Gregory Zuckerman | Jim Simons, The Medallion Fund & The Man Who Solved The Market

Youtube - https://youtu.be/uPU6hJsvMcM

Curious Worldview Newsletter - https://curiousworldview.beehiiv.com/subscribe

Gregory Zuckerman is one of the Wall Street Journal GOATS and as well has authored plenty of wonderful books. He pulls back many of the hidden curtains of wall st. The big egos, the big enigmatic personalities, and naturally as well, the big brilliance behind these masters of the universe types. None for emblematic than Jim Simon’s, the central character of todays podcast.

Theres a podcast called, Acquired, which did a fantastic episode of RenTech (if you want more), the boys over there also relied heavily on Greg’s work to put the episode together. 

00:00 - Gregory Zuckerman
01:27 - Secrecy All The Way Down
06:27 - Acquired
08:02 - Obscure Datasets
15:07 - It Will Take Longer Than You Think
20:04 - Jim’s Eye For Talent
22:27 - Discoveries From Within RenTech
28:54 - Greg's Admiration For Jim & 50+ Year Olds Making It
35:27 - Nassim Taleb
39:01 - Consequences Of Size
41:47 - Acquired Podcast & Bob Mercer
44:07 - Politics Infecting Interpersonal Dynamics
46:07 - Super Quants Can’t Recreate RenTech
50:47 - Journalism As Sales
53:17 - How Does One Conduct A Good Interview?
57:37 - The Most Important Question About RenTech Noone Asks
59:13 - Decline Of Journalism
1:11:14 - The Role Of Serendipity In Greg’s Life

🍻☕: https://www.buymeacoffee.com/ryanhogg
Follow me on Instagram – @ryanfhogg

Transcript

SPEAKER_00 0:00

Forgive the long hiatus everyone. This is the longest period I've gone without publishing an episode since the podcast emerged in the late embers of 2020. The pod's been top of mind constantly, but I moved country and back in Australia, and therefore between that and my job have been overwhelmed with things to do, but thrilled to say the bi-monthly or more cadence is back. And I couldn't be more thrilled than to start the year off with none other than Gregory Zuckerman. Greg is one of the Wall Street Journal GOATs and as well has authored plenty of wonderful books. He pulls back many of the hidden curtains of Wall Street, the big egos, the big enigmatic personalities, and naturally as well, the big brilliance behind these Masters of the Universe types. None more emblematic than Jim Simons, the central character of today's podcast. I wrote to Greg last year in the hope of speaking with him about the book, The Man Who Solved the Market, which, although it's a story about Jim Simons, is more a wonderful tale about a group of academics who created the closest thing to a money printing machine that humanity has ever settled up alongside. There is additional material to this. There's a podcast called Acquired, which did a fantastic episode on Renaissance Technologies, which is the firm that Jim Simons and co-created. And for that podcast, principally the boys also relied heavily on Greg's work to put that episode together. Greg really got unique access to this firm, which the entirety of Wall Street or anyone who manages money in the world was extremely keen to understand. And so, with all that out of the way, here is Gregory Zuckerman. There was a lot of pushback to having the book written at all. And I listened to you say on an interview recently how you'd uh since lost your sources at Rentech since 2021. So how did Jim, Rentec, and the key players take it for after being published?

SPEAKER_03 1:43

So some were fine with the book. I met Bob, I'm sorry, Peter Brown, who's the current CEO uh at an event, and I went up to him afterwards, and he he kind of turned pale and sort of nervous and awkward, and it was weird interaction, so he didn't seem to like it. But Jill was fine with the book afterwards. At first I knew he had a little couple issues with it, but then um seemed to get over them. So I've seen him, I saw him at a few events. He passed away, sadly, uh earlier this year. But um by the end we had a good relationship and he seemed fine with the book, so that was good.

SPEAKER_00 2:20

Well, what were the reasons that they didn't really like that it was published?

SPEAKER_03 2:24

Well, part of it is just their inherent secrecy, their inherent need, or that what they feel is a need for secrecy. They that that's just part of who they are, part and parcel um their nature. Um because they don't they've got what they think is a really successful and um money-making system, and they don't want any hint of it getting out, any details whatsoever. And then their big haul thing is, you know, why? They don't they don't raise money, they don't they have these outside funds, but it's not a real big focus of the firm. They're already wealthy, they want to keep getting even wealthier. What why do they want to be written about even if that something gets out? So they don't like to be talking to other people, and there's not inherently uh extrovert people, they don't like the attention, they don't go on CBC and all that kind of stuff. So, yeah, they didn't want the last thing they wanted was a was a book about them.

SPEAKER_00 3:16

And they're signing lifelong NDAs to join uh the firm. How much of that was a hurdle for you to get around just to find sources uh at all? It was awful.

SPEAKER_03 3:25

It was a it was a I still have nightmares thinking about writing that book. It was really difficult. So listen, you know, I did it's a crow it's chronological in nature the book. So I started off talking to people about the early days and getting a lot of really good stuff. And I was and that gave me encouragement, uh, made me optimistic I could actually write this book. But for a long time I wouldn't even cash the advance I got because I wanted the ability to give it back. And then slowly, because even when I was getting really good stuff about the early days and even in the middle period of of Renaissance existence, I was like, why would anyone buy this book i i if I can't tell you what's going on today? And I can't and why would someone who works there today talk talk to me? I mean, there's no upside, there's only downside. You could lose your job at the most successful hedge fund in history. So that gave me nightmares. Yeah, you're bringing back uh period.

SPEAKER_00 4:19

Yeah. All right. Well, just to make it even worse, uh how much do you lament the fact that people were disappointed that you didn't get these key secrets to the algorithm and exactly how they're doing it?

SPEAKER_03 4:31

So it's funny. The reactions were largely positive to the book. It's done nicely, people have reached out and the reviews are good, etc. But yeah, there's a segment of the readership that's like, Greg, I want the formula. You didn't give me the formula, you didn't let me make millions or even billions. How do I how do I read a book about how the man who solved the market was like, tell me the formulas, how he did it. Part of it I do regret, and I was gonna do this for a paperback, but we just haven't done a paperback yet. Uh it's in the book. All the secrets are in the book. There are a series of things, there are a good 20 or so of them that make them unique as a firm, that they do better than everybody else. They have their advantages, etc. I just don't lay it all out for people. You have to kind of pick them up here and there along the way. And I I do regret that I should have kind of had an appendix. We're here, Simon Secrets kind of thing. When he passed away, I did do a story for the journal, which distilled it into a few of them. So I I yeah, I I've had I've heard from like like I heard secondhand Steve Cohen, um, the SAC or quite 72 fund managers, like, well, why would this book didn't give me the formula? I want the formula. But most senior people get there's not gonna be a form. And then the point is also, even if there was a formula, it it's it's it's valid today, but it won't be tomorrow. So what's the point of even having it in there? So instead I focus on their approach and how um they built the firm and and what they do differently and how they hire and the leverage and all things which I think are a series of advantages that they have.

SPEAKER_00 6:11

Like you said, um potentially for a paperback edition down the line, but like laying out a few of the key things that make them such um so exceptional as a firm. I thought Acquired did a terrific job at uh pretty much exactly that.

SPEAKER_03 6:24

Uh yes, the Acquired Podcast did a nice job. It was um a lot of it sort sourced, and they they were kind to do so from from the book. So, right, that underscores that point. It's in the book, but you you kind of have to kind of underline along the way and pick it out. And and also I think I wrote it as a narrative, so I would I wanted it to be enjoyable for people, but there are others who kind of don't have patience for narrative. They just want uh the list of how they can make money at home, you know, do this at home kind of thing.

SPEAKER_00 6:51

So uh are you allergic to some type of whether it's a long form article or another book, you know, 10 steps to invest like Rentech.

SPEAKER_03 7:01

Yes. You know what? Because I don't think it would be fair to the reader, because the average person you've been thinking twice about. If if anything, the lesson from the Rentec experience is to go the opposite direction. They're short-term, they're not high frequency, but they're medium-term frequency, seconds to seasons is what they say that their holding period is, which I think is more or less accurate. So that I think the lesson for the average person is don't do this at home. Don't try to be like Ren. Well, I don't think so I wouldn't feel comfortable. Yeah, could I sell some copies? Sure. But I don't think it'd be appropriate to to teach you how to invest with them. There are some principles and lessons for sure, but management. I mean, my my book's as much a management book as it is a a trading and investing book. So there are all kinds of those lessons that I'd be comfortable sharing with people. Yeah.

