Advice from Hedge Fund Manager – Edward Misrahi


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An eternal optimist, Liu-Yue built two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a searchable content platform and business tools for knowledge sharing and financial education. also provides investors with direct access to U.S. commercial real estate opportunities and other alternative investments. In addition, Liu-Yue also co-founded Cute Brands a cause-oriented character brand management and brand licensing company that creates social awareness on global issues and societal challenges through character creations. Prior to his entrepreneurial endeavors, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group where he worked with senior management on multiple bank-wide risk management projects. He also had a dual role as a commercial banker advising UHNWIs and family offices on investments, credit, and banking needs while focused on residential CRE, infrastructure development, and affordable housing projects. Prior to M&T, he held a number of positions in Latin American equities and bonds investment groups at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities at Steinberg Priest Capital Management (family office). Liu-Yue has an MBA specializing in investment management and strategy from Georgetown University and a Bachelor of Science in Finance and Marketing from Stern School of Business at NYU. He also completed graduate studies in international management at the University of Oxford, Trinity College.

By WiloWallStreet,

I recently interviewed Mr Edward Misrahi. Mr Misrahi is well known in the hedge fund world. He made Partner at Goldman Sachs at a young age, then founded and ran the EM business at Eton Park, and in 2012 he started Ronit Capital.


We discussed his views on the industry today, what young people should be doing to learn and get noticed, and skills he thinks you should acquire.


His views on Investing:
Investing isn’t a science, it’s not about reading more books and doing spreadsheets.
The problem in investing is that there is no substitute for two things:
1. Experience: get time under your belt
2. Thinking independently: have to learn to think for yourself and understand that there is no one way of doing it. So go develop your way of doing things.


The core investing principles haven’t changed – the goal is to buy low and sell high. That’s it. The rest is over complication. So if it doesn’t work, you shouldn’t do it. Don’t be captive to a technique or philosophy. Find and do what works for you.


Being a great investor isn’t being the smartest person in the room. High IQ doesn’t make a better investor. This isn’t an analytical exercise. You have to have the right character for it, because you will fail all the time. The right personality will learn all it can from failure, but not doubt yourself next time.


Advice for young people:
Finance is a place where you can be successful quickly and at a young age. But that can also create a perception that you have to do it quickly. You don’t. Think about a doctor, a surgeon.
You have to train, be patient, learn. It takes time. Don’t be in a rush. Its key to ask who you can work with, rather than what you are doing. Your teachers matter.


The big trend / growth in finance and hedge funds is over – if he was starting out now, he probably wouldn’t do the same thing. Only do it now if you really like it and enjoy it. Don’t do it for the money anymore.


The things he looks for in young people:
1. Interest and intellectual curiosity for markets
2. Independent thinking – think and come to your own ideas.


Skills he recommends you acquire:
Learn to write well: this is critical in business. You have to be able to articulate yourself clearly and professionally.
Present well: 50% of being at a hedge fund is communication. Critical to success.


What he would do if he was 20:
Become an entrepreneur. Learn big skills. Technology will dis-intermediate everything, so he would create something, for example how to use technology to do things differently. He would join a large institution just for the training program, so he could learn.


Things he recommends reading:
Biographies: Find the key insights from a person’s life. What made them great. Even one or two big insights from a book make it worthwhile.
Non-Fiction: Help create new ideas in your brain. Find things that stimulate your brain. Find books that are outside your day to day sphere. Those will expand your mind and horizons.


How the markets have changed:
1. Electronic trading
2. Mutual fund industry is changing: getting smaller & more transparent. Any mediocre product is being disinter mediated. You either provide alpha or the money goes to an ETF.
3. Technology in investing: means that markets have become more rule based. Whether its impact of ETFs, indices or ratings. Fundamental investors need to feed that into their analysis also on top of the core fundamental analysis they do.


Problems that worry him:
Credit markets have grown beyond scale. Its a difficult market to understand. Its a complex, very large and less regulated market, and recent regulatory changes have made it much harder tho trade. This is very challenging.


Thank you Mr Misrahi for your time and views.

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