Hedge Fund Manager on the State of the Economy
Spending the weekend down in West Virginia and yesterday we stopped by a bookstore for some coffee/reading time. I picked up a copy of N+1 which I had read online before, but never on paper. Anyhow, still getting through it, but really like this two part interview with an anonymous hedge fund manager. Generally it gave some real insight into how we got to where we are and also provided some nice nuggets of general wisdom, like this one explaining why he doesn’t think people trained in finance necessarily make the financiers:
Because I think that in the end the way that you make a ton of money is calling paradigm shifts, and people who are real finance types, maybe they can work really well within the paradigm of a particular kind of market or a particular set of rules of the game–and you can make money doing that–but the people who make huge money, the George Soroses and Julian Robertsons of the world, they’re the people who can step back and see when the paradigm is going to shift, and I think that comes from having a broader experience, a little bit of a different approach to how you think about things.
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Ah yeah, I loved these interviews. From my notes last year: “bad things happen when you divorce the people who take the risk from the people who understand the risk.”
Those are great interviews. “Someone is hungry for paper, paper will be created.” That perfectly sums up the perverse logic of the subprime mortgage mania.
His thinking on paradigm shifts reminds me of a quote from Buckminster Fuller: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”
And Albert Einstein: “You can’t solve a problem with the same mind that created it.”