00:00And you'd be much better at 50 than Matt Miller.
00:02Oh, that's very kind of you to say.
00:03I mean, if you had to think about it, his point here is, and again, you have to look at where Ray Dalio is coming from.
00:09He built Bridgewater from a two-bedroom apartment in New York in 1975 to one of the world's largest hedge funds.
00:15It's been around for 50 years, and it is known for its, shall we say, unusual culture, radical transparency,
00:23open disagreements, recording meetings, asking people to rank colleagues based on their attributes.
00:28So when you build a culture like that, everything else does seem a little different and a little weird.
00:35And his point seems to be that a lot of these multi-strat, so-called pot shops,
00:39they might be great at making money, but they don't necessarily build a fantastic business legacy.
00:44Ken Griffin would perhaps beg to differ.
00:47Is the Englander as well?
00:48Is the Englander would beg to differ, and investors might beg to differ because the investors in these firms
00:53don't really care about Ken or Izzy's legacy.
00:55What they care about is, are they making a good return on their investment?
00:59Which means if these firms are performing, irrespective of how the broader markets are doing, they're happy.
01:05Having said that, you have to realize not all pot shops are made the same.
01:09There are enough variations.
01:10Yes, they all pull out money to these traders that almost operate as these independent shops.
01:17But the way it's done at different places is different.
01:20Some people pull their risk together, some people just let them off on their own, give them strict risk limits, ask them to operate that way.
01:26At the end of the day, the differentiation is, on December 31st, year after year, you look at how the performance has been.
01:33And if over 5, 10, 15 years you continue to perform well, that means you have a model that works, and that will succeed.
01:39And there will be some pot shops that won't work.
01:41And it means your employees are getting paid, right?
01:43Because I get his point, which is the broad point that if they're not working together, they can't build a collegial, sort of collaborative sense of school spirit, right?
01:53And I understand that.
01:55But the main thing that these women and men want is to get paid a lot of money, right?
02:01So if they get paid a lot, they're going to stay, and they're going to have real school spirit.
02:06And if they perform well, that will happen.
02:08If they don't perform well, they won't get paid, and they're going to leave.
02:11Right.
02:11So we touched it from the investor perspective, but Ray Dalio also talked about the point of whether it will be psychologically rewarding for employees to operate in a structure like this.
02:20And I think your point is valid.
02:22Making $5, $6, $10 million a year, year after year, is plenty psychologically rewarding, at least on Wall Street.
02:27It doesn't go further than just making money, but it's like actually touching investments.
02:31Because you could be a researcher at Bridgewater and come up with all these theses and have no idea as to whether or not it actually gets implemented.
02:39But if you're in a pod shop, you actually get to invest money.
02:42Isn't there a huge lure for that, for talent, to go to a pod shop versus just a huge research operation?
02:48Yes, there is great risk and reward.
02:50But, I mean, that's the kind of talent that Wall Street normally attracts, people who are confident in their own ability.
02:55And if you tell them, here, I'm giving you a massive pool of money, do with it what you want.
03:00You have strict risk limits.
03:01As long as you're within that, we will keep backing you and you can keep making money.
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