SPEAKER_00 7:47

I I I just imagine I think something super cool about um the way that they've decided to create this company and is the acquisition, the uh cleaning, and then the analysis of the most obscure data sets, right, that you wouldn't actually think are relevant. And so I just wonder if you ever observed or coaxed out of gym something extremely obscure, seemingly irrelevant, that might um be interesting to know about.

SPEAKER_03 8:19

It's a good question. So, in terms of observing, they wouldn't let me come close to the firm itself. Um I've driven by there, I've been around the block in the area and met people who who work at the firm and got close. But the cloth the only time I got inside the sanctuary, as it were, was Jim's office, but that's in New York, and that's um he d he does uh philanthropy there, and he's still this was before he passed away, obviously. And and he um managed the firm from there to some extent. So, yeah, and and what what I observed there, well, I had to, you know, deal with all the smoke in my face. I mean, the guy was a chain smoker to the end, more or less. He's a fascinating guy, just he was just unique uh in this day and age to be chain smoking inside an office building. Well, then he's diamond, so no one's gonna tell him to stop. Uh so yeah, that kind of what jumps out at you when you meet him the most.

SPEAKER_00 9:16

But you never, in some um, side comments, casually in conversation, they mentioned, oh yeah, we just acquired, you know, the price of salt in Sweden to de-ice the sidebarks. Uh it was a really hard data set to get. You know, just something like this that would give you an instance for the the the impossibly large mountain of data that they're putting into these various models. No, I didn't.

SPEAKER_03 9:39

The only thing that people emphasized with me, people who've worked there in the past, and people who work there today, is that Greg, if you can think of a data set, we've purchased it and we've tested it already. So it there's just no potential data set that they haven't thought about or or looked at or acquired.

SPEAKER_00 9:58

Aaron Ross Powell And no sense you could get for what their cost of data was, how much they were spending on it, and where they were even getting it from? Like who are the people out there sourcing it? Yeah, yeah, it's an unli un unlimited budget.

SPEAKER_03 10:10

Listen, their ability to obtain data, but as you note, clean it for a long, long time distinguished them. They had data going back centuries. And the way I kind of look at it is let's say you wanted to build a library. Um, how long would it take you? I don't know, a few months to to buy everything you needed for the library. But what if you wanted to build uh the Library of Congress here in Washington? There's there's rare stuff that you you you can't purchase, and that they do have stuff that goes back centuries. But but and it gives them an advantage, but it's not as big of an advantage as it used to be. But the the cleaning they were early on, and frankly, that wasn't Jim. That was Stanford Strauss, and he kind of said, Well, geez, what's with this aberration? What's with this data? It looks odd. Let's check it out. So a lot of the the his success, Jim's success was thanks to others and through good fortune. It doesn't take away anything from his accomplishment, but they stumbled into some of it.

SPEAKER_00 11:08

Yeah, that that's a that's a great point. I I asked several uh former guests um in anticipation of speaking to you, you know, what was something that stood out to them for the book or what was something they would love to know from Greg. And one of them was Victor Haghani, who was one of the co-founders of long-term capital management, and he said um the same point, like put the emphasis on some of the other guys because Jim Simons takes all the air out of the room because he's such a charismatic guy, you know, rode his bike down through to Columbia, had a carpet business, you know, and ends up becoming this, you know, forced billionaire philanthropist, everything else. But around him, there's just a bunch of tens as well, seemingly.

SPEAKER_03 11:41

Yeah. So listen, my book is titled The Man to Solve the Market, but it's a little bit misleading, and people have noted that too. It's just a good title. Uh, half the book is about others who Jim surrounded himself with. Now, Jim gets a lot of credit for that because he identified talent really well, got them to work together, which is one of his skill sets, um, genius, I would say, even. Um, created the incentive so that they would be encouraged to work together. So that's kind of why I'm not uncomfortable with the title. But yeah, half the book is about others, and Jim would be a successful manager were it not for these other people, but wouldn't be the greatest investor, slash, trader, moneymaker Wallfield has ever seen.

SPEAKER_00 12:27

No. In as layman language as possible, what are these PhD mathematicians doing?

SPEAKER_03 12:34

So it's interesting. On the one hand, their work, their academic work, I could never understand. I can I can understand, you know, uh, I could have a vague sense of it, but I I can't tell you what they did back in Stanford or wherever they came from in physics and such. When it comes to Renaissance, it's actually a little more simple in some ways. There, it depends who they are. They are some are frankly looking for data sets and testing data sets. It's a little bit beneath them, and yet it's a challenge. So some of them are collecting data, some of them are analyzing the data, some are looking at signals, testing signals. So, in other words, I don't know, for whatever reason, a lot of what they do is relationships between investments. So they've identified some odd quirk that on Tuesday afternoons, these two chairs seem to, for whatever reason, go in opposite directions. You and I would say, seems random, seems like luck to me. They will test that. So you'll have some really accomplished physicist, uh, astronomer, not astrologer, astronomer, kind of test that stuff. And you say to yourself, well, really? I don't know. You know, they were doing groundbreaking stuff in academia, and now they're testing a potential new signal that'll add, like, you know, incrementally to their overall system. And yet they find it challenging enough. Partly it's the the money you can make, but there's an intellectual challenge involved in there as well. And they'll come up with incremental ways to improve their system, and that's a big accomplishment for them.

SPEAKER_00 14:08

So they find the quirk on Tuesday afternoon, these two companies move apart. Do it is does the only thing that matter to them is identifying this quirk exists, or is it super important that they understand why it's happening as well?

SPEAKER_03 14:20

So I wouldn't say it's super important to them. They will put some money on the signal even before they understand why it's happening. They call them non-intuitive signals. And as long as it happens enough uh to be uh mathematically reliable, and they've determined that it's not random, and yeah, you need mathematicians to figure that out, um they will put some money into it. But then, yeah, the super smart individuals will, scientists, mathematicians will try to figure out well why is it happening. So it's not something they're uninterested in. They they do want to know. Then they could put more money into it once they figure that out. Aaron Powell Does mathematically reliable just mean more than 50% of the time?

SPEAKER_00 15:03

I'm not sure. But I however they determine it. I wish I knew. It it took over a decade before Jim was killing it. Um, from leaving academia uh to having something undeniable in the Millennium Fund. There's you know, there's pretty much a decade in between then. Is that timeline correct, more or less? Yeah, although it's dying fund.

SPEAKER_03 15:22

Millennium Fund is another very successful edge. Um It took longer. I I would say even longer. Yeah, in the late 70s, they started this fund, and by the early 90s, they had succeeded in commodities, fixed income currencies, but not yet equities.

SPEAKER_00 15:40

So maybe even two and a half decades before he's undeniable, basically. Did you ever speak to him about regret, a feeling of opportunity cost, and maybe even a resentment about the decisions that he'd made in his life to get to this point? Or was he just forever confident backing himself? It's all going to figure itself out.

SPEAKER_03 15:59

I think the way I would answer that is he was hedging his bets to some extent, which Nick looks as a hedge fund manager, meaning that he was doing other things at the same time. He called his firm Renaissance Technologies, which sort of sounds like a VC firm because he was doing a lot of VC investing and he was pretty good at it, frankly. So let's say the late 80s, even around 1990, he still wasn't sure if this trading thing was going to work. And again, he left academia in the late 70s to start it. So he was still figuring out whether this is what he should be focused on and whether it would work. And he had people, smart people, going all out doing the trading stuff, but he hedged his bets with other kinds of endeavors.

SPEAKER_00 16:44

But about it, I get that that he's hedging his bets, but for such a ambitious and previously high status, successful person within academia, and even before that, people always liked him, people always looked up to him, and he was always performing really, really highly. Even though he's hedging his bets this whole time, I just imagine there is a lot of feeling of resentment for some of the decisions I've made that I'm at this point in my life and I'm in my late 30s, early 40s. Did you ever get anything out of him, you know, a little bit softer like that?

