Lessons From Leaders - Hedge Fund Manager
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Fintros: As an undergraduate you studied engineering. How did you start out in the finance industry and identify this line of work as the one you wanted to remain involved with throughout your career?
Anonymous: I would say that I’ve always had an interest in financial services; I completed my Canadian Securities Course (CSC) while in high school. Since then I have always recognized asset management as a combination of art and science, especially during my time in asset management, which is where I have been working throughout the majority of my career.
I went to Waterloo and studied engineering because I thought it was important to develop a strong background and attain a professional designation. My parents shared this sentiment and I had the ability to go, so I did. I see my eventual shift into financial services from engineering as part of a larger trend. While it is difficult to ignore the glamour and the potential to make money in financial services, I think engineering graduates quickly come to recognize that this line of work tends to lead to the management of people and systems over time as opposed to actual design. Concerning the actual design portion of it, most engineering professionals fail to remain current in the field much beyond six or seven years from graduation and so the actual design portion of engineering is limited to more recent graduates. Therefore, since most end up managing people and projects the natural evolution is to learn some business skills to help with that. Thus, I ended up pursuing an MBA to further that interest I had. In a roundabout way what I am saying is that engineering was a means to becoming a professional and learning certain things, and it has certainly given me a great deal of credibility in my work – the scientific method is something you carry with you for your entire life – and in dealing with people. Becoming an engineer was just a start, but I would still recommend it for a lot of people as I think it is a great way to get into business.
Fintros: You noted an interest in finance from an early age. Beyond a natural inclination toward the industry, was there a person or a group of individuals who inspired you, or who you looked up to? Perhaps a mentor?
Anonymous: My role models in finance are people that I aspire to be like: Jim Rogers is one, Bill Ackman, another - I actually met Jim on one occasion. There has never been someone I directly worked for, nor a mentor that has been the source of similar inspiration – not that that wouldn’t have been a great thing . . . I just never had that. What I had was a desire to follow my dream. So I think your north star, if you will, or your mentor can be a hybrid person. It doesn’t need to be an actual person; it just needs to be something or a set of values that you want to model yourself after. I am always on the lookout for people who – even if they’re not perfect in every way (no one is) – I would like to emulate. I’d advise people to try and find someone from a business model, a strategy, or a timing perspective who have done things right and then try to emulate them as you move forward in time. Similarly, you have to be careful as someone might be very good at the marketing or self-promotion, but not so good at the investment management side of things. All in all, Rogers and Ackman are two people that I continue to think about in my work in terms of how they would think and their approach as I hold them to be amongst the best in my line of work.
Fintros: Many of our younger candidates are in their formative years in the industry and are constantly seeking advice to get ahead, what would your core message be to these professionals?
Anonymous: My message to younger people in financial services would be that if you’re not really passionate about it; if you’re not really interested in it, then go do something else because it is too hard. There are a lot of ups and downs, and even if you’re passionate it might not work out. You can work your tail off and be whip smart but sometimes it just isn’t your turn. It’s a hard lesson but I think that’s the way life is; sometimes you can have the best intentions but it just isn’t going to pan out. Beyond having to really want things you have to know what you are good at and what you aren’t so great at because you can’t be good at all things.
Fintros: Speaking of which, while you didn’t name Ray Dalio earlier on, his new book, Principles, discusses failure and the topic represents a common theme. Having also led a hedge fund, can you speak to what failure means to you?
Anonymous: First off, I’d say that if you aren’t failing you aren’t trying. However, there’s a difference between having an investment not work out and/or taking what happened in 2008; 2008 was people betting essentially with other people’s money, taking exorbitant amounts of risk, and getting paid outrageous sums of cash. This is why the general public is so furious with the industry today and why we have Trump in the White House, amongst other things. It’s because people look at what happened and see that no one of any significance went to prison as a result of the mess and yet so many people lost their jobs, savings, and homes. Indeed, that kind of failure is a very different thing.
In terms of a life lesson of a career lesson, if you will, the personal failures like if your venture doesn’t work out or you get laid off from somewhere are ultimately much more valuable than a quick success. When you succeed you never quite know why: was it my timing? Is it because I’m married to the boss’s daughter? It could be a whole myriad of things, but in failure you usually have a lot of time to think about it as it tends to drag on for a while. Consequently, you do a lot of soul searching so the lesson becomes much starker. And it really is a lesson! Whereas if you are enjoying success after success you tend to start bubbling along. This leads me to my next point. Many people think just because they are in a certain demographic or generation – Baby Boom or whatever – or because they happened to get to a company that clicked that they are successful and that’s deserved. Well, that’s not necessarily the case, and so I think that the people who embrace failure, realize its part of life, learn from it, and keep fighting are the ones who do well in the long run, which is ultimately what matters: where you end up.
Career wise, failure is a great teacher; a much better teacher than success, and ultimately to succeed and really know why you succeeded and be able to ensure your success continues you need to fail a bit. It might not be great at the time but it is critical and something you will appreciate in retrospect.