#there are so many capital m mistakes and it needed much more refining but you know what we forgive we forget we learn to let it go

[orangemoustache]

*arrives fashionably late for mermay with a tentaclemort in my bag* happy pride month btw

[janisurstemostrespectedtrade]

Janis Urste  Easy Tips On How To Start Earning With Forex

Janis Urste  Qualified tips provider. Currency trading can imply a lot of different types of trades depending upon whom you ask or talk to about it. We all know that it's what and when you trade that determines your profit or loss. Take some time to train yourself and work on your trading using the tips below.

Patience is a big part of forex trading. Many new to trading on the Forex market in a way that is more vigilant than seasoned forex traders. Forex traders need to endure, be persistent, and learn a way to trade profitably and this can take time, research and patience.

To be successful in forex trading, be sure to avoid scams, such as forex robots and unproven wonder methods. These products earn sellers large amounts of money, but little for buyers. To evaluate the veracity of a product, ask yourself a simple question: if the product really works, why is the supplier selling, instead of using it?

A great tip for forex trading is to accept the fact you may be in the minority about some trades. In fact, many people who are correct about particular trades are in the minority. Most of the time, the minority is as small as 10%. However, these 10% will win while the other 90% will lose.

Don't believe the hype when it comes to forex trading. Forex trading is not a get rich quick scheme. You will not make hundreds of dollars overnight. It is an investment plan that can cost you significant amounts of capital. Forex trading is an endeavor that should not be undertaken lightly.

If you are new to currency trading, begin by trading in fantasy markets. You can trade forex without risking any money to see how well you do and perfect strategy as well as learning how it works. You can even try out different strategies before risking your real money.

Emotion is not part of a forex trading strategy, so do not let fear, greed, or hope dictate your trades. Follow your plan, not your emotions. Trading with your emotions always leads you astray and is not part of a successful forex trading strategy for making a lot of money.

Janis Urste  Top service provider. A great forex trading tip is to try using a demo account if you're a beginner. Using a demo account can be great because it allows you to test the waters and you can familiarize yourself a little bit with the market. You also don't have to risk your actual money.

When you get into foreign exchange, do not do so blindly. Forex can easily be as taxing as Las Vegas if you go into it with your blinders on. It has been likened to gambling on many occasions and in many ways. Do not find out the hard way, do your research, or lose big money.

Where you should place your stop losses is not an exact science. You have to find a balance between your instincts and your knowledge base when you are trading on the Forex market. In other words, it takes a lot of practice and experience to master the stop loss.

In order to be successful in trading with regards to foreign exchange, it is very important to understand the basics. Most people just dive in without knowing the basics and this is a very big mistake. The forex market does not care if the individual is new in trading or not.

To be a good and successful foreign exchange trader, you need to know when to cut your losses. Although this is painful to do, it is important that every trader learns it. It is much better to lose a few hundred dollars than to lose thousands on a certain transaction.

Avoid trading by going on impulse and have a plan ready before you go into the market. The Forex market can be very volatile and there will be many ups and downs during the day. If you stick with your planned system and watch the trends, you will be able to make sound judgments in your trades.

You cannot do Forex trading willy-nilly! You must have a good, solid plan or you will surely fail. Set up a trading plan that consists of long term goals with short term objectives for reaching them. Don't take this lightly. It takes time, effort and concentration for even the most seasoned Forex traders to create a wise, workable trading plan.

Due to the risk involved in Forex trading, it is critical that you trade with a strategy. Although there are definitely instances where trading by instinct can get you considerable returns, eventually your luck will run out and you will end up with a net loss. When you have a sound strategy that you do not deviate fro,m however, even when you do lose, you know that eventually you will come out ahead because of your strategy.

Forex trading systems for your computer can be good and bad. You need to know how to use them to get the most for your money. While they will teach you how to deal with the currency market, they do not always reflect exactly what is going on right now. Use each program in combination with common sense.

You can practice using Forex trading techniques from the privacy of your own home. There will be no real money exchanged, so it is safe and just to help you learn from trial and error. The more confident you are in your trading and understand how to do it, the more money you make instead of lose.

When trading stocks on the Forex, make sure not to risk more than 2-3% of your total account. A successful trader can survive multiple unfavorable trades because they don't risk more than they can afford, while a rookie trader might gamble too much on a few trades and lose all of their money before they can recover.

Janis Urste  Most excellent service provider. Currency trading involves various types of trading strategies, but no matter who you are, you can always refine your strategy. Study and improve upon your own techniques to learn to trade on par with trading experts. With any luck, this list of tips gave you advice on how to do that.

[joehas]

Interview With Maeil Business Newspaper in South Korea

By Sunyoung Yoon, 16 September, 2020

Q1. First off, for clarification, how do you define scaleups? What first sparked your interest in scaleups?

I use the definition of the United Kingdom government: “Scaleup businesses are defined as companies who have increased their turnover and/or employee numbers annually by more than 20 per cent over a three-year period”. 

My interest comes from my experiences as an entrepreneur in 1998 trying to grow a business. I come from an intellectual family (both my parents were University Professors) so I was raised to look first at existing theory before I do anything new. I was surprised to discover that there was very little research into scaleup businesses. 

Twenty years later and the situation is better. There is a lot of good advice available for startups but no equivalent for scaleups. I´ve been working in this area since 2013 are I know of maybe only 100 people who really know anything about the difference between growing (which is linear) and scaling (which is exponential).

Q2. You were on the founding team of Marrakech and were the co-founder of Hot Hotels. Could you briefly explain how the two companies scaled-up?