SPEAKER_03 17:11

No, I don't think there's any uh regret because he uh had accomplished a lot in academia. He knew he could always go back to it, which he did later in in life. He was making money, and you gotta remember, he loved money. The guy loved making money. He was an academic, he loved mathematics, but he also just his whole life was consumed. He liked making money, for good or for bad, you know, critical or not. And he ended up doing interesting things with it. But the guy wanted to be wealthy, and he was, so yeah. So I don't why would he regret it? They weren't making as much as they could be making, yeah. But eventually they did get that he was still doing his VC stuff on the side and making money there. And the opportunity cost wasn't so high. What was the opportunity cost? His m more exploits in mathematics. He already had done that. He already accomplished that.

SPEAKER_00 18:01

Really? Okay. I'm just imagining um for him, for such a supremely ambitious person, there still would have been a great sense of opportunity cost. What could I have done in the last 10 years in academia had I just stayed there and focused on it and stayed with these incredible people? In academia, yeah, but he really goes down.

SPEAKER_03 18:17

I mean, he stopped doing geometry, but geometry, but he's already one of the greatest geometers over the last couple hundred years. Um, so could he and he also he was getting a little bored and frustrated. There was a problem he couldn't really figure out in academia. He needed a break. Uh yeah, I never got that sense of any. Was regret.

SPEAKER_00 18:35

Was he always money hungry? Something that he strived to have, even uh his whole life. Yeah.

SPEAKER_03 18:40

I mean, he was trading in that while he was doing academia. He was investing on the side, he was um backing some some friends with their ideas. He's he was really a unique uh individual. He uh was an academic, uh, he was a mathematician, he was a a quad, and yet he could talk to you. He drank, he smoked, he had a sense of humor. He was actually interested in in others, unlike most people I write about who who really don't care about anybody but themselves. He he did have an interest. So um yeah, he he was he was a I I he was quite the unique uh individual.

SPEAKER_00 19:13

So the criticism he received from his academic colleagues, you know, how could you go and soil yourself for something as dirty as money and use these talents there? Was that just water for duck's back? He didn't give a crack? Yeah, it was.

SPEAKER_03 19:25

He he's very self-assured, uh self-confident, happy with what he was doing. Listen, he he he he's not infallible and he's not uh a saint. He's uh gone through marriages and uh a marriage and um doesn't always didn't always treat people perfectly, but he had a lot of really uh admirable qualities among them. He he knew what he enjoyed doing, he was intellectually challenged, that was a big goal of his. And so even when they weren't succeeding necessarily or weren't as successful as they eventually were, he was still being intellectually challenged every day, which was one of his goals in life. So yeah, he didn't care what the academics thought about him.

SPEAKER_00 20:05

You mentioned a number of times, and it's a perennial theme in the book, but he was such a good eye for talent, recruiter of talent, nurturer of talent, etc. But there was a a lot of difficulty recruiting people out of academia into what he was doing in the early days. Is there something kind of a bit slimy here that deep down these guys also just really wanted to make a lot of money? And so even though they could front that why would you waste your talents doing something like money? But then Jim shows them, I've actually got a plan that might make us a lot of money, you know, that ends up being the reason they go over, or is there something a little bit more highbrow, you know, the intellectual, the team, the sportsmanship of it, et cetera, that maybe brought them over?

SPEAKER_03 20:42

So for most of these mathematicians and scientists, they didn't join Renaissance for the money, or at least that wasn't the primary motivation. Usually it was maybe some frustration with academia, it takes forever to publish in the world of academics. So here you could create something, you could find some improvement, some solution, and right away see it in action. Um, there was the intellectual challenge, the fact that you're working with really super smart people, colleagues, that um and and they'd push each other. But once they got there and you started getting paid a lot, it's hard to turn that money to down. Yeah. You get addicted to it. And that's what I saw. It's not to say some people didn't need the money and and join, but that wasn't the primary motivation, my my understanding.

SPEAKER_00 21:30

And it also feels like I I'm quite envious of the sort of life and work setup that they ended up having, you know, so much security, so much isolation. Felt it it almost reads like it's a university campus of sorts, uh, but these guys happen to, you know, just make shitloads of money and don't have to do a stuff.

SPEAKER_03 21:47

The thing is the the only catch is you don't publish, so you don't there's no recognition of you whatsoever. You've got to be okay with being anonymous and being far out in Long Island and sleeping away at It's stuff that you can't even can't tell the world about. You can't tell anybody about. You can't tell anybody. You're restricted from it. So those of us who are in the in the public eye to some extent, you know, media and ever and and such, it's like writing and writing and writing and doing really good work, and yet only the people around you, just a handful of people, recognize this. So you gotta be comfortable with that. But you know, you get rewarded for that, and you don't have to do it your whole life. You go back a decademia afterwards, which is what a lot of people do, and publish again.

SPEAKER_00 22:30

Do you uh suspect that there is loads of academic ideas worth publishing that Rentech have discovered over the years, but simply to protect their IP or whatever you would call their intellectual property? I think that's what it is. They can't really expose that to the market, and therefore there could be a number of super some of the best mathematicians in the world there that could be doing incredible stuff in sciences, um, but it's all sort of locked into this box of the Rentec NDA. It's a good question. No one's ever asked me that before.

SPEAKER_03 23:00

Uh, I bet you there might be some of that, but it's mostly ought to make more money in the market. You could publish academic papers related to that. One thing I did explore with him and others is just this talent train. Here you are hiring away all these super smart people from other areas. They could be curing cancer for all right. Talking about opportunity costs, that's what gets me so kind of frustrated and sad in some ways. Not just Renaissance and Jim, but all these firms that that lure away talent. And what's the goal? It's just to make a few extra percentage points. And it's a zero-sum game to some extent. So other people are losing as a result. So wow, what if all these people, Renan says scientists, mathematicians, what if they had focused on curing cancer? They'll counter that by saying, Greg, I can't cure cancer. I'm a physicist or what have you, or an astronomer. So yeah, we'd love to cure cancer, but that's not a good thing. But there's other great ambitions than just curing cancer. Right. And then then they'll say, well, we're I'm making a ton of money and eventually I'm gonna give it away. And a lot of them do. They do good things with it. So that's the other, that's their counter-argument.

SPEAKER_00 24:14

Yeah. I I was uh gonna leave this till later, but it seems like the right time to bring it up because in the uh execution of the medallion fund, whatever they're doing inside of there, presumably they've unlocked a lot of interesting threads that hold society together, move society in certain directions, etc. And the outcome of it for them is to make shitloads of money. But could there also be some deep value to society and what they've uncovered in some senses? We can't know because we don't see on the inside. But you know, like I just wonder ethically how they might think about that if that ever came up in any conversations you had. Well, that has not come up.

SPEAKER_03 24:57

It's an interesting theory. I I'm a little skeptical.

SPEAKER_00 25:02

They've they've uh uncovered any secrets of the universe or how it uh but it doesn't have to be a secret to the universe. It could be it could be some deep insight into immigration policy for one particular country, you know? They happen to find something really good here, but it's locked away in that box.

SPEAKER_03 25:19

Yeah, it it could be. Uh I the only time I did push them is on the Madoff, Bernie Madoff situation, where they, and Jim specifically, became they were investing with Madoff and became suspicious and pulled their money out. And I kind of thought, and not just Jim and Renaissance, but others too, who who pulled there were a lot of people who pulled out of Madoff before it collapsed in the Ponzi scheme, the biggest ever. Well, don't you have an ethical obligation to share your information with others or your observations, your your conclusions about them being a fraudulently run organization. And the way they always push back is, well, we weren't sure, Greg. And what would he have done? We would have told the SEC, and look, um Harry Markopoulos did tell the SEC, and no one cared. So nothing would have happened anyway, Greg, had we warned others. But uh, that doesn't hold that much. You gotta try, no. I don't know, but they they said we weren't sure he was he was running a Ponzi scheme.

