Todd Edgar

Well, it’s a pretty good segue into a couple of the transactions. As you might have been about to tell from my accent, which I’m grimly still trying to hang on to, I’m Australian. But I’ve been away from Australia for 26 years now, so my accent is not what it once was. I grew up in country Australia so my accent was once much, much, much thicker than what it is now to the point where I go back then now and my high school friends will tease me for sounding like Greg Norman. Which is horrible, by the way, it’s the last thing anyone would want. I’m not gonna apologize to Greg – he’s not a popular man in Australia. So I grew up in a sort of country town, about three hours south of Sydney, went to high school there, and went to college in Sydney. Fell into, which I’ll talk about a little bit later, rather fortuitously into banking. I left Australia in 1996, so I guess it’s 26 years ago, thereabouts. Was in London to Singapore, was in New York, went back to London, and now I’m back in New York. I’ve lived here for 11 years. I always make the joke, “Don’t marry for love living somewhere you don’t necessarily want.” And I did make that mistake. So I married an Argentine American Girl, who grew up a stone’s throw from where we now live, and we now have three children and live in the suburbs of Long Island. So career wise, banking, then transitioned to sort of the hedge fund side of things and then transitioned to a family office side of things a few years ago.

Maggie Lake

So when you were young, were you outgoing? Were you a numbers guy? What were you like? What did you identify with?

Todd Edgar

Oh, it’s sort of interesting. I have three children – as I mentioned – and my daughter is me, which is good and bad. It’s interesting seeing her behavior and seeing myself in that in terms of in this. So I would describe her as, you know, surface shy but underneath quite outgoing. And that’s, you know, if she knows you, she’ll be quite outgoing, the life of the party, whereas she doesn’t know you, she’ll be much more clammed up. And I’m probably pretty similar. And then I’m sort of fortunate enough to be – in terms of interests and academic stuff – decent at math and decent at more the artsy side of stuff, too. So fortunate enough to be okay to all those things, which has been a pretty useful set of skills for what I’ve subsequently done, I think.

Maggie Lake

Did I read someplace or hear that you did some philosophy as well?

Todd Edgar

I grew up with not a ton of money. So when I finished high school I actually worked full time straight out of high school at Price Waterhouse as an accountant and went to college, uni college at night, which was horrible and I found I didn’t really particularly like accounting. So I switched over to philosophy. And that’s where I sort of finished my degree there. But I’ve always had an interest in markets and interest in finance. So I was fortunate enough to fall into, despite my degree, fall into what I’m still doing 30 years later.

Maggie Lake

At the end of this, I’m gonna have to go back and count, but what’s so interesting is that a lot of the people that come on the podcast, most of them have had a fair amount of success – and that’s probably putting it mildly. A lot of them have gone through some variation of investment banker – they’re entrepreneurs, serial entrepreneurs are there – and there’s a great number of philosophers in this group, or people who took philosophy in college, which I find so unexpected and so interesting. So everyone always thinks of it as sort of completely useless and wasted time or, you know, a sort of bend down the road to where they are meant to be, but I’m sort of wondering about that. We’re gonna have to dive into that later.

Todd Edgar

I’ll push back pretty hard on that because it’s sort of a system of thinking. And also, if you look at the history of philosophy – there’s a risk of using philosophical terms– but it’s been someone who Gailey and process. It’s those ideas competing and then perhaps one idea winning out or branches splintering, and that’s not a horrible idea or not a horrible epistemological framework investing. I think good ideas and there not being any one truth and, you know, having, I guess fairly solid doubts about any ground you’re standing on, that’s not the worst mental framework in the world for trading.

Maggie Lake

No, it’s not. And also just having another discipline, just being aware of being able and diversified in thought.

Todd Edgar

It’s a big wide world out there so you don’t know way more than you know.

Maggie Lake

Yes, I know. Although, especially when you’re young, sometimes it’s hard to wrap your head around. So, who introduced you? How did you get the idea that you wanted to go in banking? I mean, obviously, you dabbled in accounting, so some kind of business career must have been on your mind. But did you know about investing or finance?

Todd Edgar

Yeah, I was sort of fortunate growing up my father, who actually worked at a steelworks, was always interested in investing. So I was one of those annoying children who actually started trading shares or not trading, but investing in shares very cluelessly at about 14, or there abouts. I’ve always had a pretty decent work ethic. So I sort of I’ve actually, when I was in high school, I actually worked at Kmart of all things for quite a long time, all the way through high school. So I sort of had a bit a few savings, and I could muck around in the stock market a little bit at that point. So the market, less investment banking, but more markets was always something I was interested in from a pretty young age. And then I was sort of fortuitous enough to actually fall into it post college.

