. There's no way on
Speaker 1: God's green earth he stays if he loses and PS
Speaker 1: I think the Secret Service would march him out of
Speaker 1: the White House. Our job is to protect you, but
Speaker 1: also to uphold the constitution, and most people agree with you.
Speaker 1: I agree. I don't do that straight talk to people
Speaker 1: in d C. I was just down in d C.
Speaker 1: I think that's a really far fetched threat. I know
Speaker 1: people there's there are a bunch of people who wonder
Speaker 1: that something to listen. If you're a macro tourist as
Speaker 1: as I am, and someone extend looking at world of politics, right,
Speaker 1: you've got to at least consider all kinds of possibilities
Speaker 1: nowadays more than ever, right to to say the just,
Speaker 1: to say the least, and and what are you most
Speaker 1: optimistic about with journalism? I just spoke to a group
Speaker 1: down in the DC area students, and it's easier to
Speaker 1: have a voice. You can start a podcast, you can
Speaker 1: start a blog, you can break news locally, you can
Speaker 1: on Twitter, right right, you can do any of those things. Yeah,
Speaker 1: there are new ways ways to have a voice that
Speaker 1: in the past there weren't. You don't have to be
Speaker 1: in the mainstream meeting necessarily to have influence and have
Speaker 1: an impact. So and you still can't have impact and
Speaker 1: improve things and write about people. And that's one thing
Speaker 1: I always tell journalists. Focus on the people. You can
Speaker 1: get at important themes through the individuals, and they make
Speaker 1: for the most memorable stories, at least the way I
Speaker 1: look at it. You know, we didn't talk about the
Speaker 1: John Paulson trade at all, So I'm gonna move this
Speaker 1: back to the earlier part. This will be the last
Speaker 1: question of the regular discussion, but I want to bring
Speaker 1: it up here. So you write a book about John Paulson,
Speaker 1: the greatest trade ever. But I find there's some really
Speaker 1: interesting oddities about the trade, not that it's not legit,
Speaker 1: but whether or not it was really John Paulson who
Speaker 1: deserves all the credit. Uh. Polo Pellegrini is his research assistant,
Speaker 1: seems to be the person who comes up with the
Speaker 1: idea brings it to Paulson has to twist his arm
Speaker 1: a little bit to get him behind it. The trade
Speaker 1: makes literally five billion, six billions for the funds Paulson,
Speaker 1: and I don't remember if this was your book or
Speaker 1: your article or somewhere else. It's all a blur. Paulson
Speaker 1: gives Pellegrini a bonus check for two hundred and fifty
Speaker 1: million dollars, and I remembering that correctly? Was it? Was
Speaker 1: it more? It was one seventy five story, hundred seventy
Speaker 1: five million dollars, and Pellegrini's responses, A hundred seventy five million?
Speaker 1: I quit? Is that fair? It wasn't right then? It
Speaker 1: was later on he quit? And how much later was it?
Speaker 1: It was a good six months later, And it wasn't
Speaker 1: necessarily Now he was okay with that hundred million. How
Speaker 1: do you be upset about that? Well, because it's not
Speaker 1: even ten percent of the six billion agreed um. He
Speaker 1: was fine with that. Listen, Paulson was the one taking
Speaker 1: the risk. If the trade had blown up, it would
Speaker 1: have blown up. But if if it hadn't worked out,
Speaker 1: then Paulson would had to close down his fun probably
Speaker 1: so Pellegarian was okay with that. UM. I think the
Speaker 1: big argument is that Paulson to I don't give him
Speaker 1: so much credit for being short housing. There were a
Speaker 1: lot of people, if you recall you probably a lot
Speaker 1: of people that were worried about housing. What I do
Speaker 1: give John Paulson credit for is figuring out a way
Speaker 1: to express that trade, express that bearishness, and that to
Speaker 1: some exent is Paul Pella GREENI I agree Pella GREENI
Speaker 1: told John Paulson, hey, boss, there are these things called
Speaker 1: CDs contracts. Really, what are they? So Paul Paulson had
Speaker 1: no idea what CDs contracts, and that obviously was the
Speaker 1: key to the greatest trade ever. So I give Pellegrini
Speaker 1: a lot of credit in the book and otherwise um
Speaker 1: for coming up with a way to express that trade.
Speaker 1: But I also give John Paulson tremendous credit for he
Speaker 1: was a fifty year old guy who didn't know anything
Speaker 1: about the debt markets, and he threw himself into learning
Speaker 1: about how to express the at trade win. Lots of
Speaker 1: other people were sticking with equities and shorting equities. So
Speaker 1: the postcript to Paulson is two subsequent hedge fund performances,
Speaker 1: Pellegrini launches his own fund quickly raises a billion dollars
Speaker 1: as the guy behind the Pulson trade. I think the
Speaker 1: first year he just shoots the lights out. It's like
Speaker 1: eight some crazy number. The second year they're barely up
Speaker 1: for eight percent, six percent something like that. The third
Speaker 1: year they're negative. They return the money and he basically
Speaker 1: retires to some island in the Caribbean. More or less accurate.
Speaker 1: So that's astonishing. Paulson, on the other hand, the fund
Speaker 1: scales up to forty six billion dollars. He becomes a
Speaker 1: macro tourist in gold and other things. It's a terrible bet.