Much of the passion that I have for teaching comes from a desire to prevent entrepreneurs from making the mistakes that I did. In the cases of both Marrakech and Hot Hotels, we did a lot of things well but neither company exists today.

What I tell the participants of Owners Scaleup Program at IE Business School is that  I cannot tell you what you need to do to scale your business, but I can tell you what you should NOT do.  Much scaleup advice is counterintuitive, it takes a long time to work it out by yourself. Having someone who has travelled the same road before saves you a lot of time. 

All unsuccessful companies fail for the same reasons, all successful companies succeed for different reasons. The trick is not to fall into the common traps so that you have the space and time to figure out what you need to do to be successful.

Q3. Are you familiar with the startup scene in South Korea? If yes, what can be improved or done more that could help startups or small and medium sized-companies to becoming scaleups?

I seen the movie Parasite (“You know what kind of plan never fails? No plan”). And my daughters are fans of BlackPink and BTS so yes I am familiar with the startup scene in South Korea :-)))

Although, I´ve never been to the Seoul, we do have many students from the Republic of Korea in IE Business School and I always ask them to tell me about their country. What I´ve learned is that Korea is not that different from many other OECD countries. Everyone focuses too much on unicorns! 

I think Korea now has 10 companies with a valuation over US$1 billion. Aprogen, Coupang, Yello Mobile, L&P Cosmetic, Krafton, Viva Republica, Woowa Brothers (Baemin),Yanolja, WeMakePrice, GP Club and Musinsa. This is remarkable but what about a company with 50 people. Who is helping them to become a company of 500 people? In most countries, I find the answer is no-one. Most of these firms suffer in silence unaware of new trends such as the subscription business model. Unicorns can manage themselves. Getting more small firms to be medium sized should be the area that governments focus on.

Q4. What are the key ‘ingredients’ that make companies to becoming scaleups? 

One of the very few bright sides to the COVID-19 outbreak is that we all now have a better understanding of exponentiality. Scaling is all about catching an exponential wave. Instead of growing linearly by a fixed amount (0,2,4,6,8,10), a scaleup grows exponentially by doubling each year (0, 0.6, 1.2, 2.5, 5, 10)   

The key is experimentation. A scaleup company spends a long time creating different versions of their product or service. When something they try starts to attract repeat users, they further keep refining until they have a “must have” or “wow” capability that no-one else has. This is called Product Market Fit. It can take a long time, as much as four years but the customers that you solve a problem for will stay with you and recommend you to others.  

This sounds simple (and it is simple to explain) so why don´t more people do it? Because in order to scale, you also have to stop doing everything else except for the product or service you are betting on. This is known as “doubling down” and is the key component of scaling. Our survival instinct tells us not to double down but instead to keep all options open. Almost every scaleup that I have studied has made the difficult decision to abandon what is not engaging their customers and put everything behind what is.

Q5. Do you think in times of COVID-19, it is possible for companies to scaleup like businesses did before the crisis? Furthermore, is scaling up quickly an advantage for businesses in the current crisis?

They don´t believe me but I tell my students in IE Business School that COVID-19 is a huge opportunity for them. From the Financial Crisis of 2009 came WhatsApp, Instagram, Venmo, Groupon, Uber, Pinterest, Slack, Square, Cloudera etc etc. New Business Models in areas such as Energy, Education, Healthcare and Agriculture will be adopted as the previous way of doing things is no longer an option.  

My research into scaleups tells me that anything that can grow really quickly can also collapse really quickly. We know this from nature where the fastest growing organisms do not live for very long,  

So what COVID-19 means is move away from optimisation and just-in-time business models to an embrace of buffering and just-in-case. Companies whose culture is based on profiting from scarcity will be unable to adjust to profiting from abundance.

Q6. Has the process of becoming scaleups changed since the COVID-19 crisis began? If yes, specifically how did the ways businesses scale up changed compared to the pre-COVID days?

I´ve never been interested in the money side of business. I´m fascinated by business in the way that others are fascinated by football, fashion or food. One of my frustrations is the financialistion of business. Many people have become rich not because they created something that people loved but because they made something like housing or education scarce.  

I wrote my masters thesis on how to plan for disasters and one of the things that disaster planners do is to strip back survival to its absolute essence. This is how I see COVID-19. There are many things in life that we want but there are much less things that we need. I can see the scaleups of the future embracing what is local and what is necessary.   

In my home country of Ireland, I feel sad for the way in which we have rejected our centuries old traditions in areas such as music, art or language for brilliantly marketed alternatives from the USA. The only time I ever wowed as a Professor was when a student submitted her assignment in an ancient Korean style. She told me it was Hanji but it was one of the most beautiful things I´ve ever seen. What a contrast it was to all the other assignments I received! The post COVID-19 future I see is that we refuse to let capitalism continue to commodify everything. This opens a whole new set of possibilities.    

Q7 Has there been a new scaleup built since the COVID-19 crisis broke? If yes, could you briefly share how the company became a scaleup?

Sadly there has been. And they are called Amazon, Apple, Facebook and Google. During the crisis, on many occasions, they grew by a billion dollars in a single day. Each of these companies is a monopoly or a near monopoly and this makes it harder for other companies to scale. 

I don´t know how much of a issue this is in Asia but any first year economics student could tell you why monopolies are bad for prosperity. If the US government will not break these companies up, then it´s not anti business to restrict the ability of these trillion dollar companies to operate in your country.

COVID-19 makes is a priority to act on monopoly power. It´s too tempting when you are big to just be a bully and to stop innovating.

Q8. What is the key message that you want the attendees of World Knowledge Forum to take away from the ‘The New Era of Scaleup Entrepreneurship’ session?

