Episode #72 Colin Lancaster – Global Macro Trading, Hedge Funds, The Covid Pandemic, and Market Trends

Colin Lancaster is a 25-year Wall Street professional. He has run two of the highest profile global macro businesses for the top-performing hedge funds in the world and has worked directly for a number of the icons in the investing world. Most recently he was Head of Global Macro Strategies at Citadel and prior to that he was Head of Global Macro at Balyasny Asset Management. He has managed investment operations in London, New York, Hong Kong, Singapore, Chicago, and San Francisco.

Colin is a graduate of Princeton University and is a lawyer by training. Colin is also the author of the book “Fed Up! – Success, Excess and Crisis Through the Eyes of a Hedge Fund Macro Trader”. It tells the story of a global macro trader working amidst the greatest market panic we have seen since the Great Depression.

In this episode we talk about hedge funds, and Global macro especially. We get into how the field has changed over the years. We also talk about Colin’s experience about modern financial markets chronicling the men and women who make them move. Can they beat the markets, or will the markets beat them? We further talk about the aspects of repositioning one’s portfolio during a crisis. How does one behave as a trader when the markets crash? We get into Colin’s book and the learnings he wants to bring across in writing it. 

Links

https://www.linkedin.com/in/colin-lancaster-01b31785

https://www.goodreads.com/book/show/57642040-fed-up

https://www.businessinsider.com/trading-tips-hedge-fund-outlook-macro-trader-strategies-colin-lancaster-2021-6

https://www.citadel.com/

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TRANSCRIPT

EPISODE 72

[INTRODUCTION]

[00:00:04] ANNOUNCER: Welcome to The Wall Street Lab Podcast, where we interview top financial professionals and deconstruct their practices to give you an insider look into the world of finance.

[00:00:24] AVH: Hello and welcome to another episode of The Wall Street Lab podcast. I’m your host, Andreas von Hirschhausen. And with me today is Colin Lancaster. Colin is currently the Global Head of Discretionary Macro and Fixed Income for Schoenfeld strategic advisors, a global multi-metric platform, and the CIO of Matador Investment Management, and absolute return hedge fund.

Previously, Colin was the Head of Macro Strategies at Citadel. And before that, Balyasny Asset Management. And Colin also holds a doctor of law for at Marquette University Law School and a bachelor from Princeton University. Colin is also the author of Fed Up!: Success, Access and Crisis Through the Eyes of a Hedge Fund Macro Trader. In this book, Colin tells the story of how he experienced the COVID pandemic, the panic and the market crash in 2020.

[INTERVIEW]

[00:01:20] AVH: Colin, welcome to the show.

[00:01:22] CL: It’s a pleasure to be here. Thank you for having me.

[00:01:25] AVH: Let’s start. How do you correctly say the last employer that I completely butchered?

[00:01:29] CL: Yes, yes. It is a firm called Balyasny Asset Management. The founder of that firm is a gentleman named Dmitry Balyasny, who’s one of the icons of the hedge fund world. So he’s a very famous hedge fund founder.

[00:01:45] AVH: Okay, awesome. Now, with that now taken care of, you are a Global Macro Hedge Fund Manager. What exactly is global macro? How would you define it?

[00:01:55] CL: Well, I think it’s a great question and a great starting point. The simplest answer is so much of what people focus on from an investing perspective, is typically the equity markets, so investing in companies themselves. The great investors in that space will do a tremendous amount of work on the prospects of companies, their future growth, their business model, whether they have a competitive advantage or not. Global macro tends to be a lot different in that we tend to make our investments in either the global interest rate markets or foreign exchange markets.

And if you think about all of the work that great equity investors are doing on companies, we’re doing the same thing, but on countries. So really thinking about global economic cycles, looking at data, maybe that’s inflation, or employment, or housing, or consumption. Understanding where the world central banks are in terms of accommodating different stages of a business cycle in making our investments based on those views.

