22-Year-Old Hedge Fund Manager: “Hedge funds are the least sexy business in the world”

You're 22 launching a hedge fund. What do you know that others don't? Running a hedge fund is the least sexy business in the entire world. The people around you tell you that running a hedge fund is the pinnacle of finance, right? You go from an investment banking analyst to maybe a private equity associate and then if your performance is strong enough over a number of years you run to be a hedge fund manager. When you're 22 like I am, you don't have a choice to be complacent. You have to always be on the edge. You have to understand what's going on in the world at all times. What's been the biggest thing that's surprised you throughout the whole process? The biggest thing that surprised me is the lack of risk management. Finance right is inherently mathematical but people are inherently emotional. Markets are driven not only by algorithms but by people investing their own money. You told me how much you were managing and frankly I was blown away. How does a 22-year-old do it? Sometimes I ask myself the same question. Noah thank you so much for coming on the pod. Yeah thank you for having me man this is awesome. You're 22 launching a hedge fund having built some hedge funds. Running a hedge fund is the least sexy business in the entire world and it's something that I learned very quickly because the people around you tell you that running a hedge fund is the pinnacle of finance right. You go from an investment banking analyst to maybe a private equity associate or vice president and then if your performance is strong enough over a number of years you run to be a hedge fund manager but the stress the short timelines that managers have from when they start to performance and then the overall tenacity and aggressive continual learning that it takes to run a hedge fund is very stressful it's very tedious and it's really hard to do well year over year competing against some of the smartest people in the world. What's been the biggest thing that surprised you throughout the whole process? A lot of these firms when they're young these emerging managers skip over the boring stuff compliance making sure you're following regulatory procedures. I think the firms that do the best and are built institutionally from day one do the things that are the least sexy but make them some of the most important principles for running one of these businesses. What are some of these things? So there's certainly regulatory filings that there are some websites in startups recently that allow you to blow past these things but just because you can fill out a form doesn't mean you understand the contents of a form so there's something called a PPM private placement memorandum and this allows you to tell your investors exactly what you're doing the qualifications that they need and then the ability for them to understand the business you're operating but if you fill those with filler terminology and very like stand still terms then not only are they not going to understand what you're doing but they're going to not give you as much slack if you make poor decisions because they're not going to have known what you're trying to do in the first place so transparency and honesty in a business that is inherently known for being opaque, disingenuous and secretive actually is one of the biggest competitive advantages for any fund of any size. Talk to me a little bit about your story so we talked a little bit about the hedge fund business earlier but you're fascinating man you're 22 you and correct me from wrong this is not the first hedge fund you've built take me through that journey. I first started investing in stocks when I was 16 the moment I always remember is with my mother who has been in finance for most of her career and we bought HCA you know healthcare corporation of America for $50 a share at the peak of the COVID drop and what people didn't appreciate is healthcare is inevitable and is one of the industries that if it doesn't exist humanity as a society will cease to operate efficiently and so while everybody was freaking out there are fundamental businesses like HCA that allow the country to continue running even in the times of COVID and from there it's only been an amazing journey I ran a crypto trading firm when I was 17 in high school where like leverage trading was was a big deal this was 2021 so I would say the palpability and the energy you get from those highs and lows is something I did not expect but you know I do it all with my twin brother Ethan he's my best friend and it allows us to have different kind of mindsets I'm more of a let's push forward let's get that aggressive alpha he's like well you can be aggressive but you have to do it with risk management and then we did our first hedge fund at 19 called sage the capital which performed very very well very quickly and we were very fortunate and so we kind of took the win early on to continue the track record and then we did some personal investing and now we're here at Vanary SM management what is Vanary so Vanary and Latin means to hunt and so our motto is we're hunting alpha continuously exponentially and forever and so Vanary is a is a culmination of the values and principles we've built from day one and so like our investors for example know what's going on at almost all times because they want to understand that and from our investing strategy to our risk management protocols it is always with the mindset of we want to have risk adjusted above market returns but consistently I do not necessarily want to have one very very good month and then have a swing right now I'd rather have consistent you know tangible operating returns over time that then allow us to show not only our knowledge and demonstration but that our youth is an advantage and not something that should be used against us how is your use an advantage and I'll ask that question you know Sam in the position of I'm 60 50 I'm older than you I've seen all the managers they all tell me they have something special they all tell me they're hot shit back to the first question what would you a 22 year old know that others wouldn't with more years of experience I think as we get older as individuals complacency is the biggest issue so a lot of these hedge funds that you see that have returns that do window over time right there's like an inflection point is because they get complacent when you're 22 like I am you don't have a choice to be complacent you have to always be on the edge you have to understand what's going on in the world at all times you have to know what technologies being used and why it is better and so the ability to have that energy is the ability to continuously learn improve and not let your biases get ahead of you like maybe what if you had 20 years of of experience on Wall Street right that's great but if you haven't done something in the last five to 10 years and you're relying on past results which never contribute to potential future performance as an indicator most of the time then you're only going to be hindered by your age and your own inhibition to continue to grow how do you build investing reps and I want to kind of cure that question from the angle of everyone has to study history everyone has to understand history in order to and understand the markets you being young you just haven't lived through some of those periods felt what people were feeling used people as indicators how do you study those things and get a grasp