1. Forget about startups. Instead focus on helping firms that already have customers and sales to scale. Existing firms are two to three times more likely to scale that startups. 2. Forget about unicorns. A country should be as proud of the companies with sales of over $100m as it is it of the unicorns worth $1 billion. 3. Continue to invest in Deep Technology. By this I mean AI, Robotics, Synthetic Biology and 3D Printing. It takes a long time for these investments to pay off so only governments will fund them.   4. The average age of the successful startup founder is 45 years old. Young people do not have the patience or the business experience to be successful. Business is not sport, you get better in middle age.   5. Korea is a reference country in how to mange COVID-19. This presents an opportunity to attract talented Koreans living overseas to return. In the medium term, even non Koreans will want to move there as COVID refugees.

There is a link to the article here.

[ronnykblair]

How to Start a Hedge Fund – and Why You Probably Shouldn’t

NOTE:

This is a consolidated and updated article that combines several previous interviews and articles on the topic of how to start a hedge fund.

You can find plenty of articles about “how to start a hedge fund,” but they all tend to make the same glaring mistakes:

They fail to explain that only very specific types of people even have a chance of starting a hedge fund;

They fail to explain that “beating the S&P in your personal account” won’t be taken seriously by anyone and that it is not at all sufficient for starting a fund; and

They fail to disclose starting a hedge fund is probably a bad idea.

If you want to start a hedge fund, as of 2019, I’d say you’re somewhere in between “a bit crazy” and “total reality distortion field.”

Not only has the industry performed poorly for the past decade, but fewer funds are forming each year, and management and performance fees have been falling for a long time.

So, here’s why it’s probably a bad idea – but how to do it anyway if you insist:

The Blunt Truth About Starting a Hedge Fund

You might have a personal trading account with $100K, $200K, or even $1-5 million+.

Your average annualized returns over the past 5 years were 15%, beating the S&P 500, which only produced 9%.

As a result, you believe that you’re a good candidate to start a hedge fund.

Wrong!

First of all, high returns on small amounts of capital (i.e., millions of dollars or less) do not mean that much.

Second, results from “personal accounts,” no matter the account size, are not taken seriously.

Third, you need to be part of an existing team at a hedge fund, asset management firm, or prop trading firm to have a good chance at starting a new fund.

To start a true, institutional-quality hedge fund that uses the LP / GP structure and has large external investors, such as endowments, pension funds, and funds of funds, you’ll need to raise hundreds of millions of USD.

The bare minimum to get noticed is $100 million, but realistically it’s more like $250 million+, and ideally more like $500 million – $1 billion.

You have no chance of accomplishing that unless you have deep connections to potential Limited Partners and a great track record over many years at an existing fund.

Yes, you could start with much less capital, or go through a hedge fund incubator, or use a “friends and family” approach, or target only high-net-worth individuals.

But if you start with, say, $5 million, you will not have enough to pay yourself anything, hire others, or even cover administrative costs.

It will also be extremely tough to re-invest, grow, and attract new investors with that amount of capital.

For more on the economics of hedge funds, please see the hedge fund overview and hedge fund career path articles.

Not only has the industry has performed poorly ever since the 2008-2009 financial crisis, but compliance and legal costs have increased substantially, the traditional “2 and 20” fee structure is now much lower, and strategies such as global macro and long/short equity have fared poorly.

There are some bright spots, such as quant funds, but they’re a few specks of light in a bloody field of corpses and rubble.

But if you believe that “ignorance is bliss,” and you have a solid track record and team at an established firm, here are the steps to start a hedge fund:

How to Start a Hedge Fund, Part 1: Raising Capital

First, note that even if you do have a solid track record at an established firm, you may not be able to use your results for marketing purposes.

You need to review your employment agreement and see what it allows because firms have different policies.

Also, even if you can use these results for marketing purposes, you won’t necessarily have 100% ownership of the results since you were in a team.

As a result, the “new fund marketing process” is often more about your process, your story, and you as a person than it is about historical results.

Potential investors in your new fund, such as funds of funds, endowments, pensions, family offices, and high-net-worth individuals, want to see three characteristics in your investment process and story:

Specific – You need to do much better than “find and invest in undervalued companies.”

Repeatable – Your strategy can’t be dependent on specific economic conditions or government policies or a key individual.

Understandable – Institutional investors want strategies they understand 100% rather than potentially-higher-return-but-complex-and-unclear strategies.

Good Pitches vs. Bad Pitches

To make this concrete, let’s look at two quick examples.

A “bad pitch” would go something like this:

Story: New healthcare regulations have created undervalued medical device companies and overvalued health insurance companies. The market hasn’t yet priced in the impact of these regulations, which has created investment and M&A opportunities.

Process: You’ll focus on specific geographies and verticals and pore through companies’ filings, call suppliers and medical professionals, do patient interviews, and complete fundamental analysis to find the best long and short candidates.

Returns: You’ve been using this strategy for 2 years in your personal account of $100K, and you’ve averaged 20% returns each year, verified by a Big 4 audit.

This strategy might seem reasonable, but there are several problems.

First, it’s far too dependent on current government policies – what if something changes, or the regulation gets rolled back?

Second, the process is not scalable because it’s extremely labor-intensive.

Finally, your track record is linked to your personal account, and strategies that work with $100K might not work so well with $100 million (oh, and 2 years of results might not be enough – 3-5 is better).

A better pitch might go like this:

Story: You’ve identified 15 key signals in “mergers of equals” scenarios that correlate strongly with the probability of the M&A deal going through. The market has continuously mispriced companies’ stock prices in these situations, creating opportunities to earn market returns but with significantly less risk.