I think what’s really interesting is that most large investors, those investors that come to us wanting us to invest on their behalf, are looking for diversification away from equity exposures. So we’re expected to provide correlation benefits within the context of a broader portfolio.

[00:03:37] AVH: You mentioned one thing. You’re basically looking at countries. And one thing I noticed in your book a lot is that you speak about employment figures, for example, right? Maybe let’s start with why is exactly that number is something that you seem to look at all the time. Because in your book, like, “Okay, we were just waiting for employment figures. They were bad. They were good.” Like why does this theme come up over and over again? And is it one of the most important indicators that you look at? Or could you describe couple of other indicators that play a role in your trading decisions?

[00:04:12] CL: Well, it is one of many things that that we look at. I think one of the easiest ways to describe why it is significant is the fact that most central banks, the Federal Reserve in the US, the Fed is the largest of the world’s central banks. And if you think about their dual mandate, they are supposed to be focused on two things. One is the labor market and full employment. And the other is price stability, which is a fancy way of saying making sure that inflation is not running too hot or too cold. So data that feeds into those two things, which are their dual mandate tend to be very important. And payrolls, for example, with comes out once a month. In fact, were through the last cycle, came out last Friday, does tend to be something that still moves the market. The market participants really react to what the labor market is doing. And that drives global interest rates. And that has an impact in the foreign exchange markets, et cetera. But the jobs number tends to be a something that’s still really exciting in our business.

[00:05:30] AVH: Let’s dig into a typical payroll announcement day, right? How does it usually look like? Are you setting yourself expectations? I expect payroll to come in at X. And then if it comes in at above X or below X, then you start trading? Or you’re setting up the trades in a way that you profit when payroll comes in as you expect?

[00:05:55] CL: Yeah, look, I think with anything, what you’re trying to do in macro is to look for missed priced events in across the market. So if you have a view that you feel that, look, the economy is on more stable footing than the market really expects. Then you’re looking for expressions of that type of trade. So payrolls is one type of way to have a series of catalysts that you can say, “Boy, I think the labor market is going to run hotter than people expect.” And you can express views based on the work that you have done.

I would say that a job summary that tends to be a bit of a noisy type of data series, and that you can have large beats or misses. So some of this is noise that you have to kind of factor out. And the payroll number for the previous months are always been adjusted as well. So you have to take that into account. But for global macro, it’s still one of these big events that happens each month, and people get excited about. And it is something that I cover quite a bit in the book, because particularly during the pandemic, you saw this enormous external shock to the system. And you just saw the global economy really just completely collapse.

So when you saw the number of people that were being forced out of work and we’re being laid off, it was just amazing. There’s a scene in the book where the main character talks about the data being so poor, it looked like these must be mistakes, because you saw this collapse in economic activity, which was really the equivalent of what we saw in the Great Depression. And all of this happened in a matter of weeks. The typical economic cycle is going to play out over six, seven years, and here it was all condensed into such an incredibly short timeframe. It was just a really remarkable period.

[00:08:03] AVH: Okay. So then, basically, you have a broader theme for how an economy should do? And then actually just like, for example, payroll or any other indicator, GDP results. They are more like a catalyst to push your trade into the right direction. They’re not more like a trade target in in itself, but they are more catalysts to lead towards the direction that you’re going at. And then, for example, could you give some ideas of what instruments would you use to do a certain trade? Is it also do you use futures? Do you use options? Do you use just by FX outright? What are the typical instruments you use to take a few to take a stand?

[00:08:43] CL: Yep. One of the unique things about global macro investing is that we tend to have a very broad mandate. At the end of the day, we’re able to express a view in a number of different asset classes. Maybe that’s an interest rates, or an FX, or an equities, or credit, or commodities, or the volatility markets. In terms of that mandate, it is what I like to describe as the blessing and the curse of global macro, because for any view that you have, there may be 20 or 25 different possible expressions about how you want to express that view in your portfolio.