SPEAKER_00 26:24

I mean, that the the just hearing it now, I mean, that seems to hold a little bit of weight. Unless you can definitively 100% say this is definitely a fraud, um, you're exposing yourself to a lot of downside by calling someone a fraud when they're not a fraud. Obviously, Bernie Madoff ended up being quite the fraud, but Yeah. Okay, but you could anonymous, not even anonymous, you could you privately Or they call Greg Zuckerman and say, hey man. Or they call Greg Zuckerman and say, Hey man.

SPEAKER_03 26:51

You could tip off a journalist. But but again, again, the kind of argument is people did tell the NCC and they didn't do anything. So who knows what would have happened. Right. You gotta try though, you gotta try.

SPEAKER_00 27:00

Uh so I interrupted you before, I'm sorry. Um, but you were saying you once did have I interrupted you when you were saying they weren't gonna uncover some secret of the universe or something like that. I just wonder if there was a thread that was unpulled there.

SPEAKER_03 27:16

No, I hadn't really considered it. I doubt they have these deep secrets, but now I'm curious. Yeah, now now I kind of wonder I should have asked those those kind of questions. Yeah, I didn't I didn't ask them about that.

SPEAKER_00 27:30

I have heard in interviews, and it also reads this way in the book, but you have a great admiration for how most of these guys sort of had this huge second wind, post-50, something like that. You know, at a time when a lot of the assumption is at least, you know, life is now slowing down, we're on the decline, we're making way for the next generation. But just tell me if this is correct or not. But I feel like you have a deep admiration for someone who is just not giving up and they're happy to risk it all and even change career completely post-50, post-everything else that you've ever done. It's a great observation.

SPEAKER_03 28:02

A lot of my work revolves around older men, it seems like, for whatever reason. I'd love to worry about older women as well, but older men, many of whom had mediocre or unsuccessful or frustrating careers, who finally break through later in life. And I do love that theme. I'm thinking of all the books I've written. Time and time again, you have these individuals who achieve greatness, as it were, later in life. And yeah, I l I love that theme. It gives us all hope. It it shows maybe I I love the the ups and downs and the arc of life. I love reading, and I know I'm writing um obituaries, and people even at the general, they're like, oh, sorry if no, I love writing stories and I love learning from these characters. Yeah, and just what they've overcome, the challenges and the obstacles, and the fact that it takes a long time sometimes to break through. And I love these people that just believed in their approach, and be it Jim or this guy, Harold Ham, who who changed the Americans' energy revolution. Uh, he hasn't like me. He was a key character of a book I wrote, and he got really upset at me afterwards and started insulting me, but I don't care. I have an emirant for the guy who spent decades, he believed that America could produce a lot of oil. No one else did, and very few people did, etc. And he persevered. And yeah, you're completely right. I love that that perseverance, that trait, and that self-confidence. And part of it is I want to learn from these people. So I don't necessarily have that kind of self-confidence. I I believe in myself, but not nearly as much as the people I write about.

SPEAKER_00 29:43

Yeah, I I I sometimes think about like, well, what would it take to have that much belief in yourself in the face of every signal saying you're wrong, it's not gonna work out, you're gonna be another one of these failures down the line. Um, and I'm totally with you on that. It gives me um, if nothing else, just uh a little bit more optimism about a path that I might be taking. Um I'm not doing anything as you know grand as what maybe Jim Simons is or what was it, Harry Ham. He's the fracking guy, right? But I think of a guy like, you know, along those lines is someone like Elon Musk, who is a really divisive character for a lot of very obvious reasons, but you can't not read his book by Walter Isaacson and just think, fuck me. You can't help but just sit back and admire the balls, the total 100% certainty you're doing the right thing when every single signal around you is telling you the opposite.

SPEAKER_03 30:39

Yeah. So I did a book about the COVID vaccines, how they were developed. And it was just stunning to me how many scientists, researchers devoted their life to mRNA, the the the the backbone of these COVID vaccines that that saved us all. And they spent decades on it when people mocked them. They dismissed the approach, don't use mRNA. There are all kinds of good reasons why it shouldn't have worked, why it's it's unstable, the molecule, et cetera, et cetera. And and they persevered. Now, now the only argument, counter-argument to to my approach and the kind of this theme and what and my my embrace of this theme is that, well, Greg, you write about this, it's a self-selecting group. You write about the winners. But for every Harold Hamm or Jim Simons or Drew Weisman, mRNA guy, there are a hundred other guys who believed just as much in themselves, and they failed in the end, and we don't hear from them, and they don't go down in history. And I'm I'm I'm I'm I'm partial to that argument. I understand that argument. Yeah, you know, I don't want to encourage everybody to ignore the experts and go and do what there's they want to do, but I admire those who can can do it in for some years.

SPEAKER_00 31:52

That that's the risk of the greatness and and the risk of saying, fuck you, and everyone is saying no, you're doing the wrong thing. Um there is the most likely outcome is you will be forgotten and ridiculed, and you know, the history will move on. But Simons, you know, if you're Harry Hamm, you have books written about you.

SPEAKER_03 32:11

Yeah, by me. And then um the fascinating thing is so I write about finance mostly. I write about Wall Street a lot. And Wall Street's such big talkers about being contrarian and going off on your own direction and just ignoring the masses, etc. Truth be told, for those in the world of finance, but it's true of other industries too, the safe bet is just to kind of go along and do fine, get your little piece of the pie, small pieces, i as it were, but not to be too ambitious, not to ignore, and to go along with the masses and not to ignore the experts. So, one more reason why I admire those who ignore it all and buck the consensus, but it's not the sanest approach to life. Better to like with the 2008 financial crisis, I've written about, I wrote a book about that. The people within, let's say, a bank who said, guys, there's Armageddon coming, there's gonna be a hundred-year flood, and and and there's gonna be a collapse of the financial system and the housing market. Even when they were right, they were wrong. Meaning, okay, fine, they were right. They made some money, let's say, for their trading desk, whatever. But everybody else in the bank it lost money. So you didn't get a bonus, you didn't get rewarded, you didn't get much appreciation, it didn't really help you that much. Better to go along with the flow if you want like a successful long career. Uh so it's it's it's it's difficult to um if you're the experts in the in the conventional waste.

SPEAKER_00 33:46

Totally. Um just to round out the theme of people above 50 sort of redefining their lives and doing something great. Someone who may be on your radar, I'm not sure. He's not in finance, unfortunately. So I don't know if you can spin a story about him, but if you could, I think it'd be incredible. He's a guy called Jack Weatherford. He wrote a book called The Genghis Khan of the Making of the Modern World. He's written a lot of books, but this is the one that really, I suppose, commercially at least, has been by far the most successful. It's potentially up to a million comments plus. Um so he was an academic, um, anthropologist, I forget which university, but American university, and he's about 50 years old, a little bit older, in fact, and then the ball Berlin Wallfalls, and he wanted to write a book about the Silk Road. So he goes into the former Soviet Union, and uh, as he's doing his research for this book, he sort of discovers, oh, there's this great man of history, Genghis Khan, who himself, Genghis Khan, did not leave Mongolia, where ethnically Mongolians lived, until he was in his 50s. You know, the real hard stuff of his life was unifying the the nomadic tribes before he even left his own geographical boundaries. And then he goes down to history as the greatest conqueror of all time. But um, Jack Weatherford himself, right, he wrote this book in a second career, which will be what he's remembered for after his 50s. And it's um anyway, maybe because I really romanticized that about Jack is why I picked it up in your book and in sort of inflections you've had in various interviews.

SPEAKER_03 35:09

Yeah, I love that theme. Uh there's also a theme that you can accomplish a lot in life, but if you blow it, you have some scandal late in life, or you do take uh blow up your firm late in life, that's what you're remembered for as well. No one remembers all those years of accomplishment. So that's there's a danger there as well.

SPEAKER_00 35:30

Did you ever get to interview Nasim Taleb for the book? I did talk to Nasim Taleb, yes. Where does his worldview leak into the man who sold the market?

SPEAKER_02 35:42

Uh I do not think it does. Nasim Taleb uh worldview lately has been one that I'm very uncomfortable with. Okay.

SPEAKER_00 35:52

Yes, not not because of what he's saying about Israel-Palestine or because of Okay. But can you, you know, remove it? Sorry, sorry. Um no um because he's a consequential figure in the world that you're writing.