Maggie Lake

That’s amazing. You’re far ahead of me, because I also worked when I was in high school and all the way through college, but never used that to have the sense to invest in shares. So you’re a step ahead. So you start out with a banking job in Australia. I’m going to condense a little bit, and I’m not even gonna mention all the places, but you really have had big jobs at some of the biggest names in investment banking; Global Head of Commodities and Prop Trading at JPMorgan, that Global Head of Macro Profit at Barclays. I mean, a stint at Tudor Investment. I mean, that is quite a resume. And I mentioned this because your first trade isn’t a specific trade, it’s being naively optimistic at most points in your career. And you list it as one of your best. That’s so interesting. Tell me about that.

Todd Edgar

I mean, the whole framing of this discussion about four trades, two good, two bad. I used to get that question a lot from investors about, you know, “Tell us about your best trade or tell us about your worst trade.” And in terms of what I do, there is no best trade. I mean, if I could sit there and say, “Oh, you know, I called the subprime blow up and made a gazillion dollars.” That’s not what I do. You know, it’s a series of probabilistic bets. And hopefully, you’ve got some probabilistic edge and gives you a positive expected return. So you can sit there and say, “Well, you know, I got the one good trade or the one really bad trade, you’ve sort of done something wrong.” That’s not how it works for me and that’s probably not how it works with most macro people, I’d imagine. So yeah, the framing of this, I understand obviously, why you frame it that way but it’s not super appropriate I’d imagine for most people like me.

Maggie Lake

Well, I think I think you got the assignment, though, because it’s never really the trade you’re talking about. Right? Especially if you’ve had a career as long as you or many of the people that come on, have so many trades. How do you pick four? And that’s the interesting part. Why did these four things, whether the trade, sometimes it’s a career move, like why does that stand out to you? So that’s why I thought that it was interesting that you chose that. But you’re absolutely right. It’s not a single trade.

Todd Edgar

You think about investing legends, I think, you know, Paul Tudor Jones could probably say the 87 stock market, George Soros would say the Bank of England, John Paulson would say the subprime stuff. So you know, I think there is that narrative, and I’m not putting myself in anywhere close to that but I think there is that narrative that people like to have a simple “Oh, you’re the guy who broke the Bank of England.” But you know, that’s probably not even true. I mean, I know enough about Paul Tudor Jones, for example, having worked with him. That’s not true for him either. So I guess almost through a process of elimination, the way I answered your questions was a little more general, rather than specific. I was sort of thinking about that what small success I’ve had in my career. You know, so much of that if you look back, you go, “Wow, I really didn’t know what I was doing. Like I had this assumption that was going to be this and if I knew what I knew now – that was just dumb.” But then it sort of ends up for the most part, working out. So I sort of thought of the term naively optimistic. And I sort of looked back at a lot of steps, and not everything worked out but so many of those were like,” well, I don’t really know what I’m doing here,” or I thought I did and I really didn’t and then it sort of worked out. So I think there’s that sort of the idea of giving a go. But also give it a go with confidence, even if the confidence is not really earned. You know, so many of the steps I’ve made in my career really fit that pattern and for the most part, it’s sort of worked out. The most recent example is starting a hedge fund. We spun out of a bank and started the fund in 2009 and the cliche of “a second marriages is a triumph of hope over experience.” I think anyone starting a fund – and I think it’s gotten gradually harder as well – but I think anyone starting a fund, if you look at the statistics, the chances of you being in any way successful is infinitesimally low. And not only that, if you think about the opportunity cost that you incur in doing that – so you can do everything, right but if investors don’t like you, you won’t raise any money – you can do everything right trading, but if you don’t have the infrastructure, they won’t give you any money. Or it’s just also super path dependent. So you can be the best guy in the world. But if you start at a time that your strategy is going to struggle, you know that those first year or two are super important, and if you don’t make any money, you won’t raise any money, and you won’t have a business. So that’s just a recent example. Those wages said they’re the facts. And I guess when I launched my fund, I don’t really know those facts. Or maybe I knew him a little bit, but sort of just decided to ignore them, and plowed ahead. And we’re very fortunate enough that it worked out in a way that was probably pretty low probability. And I can go back to almost every career decision that I’ve made, and except a couple that I’ll talk about, the same sort of pattern where you, you think, “Oh, I’ll do this because I can or will” and if you actually stopped to think about it, the chance of that working is not great. But obviously, if you didn’t try, it definitely wouldn’t work. So I guess that’s a little bit of an entrepreneur’s mindset. I, myself, am particularly entrepreneurial. I always remember, I was at a dinner – this is probably just after it launched the fund – and it was a VC dinner. I was sitting next to this guy, it was like a serial company starter. He’s like, “I just love the excitement. And it’s, you know, as soon as it starts working, I get bored, I want to start something new.” And I’m like, “That sounds horrible.” Like, I’ve just set this thing up. And I wouldn’t say I hated it. But I still I didn’t enjoy it. It was just stressful and scary. And at no point did it feel good. So the fact that you sit here and say, “Oh, I love I love the thrill of this.” It’s like, “Well, not for me.”