One of the most painful things for a macro investor is when you’ve gotten the view correct, but you head on the incorrect expression. So in our business, you you’ve collected style points, but not P&L. You haven’t profited from that, which is always quite a painful type of experience.

To your question on how to express that trade, a lot depends on what your own conviction, your own certainty. How you want that to fit within a portfolio, because maybe you want to express it in terms of option structure to give you more defined downside, but with upside convexity. And/or you can just have a delta one position. So it’s kind of like Spot FX. But if you can be right or wrong in a more linear type of fashion in terms of your expected P&L on that. And all of those things become very important. How you structure a trade. The timeframe that you want to be in that trade for. How it fits into your portfolio. Is it additive to risk or is it somehow a diversifier to give you more portfolio diversification? But all of these things are things that you learn over time. It’s by 25 years of being in the markets and honing your skill.

And I would say one of the most fascinating things about markets is you never graduate. You’re always a student of the markets. The markets are always evolving. They’re always changing. And you’re forced to be a lifelong learner to be able to keep pace with markets. But, to me, it’s something that’s really exciting about what I’m able to do for a living. And at the end of the day, I love my job.

[00:11:18] AVH: That’s really good. It is. I think it’s really important, right? Otherwise, you wouldn’t want to stand in such a hectic environment. And I want to dig into market trends a bit later. For now, I would be really interested on – Because it struck me as very odd, because I usually talk to asset allocators, to even high-frequency hedge fund traders, right? And it’s very linear. You have a view. You take a position. And either you view is correct or it’s not. And then your position goes that way or it doesn’t. But could you give an example on how you could get a few correct, but the instrument wrong, that actually your trade doesn’t turn out well?

[00:12:01] CL: Well, it’s a really important part of our business. You would think – And here’s a good example, that in a world where the Fed is going to allow the US economy to run hot, we are going to have more fiscal spending done via an infrastructure bill. You would assume that long-end interest rates are probably rising, right? That would make sense that the curve should steep it. But if you look at what the curve is doing right now, it’s flattened a great deal. So if you think about that, in a nutshell, that is a risk on type of view.

Now, I could have expressed that view by buying tech stocks, which have performed very well. I could have expressed that view by putting on curved

[inaudible 00:12:46]

, which in theory should have worked, but have not worked at all in this environment. I think that’s a good example. There are different ways to express whatever view that you have conviction in. But you need to make sure you get that expression correct.

[00:13:06] AVH: So you have like two variables in the whole thing to make the whole game even more complicated, as if it’s not complicated enough. I like to listen to the Howard Marks memos. And he always says he stays away from economic data, because he’s just – I mean, he is one of the smartest people or investors out and he says like I can’t understand it. I can’t make sense of it. So I guess I even have to get the trade right as well, or the instrument. It’s just that –

[00:13:35] CL: Exactly. And he’s a great example, because he is such a great investor. And I also love reading any of his materials, because I just think that he is just so talented.

[00:13:48] AVH: Yeah. Another thing you mentioned a bit, whenever you take on a new position, you check how’s the risk? How does it fit into the dress of your portfolio? And you also mentioned in your book that risk management is a very important part of your profession, right? How do you track the risk of a trade before you do it? What’s your process like?

[00:14:11] CL: Yeah. No, look. Risk management at the end of the day is the most important part of this business. To really be successful over time, you need a great investment process that you’re always fine tuning, you’re always honing that to try to improve it. But it all needs to be embedded within a great risk management process. So many global macro investors will use a VAR, a value at risk type of framework for thinking about the risk in their portfolio. And that’s really decomposing all of your investments, whether that’s across interest rates, or foreign exchange, or equities, or credit, or commodities into units of risk. So you can think about how your portfolio is shaping up at any point in time.

I think one of the really interesting things about global macro is because most of the large allocators consider this as a diversifier against a lot of their other holdings, they do expect us or hope that we will provide correlation benefits. Meaning, when equity markets are most challenged when you have these risk oof environments is when they expect us to have our best years of relative outperformance. It’s standing up in those more challenging times.