SPEAKER_03 36:07

No, I I'm yeah, I'm I'm being dismissive, but unnecessarily so. Uh listen, I did talk to him. I I talked to him a little bit for the book, not doing spend a lot of time. I've talked to him subsequently a little bit. Um but right, I never his worldview, yeah, you could argue. Uh I have to think about it.

SPEAKER_00 36:28

Okay, no worries. Maybe, maybe this question will jog some type of thread. But yeah, would you agree with this assertion that Universa, Spitznagel's fun, but which Taleb is, you know, famously a consultant for, at least I don't know if he still is, but he certainly was at one stage. Um, your great colleague Scott Patterson uh wrote, you know, uh The Chaos Kings, which explores this very well. But would you say that Universa is on the other side of the Rentech coin? Rentech say that they figured it out and they can predict the short-term future more than 50% of the time. This is where their wealth comes from. And meanwhile, Universal, they don't even try to predict the future. They're just exposing themselves time after time to the wild upside of the unexpected.

SPEAKER_03 37:08

I like that observation. I like that analysis. You can make that argument. That's not a bad argument to make the strong argument, yeah.

SPEAKER_00 37:16

Okay, but give me a little bit more than that, Greg. I'll just be like leading questions here or anything like that.

SPEAKER_03 37:20

Although obviously they are, but include your own thoughts in this segment, and people can learn from you as well. Uh listen, the Renaissance team, they don't presume to have confidence in where the world is going, where investments are going, to market neutral funds. They don't even know if their trades are gonna work more than like 50.1% of the time, is the way it was explained to me. So I don't think one can view them as some firm that believes that one can determine the future. And frankly, you know, the the one observation from my book that people have had is well, geez, there's a lot of alpha out there. There's a lot of way to outperform. It's an inefficient market. I didn't take that at all. I kind of came away from my book and the research thinking it's a pretty efficient market. Yeah, these guys have done really, really well time and time again, but they capped they've capped their funds at a certain size. They can't get too big because then it will hurt the return. So that suggests there isn't that much inefficiency out there. And in terms of predicting the future, they get it right only, yeah, just over 50% of the time. They're really good at levering it up and knowing when to put on lever, and that helps their returns too. But I don't think they're opposite sides of the uh the spectrum, the Universal guys and the Renaissance guys, um, they do have differ very different approaches, though.

SPEAKER_00 38:52

Could you actually explain that point a little bit more? Why their funds um it will hurt their returns if they sort of keep growing in size. You talk about slippage in the book and stuff, but admittedly, I actually I never really understood exactly why that would be the case.

SPEAKER_03 39:07

Well, there's the simple observation that the bigger any fund gets, uh, the harder it is to perform. And I've seen it time and time again in my coverage at the Wall Street Journal and my books. I mean, this I wrote that book about this guy, John Paulson, who made the greatest trade ever, made $20 billion over two years, 2007 and 2008. And what did he do afterwards? He grew his fund to like $36 billion, and then his results subsequently were were really disappointing. And it's because of that. So when you get too big, and it happens over and over again.

SPEAKER_00 39:39

But but but is is that is that because as you're growing big, you need to be placing more bets? And so just odds are you're not gonna be as consistent with a larger pool of bets than you might be with the smallest pool, or is there something deeper that I'm missing?

SPEAKER_03 39:54

It's no more um uh deeper than the fact that there's just a certain amount of inefficiency in the market and alpha and opportunity and ways to make money. So you've got 10 signals that work time and time again, but then you add your, and they're gonna be your 10th best. The 10th best. You determine these are the 10 best. They work, they're consistent, they're reliable. But that means but you're saying, oh, you're gonna double the money I manage. Well, I got to start using my 11th, 12th, 13th, 20th best signals. They're just not as good. And and and prove is in the pudding, when Renaissance started these outside funds, their strategies were a little bit different, but still they got really big and the results were not very good. So as you get bigger, you've got to start uh incorporating um signals, trading, trading strategies that just aren't your ideal ones.

SPEAKER_00 40:51

But then why can't you just double and triple down on your 10 best signals? Because even they are limited.

SPEAKER_03 40:58

Even your best signals don't give you unlimited gains. They have certain amounts of returns possible. Let's say the markets are relatively illiquid, um, commodities, currencies, uh, fixed income, they do some trading there. You can't make that much, can't put that much size in a lot of those areas. And even in equities, there's just so much money you can put in some of these shares in the market without moving the prices. There's um this danger you have of of putting on the pro to trade at the wrong time, and they're very, very good at this slippage and they call it the devil and the impact on the market. But if you have too much money, imaging much too much money, you push prices around.

SPEAKER_00 41:40

Uh, Greg, just one or two more on RentecNet. I'd love to ask us some journalism questions, but we'll see how quickly we can get through them. The detail from the acquired episode was that the the boys made this observation that um a lot of these professors in mathematics and so forth, they might not even be able to read a balance sheet. Do you think that's a little bit so hyperbolic, or could it really be the case that these guys managing billions and billions of dollars in and out of the market every single day, they didn't even need the crash course in fundamentals?

SPEAKER_03 42:09

The Renaissance team doesn't want to know much about finance. I mean, I've got an anecdote in my book where Bob Mercer, who was the co-CEO at the time, didn't even realize that Chrysler wasn't a stock anymore that had been acquired. And he in a presentation, he talks about Chrysler this, Chrysler, that. And then his staff is like, Bob, Bob, that's not even a stock anymore. And at one point they kind of talk, he preferred, he said something about he'd rather there be no names for stocks, just have be numbers. So yeah, that that underscores the whole paradox here. These are individuals, mathematicians, scientists who don't even have any curiosity, or I don't want to generalize, many of them don't have a curiosity about business and economics. So balance sheets, no. Listen, will they analyze balance sheets to the extent that they see it it helps them in terms of developing patterns and signals? Yeah, but they don't really have inherent interest like you and I might in a balance sheet and a company and its growth. Some do on a personal level, but a lot don't.

SPEAKER_00 43:11

What's Bob Mercer doing these days? He was a massive, massive conservative donor.

SPEAKER_03 43:16

Yeah, he got burned by all the attention surrounding 2016, and he really helped put Donald Trump in office. And there was a backlash at the firm, which I write about. I mean, my book is about my book is really about how they made all this money, but how it split them apart at one point. So he he and he's a very secretive, kind of quiet, introverted guy. So he ain't didn't enjoy that experience. He's pulled back a lot, and then he ended up stepping down to be just an a a researcher there, stepping down as from key co CEO because the morale was so bad. Uh, I write about that in the book. So he just kind of pulled back and then he left the firm even. I think he's up in New Hampshire, I'm told, somewhere. I'm not sure what he's doing, frankly. Someone out there is listening, let me know.

SPEAKER_00 44:02

I'd love to know. Do you think it's just our sort of um modern political environment that creates giant problems if one person is so radically on the right and their colleagues so radically on the left? You can't sort of just move past your political differences to the point where a guy like Bob Mercer, who's, you know, at the top of the world, he clearly has this feeling about where the country's going and his politics, etc. But because of all the hate he would have gotten from it, you know, he's retired, I guess.

SPEAKER_03 44:35

Yeah, well, I think some people at the firm and elsewhere are able to get past that. Jim, for example, he always liked Bob and he was fine with him and his political views. They had very distinct political views, very disparate ones. But remember, Jim loved money, so Bob and Mercer was helping make a lot of money. But um, it's also the case we have to acknowledge these these are not normal times anymore, and these are not normal candidates. These and at the time, people had these real concerns, and and many do today, about he was leading the country.

SPEAKER_00 45:08

And right, so it's potentially way more consequential than just, you know, a political difference. Uh do you notice that a lot in because you've at this point, what, thousands of firms, you know, really taken a deep dive on? Do you notice that political differences are how rather rephrase the question how often do you find that political differences become the downfall?

SPEAKER_03 45:30

I've not found that. Wall Street is still to some extent driven by PL and profits and losses, how much you're making, returns, etc. Still meritocracy. There's a push away from DEI lately. So I haven't found that. It's usually personalities, wealthy people who are jealous that others at the firm are a little wealthier. That happens a lot. Um and just sort of just not being able to keep up with the market, that usually leaves leads to demise of these firms.