Maggie Lake

It is special. I think especially the entrepreneurs, I mean, building a company, the founder mentality – you’ve got to be almost evangelical about it. I mean, it’s really an amazing skill. And I think a lot of people think they have it, and it turns out very few of us – well, you see what happens. I mean, the lucky ones, I think, bring others in, maybe, who can help. But you know, back to the optimism. Do you think it was a conscious decision? Or do you think it’s just the way you’re built?

Todd Edgar

I think that’s probably just the way that I’m built. And it’s interesting if I think about specific investing, I’ve noticed over the years one of the biases that I have that sometimes works and sometimes doesn’t, but is always something you want to be aware of, I’m the guy who will say, “Oh, we’ll be okay.” Like, “Oh, Russia invaded Ukraine.” “Oh, that’ll work out.” So I think it’s sort of definitely inbuilt and in a macro sense, that’s a useful thing and maybe more micro trade by trade thing, that’s one of the heuristics that I definitely have that I need to be aware of and compensate a little bit the other way.

Maggie Lake

Yeah. Where do you trace that feeling from? Or that sort of that optimism or that gut sense that, “Oh, it’s gonna work out”?

Todd Edgar

It’s a good question. I think there’s, again, you sort of seed in your children a little bit. Some people are confident, and some people are not, and I think I’ve always been fortunate enough that obviously, everyone’s insecure about certain things so that’s not to say – complete 100% confidence in everything you do is sort of probably akin to sociopathy. So having an underlying level of self-confidence that often is completely totally unwarranted and is probably a little hardwired. It’s not something I’ve thought about too much, frankly.

Maggie Lake

Yeah, I think that it’s one of the hardest. I have thought about it because I’ve seen or experienced it, and it’s so interesting. It’s hard to answer why people are that way or not, whether it’s sort of nurture or environment, but it is a critical factor in how people navigate. It’s interesting that you were able to hang on to that because sometimes people start out like that and then most certainly, their experiences kind of break them of it, like they shake it out of them. And especially in banking, going through the great financial crisis, I saw a lot of people who were very bold – I’m going to use instead of optimistic, bold – and unafraid of taking on new challenges. And the mindset changed a little bit after the great financial crisis because so many unexpected things blew up. And so many lives were changed and you saw people sort of, I don’t know if Humboldt is the right word, but just aware of the risk. Suddenly the future was at risk. And like, since so many people were in investment banking, that kind of altered them a little bit. But you started a fund after that in 2009? Right?

Todd Edgar

Yeah. I mean, like most macro people, 2008 was pretty good for us because ultimately, what you want is volatility; you want things to move. And it did, and we did okay. So that was that was fortunate. But I guess it’s interesting you say that about the sort of humbling when you go through something bad. I think that naive optimism, the term I used, maybe you sort of want to couple that, and we touched on this with a philosophical discussion before with naive optimism, but with humility about “bad stuff happens”. So any sort of certainty around, frankly, anything, you are dealing always, whether it’s an individual trade or whether it’s your life with a probabilistic bet. And sometimes, it’ll work and sometimes it won’t. Hopefully, you try and structure things such that the probabilities will fall in your favor, whether that’s on an individual trade basis, structuring your trade, or risk-return or stop losses or whatever. Or even on a life basis, if you think about sort of, again, that your kids and my kids go to college – probabilistically, that’ll give them a better chance of having, quote, unquote, a successful life, whatever that means – that’s a tricky term. But that’s just putting the probabilities in your favor, it doesn’t mean it’ll work out. But you structure things such that you have the best chance of it working out, but with the knowledge that it might not. And you see this, it’s one of those things that sort of, often another sort of slight tangent, you see this all the time, with sports stars, who get paid a gazillion dollars and then three years later after they finish, they’re bankrupt. It’s like, “Well, how did that happen?” And it’s because you’re making the assumption that you’re just going to get paid like a sports star even though you’re not a sports star. So I think investment, as an investor, that’s similar. You have a very volatile earnings stream and you know, having the mindset that “This paycheck might be my last one, so let’s live accordingly,” – it’s probably not the worst idea in the world.