Process: You track M&A activity in a sector and apply these rules of thumb about the exchange ratio, stock price volatility, and others, and then you confirm your findings with a review of corporate filings and additional due diligence.

Returns: Working in a team of 3 with $20 million in capital at a generalist hedge fund over the past 5 years, you’ve averaged 11% annual returns, always in a relatively narrow band from 8% to 15% in any given year.

This strategy is specific, not tied to a fad or trend, and the process is more repeatable and scalable.

It’s also less dependent on you, and your returns have been more consistent with a much larger amount of capital over several years.

In addition to honing your pitch, you need to be personable because institutional investors often place just as much weight in your character as they do in your strategies and returns.

The Capital Raising Process from Beginning to End

Once you’ve refined your pitch, the process of raising capital differs depending on the types of investors you target.

For example, if you pitch to a $10 billion endowment that only invests in funds with over $500 million AUM, it will be slower and more bureaucratic than pitching to a small family office.

With large institutional investors, you can expect the following:

Introduction – Get an introduction via other fund managers, trustees, your prime brokerage provider, or anyone else you know.

Phone Interview – Answer questions about your strategy, how you make decisions, and qualitative aspects of your fund.

Informal Background Check – They’ll ask about you in the community to figure out your reputation. “No search results” can be worse than negative findings!

In-Person Pitch Day – If they like your story and reputation, they’ll invite you in to present for an entire day. You’ll go through your slides, your story, your process, your risk management, your team, your performance, and more.

When you’re presenting your past investments, you might use a structure like the following for each one:

The Idea: “This healthcare company was undervalued because one division was dragging down earnings, and we thought there was a significant chance of a divestiture because of new competitors entering the market and increased pricing pressure, so we invested and expected to realize a gain within 12 months.”

How You Developed the Idea: You witnessed a similar event in a different industry, and then realized that undervalued companies with underperforming divisions might exist elsewhere – and that certain industries were more likely to come under pricing pressure than others.

The Work You Did on the Idea: You went back 5 years and analyzed the financials, valuation multiples, and market conditions of all similar cases; based on that, you found 10 rules of thumb you could use to identify cases where there was an 80% likelihood of a company’s stock price appreciating upon announcement of a divestiture.

The Result: You invested in the company, and, as expected, it announced a divestiture within the next 12 months. However, its stock price rose by only 5% rather than the 10-15% that your analysis had predicted, and you sold off your position for a modest gain.

How You Applied the Results and What You Learned: Your thinking was not entirely wrong, but you had underestimated the impact of new regulations in the sector, which accounted for the difference. As a result, the company’s earnings growth was dampened, and the divestiture resulted in less uplift than you expected. You decided to focus on sectors with lighter regulations, such as [Name Examples].

The #1 mistake in day-long presentations is focusing too much on your successes and not enough on your mistakes.

You might be tempted to walk in and give them 10 case studies of investments where you earned 50%, 70%, or 100% within 12 months.

But no investor is perfect, and everyone loses money sometimes.

If you want a higher chance of closing the deal, throw in a few stories about mistakes and what you learned from them as well.

After you present, you might have to wait up to a year to receive a definitive “yes/no” answer.

You might also have to pitch to different groups, and they might visit your office and speak with other team members.

If all of that goes well, they might submit a proposal on your fund to the ultimate decision-makers, such as the Board of Trustees for an endowment, and then you’ll have to come in and deliver the “final pitch” to them.

Other Process Points

The process is quicker if you focus on smaller family offices and HNW individuals – you might get an introduction, speak on the phone, and then visit in-person for a day or two to answer more questions and complete the paperwork.

But it will also take more meetings and individual investors to reach a critical mass of capital if you do it that way, so there is a clear trade-off.

However, if you have less than $100 million in AUM, you pretty much have to start with these smaller offices and individuals because large institutions have a minimum check size and concentration limits (i.e., they don’t want to be 40% of AUM in a $75 million fund).

The success rate with investor meetings of all types is very low unless you have a great reputation at a top firm and you’re starting a new one with the same team.

You might have to contact hundreds of LPs before you start to see success, so the odds are much worse than those in investment banking networking.

Also, endowments and pension funds are extremely conservative and almost always avoid brand-new funds unless they already know the manager(s).

Consultants (i.e., placement agents) play a big role in the fundraising process as well, but there is a “size bias” there, and it’s tough to get their attention if you’re under a few hundred million AUM.

If you manage to raise enough capital to get started, you’ll then have to send out monthly or quarterly updates and an annual letter to your LPs.

Investors will also call you randomly to ask how things are going or to explain the strategies you’re currently using.

Large firms will scrutinize you closely, often devoting entire departments to fund monitoring, while HNW individuals and small family offices will be more hands-off.

Having skin in the game is quite important, and many investors won’t commit unless you also put a significant portion of your net worth into the fund.

So, the “capital raising process” is also about putting your own capital into play.

How to Start a Hedge Fund, Part 2: Setting Up the Paperwork and Legal/Corporate Structure

So, let’s say you’ve been meeting with investors, you’ve presented a solid pitch, and you’ve managed to win commitments for $100 million in AUM.

You need to think about logistical issues next.

You’ll have to tackle some of these issues before you even raise capital – but we’re labeling it as “Part 2” here because without capital, nothing else happens.

First, you’ll need office space, which is expensive in places like in NY and London.

To save money, you can start from your home at first, use a “hedge fund hotel,” or share space with other managers.

Until your management fees are enough to cover office rent and your other administrative expenses, frugality is the name of the game.

You’ll also need service providers, such as lawyers, auditors, administrators, marketers, prime brokers, compliance officers, and IT.