for how things will evolve based off of yeah obviously not purely basing everything off of what happened in the past but using it as somewhat guidelines and data the number one thing that my brother and I focus on from a historical lens is behavioral finance the one good thing about looking at the past is you can understand the winners and the losers at the same time and so while being in the moment is very important and you learn along the way the mistakes you make are ones you wouldn't necessarily make if you had the previous knowledge right so it's basically like I have the ability to back test what happened now versus people in the moment who may have lost a lot of money in the same process and so studying history in behavioral finance is exactly how we learned before I looked at what a PE ratio was or like growth rates or net profit and how that operates I wanted to understand how do people fundamentally see the world right the psychology are people going to continue to learn right what countries do well because of these mindsets a great book on this is principles by radalia right if you understand how people think to a degree and if you can understand the culture of these companies then your ability to understand them fundamentally and then make investments that are better is a very tangible and honestly not a very difficult process because all the information is already there but like I said about complacency you have to be willing to look at all of it and understand it from every angle instead of having your own biases that certain pieces of information are inherently better than others because you agree with one versus the other can you give an example of the way you studied a particular event name situation and how that translated into judgment for present day something you did so one thing I like to look a lot at is the great depression and obviously it was very tragic and what happened was very unfortunate but what happened right is a lot of people kept buying stocks and they were investing a lot in the markets and at some point when these markets become so inflated and people have to take profits or they have to understand that you know they need to sell to make money then as they say the ride up always takes a lot longer than the ride down and so as people got margin cold and as they lost a lot of money and there's something called Hooverville's right where people lost a lot of their homes and in the value of the dollar decreased it wasn't even necessarily about the amount of money that was put into the market it was about people's mindsets that things always come up but right it's gravity if something comes up it must come down and you know we saw that with the you know the dot com bubble which obviously led led to the great financial crisis right just because something has a paper value does not necessarily translate to tangible value right that's why startups evaluations it's you know future earnings potential and so if you look at events throughout human history that kind of mindset of it's only going to get better and better and better all technologically that might be true but nothing has infinite value right you have to have that equilibrium that I think most people miss out on is equilibrium also an open is sponsored by Onyx Capital Group the top market maker and oil derivatives they just released the fourth version of the terminal flux and there are two things in it worth knowing if you have oil exposure first it streams live fair value on 800 oil curves including the ones that are hard to mark second it carries their own positioning data so you can see how the market is positioned long and short and at what price they got in you can find it at flux dot live and the link is in the description talk to me a little bit about the strategies your firm runs so our main like thematic lenses is macro and we do macro discretionary so we can do long short equities sometimes commodities in futures but mainly IEI equities ETFs and options and so we take the macro lens as a behavioral finance lens so I want to understand why are countries doing what they're doing how is that going to lead to infrastructure that's currently in the United States so one particular strategy is focused on geopolitics recently we've seen a lot more governments have stronger intervention and their economies China is well known for this the United States is starting to buy equities again which the US has invested in private companies before post World War II so it's not actually the first time it's happened and so understanding to the degree that we can well what is the government thinking we see certain laws that are passed and you go into these laws who were the winners and who were the losers who is making these political donations right where is the money going and then are those Congress members you know buying the said companies that are are there for backing them so these like trackers which you know people can access which is not it's not too hard to see now but it's not necessarily about the exact companies in the one tangible reason that these politicians are buying them it's like okay what is the underlying thesis because it's not just about one company right isn't about an industry so defense right we've seen a massive increase in defense expenditure Germany released a massive new defense plan the United States as of recently requested their largest defense budget ever at over I think one and a half trillion dollars for 2027 but defense has always been a thing it's not like a new hot button issue and so people that are looking too much at current trends right versus historical trends that I mentioned earlier are gonna miss out on the waves that are building up for a long time so it's historical data with geopolitical influence based on industries that have done well and will continue to do well based on the government's backing one strategy being understanding geopolitics and seeing who's doing what what are some of the things you do personally to enhance that sort of sharpness that allows you to see the forest for the trees and so it's a great question in a world where information is more abundant than ever before it means that the specific pieces of information that you digest have to be increasingly more credible and increasingly more important so for example you know a lot of these cable news media are becoming increasingly less interested or less interesting excuse me by the general populace which means podcasts like this one for example where you bring on guests that are experts and are sharing their honest opinions can be tangible pieces of information at the forefront and not and the ivory tower policy to your point about you know seeing the forest through the trees and so I think getting in the weeds of it I want to understand what people on the ground floor are talking about so Eli Lilly was an investment we made and so I wanted to understand why or GOP ones so important by what was the missing factor for why they could be better than like a Nordisk was because women between the ages of 40 to 60 that wanted to lose weight found a way to do it and if they have the resources they're going to buy a lot of it and so the interview process conversations like this understanding what is the other side looking at and not having inherent biases that say because this is my viewpoint I'm correct right and so it's that continuous learning process interviewing people on the ground floor that will continue to allow us to operate in a way that