(Find Walter on LinkedIn)
I’ve been a Visiting Professor in the University Of Tokyo and Waseda University, Japan, and a Senior Research Fellow at UNISA in the School of Commerce.
Threema ID: DEP9ZP2J
I’m in the process of creating a DAO on the Blockhain that I hope the Indonesian Government will adopt; a cryptocurrency or clutch of cryptocurrencies will transport different types of value, with the intent broadly of raising prosperity levels and to offer effective hedging tools against the next (and likely deleterious) GFC!
Allied trading processes will be algorithmically girded to reflect outcomes that are centred on stability and sustainability, invoking a perspectival shift (much as we had with Benoît Mandelbrot and fractal geometry) and are thus not opportunistic in nature. Getting a higher level of ethical system to gain traction and to operate pragmatically might occasionally require a circuitous path.
When managing your team of traders/PMs, how do you handle being a player in the same team that you lead? What level of closeness and transparency about your own trading history and performance do you share?
It depends on what targets we set as a team. I don’t always ensconce myself into the same matrix as my traders. Sometimes I take angular approaches to test the waters, and if I espy opportunity I enjoin my team to follow suit. Much depends also on the directions I want the portfolio mix to take.
How do you balance the CEO and CIO roleS? What tasks are you comfortable outsourcing versus which ones must you absolutely do yourself?
I don’t see a strict division between the two roles: a great leader straddles categories, and often defers also for advice to those better placed or more knowledgeable in some areas. When it comes to construing the vision, I take the lead; — and then listen carefully for the moments when I need to step back and move into the rearguard.
What kind of parameters do you use when assessing talent for promotion/allocation increases/retention? (Performance, skills collaboration with analysts, idea generation, etc)? Do you use similar criteria assessing new hires?
I usually get a good feel for new hires. Not everyone needs to be a superstar, but personalities need to be able to mesh well with others. Impulses are not only or merely cognitive, but there are feeling values good people bring into the total equation that I would not want to miss. It’s all about the chemistry; — the targets are often secondary.
When making the initial hire, I try to observe the character closely … does the candidate have the necessary patience to restrain himself; how speculatively minded is he or she? How fast do they want to become rich? Despite mainstream proclamations to the contrary, the best traders have a keen appetite, but are not greedy. They find the balance time and again.
Focus is important, too. Some people, for instance, can only function optimally in retail markets: they have touched consumers directly, perhaps, and can relate to the cycles in this industry and often have an accompanying astuteness of market nous, being able to intuit the dips and the troughs as well as the moments of high tides.
One team-member used to excel at doing in-store promotional campaigns of real product. When he had to deal with numbers and make projections, after initial coaxing and coaching by me, he could visualise people queueing up for particular product lines; he began to connect disparate dots in a quantum field and solved the wave-particle (or buy and sell conundrum) very effectively! I’m actually convinced, if a proper equipoise were obtained, that intuitive modes would override (or perhaps complement and correct) quantitative trading strategies (which are often cumbersome algorithms, and lack agility to respond to real-time fluctuations effectively).
You might recall Einstein’s quip that imagination beats everything else, and that is conditionally true. The mind and analyst needs to be trained first, though, and then begin to trust his intuition, which comes along almost furtively.
Only if you are balanced and attentive will you catch the whisper or see what everyone else does not. And then there are those who are all flame for short spells; if they’ve done the fundamentals well enough, the scalping of intraday trading might suit them best (but here one had better invigilate and ensure that an exit strategy is observed carefully)!
Personally I find candlestick charts redolent of transistorised amplifiers, and it takes some effort to get to hear the music of the spheres or feel the beat of the market! Odd as it may sound, I think an (analogue) wind-up mechanical metronome should be on every trader’s desk! There is no better tool to internalise time and tempo!
But there, too, comes a moment when a rubato takes over: at this point the metronome should be tossed into the vagrant fire-place.
How do you manage the different emotions that come up in individuals and the team itself? (Slumps, times of sadness, stress and burnout)? Do you focus on personal contact, financial incentives, other ways?
Burnout should be staved off if at all possible. It’s better to take frequent breaks and be productive than to burn the candle at both ends. Different individuals will desiderate different remedies, so being sensitive to individual needs (without getting burdened by micromanagement) is always to the fore.
But having excessively emotional people on the team is contraindicated; it doesn’t jell with the patience factor, without which no achievement becomes possible! Stabs in the dark that fortuitously find the target will never bring light to the engine room of growth. How does one approach emotions?
Reactiveness creates only more problems, deepens the malaise. By ‘malaise’ I also mean exuberance that is excessive. One needs to be a little unconventional here. Recall how when Benoît Mandelbrot talked about fractal geometry; — nobody quite got it, so his assistant had to come on stage and explain.
In his key work, The Fractal Geometry of Nature, Mandelbrot explained that, for instance, comparing coastlines does not work using the viewpoint of “length”; you needed to add the fractal concepts of dimension, measure, and curve. Emotions are ‘curvy’, angular, incommensurable, but they always point towards an imbalance in the thinking/feeling manifold.
If you allow the emotions to come up and manifest without burdening them with judgment, this laissez-faire approach will ‘unstitch’ the underlying perplexity, and bring peace. But of course the above implies authenticity and a fearlessness to speak; — and for that, most commercial alignments are not suitable, given the guardedness we impose on such relationships.
The level of closeness you have with a particular employee will define what approach to take. Generally speaking, though, excessive emotional attributes cannot be simply ironed out; they require therapy and a shift in perception, and for that we ordinarily have too little time.
Awareness for hidden attributes is important in rather unconventional interviews that I will have with people; I endeavour to dig deeper, to discover grudge complexes and other elements that might later create burdens.
How do you manage and compensate the most ambitious top performers? How do you walk the tightrope between retaining them by giving them too much versus them leaving due to getting too little?
That’s always an interesting tension to behold and to manage effectively, and one doesn’t always get it right! Generally I don’t look for those who only look for monetary compensation, but who also value qualities that inhere in the entire team’s spirit and orientation into other fields of value.
Creating “fields of value” is with me the overriding ambition: just making money is the stuff of dullness and bluntens the powers of the mind and leaves all else desiccated and dead.
Key Lessons from Walter
- There is little time to deal with emotions, but authenticity and fearlessness to speak of them are important. When dealing with the inevitable emotions of trading, being honest with yourself and open about what you’re feeling will be essential in not letting these emotions overwhelm you;
- When hiring, look for character traits. Patience, ambition without greed and a (possibly undeveloped yet) intuition are important traits to have besides formal education and skills;