My Age of Investment

Spitznagel took Xia Jingxing and the others to briefly visit the office on the first floor, and then he led the three of them to the second floor.

"Dylan, what do you want to drink?"

Xia Jingxing smiled at Spitznagel, said "Whatever", and then looked at the surroundings curiously.

The second floor is decorated like a small bar, with a bar counter and a wine cabinet filled with all kinds of drinks. Next to it are card tables, sofas, pool tables, TVs and other furnishings.

"This is where you usually rest and relax?"

Spitznagel did not answer immediately, but stared at Xia Jingxing seriously for a moment, then suddenly grinned: "Yes, Darren, what do you think of this place?"

Xia Jingxing nodded, "It feels good! Financial transactions are a very boring thing. There is a place like this for everyone to have fun. If I were an employee, I would love going to work."

Spitznagel laughed, feeling like he had finally found a soulmate.

Nine of the ten LPs who came to visit in the past felt that he was not doing his job properly and turned his serious financial investment work into a weekend party, which was held every day.

As everyone knows, the reason why he chose to do this naturally had his own considerations.

Abel was the LP that Spitznagel said he didn't understand. He suddenly said: "It's okay to relax at work, but don't get too drunk. Once you make an error, the fund that originally made money will become a loss." It’s tiring, and no matter how serious it is, liquidation is possible.”

Abel's words were very serious, but Spitznagel was not angry at all. He also specifically explained: "We usually don't drink at work. Only after get off work and on weekends, the whole team will get together and have a drink." .”

"That's good. Three years ago, an Oolong index incident that shocked the industry broke out. A trader from Mizuho Securities Company in Japan mistakenly blocked the client's order to "sell 1 share of J-Company stock for 610,000 yen." It became "Selling 610,000 J-Company shares at 1 yen per share."

This incident caused heavy losses to Mizuho Securities, and at the same time, its professionalism was greatly questioned by the industry. "

Abel looked at Spitznagel with a smile and said like a joke: "Man, I don't want you and your Global Investment Fund to appear on the front page of financial news one day."

Spitznagel smiled and said nothing. Compared with the doubts and ridicules of other LPs, Abel's words were already the most polite.

Since the boss was right next to him, Abel stopped scolding Spitznagel.

He believes that the boss has his own judgment and does not need to be reminded too much.

Spitznagel invited Xia Jingxing and the others to sit down on the sofa, and brought each of them a cup of coffee.

Xia Jingxing took a sip of coffee, put down the cup and asked, "I heard that Global Investment has made a lot of gains this month?"

Hearing this, Spitznagel's heart moved, as expected.

His “tail risk strategy” has alarmed financial tycoons!

Otherwise, why would the boss come to this remote Santa Monica in person?

Thinking of this, Spitznagel said quite proudly: "This is actually an attempt by our fund. So far, the results are pretty good!"

Xia Jingxing smiled, "Try? Black Swan Fund's first try?"

Spitznagel shook his head slightly, "Darren, you are wrong. Global Investment is not a black swan fund."

Seeing Spitznagel's arrogance, Abel couldn't help but interjected: "You are betting that unprecedented catastrophic events with extremely low probability will occur in the future. You are betting that these catastrophic events will impact the stock market or cause inflation." To soar, the specific method is mainly to buy put options, especially in large quantities when prices are cheap. Once the stock market becomes very bad, these put options can bring profits.

Is it not? "

Spitznagel first smiled politely at Abel, and then explained unhurriedly: "You are right, this is the "tail risk trading strategy" of general black swan funds.

Once a black swan event occurs in the market, there will be a huge risk of fluctuations in security prices.

This kind of risk is at the end of the bell-shaped curve of the risk assessment model, so it is called tail risk.

In the book "Black Swan", black swan trading strategies are introduced and explained in detail. "

Jiang Ping spoke at this time, "I have read "Black Swan" no less than three times, and I have this book in my office now.

The author of the book, Nassim Taleb, is also known as the "Father of Black Swan." He is your mentor and your partner, right? "

Spitznagel smiled and said: "Yes, he taught me how to make money in a crisis, and he was also my mentor on the road of life."

Xia Jingxing nodded slightly to acknowledge this.

Spitznagel is a young man with great talent for financial trading. When he was 16 years old, he worked as a summer job in a futures trading company founded by his father's friend.

When his peers were still working at KFC and McDonald's French fries, this guy began to be exposed to the research on food prices and crop reports.

His father's friend, Mr. Crimp, is not an unknown person, but a well-known trader in the futures industry.

However, Crimp only gave Spitznagel some investment enlightenment. This guy really became successful because he met the second nobleman Taleb.

"In 1993, when I was 22 years old, I graduated from Kalamazoo College in Michigan. Then with the support of my father, I bought a trading seat at the Chicago Board of Trade, engaging in Treasury futures and foreign exchange futures."

“I was very happy at first because I could see huge amounts of dollars coming in every day.”

Spitznagel smiled and told the three of him about his experience in the industry when he was young and how his investment style was shaped.

“Then the storm suddenly came. In 1994, the Federal Reserve unexpectedly raised interest rates, the Treasury market plummeted, and many traders lost their money overnight.

Many of my exchange idols were buried forever, body and soul, in this crisis.

Relying on Mr. Crimp's advice - don't be afraid of small losses, I was lucky enough to escape, but my strength was also severely damaged.

After that, I moved to the proprietary trading department of a Japanese investment bank and experienced black swan events such as the Asian financial crisis in 1997 and the Russian debt crisis.

In every crisis, a group of financial giants fell and went bankrupt, almost causing me to suffer from crisis PTSD (post-traumatic stress disorder). "

Speaking of this, Spitznagel smiled and said, "I'm not afraid of your jokes. During that time, I was very afraid of losing. My whole spirit was about to collapse. I kept complaining and fearing. How could there be so many markets?" Black Swan?"

Xia Jingxing and the other two nodded gently. Financial trading work is not an easy job, and the psychological pressure is particularly high.

What happened to Spitznagel is by no means unique!

As far as Xia Jingxing knew, in order to maintain a calm trading mentality, Jiang Ping secretly took estrogen...

It is not difficult to imagine how serious this side effect is.

Spitznagel said with emotion: “This series of encounters convinced me that making money from disasters is the secret to truly staying victorious!

Then, in 1999, I chose to enter the Courant School of Mathematics at New York University for further study.

In college, I met Nassim Taleb, my mathematics tutor and the famous black swan theorist.

He holds the same view as me, that we should take advantage of various crisis events to achieve profits.

So we joined forces to form the hedge fund Empiricism.

We buy cheap puts, watch the value drop until it reaches zero, then buy new puts, and repeat the process...

Not only are the traders under his command unable to tolerate the investment style of "looking like a fool but feeling like a fool", even Taleb is a little worried that the foundation will bleed to death and cannot wait for a black swan event.

We endured it, but the 911 incident came! "

Abel asked: "It took nearly three years from the establishment of your fund to the September 11th incident. What if the incident broke out one or two years later?"

Spitznagel said in a calm tone: "Then the size of our fund may be much smaller, but we will still achieve final victory because we firmly believe that the market is not a stagnant water, and crisis events always appear according to certain rules. "