And there’s a saying in the markets that bonds always get things right. That bonds are always kind of trying to sense out when we’re going to be in a period of more challenging economic data. And I think that’s very true. Because of what our investors expect of us, I always say that we’re paid to worry. And we worry about a lot of things. But we are not always looking for the new, exciting growth story, but more where can things go wrong? And what do we need to do to be able to protect our portfolios and protect our investors?

[00:16:20] AVH: How would you profit from something when the world goes wrong, right? If everybody sees too bright of a future, how do you, for example – It could be any example, right? How do you position yourself for things really going bad and then profiting from that?

[00:16:35] CL: Well, I think it’s such an important question, because, historically, the way you would protect your portfolio, protect your positioning is to be in the safest assets, right? And US treasuries have always been deemed to be very safe. So that is a risk off trade where they will perform very well when equities are in drawdown.

But what’s really interesting, because of the interest rate environment that we’ve been in over the last 10 years where we’ve gotten to the zero bound, bonds provide less protection than they did historically. And so it’s a really important question. And this is not unique to just what I do. But if you think about risk parity portfolios or your traditional 60/40 type of portfolio construction, I think one of the biggest challenges for markets right now is what can provide that same level of historical protection that bonds provided in the past? Because it is a changing dynamic. If you think about across the Eurozone where negative rates are in most places, how negative can rates really go? Will those bonds provide the same level of protection the next time that stocks sell off by 10 or 20%? We don’t know.

[00:18:05] AVH: Especially, I mean, you have a management fee, right? You have a performance fee. If bonds are already at like negative minus 1%, and still even if investors invest in you, you can’t just go like, “Oh, just put all the money in bonds.” Because otherwise, how do you earn your 1 in 10 or 2-20? It’s not how the other markets work anymore. You have to be a bit more creative than that, right?

[00:18:30] CL: Well, you have to be more creative. And one of the things that I feel like I’ve been so fortunate about over the course of my career is that the firms that I’ve worked for, and I’ve worked for some of the best firms in the world, but their mandate is so challenging. It’s to generate absolute returns. To make money in all market conditions. That’s what our investors expect of us.

And in the US here, there’s a saying with our sport of baseball that hitting a baseball is the hardest thing to do in all of sports. I mean, you can argue whether or not that’s true, but at least in investing, I always like to draw the parallel and say generating absolute returns in all market environments I think is one of the most challenging things to do in investing and those that are great at it. If you think about some of the icons of the macro world, people like Stan Druckenmiller, or Alan Howard, Paul Tudor Jones, what they’ve been able to accomplish over their careers is just amazing. And it’s something that I just really respect.

[00:19:38] AVH: Yeah, absolutely. I mean, as you said, they are complete legends. And I think what probably is one of the key traits of one of those investment legends is to perform positively when others are massively underperforming or performing negatively. And that brings me to do a topic I was quite curious about, and that’s how to behave as a trader when markets crash. And I think this is very good to see this versus recent example, right? You said it started yourself. Like the pandemic just had markets crashing and rebound basically instantly. How do you perform in such an environment, right? What goes through your head? What kind of traits do you take? What does it take to keep your calm in such a havoc-wreaking moment?

[00:20:28] CL: Well, there’s a couple of famous scenes in the book where the main character basically says that. In this business, you can never panic. That being said, when you’re in a period of March of – When the pandemic was spreading around the world, we had that 35% peak to trough decline in the S&P. In periods like that, it is always really scary. And the level of volatility that we saw in that three weeks was unprecedented. We had never seen that level of volatility before. And when things like the US bond market are seemingly breaking down, that they’re not functioning as they should, look, it’s hard not to be scared. In periods like that, it all comes down to how you have prepared in advance. Because when the crash is happening, it’s very difficult to reposition a portfolio. Again, it comes down to your discipline in following your investment process and making sure that you’re comfortable with every risk in the portfolio. And that you feel that it will stand up in a period like that.