You might be tempted to save money by using cheaper, lower-quality providers, but that would be a big mistake because incorrect legal or compliance procedures could kill your fund.

Also, potential investors will look at the quality of these providers to judge your fund.

The legal requirements to start a hedge fund vary widely by state and country, so we’re not going to attempt to address them here.

At a high level, nearly all hedge funds are structured as Limited Partnerships because of the LP and GP split in the hedge fund structure.

A good attorney should be your first call when starting a hedge fund, and your investment agreement should include these terms at the bare minimum:

Fee Structure: As a new fund, you’ll most likely have to settle for lower management fees (~1%) and performance fees (under 20%). The industry-wide trend is toward lower fees, with more weight given to performance fees.

Lockup Term: This is the length of time that investors’ money has to remain in the fund before it can be withdrawn, and it should match your strategy (e.g., longer for an activist fund that acquires large stakes in companies, but shorter for a global macro fund with high liquidity).

Redemption Terms: How much notice do investors need to give when they want to take their money out?

Performance Targets: Are you trying to outperform a particular index? Is there a rate of return you have to beat before collecting performance fees? Is it based on the fund’s “high water mark” NAV instead?

You may have to register as an investment adviser and complete a literal ton of other paperwork and licensing, depending on where you set up.

Altogether, you can expect to spend tens of thousands of dollars, up to the hundreds of thousands, just for the legal fees.

Beyond lawyers, you’ll need auditors to monitor your performance, administrators to handle trade reconciliations and allocations, marketers to find more investors, prime brokers to manage the brokers and dealers you trade through, and compliance staff to manage reporting requirements.

IT costs vary based on your fund type – expect higher costs for quant funds and ones using algorithmic trading, and lower costs for fundamental-oriented ones.

The bottom line is that because of all these expenses, you will not earn much for the first few years of your fund.

Until your AUM grows enough for management fees to cover overhead with some breathing room, you will be in “frugality mode.”

Supplemental income sources and high savings are highly recommended because it could take years to reach the AUM required for long-term success.

How to Start a Hedge Fund, Part 3: Hiring a Team

So, let’s say you’ve made it through everything above, you’ve set up your fund, and you have around $100 million in AUM.

Now you need to think about your team because even with external service providers, you can’t do everything by yourself.

We label this “Part 3,” but you’ll have to build your team from the start because you’ll get questions about it in your pitches.

And you don’t even have a great shot of starting a fund unless you have an existing team that has worked together for years.

First, note that $100 million in AUM is barely enough to support a “team”: you might earn $1.0 – $1.5 million in management fees from that, and infrastructure, overhead, and compliance expenses will eat up a good portion of those fees.

You might have a few investment professionals at that level, a few support staff, and many outsourced service providers.

Once you move closer to $1 billion in AUM, you might hire several more investment professionals, a few more support staff, and even more outsourced services.

Quant funds have more IT needs and tend to have bigger teams, but many value-oriented funds start with just the Founder, one person on the investing side, and someone else in support.

If you only have the funds to hire one person, make it someone on the administrative/operational/marketing side.

That may sound crazy, but you will spend an unbelievable amount of time on non-investment-related tasks, such as talking to lawyers and accountants, reviewing legal documents, and answering questions from potential investors.

Without someone else to handle these tasks, you might spend 50% or more of your time on them, which limits your ability to create and implement investment strategies.

Hedge Fund Hiring: What Qualities Do New Hires Need? from ronnykblair digest https://www.mergersandinquisitions.com/how-to-start-a-hedge-fund/

[how2to18]

TEN YEARS AGO, the collapse of Lehman Brothers triggered the global financial crisis of 2008. Democrats were eight years in power, and their failure to prosecute the corporate criminals behind the crisis surely ranks as their biggest legacy. That failure was the condition of possibility for the anti-elite narrative that inspired the white working class and the white upper class to support a genuinely fascist insurgency before and beyond November 2016. It was also the condition of possibility for Billions.

Across its three seasons on Showtime, Billions explores the aftermath of Lehman’s and Obama’s 2008 peaks, tracking the waning and waxing faculty of elite professionals to steer their careers and helm the most powerful country in the world. The show is built around an extended parallel between outer-borough upstart Bobby Axelrod (Damian Lewis), principal of the wildly fruitful hedge fund Axe Capital, and Manhattan WASP Chuck Rhoades (Paul Giamatti), US Attorney for the New York Southern District and hero of a counterfactual recent past in which 81 bankers and traders were successfully prosecuted for their outlaw engineering of toxic asset slides. Rhoades fancies himself a just warrior, fighting against “[these] Teflon corporations that defraud the American people on a grand scale.” As the series opens he levels his gaze at Axe, the Moby-Dick of parkour finance.

Root for the law, or root for the money? Fortunately, we don’t have to choose, since here both sides equal each other in their maniacal pursuits of professional acme — a steady double date with bent rules, a shared ruthless drive to win. Root for the winners! Both men are game theory geniuses, spooling out scenarios and hedging countermoves with the speed of gigahertz processors. Their sheer effectiveness propels the show’s narrative and renders the difference between good guys and bad guys a mere matter of preference.