lets us beat the market so give me the A to Z you want to do work on a name you have this broader geopolitical context you have a macro view let's say you get an idea how does that idea become an investment so from a top down approach you want to focus on where is the world going and obviously there's a lot of different factors that play into that we call that the fracture world right domestic inbound so the first thing honestly is if we're investing in U.S. equities what companies are turning their infrastructure inside the U.S. so from a basic lens it's okay what are these super large companies is becoming domestic in terms of their manufacturing they're AI infrastructure investments their talent pools etc so we start there and then we see what are the industries that are necessary for the economy to do well so healthcare as I mentioned for example finance defense even retail to accent rates so people can buy goods and services so then we look at what are the companies right that are in those four industries that fit the profile that we just talked about where they're bringing domestic inbound and then we look at research and development we want to understand where they're putting their money to the extent that we can so when you look at reliable sources of news so I'm listening to their earnings calls I want to hear from the leadership what are they thinking and why are they thinking that so that's how we find like in the Lily or like an Nvidia and tech etc and then from there we look at the financials I want to understand are they cash profitable right a lot of the what they call circular financing that's happening inside of tech means that at some point if something goes wrong those companies are basically gonna have to either bail out each other or pull all the deals and kind of consolidate into their own balance sheets which is obviously that's a whole no other can of worms and so are they cash positive right are they investing in the right infrastructure and then the management teams is their experience relevant if somebody is at Nvidia right and they have a their systems engineer that understands GPUs that is gonna be a better tale of how they're gonna do than if the person was at Walmart right and selling some kind of good and okay maybe they had senior leadership at Walmart but industry specific is also very important and then as we continue to break down those layers obviously AI allows us to do all this information pretty quickly and then it's understanding okay does this company have all of those factors that we checked and are they are they fundamentally sound so also what did the people think of them right are people talking positively about this business consumers I've never invested more money into the US economy than ever retail investing is at an all-time high and so the sentiment from the mass which before was maybe disinteresting to some of these firms is becoming increasingly relevant especially after game stop and so that's honestly the kicker that I feel like a lot of these larger firms sometimes miss out on is it does matter where the money is flowing but it's not just necessarily institutional right it's all sort of retail are there any non-consensus indicators that you use at your firm to determine whether something's a good investment that's a good question it's hard because alpha is obviously temporary right one strategy is not necessarily gonna last forever so the principles I mentioned before are the ones we mainly focus on but a non-consensus indicator is honestly case dependent so in the data center right for example like a company I would be very interested in is the HVAC business that has the partnerships with a lot of these companies right so okay if they're the cool excuse me cooling system for most of the data centers let's say in Virginia that company is going to be a lot more interesting to me so one of the non-consensus I guess to wrap it up is the non-sexy businesses. A lot of people are falling. the trend. We saw that with a recent hedge fund that had a bad experience, right? And so we see that, okay, what are the things that people are missing out on and why are they missing out on it? Right? I'm not necessarily trying to find that one gem or the one diamond in the rough. I want to find the company that can relate to the entire mine in a way that is more of like an operation efficient business related to each party, but it's neutral too. I want to find the company with nuance. So I want to find a company that's not very polarizing. That's another non-consensus indicator we use. Right? Are they going to have a ton of flak from large enough parties that could hinder that business? Or are they going to be in a broad enough light and well respected enough by the players in their industry? Well, they'll be propped up by those businesses. When you talk about companies like that, you just laid out, I can't help but think about how you view crowded trades, crowded trades tend to go up. You know, they on average momentum as a factor works, right? I reckon if you buy what's hot in general, it will pay. Obviously you will be hit with some brutal drawdowns occasionally, but I think over a long enough time arise in you win. How do you view your opportunity set for names that you buy? So to your point, momentum is a huge factor. And the two words I would use that would allow as a momentum investor to continue to do well is risk management. A lot of the time to what I talked about like during the Great Depression or the Great Financial Crisis, right? You know, money keeps making money, which keeps making money, and people think it's not going to stop. Oh, obviously it has to, right? That's human nature, and that's the, like, loss of nature itself. And so, you know, continuously taking profits, continuously moving up your stop losses or your max drawdown. And so following the wave, right? If I'm up, let's say 100% on investment, which is amazing. I'm not going to have 100% of my initial investment in that, right? I'm going to have continuously taken profits or taken gains throughout that entire process. And so when your momentum investing and following the crowd, right? These things do well, but it's understanding that there are limits to liquidity and eventually these big players are going to take their wins. So you just have to be willing to risk out on the gains in the future, the potential gains for realized gains. Right? I would always have smaller amounts of realized profit in the bank account than tons of potential unrealized profit that could turn at any point. What does your risk management process look like? So it first starts with our due diligence, right? As I mentioned about the thematic investing. And then there are certain controls in place, right? So you have like a max drawdown percentage. We have every single trade has to have a certain stop loss. If we lose X amount of money a day in certain trades, right? We just, we take a break. And so we have to be very specific, though, and we can never break our own rules. That is the one hard definition. I know some people bend the rules and other industries, but we are not allowed to do that because not only do we have responsibility to ourselves, we most importantly have responsibility to our investors in our constituents, right? We're stewards of capital. This is not just for lack of a better term game. And so if we understand that we have to follow strict protocol and the protocol obviously is what we set us with the parameters I mentioned before, it