Maggie Lake

So your second trade – we don’t have dates on them so I’m just putting them in an order that seemed to make sense to me. But your second trade is one of your worst. And that’s moving from the sell side to the buy side way too early, without being mentally ready. So you know, set the scene for us. What period are you talking about in your career?

Todd Edgar

That’s the order I would have put them in, too. And that’s really the one time for me that the sort of naive optimism didn’t really work out too well. I guess, that was 2002. I was in my late 20s and I moved from Morgan Stanley to Tudor and I moved from running a market making business and doing a fair bit of prop trading on the side to a pure portfolio management states And it’s actually weird, I could have made that move – even earlier I could have made that – I was offered that same job a couple of years earlier, but I didn’t think I was ready for it. So I wasn’t completely sort of naive to “Oh, this will be a change.” But I massively underestimated what a change it was. And again, this is something I’ve been asked a ton. In my career I’ve had a lot of investor meetings and this is a question I’ve been asked a lot about why did that go so badly. And the analogy I’ve used is that it’s sort of somewhat akin to a guy who’s a bus driver asking himself, you know, “What do I do for a living?” “Oh, I, I control a machine that transports people. A plane is a machine that transports people, I guess I can fly a plane.” And now that’s not to say a bus driver can’t become a pilot and it is a job that has some similarities, but ain’t the same thing.

Maggie Lake

You don’t want to be in the plane with somebody who is a bus driver flying it.

Todd Edgar

Or allocate money to them. Obviously, you can make that transition and a lot of people have done that done very successfully. But I enormously – to quote George Bush II – misunderestimated the difficulty in making that transition, moving from a very collegial atmosphere to a very un-collegial atmosphere, not having the power of the franchise to mentally prop you up when you’re not doing well and then having that sort of cycle. You touched on it before about being sort of the hardwired to be optimistic, having that insight of, “What am I doing? I don’t think I can do this anymore.” And “I guess I’m no good at this” and etc, etc. So, again, looking back on this, had I’ve been a little bit older, maybe a little more mature, and thought about it a little bit more – about what the challenges would be and been more mentally prepared for them – then I would have done a much better job. Because I was at Tudor for three years and I pretty much sucked the entire time. And when I left I was happy to leave and they were not remotely unhappy to see me go.

Maggie Lake

It’s hard though. When you’ve done well, especially when you pull yourself up and you get that job and you’re sort of checking all the boxes of what success looks like – to kind of get punched in the face for three years straight – how do you handle that mentally?

Todd Edgar

Not well, I guess, is the answer for me. I mean, the conclusion I came to, which ended up not being wrong but not being as right as I thought it was, was like, “I guess I was not a hedge fund guy. I guess I’m just a bank guy.” So that’s why I went back to a bank after that. And thankfully, I didn’t go back to the sales side of a bank. I went back to run a prop desk, so at least I didn’t go all the way back. But you know, that was the conclusion I drew.

Maggie Lake

When you think about it now with all the nuance of basically, a prop desk is a hedge fund in a bank, in an investment bank, when they were allowed to be. And then you ran a hedge fund, and you did well in those. So were you really not a hedge fund guy? Or was it something about that time and experience?

Todd Edgar

Yeah, with the benefit of hindsight, it was more the latter. As I said, I just wasn’t ready for it. I wasn’t ready for it, and I was too immature. Yeah, I just wasn’t mentally prepared. I massively underestimated the adjustment that it would take. And it was one of those things where people tell you, “Oh, it’s a big adjustment.” You’re like, you know, “Don’t worry, I’ll work it out,” and I didn’t.

Maggie Lake

I have not worked at a hedge fund. I mean, you said you were in your late 20s, right? That’s still young, in terms of career and development. Is there any mentorship that happens in a hedge fund?