SPEAKER_00 46:06

So I think correct me if I'm wrong, but D.E. Shaw sort of came out of Rentec at one stage. Yeah. And then they were in sorry, just think.

SPEAKER_03 46:15

I mean, you can trace some connections, but no, they were doing their own thing. Okay.

SPEAKER_00 46:19

But D.E.S.haw, Jane Street, uh, Citibank, they are all doing as much. They all there are departments within those companies that look as much like Rentec as they could possibly make it. Is that a fair assessment?

SPEAKER_03 46:34

Some of these places have pockets where they do this medium-term, not high frequency, medium frequency trading, PDT, uh a little bit of two sigma, a few hedge funds here and there, not as many as you would think.

SPEAKER_00 46:49

Aaron Powell But the the reason for me asking the question, and forgive me because I know this is something you probably had to answer a million times, but I just wanted to get my chance to ask you myself. You know, having seen that these firms can identify from the outside what a strategy looks like. Hire the just pure academic, most brilliant people that you can possibly find, buy the best possible data in the world, give them anything money can buy, and then why can they not perform anywhere close to what the Modelian Fund is doing? It's a great question.

SPEAKER_03 47:19

I'll give you a few of my uh theses about that. One is that one of the advantages Renaissance has always had is got one model, one trading model. Everything, every signal, every discovery is put into this one system, and nobody else does that. So you say to yourself, well, what why don't they? At this point, it's too late. If you're, I don't know, um DE Shaw, you've got different silo, different groups, different approaches, different people making money their own way. There's no way you're gonna clear all that out and have everybody do one model. None of these firms are gonna start doing that. Could they start from scratch? Yeah, but you gotta start from scratch and compete against Renaissance. Nah. So that from the get-go was one of their um their discoveries or um one of their approaches that they that has worked out really well. So that's one explanation. And then the other is yes, there's talent everywhere. And you go to Wall Street and you get a tour, and people find out that's our PhD. That's our those are our PhDs. Renaissance isn't just PhDs, and yeah, it's a third of the firm or whatever, half the firm are PhDs. These are people that led departments at major universities, so it's a whole nother level. They don't even think of themselves as competing with Wall Street for talent. They see themselves as competing with Silicon Valley to some extent. So, yeah, there are a lot of smart people out there, and they're not that much smarter at Renaissance, but I think they are a little more.

SPEAKER_00 48:49

But they still have that very marginal edge on the intellect and they're well this kind of complements that point a little bit. I asked you before we start if you saw the Willow Chip news, so you haven't. I'm not gonna pretend like I know what it is, but it's got something to do with um quantum computing, which basically just uh makes computers way. I mean, the demo they showed was absolutely unreal. But wow, I gotta look it up there. Exponentially more powerful, basically. Wow. Um and so the question was: does this computing tech, would it help a firm like Rentech, which is in other words asking how much of Rentec is their tools and their data versus the minds using them? So I haven't asked them about quantum computing.

SPEAKER_03 49:28

I've asked them about AI and the breakthroughs lately or the advances in machine learning and such. And listen, Renaissance is pioneered. They were doing machine learning in the 1980s, so it's part of the reason I wrote this book. But they still, this is as of a year ago. I don't know if they've changed since then. The people I've talked to, it's hard to get in touch with these, it's quite secretive. It's like checking in with your your spy behind the lines in some foreign country kind of thing. You don't want to do it too much either. Right, right. You know to get them in in trouble and outed, as it were. Um, but the the the last I heard from my people, they were still of the view that you can't turn all the decisions and all the operations over to the machines. They were of the b view that it should still be machine plus man. I was about to say man plus machine, but they don't believe that. They do believe it's man plus machine. So there's still a role for these PhDs. And they're not ready to turn that whole system over yet. But in terms of quantum computing and such, I haven't asked that.

SPEAKER_00 50:33

No worries, mates. Um Okay, so just give me a wave of the hand or something if you really need to leave. Uh, but there were a couple of questions I wanted to ask for you uh more about you and a little bit about journalism. Uh to the point you just made, you know, it's hard to get in touch with these guys. How much of your work is sales? How much are you figuring out to get in touch with them, composing a you know, compelling email, following up 20 different times, attacking them from different angles? It's a good question.

SPEAKER_03 51:01

So I like anybody's job, there's a lot of sales involved. And so I teach a course, a little class, whatever, to young journalists, either they're they're interns or they're young journalists here, or some of our students come by. And one of the points I make to them is uh some of the most simple, obvious things or seemingly obvious um um habits uh one needs to remember, just being polite to people, just be polite and appreciative. Um and and just kind of write an email afterwards. Thank you. It was great talking, it was interesting, and just being it's sales, but in my world, a lot of it is showing enthusiasm and talking to someone. There's this great YouTube I lit um um session years ago I I saw it was four of the best comedians sitting around talking. It was like Louis C.K. before he was discredited, Chris Rock, uh Joey Seinfeld, Mary, maybe Larry David, somebody else. And I think it was Larry David says something about how when they get interviewed, when Larry David says, whenever I get interviewed, the journalist or often has like a list of questions. And as opposed to having it make it be a conversation, and and and and you need to have that conversation. So uh a lot of it is just sort of showing enthusiasm and and being interested in the subject matter, and I'm lucky in that I actually find the subject matter interesting. Most financial journalists don't. Most credit journalists got into financial journalism because their jobs here and they're better paid than in other kinds of areas of journalism. And good for them. I'm I'm not and they're probably better writers than I am, and they super smart, maybe with better schools. But my only advantage, one of my only advantages is that I'm actually interested in the in the subject matter. I find it fascinating. So that's helped me. I'm not even sure what your original question was. I'm sorry, I'm sorry to kind of No You totally answered it.

SPEAKER_00 52:55

It was asking about sales and uh turned into the person ability, the enthusiasm, because obviously humans are so good at at detecting BS. Um and so enthusiasm is incredibly hard to think. Obviously, you can you have to be psychopathic, right? To genuinely fake enthusiasm to the point where the other person believes you. Uh but to turn that Larry David point around onto you, you're interviewing thousands of people um, you know, in your in your career. What do you feel like when you're interviewed? What what what are the interviews that stand out? Not to get too meta.

SPEAKER_03 53:29

I I I always a little bit uncomfortable because I let's say at a barbecue or something, a bar mitzvah or whatever, my wife will always tease me that I'll sit down next to somebody and just give them question after question. It's it's could be annoying to some people. Other people probably enjoy it. I'm not sure. But I'm genuinely interested. Like I think everyone's got a really interesting life story. Like, give me, you know, 20 minutes with you, and I bet you I'm gonna uncover some really interesting things. And I don't even care who it is. You know, I need a dentist and accountant. I'm sure they've had some challenge. I'm sure they have a have some obstacle in their life, be it health, be it family, career. I mean, I know myself. I mean, I was almost fired here um years ago for various reasons. Maybe what'd you think? Yeah, the Holland Basilink thing probably wasn't a good smart idea, just kidding. Um but um yeah, so yeah, right. Uh so I I um yeah, I'm of the belief that every that people are interesting. So I'm inherently a little bit uncomfortable talking about myself. It's just not, and that's part of the reason why I went into this industry because I like asking questions and I'm curious about other people. And yeah, I just kind of find it boring talking about myself to some extent. Well, you know, you get past that. And um, if I can share some lessons with people, I really enjoy that. So teaching is partly uh um taps into that that impulse. So I'm I'm open to that.

SPEAKER_00 54:54

My father was a teacher, my brother's a teacher, professors, so I get that. So enthusiasm, authenticity, genuine interest, you know, these things drive a camaraderie and potentially they'll open up to you, et cetera. Um, but what about just the perfectly crafted question? Do you do you think about that? Is there a way I could combine the right words here to get them to say exactly what I want to hear?