The winners run their races in structural parallel, their lines intersected at right angles by mutual ballast: Wendy (Maggie Siff), a psychiatrist whose penetrating understanding of Bobby guides the growth of Axe Cap, and whose lashing crop rouses the vim of her husband, Chuck. The very first shot of the series frames Chuck bound and gagged on the floor, a vinyl stiletto boot pinning him down. (It’s not TV, it’s Showtime.) “You’re in need of correction, aren’t you?” she says, burning his chest with a cigarette and again with urine in the wound. Cut to the Manhattan skyline, that other site of bad boys who will be bad boys even after market corrections, and there we find Wendy’s second sphere: she is lucratively employed as the in-house performance coach at the hedge fund, a high-class fluffer whose flash-sessions amp the traders with dominatrix directives to “get out there and do what needs to be done.” All day long, Wendy dispatches debilitating anxieties and disruptive fetishes at lightning pace, checking in frequently with Axe to save him “from making a huge mistake for dick-measuring purposes.” She takes deep satisfaction in her beneficent effects. On “Comp Day,” when financial firms assign annual bonuses to their employees, she regularly merits $2 million — and that’s not counting spontaneous gifts from Axe like a black Maserati GranTurismo Sport. Her business model is clearly not Jacques Lacan’s.

Chuck’s rewards differ: he can’t help but be bad, even as he draws the compensation of righteousness, and his inner conflict mines much more fodder for repentance under the latex lash. “I work for the public good!” Chuck scolds Wendy in season one. “No, you work for the good of Chuck Rhoades,” she flatlines back. When he initiates an indictment against another giant hedge fish whose political ties will fall out advantageously, Chuck’s deputies repeat the exchange in a later season: “It’s the right thing to do,” Lonnie Watley (Malachi Weir) says. Kate Sacker (Condola Rashad) parries, “It’s what Chuck wants. It doesn’t make it right.” At the end of his righteous road, if Chuck Senior (Jeffrey DeMunn) pulls enough strings from behind the velvet curtains of his Fifth Avenue study, Chuck will be governor, a latter-day Spitzer chasing corporate offenses in between incriminating sexploits, clad in ever-more refined sharkskin grays of power.

Even as Axe, Chuck, and Wendy split repeatedly over the public good, legal technicalities, and codes of honor, they are three peas in a pod, winners united in their incomparable competence, their oft-declared outsized intelligence, their profound professionalism. The show’s creators are also consummate professionals (a team that includes Andrew Ross Sorkin of The New York Times financial pages): the script is exacting, the plot gasping, the performances riveting, the cameos towering, the wardrobe flawless. Not your average workplace drama, Billions is impressively synoptic in its horizontal integration of mental health, financial services, Silicon Valley industries, and law and order, with a little Yonkers-secret-recipe-pizza and private-duty-intravenous-hangover-cure-nurses spicing the mix. Some seek money, some seek glory, some seek power, but everyone wants to win. The show thus poses the question, at the time of writing in 2014, at the time of setting in 2012–2016, and at the time of airing in 2016–2018, of professional potency. What is it about this decade that makes being excellent at your elite job a matter of concern?

¤

The authors of the financial crisis were, on the whole, excellent at their jobs. Inventing asset classes to dissimulate toxicity, booking loans as revenues, hyping instruments to defer reckoning, evangelizing for the equations that discount merely mortal common sense, and evading regulatory oversight with NASCAR agility, the hedgies of the new millennium performed spectacularly. What Axe calls the “unimaginative, do-gooder authorities” — regulators and legislators, Federal Reserve governors and lifetime senators — stood equally spectacular in their unwavering commitment to the upward transfer of wealth.

Barack Obama, the executive officer with purview over all this excellence — Harvard Law stamped, a 10 million popular vote win span, and cooler than the crispest cucumber — tragically forswore the audacity of power, and instead measured his every move for the middle. Appointing Wall Street alums to the Justice Department, maintaining the GOP Treasury, and utterly staying the course with the boondoggle bailout Hank Paulson and George W. Bush had rushed in late 2008, Obama achieved bipartisan support for the plutocracy. He declined to bail out the people. He announced but never really executed a program to aid homeowners in tiny proportion to the support for banks. He committed to but never delivered a plan for jobs for struggling homeowners, and he oversaw, in the name of Too Big To Fail, outrageous mergers of investment banks with consumer banks destined to risk even bigger failures. Facing the black and white of racist obstruction and class war, he went gray. Professionalism of the middle is not professionalism of the top.

2008’s extreme wreckage couldn’t be answered from the center. Billions endorses excess, and not only through the tops of S&M dens. It meets tremendous deeds with zealous, polarizing professional prowess. All three principals are awesomely effective, getting out there and doing what needs to be done. In supreme-stakes “three-dimensional chess,” as they call it, Axe, Chuck, and Wendy appraise their options with hawkish precision, and much of the viewing pleasure rests in the exertions of keeping up with these darting analysts. If we can hang with these pros, tracking their razor rhetoric, technical argot, nimble abbrevs, and bountiful movie allusions, aren’t we smart too? (I watch the show with my JD/Econ PhD husband, and we need subtitles.)

The power of the spoken smart animates most episodes of Billions. Choice bon mots leaked to the press can trigger shorts and swaps, misdirections planted in the ears of suspected moles confirm corporate espionage, incendiary insults inspire ire, and single syllables can suborn murder. Threats are promises and speeches are deeds; to be effective is to wield the word as cause, spurring domino actions. Fierce oratory anchors the action, accomplished stage actors people the remarkable cast, and the show makes much ado of theater, its narrow focus on the orators predominating over fancy camerawork, set design, or action sequences. Drama is the paramount medium of the act, so Billions deploys its theatricality to foreground its study of agency.

Evoking black box theater in its constrained interiors — the dark kitchen of the Rhoades’s Brooklyn townhouse, the wood paneling of Upper East Side clubs, the utilitarian taupe of federal offices — the show’s aesthetic is a tight frame for the efficacious act. It makes virtually no use of exterior settings, establishing shots, panoramas, or montage, only occasionally inserts drone footage of the Manhattan skyline between scenes, and is almost exclusively low-lit, faces half in shadow. Even the gleaming white of the Axelrod Westport headquarters (a conspicuous post-9/11 relocation for many such firms) reflects the light of scrutiny, transparent office walls and centered communal trader table exposing and circumscribing power plays. Chess moves within close squares, the actions anyone takes best be good form, as they’ll ramify into a long tail.