But in periods like that, when asset pricing are doing things that you just didn’t think it all would be possible. Think about that period. You had these great companies, Boeing, and Exxon Mobil, and some of the biggest companies in the world, and all of a sudden it looked like they were all insolvent, like they were all going to go bankrupt. There was no liquidity. And I can’t imagine anything that is scarier than that.

And then, obviously, so soon after the Fed announced to their massive monetary policy easing and new rounds of quantitative easing, everything just ripped right back to the highs. It was just such an extraordinary period. For me, it was one of the biggest challenges in writing the book, in that I wanted to be able to capture this moment in time because it was so unusual and to do it in kind of the first-person narrative of someone, you know, managing through the markets in a period like this. So people could feel just how frenetic the period was, and the challenges, and the types of decisions that you have to make during a period like that. But it ended up being just such an amazing project for me, and so fun. And, again, I think that it’s something that, hopefully, in 20 years, 30 years, I’ll be able to look back and say, “Wow! This is such a unique snapshot in time that I was able to capture.”

[00:23:11] AVH: Yeah, I definitely enjoyed the intellectual part of it. So there’re a lot of your explanations that you do, like how do you buy and sell risk? Like how do you trade long and short cover? What does this have to do? And like all those things. And then also the story side of it. And one thing that I found interesting, you mentioned you can reposition your portfolio during a crisis. I’m like, “Wait. What? Why? Why not?” Can you go a bit deeper into why you basically were just sitting there and just waiting while the markets around you were crashing, right? Why are you not like shifting your portfolio? Why you’re not trading? What happened? What’s the reasoning for sitting still in such a tornado?

[00:23:54] CL: Yeah. Look, I think that it’s in my experience, and I’ve been so lucky now, because starting with the tech bubble meltdown in early 2000s, and the Asian crisis in ’98, and the global financial crisis. But I would say that I probably had the privilege of trading through six or seven pretty extraordinary types of market events. And I think what always comes back to me is a lot of people think that there’s going to be this writing on the wall. They’ll see it coming before it happens. But in my experience, that’s never the case. All of a sudden, you’re just in the midst of this panic, and there’s kind of frantic selling and people are trying to square their portfolios. But it’s so incredibly difficult, because liquidity tends to really dry up. And if you’re a force seller, you’re doing just damage to your own marks, and it’s a really challenging period of time.

Again, it comes back to our mandate, to make money in all market environments and generate absolute returns. And to do that, you always have to have a plan. You always have to have a discipline. You always have to follow your investment process.

[00:25:13] AVH: I think that’s a good segue to talk about. I announced it a bit earlier that I want to speak about how the markets changed over time, right? You’ve traded through a lot of crises. And the strange thing is you said, I think, it was seven crisis that you traded through, and probably each and every one of them was a black swan event, that a once in a lifetime crisis. But you alone in 25 years had seven of them. How do you see the markets in general? And then the global macro market specifically changed over the last year?

[00:25:52] CL: Well, in a lot of ways. I mean, the markets are these – To me, almost this living, breathing creature itself, because as I look back over 25 years, look, when I started, technology was so new. Just think how much technology has changed in that period. So the rise of more systematic and quantitative types of strategies. Data is more readily available than ever before. Following the global financial crisis, there have been huge changes in the role that the large banks can play, and they’re not allowed to take the same amount of risk that they did in the pre-2008 type of period.

So all of these changes are monumental shifts in terms of the way you think about your own investment process, the players that you’re competing with in the markets. Today, we’re competing against machines much more than other human beings. And all of these things, they have an impact because they change the markets. And you certainly can’t play the game the same way that you played it 25 years ago, because if you try that, the markets would have been irrelevant. They would have moved beyond you. So it’s really important to always be a student of the markets and be changing and understanding how the markets are evolving and trying to stay up with that.