SPEAKER_03 55:18

Probably is, but I've I'm ready my my life's pursuit is of that question. So listen, a lot of what I do is different from what others do. I've got to piece together information, be it a book, be it an investigative article, and I gotta make sure it's accurate. And it helps being at the Wall Street Journal because there's always that element of do I want to see this in the paper? And I want it to be inaccurate in the paper. And I take advantage of my tools. Everyone's got to take advantage of their tools. And you know what? You listen to the newsroom and everybody does it their own way. Everybody, man, woman, is it a connection you've got? Something, some commonality. I like to find some commonality. You can always find something. You know, I went to I wrote a book about the fracking business called The Frackers, and I went out to talk to this guy, George Mitchell. And George Mitchell was this oil baron who is the grandfather or the father of fracking and changed this whole country. And I didn't really know much about energy, and I didn't really have much in common with him. He's in Houston, and I'm like, what am what am I gonna how am I gonna connect with this guy? And then he told me his story, and he's a son of a Greek immigrant uh who changed his last name. Sabas Perascopopolis was his father's name. And at Ellis Island, so he has a great story about how his father was working building the railroads from Arkansas to Texas, and his paymaster came to him one day, all on happy. He's like, Parascopolis, I can't spell this. What's with his name? And the Savas Periscopous is like, well, what's your name? My name's Mike Mitchell. So Savas said, All right, I'll take that name. That'll be my new name. His paymaster's name. And my grandfather got off the boat and they said, What's your name? And he said, Romsinski is our last name. And they're like, Can't spell that. Take the last guy. It was Zuckerman. And it could have been Smith or O'Brien or something, but I found a connection and we both had that connection. So I'm a big believer that you gotta find that connection with to people in general, not just when you're interviewing them, but in in life. No, totally.

SPEAKER_00 57:22

That's an incredible anecdote. Is it Russian or Polish? It's um Polish. Um, I got my questions out of line here, Greg. Please uh bear with me if you don't mind. But I just wanted to round out the Rentech. What is the most important questions about Renteech that people never ask you?

SPEAKER_03 57:38

The only I just find too many people are focused on what the right formula is, what's the secret thoughts. And either I'm a really bad reporter and I never discovered it, but I've talked to dozens and dozens and dozens of people that work there. And I don't think they're all lying to me or misleading me. And they all say, Greg, that's just a silly approach and way to understand it. There's no one signal, we've got so many signals, there's no one that's produced all this money. There's some that are very reliable, and we're not going to tell you, that have worked for a long time, but they may degrade tomorrow. And by the time you write this, it won't be valid anymore. So they've discouraged me from asking that question. And so I get that question a lot, and and for good reason. For good reason. I mean, the only question that doesn't get discussed enough is the management of the firm. And I really after I wrote the book, I realized it's as much a management book as it is a trading, investing book, because they're just a fascinating, interesting organization in how they're put together. And then I don't think people emphasize that enough.

SPEAKER_00 58:47

Also, in some sense, um, I don't know, I this may change the more experiences I have, but I kind of have the feeling that some people just sort of have it and um it m can't necessarily be taught. You know, great people management, actually having authority, being able to admit when you're wrong, but still maintain some type of authority and move pieces around on a board and people and make people happy. You know, I I don't know if that that'll change over time. But all right, so you were always keen on finance. You tried working on Wall Street from several angles, and you ended up applying to an open position as a financial reporter, and a part of that application you had to write a mock piece that you submit. And you said in an interview how it was just pure fun. You couldn't believe that this would be a job. So it was a joy in a sense. Now I wanted to ask you, do you still have that joy for journalism? Or has declining business models and a falling status of journalism sort of soured that pure joy over time?

SPEAKER_03 59:43

So in some ways I'm embarrassed to say that I still love being a reporter. Why is that embarrassing? Just because there's no growth there, and others have gone on to be editors or other kinds of things and or left the industry. I find it endlessly fascinating. Just because every day there's something new. So right now I'm looking into Bitcoin and Michael Saylor and MicroStrategy and the levered ETFs. I don't know. Tomorrow will be something else. So it changes every day. Um, I'm a curious guy by nature. I like talking to smart people. I'm not sure. I'm not I'm not necessarily the smartest guy, but I am a curious guy. So I'm privileged. I get to, these people will pick up the phone to talk to me. Groundbreaking investors and traders and and others who move markets and move finance and move the country. I I'm just a very um I'm grateful and I'm I'm very lucky in a lot of ways. So yeah, no, if I won the lottery tomorrow, my wife always says I'd come into the office or or fire up the computer, at least from home. Yeah, work from home, but uh I'd still be working.

SPEAKER_00 1:00:52

But you have a really high status at one of the highest status publications in the world. Um how do you see the media landscape changing over the next 20 years? And is there any solution to a sort of declining business model that is the type of journalism you work with?

SPEAKER_03 1:01:10

Well, if you think about it for a moment, I I mean, I make my career writing longer pieces usually. I mean, my books and such, and even here, it it's it's mind-boggling. Like I in 2024, close to 2025, I could I could I still get paid for that. I'm I'm I'm grateful and I'm and I'm lucky and I'm fortunate, but man, will people still be reading books in in 10 years and young people? Uh it's hard to get them off Instagram. They're gonna read uh uh hundred thousand words. I mean, I'm writing a new book right now. I part of me wonders, I are really people gonna read 100,000 words. Now, book sales have held up nicely, I have to say, in general, you know, in the in the industry. But I'm I'm I'm I'm worried about the future. Yeah, I'm definitely worried about the future. In terms of the media world, it's harder because we're we're relatively stable at the Wall Street Journal. So that's good, but I see um the landmines everywhere else, and people step on them and going down, and and my colleagues elsewhere and other publications. And again, the attention span is is shorter than ever. And also it's just harder. It's just a disparate uh world where you you kind of have to build your own brand, is is and I don't I'm a little comfortable doing that, putting a lot of effort into it, not just because yeah, I could go on TikTok and talk, or I could pick up the phone and and ask a really interesting, smart person some curious questions. I would rather do the latter, but I kind of need to do more of the building of the brand if I want people to read my long pieces in five, ten years, and I would love to keep doing this. So I am wary and anxious about the future, but we are relatively stable at the Wall Street Journal, so it's it's a miracle.

SPEAKER_00 1:03:02

But if if a lot of the great media we're consuming in 10, 15 years comes from individual content creators, you know, what are the consequences to what that is uh to what the final product is that's being published when it doesn't go through the mechanisms of editors, um you having a salary to sort of actually do it really well? Um how you know this is more what I'm getting at. As someone in media, how do you see the media landscape changing really consequentially after you've observed these changes, the landmines around the Wall Street Journal? Maybe you have to build a bigger personal brand to have some type of staying power down the line to still do the work you love. What are the consequences of that?

SPEAKER_03 1:03:46

Yeah, Ryan, it's um it's gonna be a dangerous, perilous world. I am worried about it because you need those editors that are not in the public eye and don't don't get a lot of attention necessarily. Their names aren't in the in the paper, but you'd be I'm not surprised. I mean, maybe if your your audience would be surprised how many times they'll find a mistake, they'll see a word that's choice that innocently I I chose for for uh a good reason, but it can be viewed in in a in a certain way, and it's just either wrong, it's defamatory, it's it's not appropriate. And again, I didn't mean it to be as such. And editors are really important, different sets of eyes, people who care about the meaning of every every word. We slave over every single word in our pieces. And if we're gonna get into a world, and we are moving in that direction where people are on their own, is kind of firing off thoughts or observations or things they've heard that haven't been checked, aren't accurate. Uh that's dangerous territory for world to people to be relying on that kind of information flow. And also it's also the case that it creates incentives. It creates incentives. People want to grab attention. So the louder you are, the more controversial you are. That's going to be more important. You're going to stand out in that way as opposed to the faster you are confirming. Well, I'm sorry.

SPEAKER_00 1:05:12

The faster you are before confirming. Yeah.

SPEAKER_03 1:05:14

Yeah. So that does worry me. Yeah. And I I am grateful. I'll look around this newsroom at the Wall Street Journal where and there are people there still whose job it is to make sure guys like me don't make dumb mistakes.

SPEAKER_00 1:05:26

So I'm I'm grateful for that. And is it just uh monthly subscriptions that is the journal's income and advertising on podcasts?