Poor form haunts Axe even as he cuts a precision figure, since his solo firm originated in unsavory transactions around 2001, a second world-historical juxtaposition alongside 2008. The destruction of the World Trade Center created all kinds of opportunities for financial crimes and shady gains, from insufficient health care for widows and first-responders, to the war-profiteering that drove the stock market up after the fraudulent invasion of Iraq. Axe, we learn late in season one, owes no small segment of his empire to 9/11. A stroke of luck kept him out of the office that morning, and a stroke of evil genius netted him nearly a billion dollars by shorting airline and hotel stocks in the very hours during which his colleagues perished.

The line from 9/11 to 2008 to 2018 spun by Billions is the problematic of professional power, from W’s amateur incompetence to O’s centrist impotence to HRC’s unshakable taint. Does power rest with the mighty rulers of imperialism, or with the few who seek retribution? When the elites peddle business as usual amid crises of their own making, how do they get away with it? Can a woman maintain the same middling charade as her male predecessor? Billions merges these elite domains of the political, the legal, and the financial with the baser registers of the professional, the sexual, and the criminal. Absolute effectiveness requires relative tactics in different domains, but the strategy remains the same.

¤

Luxely compensated black-clad Wendy is the cold, beating heart of the show. Her impeccable professionalism carves out an admirable Obama middle way between justice and money. The creative choice to foreground a woman in a genre usually defined by its abundant big swinging dicks comprises the show’s sizable allure. Beautifully loyal to both Axe and Chuck, Wendy’s actions are not quite as determining as theirs, and indeed several of the plot trajectories involve elaborate maneuvers by both men to protect her from implication in their misdoings. But she is fiercely dignified in her right to a career unhampered by her husband’s, hungry at every moment for a harder puzzle. Her work acumen shines as a real point of identification.

The middle imagines itself as noble, going high when they go low, but it often requires a certain prostitution, and Wendy finally sells herself to protect both her men. Having quit Axe Cap and left her marriage at the end of season one, over the course of season two she eventually negotiates a deal to recenter herself and buffer her men from one another: she’ll return to the firm, and Bobby will drop the hundreds of malicious prosecution lawsuits he is funding against Chuck; she’ll return to the marriage, and Chuck will hunt other whales. A potent broker like the rest of them, she exudes Swiss neutrality even as the show centers her decisive seat of power.

Combining the financial and legal expertise of her two men with her own primary expertise in psychic motivation, Wendy’s control is dazzling to behold, her deeds superseding those of both men. It comes as a hard gut-punch when the third season’s decisive misdeed is her own: she violates her patient Mafee, a likable every-bro with just enough “Navy SEAL” to thrive at Axe Cap, trading on her insider knowledge of his infatuation with her to seduce him, persuading him to lie to federal investigators on her behalf. Axe, Chuck, and Wendy are all facing jail time for their vertiginous triple crossing at season two’s climax, in which Chuck raids the personal trust he had sequestered when taking public office to overinvest in his friend’s juice company, but really to bait Axe into sabotaging the company to score on a big short of the IPO. Wendy, learning of the sabotage, does not warn Chuck, but joins the short. Her hedge is financially savvy though legally and maritally unsound, a middle ground between competing value systems, but no longer innocent. It primes her to shrewdly cross lines in season three, colluding with Axe and Chuck to pin the sabotage wholly on a fourth party, and to mine the exculpating falsehood from Mafee’s affections. As her black vixen sheaths foretell, the gray is untenable. There’s no credible integrity in the middle.

Wendy’s highly calculated betrayal of Mafee, and her betrayal of us for rooting for her, gets repaid in a patient’s betrayal of her. Taylor Mason is introduced in the second season as Mafee’s intern analyst, bound for the U Chicago MBA. Axe demands to be introduced to the young temp who makes Mafee millions, and on walks Taylor: “My pronouns are they, their, them.” Played by Asia Kate Dillon and earning Billions the Outstanding Drama Series award from GLAAD, Taylor is often celebrated as the first major gender nonconfirming character on a television series, but their drive is all too binary. “It’s not just about numbers and decimal points,” Wendy warns them. “No, I’m pretty sure there is only money,” comes their icy retort.

Where others want the good or the might, Taylor’s want is the machine. A stony quant, their grad school plans dissipate in the sway of one of Bobby’s trademark virile speeches: “You retreat behind your aquarium walls. What you don’t realize, Taylor, is that glass — it’s not a barrier, it’s a lens. It’s an asset. It’s what makes you good. You see things differently. That’s an edge.” The ensuing comp bargaining, rapid-fire and cut-throat, is equally signature. If there is someone who can rival Bobby, it is Taylor — not Chuck, poor analog soul. Where Chuck tries and fails to use Wendy to beat Axe, Taylor wins, optimizing their private sessions with Wendy to ultimately manipulate Axe.