will allow us to continue to do well because we're going to understand there's not another option, right? And if markets shift and if things qualify for different, you know, parameters, we have an investment committee, we meet with them, you know, we make sure that we're in a consensus. But we do not allow individualistic ideologies to push or break these rules. There has to be a general consensus among our experts because once you start going off on your own in a system that's meant to be used together, you create problems really quickly. And then that's when it starts to to double down and create a very bad windfall. What are the rules you hold yourselves to? So one of the rules that I think is the most important is never do anything on your own. And what I mean by that is if we have an idea, ask other people about it, whether that be a trade, whether that be a thesis, whether that be a meeting, maybe you're not necessarily familiar with with the investor or the LP. I know a lot of large hedge funds that are like pod structures, right, are like in your pot. You're like maybe unintentionally competing with other pods in the business. But since we're a lean team and we're small, we want to make sure that everybody else has everybody else's back. And so when I'm looking at an angle of, okay, if you know, one of my partners says a really good idea and maybe I have a different idea, we're not going to butt heads over it and create an argument. We're going to come to a consensus and make sure that what we're doing makes sense in the context of the firm itself. What's the structure of the firm? It's a multi-stretch. It's not a pod shop. Tell me about it. So you know, the multi-strategy can be certain equity sleeves or certain option sleeves, but obviously it's within like one fund, right? And so that allows us to kind of have sleeves that help each other write hedges, obviously. So we have, you know, the CoCIOs, you know, my brother and I, and then we have, you know, quant analyst, and then we have a fundamental analyst, and then obviously we have a trader. And so since it's a lean team, it means ideas are shared quickly and efficiently, right? They're all in person with the right, you know, computer materials and IT and everything. And so communication is the most important. And so that is like the number one rule of our firm and how it's set up as you have to communicate. Even if you're ideas right, if your idea is wrong, if you're unsure, if you're sure, you need to make sure you're sharing what you think, because you know, they say two heads are better than one, especially when you guys can combine on similar ideas. So then from an investing standpoint, right? You have the investment committee. If you want to play certain trades, you know, you talk about the parameters that fall within the firm, and then that's how we determine that's an equity's position, ETF or options position, and our main multi-chrategy approach. So what are the different sleeves? So we have like a long short equity sleeve, then we have, you know, like an option sleeve, or we're taking more leaps than swings per se, and then we have kind of an ETF, I'd say, even more like basket approach, I should say, because the equity sleeve is, you know, 25, let's say individual names. And then on the ETF kind of bundle side, we're seeing, okay, what are the themes that we like overall? But maybe those names in the theme are not ones we have super high conviction on that specific company will do well, but as the industry as a whole, we're very confident on. And then on the option side, you know, that's when we have these leaps or companies that we're confident in that maybe we also have on the equity side that we want to have a little bit more leverage, but that's our smallest holding on the option side. Who manages what? So I'm more on the option side, so like, and then my brother is on the equity side, and then the analysts we have are focused, the analysts is focused on the ETF side, and then obviously the trader and the quan help position all of the above. And that allows us to have, let's say, an expert in a specific sector for all three of us, but then at the same time, we're never alone, right, because the, the medics we're investing in or the macro views we have are still, we all come to consensus on. And so since I really enjoy kind of the options, you know, we're not taking out a ton of leverage per se like a lot of margin, we don't do that. And since my brother is very good at like individual company analysis, it helps us cross-check each other. And then the overall profit of the firm can be higher, because like I said previously, we're not fighting each other, we're not trying to say our ideas the best, we're just trying to understand. And the overall lens, what do we agree on, and why do we agree on it? How correlated are each of those different sleeves? I would say they're decently correlated, because I'm not necessarily trying to have one industry be completely different from the other, but at the same time, right, I'm not going to invest necessarily in the exact same thing every time. So if, you know, we're more heavy into AI on the individual equity side, maybe we'll have some of that on the ETF side, right, but at the same time, we're going to be more into healthcare or, you know, finance or some of these other industries. So we are more, we're very strong believers in like American dynamism and the American economy overall. So the most general consensus is going to be American-based businesses. And obviously, there's other parts of the world that are interesting to us too, but the strongest correlation, even if it's not sector-based is mostly American businesses. If you were to boil down the ethos of the firm to one principle, one underlying belief, what would it be? Never be complacent. And your inherent biases will be your biggest weakness. A lot of the time when you see some of these big funds that go bankrupt is because one person, whether they'd be in charge or not, was so headstrong and an idea that they ignored the feedback of others. And they were too focused on what they wanted to do and to be right. And so complacent. agency isn't necessarily just, you know, stopping what you're doing, complacency, and being, I don't even want to look at other opinions. And I'm comfortable with what I'm doing enough to make an aggressive decision. And so an art principle, it is always be intellectually curious. Financial markets are very interesting because there's always something new every day, every hour, sometimes every minute, right? And so if you're always wanting to learn and you're always willing to look past on biases you may have, but obviously we need conviction, right? It will allow the firm to continue to grow. So even if we don't do well in performance per se, let's say like a month or even a quarter, because we're continuously operating in a model that means we have to learn more, and we can never be stuck in the values, or I should say, in the macro or thematic ideas are focused on, it will allow us to keep growing on a growth intellectually of the firm. Are there any operational things you've done and have put into place that you think will yield unbelievable benefits in the future? A book list. A reading list. We have certain books, like I mentioned, principles by Radalio and some other novels and literature that I think is really important. Obviously, AI is great when it can summarize things, but reading is, honestly, one of the largest brain