SPEAKER_03 1:05:36

Uh so it used to be the case. I I've been here since 1996. It used to be the case that I think maybe 50, 60% of our revenue was from advertising, and now it's gotta be 10%, maybe even less. And so it's all subscriptions. Yeah, I don't know. Monthly subscriptions, but it's all subscriptions. We got a little bit of uh other kinds of revenue. So yeah, people are still paying to. Read us the the danger, the the catch is that um i it's just harder to get their attention nowadays. Google searches, we used to get a lot of traffic from Google searches, and that's dried up for everybody. Nobody gets their their their eyeballs uh and and traction from Google anymore, and that presents all kinds of new problems.

SPEAKER_00 1:06:18

Totally. How do you like this for a sort of worrying anecdote? 60% of your income back in the day was from advertising. You could sort of cynically say that you are sort of in the service of the advertisers, but you could typically, you know, someone could easily sort of read past that and be like, okay, no, it's not. This is just how they make money. But then when 90% of your income is on subscriptions and you see someone like uh the Washington Post, that's Bezos' paper, right? Uh not endorse a president and then lose 250,000 subscribers, that's an insane amount of revenue. And then combine it with this anecdote, I interviewed one, a huge substacker, and we were sort of talking off air about it, and he's felt this experience with a couple of his mates who also have giant Substacks, um, some of them political. When they write a piece bashing Trump, they get more revenue. They get more people subscribing. And then everything else they write barely moves the needle at all. And then they'll write something uh not pro-Trump, but not bashing Trump, and then he starts losing subscribers. So you've got the Washington Post anecdote, you've got this Substack anecdote, and the declining business model moving towards subscriptions on the surface seems like, okay, that's way more sustainable, this is way better. But actually, what it might be doing is further drawing people down, only consuming the things they want to see, never, ever consuming the things that they don't want to see.

SPEAKER_03 1:07:41

It's a huge, huge problem for society. People are in these bubbles, information bubbles. They read that which they choose to read and listen to and watch and hear people with similar opinions more than ever. And people talk about pushing themselves to be exposed to others, but uh it it's hard to do. Now, listen, there are many papers like ours where we try to play down the middle. We try our best on the news side, not on the editorial side. But there's a sh I'm I'm petrified about the future of a society where people aren't exposed to opinions other than that which they already agree on, agree with. There's a guy I once wrote a piece about this guy, David Rosenberg, and he has been a bear on Wall Street for many, many years. And then one day he became more bullish, and he told me he got these angry, angry emails, you know, similar to what you were suggesting, and he was just taken aback by these are people that subscribe to him and then like him and uh have have been loyal to him, and he came to the view that they weren't loyal to him, they were loyal to a viewpoint. They were loyal to this bearer's viewpoint, and they just wanted to hear, they've already had determined that they had a perspective and they wanted someone to um share that view and give them more um support of that view, and and it's just yeah, it's trouble, it's it's troublesome, it's troublesome.

SPEAKER_00 1:09:17

A very cheap psychological observation one could make there is this comfort in the tribalism, basically. I want to feel like I'm staying informed, so I'm gonna keep reading the news and I'm gonna stay on top of everything that's happening around the world, and if something strikes me, I'm gonna really enjoy it. But it's just wanted to reaffirm what I think, what I know. Um, I don't know if there is no question under that, or whether it's even an observation with me. No.

SPEAKER_03 1:09:41

Well, the other point I was gonna make is that um it is a new world in that there's much more anger uh targeted towards us in the in the media. There's also more appreciation, so I think half this world appreciates us maybe a little bit more than in the past, perhaps. But yeah, I never got the kinds of emails and passion uh that we've received in the past few years. And it's not just sort of oddball view readers, they're mainstream kinds of people. Um there's a big m money manager named Jeff Gunlack, who I wrote about, and this is already at this point, good five plus years ago, but I just wrote about how he was on a roll for a long time and now he wasn't. The numbers were the numbers. It was it was pretty obvious theme, wasn't a great leap on my part. And he got so angry that he goes on this conference call with his clients, thousands and thousands of people, and he said, and he referred to me, he said, Mother Zucker. That mother zucker. That's quite a lot. I kind of appreciate it. Yeah, but years ago, and you wouldn't do that, you just deal with the criticism. It's I mean, criticism is just an obvious story to be written. So yeah, this is a new world we're living in.

SPEAKER_00 1:10:53

Yeah. Okay. Uh Greg, you've been so generous with your time. I I really do appreciate it. Last question for you. Um, I suppose it's kind of double-sided, which I suppose is not a good way to ask a question. But I ask as many guests as possible, what is the role that serendipity has played in their life? So I definitely want to present that to you. But then as well, specifically, after publishing the Manus of the Market, what type of in serendipity did that invite into your life?

SPEAKER_03 1:11:20

So serendipity in general, I saw an ad in the newspaper for a newspaper which back then had ads, and they had jobs available to be a financial reporter. I never I never considered being a financial reporter or being a reporter. It didn't cross my mind. So I was just kind of skimming the paper that day, and and I fell into um the the job, my career, that what I was meant to do. So I'm uh it's all due to serendipity to some extent there. It didn't even cross my mind to be a financial journalist. I was like finance. I was like writing, but I never thought of putting them together. And in terms of uh the man who solved the market, I'm not sure it's serendipity, but I went to Jim's funeral. I had second thoughts whether I should go or not as a journalist. I didn't want to make anyone uncomfortable. Not everyone there was happy with the fact that I wrote the book uh in his family and such. And then I went, and then I heard there was the Shiva, you know, Jewish tradition. You you go afterwards, this little bit of like a wait kind of thing where you sit around with the family. So I also thought, there, should I go? I didn't want to make anyone uncomfortable, but I wanted to pay my respects. He was a special man and played a big role in my life, actually. You know, I spent years, you know, involved in him. So I thought I should pay my respects by going. So I went and I met his uh widow, and she and I was really uncomfortable with her, and I but I I I just said I just wanted to say hi and and pay my respects and and tell you what a special man he was and how I enjoyed meet meeting with him, spending time with him. And she really liked the she liked the book, but she also liked it. I did an obituary about Jim for the Wall Street Journal. And then she asked me to speak, and I was just like bored. I spoke at Jim Simons Shiva, and that was to like top mathematicians and family members and the children and ex-wife and wife, and I was like, wow, uh to speak at Jim Simons. It was an honor. It was frankly, no, I'm not really supposed to probably shouldn't be saying that as a journalist. You know, I'm I'm supposed to be objective and not have any emotion whatsoever, and uh not supposed to like the people I write about, but he's a likable guy and he did good for the world, he was very charitable in the end, and um anyway, I got to speak about Jim at his ship. It was a real it was a real I feel uh honored.

SPEAKER_00 1:13:43

Totally. Um let's leave it on this then. As an ode to Jim Simons, what is your favorite memory or anecdote that you had with him? Me personally with him or the one I I've written about? No, no, you, whatever comes to mind right now, having just told the story about speaking at his shiva.

SPEAKER_03 1:14:02

I just can't stop thinking about how I would spend hours with him in his office dealing with the smoke, dealing with cigarette smoke in my face. And he wasn't apologizing or anything, and I just gotta deal with it. That's part of the deal, you know. You you interview Jim Simons, you get smoke in your in your face, and just the the fun, the humor, and the intellect and the uh he was crafty and coy and didn't want to share too much, and he was probably playing games. It was strategic in some ways, a little bit of a chess match to some extent. I was trying to get as much possible out of him, and he knew that. And then he said to me, just a few months before the book came out, our last meeting together, he said, Greg, I really don't want you to write this book. I was like, Jim, the book's at the printer right now. I'm sorry. I apologize, but the book's at the printer, let's just make sure to get it as accurate as possible. Mm-hmm.

SPEAKER_00 1:14:59

Amazing. Well, Greg, thank you so much again for your time, mate. Super generous of you. Uh this was fun. This was you asked a lot of questions I hadn't been heard uh been asked before.

SPEAKER_03 1:15:07

So uh I give you credit for that. Well, amazing. That means a lot coming from you. Sure. And I I've I've done a lot of interviews, yeah. Cheers, Greg. All right, meanwhile.