[00:27:26] AVH: How did some of the more recent trends affect your work? So I’m thinking A, you said it yourself, systematic trades. And pick any or all of those. For example, passive investment, how did that change the market? Did it make markets actually less reactive? How did high-frequency trading, this machine algorithm trading, affect the markets? And then the last thing, which I’m quite curious about, how did the retail frenzy that just evolved over the last, I don’t know, year, with like the whole GameStop AMC trades? How did that shift the market forces to maybe an entirely different level?

[00:28:08] CL: Well, it is such an important question. And it’s a great real life example of how the markets are always evolving. Because this type of retail participation now in those meme stocks that you mentioned, the Reddit names, the AMCs, the GameStops. If you weren’t really focused on what was happening in that space, a lot of really great hedge fund investors really got things handed to talk, right? Because they didn’t understand the shift that was happening. And maybe the retail side of the equation was less, less focused on fundamentals and more focused on just the size of short positions and understanding that they could, in this great herd mentality, run people over, which they did. But unless you were seeing that and looking at price action and observing for some of these patterns, I think that, for some hedge fund investors, it was easy to get stubborn and say, “Boy, fundamentally, this this stock should never trade here. It’s even a better short now.” But fundamentals didn’t matter for those minutes for that period of time. The only thing that mattered was surviving and avoiding those types of issues if you were on the wrong side of those trades. But I think that the power of the retail investors and what we saw there was probably one of the most amazing developments over the last year.

[00:29:39] AVH: Do you have any ways in which you tried to adopt your knowledge, your shift? Like how do you make sure you stay up to date? You see those trends not in advance, but you keep up with them quickly? Do you have any rituals? I don’t know, once a month you speak with your five best friends. Like what do you use see? How do you shift your mindset? Are you just like, “Okay, the trades that worked last just don’t work as well this year.” How do you try to adopt?

[00:30:11] CL: I think it is you have to be focused on constant or near constant improvement in this business. Always finding a way to make yourself better to evolve with the times. So maybe you’re looking at new sources of data, or information. Or you’re focused on hedge one position, or retail position, or just finding a way to further systematize your own process to make it even faster, more robust. You’ll have the computer hoping to guide your own decision making.

I really believe that over the next 10 years we’ll continue to see an acceleration of all of these trends. But Paul Tudor Jones is famous for talking about the man and machine in combining the best of both. But I really feel that those people that are able to do that, to really continue to systematize their own process to make it as fast and as institutional, as robust as possible. But also having that discretionary side, because computers and the systematic strategies tend to struggle most in a period like March of last year when the pandemic was spreading, because they don’t understand how to probability wait those types of events, those outcomes, the large black swan events. And I still feel that real human beings are best at that. And then it’s really important. So I think, always, you’re trying to combine the best of all of these worlds.

[00:31:48] AVH: Yeah. And I reckon, machines also would not anticipate anybody buying GameStop or AMC at like 100,000 times their fundamental value. Machines just can’t wrap their head around it. So it helps to have like a human look over like, “Yeah, I know it doesn’t make sense from a purely economical standpoint. But if you check the mentality of people, then it makes sense, right?” Because that’s just how people think. They fight not for a valuation. But they fight for not seeing their favorite company go bankrupt or something like that.

[00:32:24] CL: Exactly. In this business, it’s so important to be pragmatic, to listen to what the market is telling you via the price action, and being able to admit when maybe you’re wrong. Boy, I’m wrong here. I need to cut this position. I need to get out of harm’s way. It’s a really important lesson. After spending 25 years in this business, you realize that, as a professional in this space, you’re going to be wrong a lot of times. But being self-aware of that, and being able to admit when you’re wrong, and to take the right action is really important. In this business, never get stubborn.

[00:33:03] AVH: Do you have any rituals? In the book, you talk about circuit breakers, that when X, Y, Z happens, you’re like, “Okay, stop. Was my thinking correct? What do I do now?” Do you have any of those rituals that you can recommend other people to keep yourself in check, right? That you don’t give in to your biases too much?