Speaker 1: He's a big buyer at the peak. The fund puts
Speaker 1: up some pretty crappy numbers for a couple of years,
Speaker 1: and now the fund is back to what in little
Speaker 1: digit billions. It's mostly his money too, so it's become
Speaker 1: a family office. And he proceeded to lose twenty or
Speaker 1: thirty billion dollars, so someone said, and I haven't verified this,
Speaker 1: but career wise, net net, he's a money loser for
Speaker 1: his outside investors. I think it's close, and I would
Speaker 1: argue that he missed the lesson of the greatest trade ever.
Speaker 1: Why is it called why do I call the grad
Speaker 1: strade ever? Because it had limited downside and remarkable upside.
Speaker 1: And frankly, that's what he did his whole career, even
Speaker 1: when he was a risk arb. He was getting into
Speaker 1: positions little riskier than most other risk carbs, but they
Speaker 1: had potential for upside. A new buyer comes in in
Speaker 1: a merger deal and limited downside because I already had
Speaker 1: a deal. His whole career, he was doing those countrades
Speaker 1: until he did the greatest trade ever. And then he
Speaker 1: took on all this new money and he started betting
Speaker 1: on banks and on pharmaceutical companies with and gold lots
Speaker 1: of upside, but also lots of downside. He missed the
Speaker 1: act opposite of what Simons did with medallion. Hey, this
Speaker 1: won't scale, and we want to make sure we're are
Speaker 1: are upside and downside's reward is balanced. The greatest trade
Speaker 1: led to the man who did not solve the market
Speaker 1: the and that basically created what is now ostensibly a
Speaker 1: hedge fund but really a family office for the Paulson
Speaker 1: for Yeah, it's a great point that John Paulson is
Speaker 1: a very good investor, but he got too big And
Speaker 1: how many times have we seen that same store over
Speaker 1: and over over and over? And you know it's these
Speaker 1: guys are fallible like anybody else. You can be smart,
Speaker 1: but take on too much money and then you're going
Speaker 1: with your second best idea and your third best idea,
Speaker 1: et cetera. And he missed that lesson. Everyone thinks I'm
Speaker 1: the exception because I'm I did the greatest trade ever
Speaker 1: and I caught this one before other people and they're wrong,
Speaker 1: and it's tough to take on all that a O M.
Speaker 1: And he's as you suggest, Jim Simons capped at least
Speaker 1: the Medallion Fund. He capped that, so maybe he learned
Speaker 1: that lesson for sure. And our last two questions, what
Speaker 1: sort of advice would you give a recent college grad
Speaker 1: who was interested in either becoming a journalist or a
Speaker 1: book author or covering Wall Street and finance? Well, this
Speaker 1: is a broader recommendation for young people in general. Find
Speaker 1: the people. Find the individuals in whatever area you're interested in.
Speaker 1: Who are the pace setters, who are the key individuals
Speaker 1: people that you are you respect, and reach out to them.
Speaker 1: Send him a note, Hey, I'd love to buy a
Speaker 1: cup of coffee, give twenty minutes of your time. People
Speaker 1: are generous with their time. You'd be surprised. I'm sure
Speaker 1: you found the two people on Wall Street um senior.
Speaker 1: People want to help, want to give back, are much
Speaker 1: more generous with your time than you might think. Don't
Speaker 1: be intimidated. If you've got genuine interest, reach out to them,
Speaker 1: tell them why you're interested in the area, form a
Speaker 1: relationship and learn from them. And our final question, what
Speaker 1: is it that you know about the world of writing
Speaker 1: and journalism today that you wish you knew twenty five
Speaker 1: years or so ago when you were first getting started.
Speaker 1: That your relations tips are the most important thing you've got,
Speaker 1: and you've got to develop them. You've got to be
Speaker 1: kind to people that are kind to you. I always was,
Speaker 1: but it's been reinforced to me. But also the fact
Speaker 1: that our reputations are created and recreated almost on a
Speaker 1: daily basis, so you can be doing poorly at your job.
Speaker 1: I've had times to the Wallstreet Journal where I was
Speaker 1: a low man on the totem pole and people didn't
Speaker 1: really give me good assignments. And you can change that.
Speaker 1: That's the beauty of it. You go break a story,
Speaker 1: you can change, You can your reputation can transform. And
Speaker 1: and if you blow it, you know your reputation is
Speaker 1: impacted too. Is don't make any mistakes, but don't lose hope.
Speaker 1: Just tomorrow is a new day. Go break a story. Huh.
Speaker 1: Quite fascinating. We have been speaking with Gregory Zuckerman, the
Speaker 1: author of The Man Who Solved the Market How Jim
Speaker 1: Simon launched the quant revolution. If you enjoy this conversation well,
Speaker 1: be sure to look up and intro down an on
Speaker 1: Apple iTunes, where you could see any of our previous
Speaker 1: two hundred and fifty eight conversations we've had over the
Speaker 1: past five plus years. We love your comments, feedback and
Speaker 1: suggestions right to us at m IB podcast at Bloomberg
Speaker 1: dot net. Go to Apple iTunes and give us a review.
Speaker 1: I would be remiss if I did not thank the
Speaker 1: crack staff who helps put together this conversation each week.
Speaker 1: Carolin O'Brien is my audio engineer. Attica val Brunn is
Speaker 1: our project manager. Michael bat Nick is my reluctant head
Speaker 1: of research. Mike Boyle is my producer. I'm Barry Ritolts.
Speaker 1: You've been listening to Masters in Business on Bloomberg Radio,