foods. That is somehow becoming a little underappreciated in the age of new technology. So we have a book list that we say, you know, you all should read these, let's say it's 10 books, for example. And then it will allow that intellectual curiosity to continue. And then another one that is not as interesting to most people, actually, is mindfulness, right? You need to be able to be present in the moment and control your reaction. Because if you are maybe losing on a trade, you don't want to potentially double down if it's not a good idea. And so if you're present of your emotions, which, you know, people take for granted, because we're a macro firm, right? We have to control that with the combination of being intellectually curious, right? From reading these novels, you actually have a unique combination of not only am I in tune with myself, but I'm in tune with how I think and how the people that have done it the right way think. And then when you combine all that information, it allows you to have the fastest chance for growth intellectually, because everybody else is on the same mindset of we have to focus on our own mindset, our own beliefs, so that it will allow us to collectively operate as a better team. What does mindfulness look like to you? Mindfulness is being present in the moment. It doesn't necessarily have to be listening to meditation from a podcast. It could be if you work out a lot. And then you're able to understand where you are and appreciate where you are and focus solely on that task. That's an example of mindfulness. I'm, I'm a violinist. So for me, mindfulness could literally be playing the violin, right? Which may not necessarily relate at all to finance, but it's that brain growth and that ability to stay in the moment and ignore emotions that may be reactional versus something that may be logical. It will allow it myself to focus on the things that matter most. So if it's, you know, an idea or a trade, and I'm not going to be thinking about, oh, if I made a mistake in the past and I let it cloud my judgment now, if I'm able to stay present in the moment from that mindfulness, then I can figure it out. Of the sort of things you've put into place at the firm, the reading list, the mindfulness, what are the most important? So obviously, in your view, everything's important. Of course. What's the, the 1%, the 0.5% of stuff that everyone listening to this podcast should pay attention to? Mindfulness. Really, it's, and I know it's not the most expected answer. But I think in the context of what we're doing, right? If you're a trading firm and you have a lot of AI models, it's a little bit different. But if you're a macro, and especially if you're a discretionary firm, it's the ability to stay present in the moment that matters the most. The worst decisions that people make are also sometimes the quickest, their reactionary. And so if you have a big firm and you have a trade that is not going very well and you're not able to separate that judgment and your reaction is to do something versus maybe even taking a step back, then the chance of it not going well is higher than if you're in tune with what you're doing. And finance right is inherently mathematical. But people are inherently emotional and behavioral finance exists because the two things quarterly markets are driven not only by algorithms, but by people investing their own money. And so if they have everybody talks about trading psychology, but the biggest thing about trading psychology is being present in the moment. And it sounds simple, but it's hard. I mean, if you try sitting for 10, 15 minutes and just like not listening to music or just trying to focus your mind, it is not easy. But if you're able to do that, then when you're in a tough situation, you're not going to start overreacting or panicking in the same way you did before. And then it will allow you to lock in on that thing you need to focus on on maintaining focus. I have a question for you because when we were having dinner yesterday, you told me how much you were managing. And frankly, I was blown away. You're 22, managing a big, big, big sum of money. You have to build the business. You have to manage your options, leave. Think two things that I, in my opinion, are separate things. They're not, they don't really help the other. How do you maintain that focus on each of those two very important aspects of the business? By having a great team, I know I can't do everything alone. And so I would rather have people I trust than to make all the decisions by myself. So the reason I've been able, we, I should say, have been able to perform well is because the systems we have in place were designed at the advice by some amazing industry experts, even though they're not necessarily correlated, operating and investing are two different things, right? To like what you said, but if I can trust the people on the operational side, the compliance, the, the, the risk profiles, the regulatory filings, whatever it may be that may seem boring, like payroll and office rent, right? Where people say, Oh, that's easy. But any of those unnecessary stress from one side can absolutely bleed into the other. So if I have the right systems and the right people, then inherently I have that trust. And so then I can focus exactly on the investing that my brother and I do, because I know I'm not going to have to worry if we have a redemption request that it's going to be met on time, right? I'm not going to have to worry about us getting kicked out of our office or people being paid, which are things that can definitely over time take a toll on you, but you may not take, you may take for granted in the moment, because it seemed so easy in the beginning. And again, on raising money, you've raised a big sum from some of the wealthiest families in America. How does a 22 year old do it? I think for me, it was authenticity and honesty. What I've noticed is the investors, these families, they care about a couple things most importantly, one is the next generation. I know family offices are becoming increasingly more visible in America. And they're not necessarily about making the most money, but they're making sure that their kids, their grandkids, their great grandkids are taking care of. And so they don't necessarily want to hear from me, who's younger, and I'm going to make them the most money they've ever made. They'll instantly say thank you, but no thanks. What they're going to say is, are you able to be a steward of my capital and appreciate what my family has built and continue that legacy even through a third party? And that has been very successful for us, honestly. And then the second thing is authenticity. People are much more likely to invest in your fund if they understand what you're investing in. A lot of the times I see with emerging managers try to either overcomplicate their investing strategy to make it seem more grandiose than it is, or undersell what they're doing. And so that the alpha they're trying to portray is not quite to the degree that they actually know. So understanding that there's a nuance in the middle between how much I want to share so they understand it and trust me enough to manage the money, right? But not too, you know, undercomplicated where it seems like I'm just following, but maybe a well-known retail investor on X would do. So that that middle ground is surprisingly underappreciated. What are some of the common questions these family office types are asking you? There's a few questions