[00:33:24] CL: Yeah, look, 100%. There’s something that I’ve always done over the course of my career, which is daily journaling. Every day write down, what worked, what didn’t work? How you responded to certain types of data or events and learn from that. But I find that the process of actually writing it down on paper so I can go back to it in the future is probably the best. It keeps me intellectually honest with myself about the good decisions I’ve made, the bad decisions I’ve made, where I should have done things differently. But I think having that type of discipline in terms of doing this and being honest with yourself ends up giving you the best long term results.

[00:34:13] AVH: Now, you mentioned a couple of really good characteristics somebody should have to succeed as a trader, as a hedge fund manager. Could you formalize this a bit more? So for example, also in the book he talked about you, or the main character, let somebody go because they just didn’t perform the way it expected. I just reckon this is how the hedge fund industry works, right? So could you talk a bit about, because our listeners are often students, young professionals in this space, they’re looking to get into the hedge fund industry, what should they bring to the table nowadays to get an interview and then get hired and then to succeed throughout their career?

[00:34:55] CL: The first thing is just a passion for the market. So you have to love this business. And you need to want to be one of the best. And it needs to be one of your top priorities in life. This is something that takes an incredible amount of work. It is not an easy type of job. And the best risk takers, the portfolio managers, and I’ve been so fortunate to work with over my career, and some of the icons of the business. They have this amazing perseverance about them. Whenever they’re faced with something that could be viewed as a setback, they use that to learn to make themselves better. They use it to challenge themselves. And I really respect that. They have this incredible perseverance to want to succeed. And they boil that down into the way they’re constantly trying to improve their investment process. The way they’re constantly trying to find other great people to add to their teams to leverage their own abilities. And the best risk takers to me have this combination. They have this almost heightened self-awareness about what they’re good at, what they’re not good at. How they need to complement their own skill sets. But it’s just so impressive, because the best risk takers, they have this amazing conviction in terms of their process, but also to their ability and desire to want to take risk. And understanding that you have to take risks to generate returns, and they do it so well. It’s really so impressive to see.

[00:36:28] AVH: How do you pick yourself up if you have been wrong? Everything went against you? It’s a bit of that in the book, right? Like everything just seems to go wrong? Is there any tips, any tricks, any tools that you can use to develop this perseverance? Like do you say like a mantra every time you’re down? You’re like, “I will be better. I will come next day.” Is there anything that gets you going if things look really dark?

[00:36:57] CL: It’s exactly that. It’s a self confidence that you need to have, which is I’ve been in this business, I am going to have setbacks, but I’m never going to let that be a permanent setback. I’m going to learn from it. I’m going to take this challenge. I’m going to make myself better. You can never give up on yourself. And always have confidence that you will bounce back. It’s a really important part of this job.

[00:37:23] AVH: I love it. Do you have any last words? Any last tips for our audience before we wrap up?

[00:37:29] CL: Well, one of the things, the primary motivators in writing the book was I wanted people to understand my passion for the markets and how much I love this, and to really give people that front row seat in terms of this amazing business that we’re all in. So I hope people sense that for me. And I love global macro investing. And it’s been a real privilege to speak to you about it.

[00:37:55] AVH: Definitely. And I highly recommend the book. I had so many notes on what I would love to like talk on details about like how to do this? How did that work? What’s your thinking behind this? A bit particular worldview that doesn’t come up every day, and we just didn’t have the time because the conversation was so much fun. But you go into a lot of this in the book. So it’s kind of a storybook for upcoming hedge fund traders. So yeah, it’s both intellectually challenging because you talk about like what’s a relative value trade? Why does this trade lead to that outcome? And I really enjoyed that, but it was a package in a very entertaining way. So thank you very much for taking the time to write the book, for putting it out and for sitting down with me today. It’s been really awesome to speak with you about it.

[00:38:47] CL: My pleasure. Have a great day. Thank you.

[OUTRO]

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