Heeding Wendy and trusting their judgment, Bobby gives Taylor the reins at Axe Capital after one of Chuck’s contortions at last ensnares him in enough legal trouble to warrant a trading suspension. After crushing the capital raise by garnering $6 billion in new investments from a single speech, Taylor abruptly launches a solo firm, breaking Bobby’s bank and Wendy’s heart. All along, we’ve watched Wendy’s dual loyalties reap uneven returns: Axe tells her almost everything, leaving little plausible deniability (thank god for Doctor-Patient privilege), but Chuck tells her lies, and profanes patient confidentiality to steal fuel for his cases against Axe. With Taylor, she finds a relationship more complicated and intriguing than those with the male traders — an arc of actualization for both, a hint of the psychiatrist’s vocation beyond fluffing. But she also finds out that her most genuinely gratifying work can be someone else’s chess move; Taylor uses Wendy’s empathy for their experience in the über-male workplace to spur Wendy to advise Axe to offer Taylor more money, more prominence, more “forward momentum.” In a gray garage, in the most stabbing exchange of all the show’s Shakespearean duels, Wendy spits, “What do you want?”:

Taylor: You.

Wendy: You think … I’ll actually come with you? Haven’t you done enough damage?

T: I’m building not destroying. That’s where you come in …

W: Nice ideas. You are no moral fucking compass. For a moment, I thought you might be because you needed me to think that. But you used me. … You preyed on me and my empathy for you, preyed on me to get what you wanted from Axe — being part of the raise — so fuck you.

T: Oh, you don’t seem to understand. I’m not just offering you a job for my sake. I’m offering you a fresh start for yours. A restart for your slew of fuckups. You let things devolve at Axe Capital. You didn’t see me being pushed out the door. You couldn’t stop Axe from succumbing to his own worst nature. Instead, you succumbed to it. And who knows what other fallout you’ve created or at least allowed elsewhere in your life.

By recognizing that Wendy’s professional power underwrites Axe Cap’s, and thus that Wendy is culpable for its sins, Taylor caresses Wendy’s raw desire in one hand, while bitch-slapping her with the other. Wendy pretends to be in the middle, but is really in charge; by contrast, Taylor intends transparent management, “top down but not imperious or impetuous,” and largely “tech-centric,” employing the team of algo writers Axe Cap only briefly entertained, working as purely as possible. “A place free of arrests, indictments, insinuations,” Mase Cap pledges a Shangri-La of robotic proficiency bulwarked against irrational exuberance and illicit info. Even through the original sin of its founding, it’s a vision that winds Wendy, thudding the sternum of her own illusory virtue. Like Axe before them, Taylor goes solo with filthy lucre, but points out that Wendy, too, is an axe. There is no middling in financial baseball.

Axe vows certain vengeance, while Wendy counsels “looking within, to see what you, what we, may have done to cause this. We rebuild our business as we rebuild ourselves.” As Wendy and Bobby align against Taylor, Wendy and Chuck also realign, finding new thrills in resistance to the noxious anti-black autocrat Jock Jeffcoat (Clancy Brown), the new Attorney General after national regime change. A gruesome fusion of Sessions and Trump, Jeffcoat’s racism is matched only by his corruption. (He even gets to shout, “You’re fired!”) Chuck spends the second half of season three working with his two black Assistant US Attorneys and a black New York State Attorney General to build an obstruction case against Jeffcoat, renewing his commitment to justice after a détente with Axe Cap, but applying all the brinksmanship lessons learned to goad Jock into exposure. Jock is a better target than Axe, for it is easier to believe in preserving the neutrality of political institutions than in revealing the open truth of the rigged market. Sacker assures: “He’s finally doing it right, the right thing […] He’s doing that Chuck thing, but for the right fucking reasons this time.”

The final sequence of season three distills all these tactical realignments. In companionable silence with Chuck, Wendy takes a call from Axe. “I saw Taylor,” she says. “Fuck them. No, I mean fuck them over. You have to. We do.” “Well, that’s different from look inward,” Axe reproves. “Yeah, well, you know what, I’m different.” A different Wendy invites Bobby into the Rhoades dining room, mutually funding a new rapprochement. The closing lines over flowing wine put the long play for season four: “So you know how you’re gonna go after Jock?” Bobby asks. “Some ideas floating around my head. And, uh, Taylor?” Chuck reciprocates. “Yeah, yeah, got a plan that’s starting to form.” Wendy, wronged by both Taylor’s treachery and Jock’s tyranny, husbands the partnership: “Tell him about it. There’s no one better at breaking down a strategy.” From above, the camera’s final shot captures the tops of three heads harmoniously leaning in, readying for “a real good time together” (The Velvet Underground trills us), for staking out different fights.

¤

From Wall Street to The Big Short, the financial malfeasance genre is often marked by its gray regard for greedy elites, and Billions doesn’t quite crack this ambivalent mold. It offers charismatic winners at many chosen professions, unencumbered by constructs like ethics or law, and we want to be on their teams. But the insistent connections it draws among its principals, their common core of intrinsic drive, provokes not so much the guilty pleasure of cheering guilty heroes, as the savory systematic reflection on the diversified ends of powerful means. Use your might for the middle, or go one better?

A hedge offsets risk by playing both sides, rapacious plunder in middle-ground clothing. Billions deftly explores these faux middles via elite power struggles, elite deeds, and the tactics of elite war. Strikingly, though, its insights catapult beyond elites, whose monopoly can’t be trusted, who shouldn’t be the winners all the time. Everyone needs tactics, everyone needs strategy. Even we the writers and readers of literary magazines amid the ruins of the university, we the taxi drivers and lawyers at LaGuardia, we the marchers for climate science and gun regulation and feminism, we the teachers on strike, we the candidates with “impossible” platforms, we the servers in restaurants, we the occupiers outside baby jails, we too with power. The middle cannot hold. Get out there and do what needs to be done.

¤

Anna Kornbluh teaches literature and literary theory at the University of Illinois, Chicago.

The post Fifty Billion Shades of Gray appeared first on Los Angeles Review of Books.

from Los Angeles Review of Books https://ift.tt/2LlIAtf via IFTTT