in particular, right? I mean, the common one is, you know, what differentiates you? Right? Where it's like that be age or, you know, your historical knowledge, maybe your strategies returns, et cetera, which all of us see are very important. But to what I said, it's, you know, how will you take care of the next generation? Because the funds that you manage are going to be impacting the amount of capital or philanthropy that the family office can do right throughout the time. And so are you, you know, how long are the lockout periods? How long are the redemption periods, right? Family offices do not necessarily invest for the one, two, and three year, on average, right? They're looking at the five year, the ten year, the twenty year. So it's age in this case can actually sometimes be an advantage because if I'm younger, then I will be with them a lot longer, right, than an older manager. So will you continue to value our investments throughout time, even if you get a lot bigger? And the answer is always yes, right? So every dollar that we're investing is something that we hold an equal value because the whole point of the firm is, you know, that transparency, that credibility, and that that consensus agreement. So honestly, the main question is, right, how will you treat the next generation? And sometimes there's a lot of answers to that, but we've noticed that be the most frequent. Do they expect you to provide some sort of mentorship for their grandkids? And is that part of the arrangement as well? Not necessarily, but I've noticed that if you're willing to offer that advice, if they're willing to take it and show them at the journey that you're going on, and if they want to contribute, it can be an added bonus, right? So every time I meet with them, I offer this because I love teaching it. And there's a lot I like to learn. And so, you know, by teaching and I learn more. And so I think showing that you care, right, it's not just about money, right? The reason these families have done so well is obviously they're great investors, but they built businesses that last in businesses that last have fundamental values, mission, and core theses that continue throughout generations. And so if I'm saying I understand that, and I respect that and I value that, and I want to make sure that if you trust in me, I can make sure the next generations understand the value that I'm bringing you all to them. It makes the conversation go from an inquisition to compatibility and an acquisition of ideas. You've met with plenty of wealthy families. You see how they operate. You see the principles that they govern. You see how they think about wealth. What are some principles that you've learned from then? With regards to wealth creation and wealth preservation that you think are very important. Things people should know. I would say understand the necessity of short term ideals. But appreciate the long term value that compound interest creates. A lot of problems with today's society is the dopamine addiction, right, when you're scrolling through seeing something you like or buying something that you look at, maybe on a TikTok ad, for example. And so obviously it's not very good for our brains. So on one hand, you have to understand that these people are very short term attention spans. And that matters also with investing as we see the momentum investing, right? So that's going to be a theme with these people just buying stocks super quickly. And there are certain apps that make it very easy to do that. And then on the long term side, appreciating that those fundamental values are super important for the firm, even if the CEO is no longer there, right? So you have to understand that short term trends are important. But people historically are also pretty similar. And so over the long time, if you're able to understand the principles of human history and how nations rise and fall, then you're also going to be able to use the short term context and the long term historical context in your investment portfolios across different industries. What does these sort of barbell immediate diet look like for you? And for our viewers who haven't heard of this concept of the barbell immediate diet, the way I see it is trying to understand what no one mentioned about that short term, understanding the cost of what's happening, say X and then long term being more so a reading, deep research, long form pieces. But what does it look like for you? I think it's a mix of everything because there's no singular right answer that matters to everybody. And so I look at both, and it's not having this one source be the truth of all information because inherently that's not possible. And so for me, it's finding the nuance in between these answers and not necessarily always focusing on definitive. I think mistakes that people make is looking for definitive because then that will agree with maybe their cognitive dissonance. And so if I can find the people that have nuance but is backed by facts, right, I'm more likely to look into that piece of information than say this company is going to do this and it's guaranteed. I don't operate in guarantees as a manager. I don't. What are you operated? I operate a nuance. So I know our turns can be maybe one thing this year and one thing that year. But as long as the consistency of the portfolio, the risk management, you know, how we break things down are the same. That's what matters to me. And so if I'm analyzing a business, it's kind of reading between the lines, right, you have to appreciate the face value. They're operating margins. They're growth potential. They're research and development. But it's also like historically when this company is faced by hard challenges, how do they respond? Right. And then it's valid finding the balance in between those things. So when this company had a hard challenge, how did it affect their cash and operating margins? When they had media appearances, were they just deflecting the problems that they had? Or did they face on those challenges so that their shareholders could feel better and understand where the company is going? So I think living in the middle ground, but appreciating the polarity that these sides bring together. And if you can combine all of that, you can build a pretty substantially successful firm. When you study the top firms, obviously you aspire to be up there. What are some things you think people miss about these firms that they shouldn't? I think they miss the infrastructure. And they also miss the training. A lot of these top firms, Worldquan, for example, which is an amazing training ground, you know, SIG, which has an amazing training program, Change Tree, HRT. A lot of these firms focus on human capital, which means can I bring the brightest and best minds, the tools, the information, the educational training that will allow them to succeed? Right? It's not necessarily saying I'm going to have all my employees completely replaced by AI. For example, it's saying can I have 10 to 15 really intelligent people train them? And then instead of having one trader with AI, I have 15. And so having that operational infrastructure to allow people to learn, feel valued, and then want to grow is one of the biggest things that companies miss about culture. They assume it's just because they're the smartest. They're going to do the best. But it's actually the environments that are created that allow the brightest minds to learn in a way that they find enjoyable. Have fun, but also understand