Professional Background:

I’ve really only had one job, and that’s been with this firm since the late ’70s.

Day-to-Day Responsibilities:

It’s kind of twofold for me. First, I’m partially responsible for managing the overall risk to the firm. I’m the one who’s supposed to sit back and have a bit of distance from our current positions, and consider possible tail events, when they’re most likely to occur and when those tails are getting a little fatter. I try to devise strategies to protect us from those kinds of events. Second, I was involved in founding the firm, so I feel very protective of its culture. And I fight hard to protect that culture — which is important to all of us.

Education:

I have a law degree and an M.B.A. from Stanford.

Fun Fact

I’m passionate about architecture and I enjoy design and building. I’m a jet pilot with an instructor rating. But mostly, I’m just addicted to this business. One of the reasons is that it doesn’t matter what I read — whether it’s about the weather in Australia or an announcement out of 10 Downing Street — everything has the possibility of influencing what is happening to us and how we will respond. Being engaged at that level and working with spectacular people — how great is that?

BIG PICTURE

Biggest trading opportunities for the firm?

I have to say that I don’t really know. For us, looking for opportunity is a never-ending exploration. We are trying to find inefficiencies in a world that’s actually pretty efficient, so we just keep looking. We start with individuals who are asking simple but insightful questions; we add a heap of work to that, and we hope that with a dollop of good luck we end up with something.

Difference between trading for an alternative investment firm vs. trading for a traditional asset manager?

You’re going to have to be innovative, creative and love the game. It also helps if you’ve got some humility mixed in with all of that. However, one could conclude that those attributes are the same ones that lead to success in any area.

What is the most challenging aspect of your job?

Managing effective communications. That sounds like a stupid business school kind of an answer, but most problems for us start with communication issues. When there is a problem, it is critical to get the right people to talk to one another early rather than waiting until resentments build up. Another issue in the communications area is getting smart people who have come up with extremely complex ideas to answer very simple questions. I’m never going to buy into a complicated design if the individual proposing it can’t explain the key ideas that drive that concept at a 10th grade level. We never stop asking ourselves what is happening inside of a market that would explain the inefficiency that we’re trying to exploit. I’m the guy who’s supposed to ask those 10th grade questions, and it’s possible that it’s all I’m capable of.

Major Industry Trend

Looking at the industry as a whole, I’m pessimistic. There always are going to be people and firms delivering real success. But there’s too much money moving too fast in search of something described by a word that I just can’t stand anymore: alpha. And there also are too many people who start with a business idea that is based on managing money instead of being motivated by a love of the game and a passion for investing. For us, it’s not really about managing money; it’s about the trading and investing. Our programs are costly to run, so our real returns come from our investments in the models, not so much the management side. Further, if you have something that you believe in, and it’s for real, you should be the first in line as an investor. And that’s where we want to be. So we end up building models to be investors rather than marketers — which probably explains why we’re such lousy marketers.