that, you know, these things matter a lot is honestly the biggest advantage. Everyone talks about capital consolidation, everyone talks about how the biggest hedge funds, biggest trading firms own the market, and that it's impossible to compete. You obviously believe that you can be very big, otherwise you wouldn't be betting on yourself. What takes a firm like yours, good size, but in the grand scheme of things, still quite small compared to those guys, what takes you from this point now to hopefully being one of the big five? It is finding the right people to work with and continuously be open to new ideas, but also at the same time, respect that there are some things I can't change. And so, you know, I can't change the fundamental values of the business, or how we operate on a core standpoint, but what I can do is know that as long as I continue to have intellectual curiosity, continue to understand that things change over time, and complacency will be the downfall of our firm, and understand that even though times change, people don't, and as long as I can study those trends, even if it takes me a while, then I will have the ability to continue to grow this firm and raise capital. How do you think about building a personal note for yourself? You talk to a little bit about infrastructure of the big firms, people miss that. I think another thing people miss is competitive advantage of one's own skill set. You mentioned reading, no one reads now, so it's clearly a huge edge, right? You mentioned mindfulness, everyone's addicted to scrolling, another edge. What are some things that you try to build within yourself to create that differential? that competitive advantage and build up a moat around what you can do. - I think it's understanding the culture of the business, as one of my partner says, in the beginning of the day, we're in the people's business and the end of the day, we're in the results business. I'm understanding that while returns are inherently mathematical, there's a people aspect that's very important. So, personality, can you and I have a conversation about investing, or about the firm, or about the macro themes that are going on in the world that make you feel appreciated for your standpoint, even if you're the one investing in my firm. And so, that could look like us playing ping pong. It doesn't necessarily have to be in a boardroom. And so, understanding that serious conversations, but also intellectual conversations, don't necessarily have to be in the most spiffy of places. I think a lot of people mistake the 90th floor boardroom conversations for being inherently a lot more valuable, and maybe the coffee chats. But it's not the environment, like the physical setting that has the biggest impact. It's the relationship we have with the other person, your personality, and your willingness to be open. And so, if you're mindful, like I said, you're able to stay in that present moment, and not necessarily think about, oh, because I'm not in a suit. Maybe they're not taking me seriously. No, it's about the human connection. As AI grows and as social media grows, people will become more displaced. But if you're able to understand that we are social creatures, and that we must appreciate people for who they are first, and maybe what they can do second, it will allow you to grow in an industry that's continuing to be more and more mathematical because it's human nature. And I would actually even argue that that boardroom setting that's suit and tie on, our environments, where people are guarded, it's very difficult to get to know someone on the N90th floor. And on that, on meeting people, on hiring, how do you vet a great hire? How do you vet someone, and really take a step back and say this guy's exceptional. This girl's exceptional. And it's obviously one of the trickiest parts of any business because if you make the wrong hire, you have to go through the process of however long it takes to unfortunately fire them. And then you have to make up all the lost time in the same process. So I know in tech startups, work trials have been more commonplace recently, which I think is pretty good like tankhole materials. I don't necessarily care about how much you know in the moment. I care about how much you're willing to learn for the future and understanding the work it will take to get there. From what I've known as the greatest hires, they may not necessarily agree with me on every investment idea, but they may not even agree with me on the color of the jacket I wear. But if they understand that to get better, you have to be open, you can't be complacent. They're inherently intellectually curious and they're personable, right? They get along with the team, then more likely than not, that hire will be more successful. Even if they didn't have the highest grossing returns or like this unbeatable strategy, which doesn't even exist, right? But if they have those other qualities, then I can get along with them and I can train them and I can appreciate them for who they are and then they'll appreciate us for who we are and then we'll grow together as a firm. - I have a good friend who's a hedge fund manager and he says the number one thing he screens for is just rate of improvement. What are your thoughts? - I mean, it goes in line with what I said. Right? It's that intellectual curiosity. Can you have that exponential curve that allows the person to feel appreciated but also demonstrate that they know what they're doing? And so if they're able to rapidly improve like your friend said over and over again, that's gonna be a great hire. Even if they're not perfect at the beginning, they can get really good over and over and over again. That person's gonna be invaluable to your firm. - This friend of mine, he sees a parallel between great hires and great stocks and one thing he looks for in great stocks is how fast the fundamentals are improving. In fact, if he sees an acceleration, he likes to look at those names and really go deep on them. And then he sees that when betting on people underwriting talent, he sees a similar thing. Are there any investing principles or ideas that you have that have allowed you to take a step back and see interesting things or observations about the world that you think most people don't notice? - I would say the number one most underappreciated asset by big companies is culture. And so a thing that is very well known as Project Aristotle, which was done by Google, and understanding that the teams that are the most successful are the ones that allow people to communicate and share their ideas and environments where they don't feel judged, allows the best companies to succeed. And so if you can understand a company's culture which can be hard if you can't see the underlying business, but even seeing how employees interact with CEOs or how people talk about other employees at the companies that are at. It can be a huge asset even though it is inherently the most intangible thing that you can possibly quantify. - On that, on openness of culture, I see this sort of, I see a contrast between that and the top funds. Your pod shops are possibly the most brutal cultures on the planet among any company. It's intense, but at the same time, a lot of people like that. How do you view those two sides of the coin? - I think just because one egg fits in one basket doesn't mean it's gonna necessarily fit in the other one. And so if you're somebody that's hardwired and you're able to handle that intense feedback and that intense culture, it makes sense that they would go to a pod shop, right? And inherently if that's where your mindset you should follow what you enjoy. And then on the flip side, in my personal experience and my father who runs culture and compliance at a very large state of company, over the long run, the companies that are gonna succeed, even if it's not necessarily in the moment, but over the hundred year time frame are the ones that have that culture that is not based on you're doing the wrong thing every time, but here's what you're doing that could have improvement and like your friend said, that exponential rate of improvement. I mean, in my opinion, I think that that is something that I would find a lot more enjoyable to work in because I want to also enjoy what I do and feel valued for that. And I don't necessarily wanna get attacked or aggressively criticized for something that I may have messed up on. I'd rather have the feedback be constructive and allow me to grow as an investor and a trader as well. What's one thing about yourself that the audience should understand in order to understand you as a person and as an investor better? I am here to learn and to be authentic about what I do. I'm not gonna masquerade pretending I'm somebody that I'm not. You know, I'm not necessarily the most mathematically gifted or the most violent, virtuoso person. But what you see is what you get. And so these interactions, right? I want people to feel comfortable with who they are and allow themselves to share stuff about themselves that maybe they would wanna keep hidden to the public which is completely understandable. But I would much rather be an authentic founder and authentic family member, an authentic friend because in the long run of life, that's the most important. Right, you know, they say people don't remember what you say. They don't really remember what you do but they remember how you make them feel. And in an industry like finance that has inherently clouded in harsh criticism, you know, aggressive judgments. I would rather be the firm that gives a breath of fresh air and allows people to feel comfortable in authentic and honest, even if at the same time I'm not the highest performing hedge fund every year for the next 50 years. - I love it. Another thing that blew me away about you was you were actually a professional violinist. Talking about that and do you see any parallels between being a violinist and in investing? - Thank you for the kind words. I certainly try my best. You know, I started playing when I was three and a half. My mom and I joke that I was in, you know, pre-K. I looked across the room and I saw a stand with the guy with a violin. I was like, "Mom, I want to play that one." She's like, "Okay, no, you know, like you're pretty young "but let's try it out." And so I think the correlation is not necessarily about the instrument itself. It's about why I play it, right? It's a way for me to express emotions and authenticity and, you know, also having a regist structure, right? Like reading music. music and hearing it, and so it makes me a better investor because it's always about constant improvement. There's always something I can do better, a certain note that could be more in tune, a certain shift that can be cleaner. And so from that correlation, it's the same as investing, right, that rate of exponential improvement. So musicians are magic players, you know, magicians, and things that maybe don't appear as interesting, like solving your Rubik's Cube, which is cool, right, but maybe you're like, "Oh, how is that related to investing?" But it's kind of allowing your brain to grow from all angles, like your left brain and your right brain. If I give the intellectual curiosity and the brain food that will allow me to grow as an overall individual, whether that be music, or, you know, Rubik's Cubes or digital art, I think that will give you an inherent edge. As an investor, because you'll have more of your brain you can literally use to understand these problems. Do you like to look for people who have that, when you hire them? Absolutely. I think it also gives a unique story, one of the business partners I've been talking to is a former professional baseball player, and it's interesting, you know, they went from a professional athlete to a hedgehog manager, and they're crushing it. And I think it's the ability to differentiate, not just your work, but the things you enjoy in life, because sometimes those things can correlate more than people realize. If you have a home life that's very stressful, or family members are not feeling well, or friends are not doing well, it's kind of kind of bleed into the work you're doing, even if you don't intentionally do that. But if people are multifaceted and multi-talented, and are used to having stress in different areas, but can appreciate their life as a whole, it will make them operate as an investor, or as a manager, or operationally, at a higher level than if they didn't have that initially. I think there was a thread or a tweet about Steve Jobs that I saw a couple months ago, and it stuck with me, because it was trying to dissect his creativity, and his genius. And when you really look at anyone who has been able to come up with something differentiated, you know, differentiated output, their inputs were differentiated as well. And so you look at Steve Jobs, he's a guy who was a super high IQ hippie that was fascinated by computers, like what the fuck is that, you know, it's ridiculous. And I think in some sense, and I think Josh Kushner is a great example of this, he tries to cultivate a differentiated set of inputs all the time. He's a venture capitalist, but he's fascinated by calligraphy and all these different things, and I think in some sense, now obviously you're so very young, and you haven't achieved that level of success at all. But I would say you have a very differentiated set of inputs in that you're still a college student, you're building this great firm, hopefully, you play the violin professionally, are there any conscious things you try to do in order to maintain differentiation in your ideas? I would say being open to new possibilities is the best way for me to find differentiation. Even if there's something I think that may be right in one lens, it may not be right in another lens, and that lens that I wasn't looking at before, may be the overall thing that makes an investment not as good as another one. And so obviously you have to have conviction, right? You have to say, okay, I know that this industry, from the research I've done, is the most optimal for this investment strategy, which is obviously very important, but at the same time, if you're super tied to biases that you've built, then it won't allow you to look at other possibilities that may be better for you in the long run. Final question. An on differentiation. What is the single biggest differentiated thing about yourself would love to hear it? Be curious. Life is long. Always be willing to learn new things. That's one thing I really love about my life is conversations like this, new questions I'm asked. It's like neuroplasticity. Your brain is always learning. It's always developing. So if you're curious, if you're authentic in your humble, I think you'll find you'll have a pretty awesome life, and it'll make you a happier person, and it will make you better investor. I love it. Thank you for coming on. It's on open. This was awesome, man. Thank you so much for having me. I appreciate it.