Todd Edgar

It depends on the fund itself. And I think to Tudors credit, they tried. It wasn’t that they didn’t want me to succeed as well – trading coaches, meetings with the regular meetings with the more senior guys there, whatever else. But ultimately, that’s the thing about portfolio management is, it’s sort of not a team sport, at the end of the day. That number next to your name is your number and you can get as much help as you want, you can try as hard as you can, and people will try and help you as much as they want. But if you make the wrong decisions, for the wrong reasons, you’re gonna hurt.

Maggie Lake

Is it more of a team sport when you’re on the prop side? And in other situations that you then went on to do? Can it be a team sport in that way? And does that help the process for you?

Todd Edgar

I think it does more than I thought it did, but not that much, if that makes sense. That’s not to say that’s the right way to do it. You know, different people have different approaches. And for me, just as an example, over the years I have hired many analysts, I’ve never really found a great way to make them work for me. Because either I believe them too much or don’t believe them enough. And that’s also somewhat analogous to using other people’s ideas, lock stock and barrel. Think about an individual trade – so when you make a trade, it’s very, very, very rare that you buy something that goes to where you think it should go, and you take it off and go, “Oh, that was easy,” like that, that almost never happens. So invariably, through the life of a trade, you know, the price action will move against you or something or come out that will challenge your thesis or whatever else and if you don’t really own it – if you don’t fully accept the risk and own the trade – when you have that challenge, you’ll be like “what I do this for? Stupid analysts, I should never listen to that guy!” or like, “Oh, you know, of course, if I’m trading everyone’s ideas, it’s gonna work,” and you’ll invent that does, that might be true, but it may not be in your variably stop yourself out at the worst possible time. So now, obviously, there are a ton of people out there who do a very good job of using analysts, and they probably trade way wider than I will because they got a team of people who can look at stuff because obviously only several things that you can look at and the number of things you can focus on any given day. So being able to sort of use other people to do your work for you, I can imagine, would be awesome. But it just doesn’t really work for me personally. So but that being said, there’s also a happy medium. So that’s the sort of individual trade basis but there’s also a happy medium I mentioned before about portfolio management being a somewhat lonely occupation, because you know, it’s you in terms of ultimately the buck, the buck stops with you. So I’d make the argument that when you’re structuring however you happen to be working in, whatever environment you’re working in, you want to structure that in a way that mitigates that loneliness does not exacerbate that loneliness. And I think my time at Tudor, at that point, was very silo. So you almost weren’t encouraged to talk to other people about ideas. And then a very good reason for doing that, which is not something I disagree with. Having an environment that mitigates that loneliness that’s something that’s important. And that can change, too, by the way. So that’s sort of a look at my last 15 years since I left banking. So you know, if you’re working in a prop desk, at a bank, or in a trading room, or in a bank, you’re surrounded by people, it’s awesome. You wake up, you go and say hello to everyone, and by definition, that loneliness is mitigated. Whereas if you’re working as a standalone PM, at a fund where you’re not encouraged to share ideas with people, that’s a tough one.

Maggie Lake

I think you just said two really, really important things, and your description of trading, I never really heard it put that way exactly before. Even though we talk about stop losses and up and when to get out, it still seems like an action. And you really just almost describe it almost like a relationship, like you’ve got all of these decisions to make at any given time about how you feel about this, and it’s going to test your feeling. So I really understand having some conviction about it, whether it’s a person doing it professionally or even as an individual, really understanding what you’re doing – fully – so that you can make the multitude of decisions that may come up about that. I think is so interesting. And when you describe that process, and then you couple it with the loneliness –I mean, you could be talking about an entrepreneur, you could be talking about a founder, you could be talking about a political leader, I mean, having to sort of have the buck stop with you but figure out a way to deal with that decision process taking information, but make sure you understand that. I mean, it really applies across any kind of decision-making.

Todd Edgar

Yeah, I’ve never thought about that before. But yeah, probably.

Maggie Lake

So I think this brings us to your third trade, which is also one of your worst. And that’s being a horrible delegator and manager. It sounds like that’s kind of what you’re talking about when it comes to working with other people.

Todd Edgar

Yeah, I think it’s a little worse than that, actually. Everything you just said is true. But on the business side of things as well, I think I didn’t do a great job running the fund. It was two things, ultimately. I don’t like managing other people. And to a certain extent, I’m very happy to be left alone. But, you know, having interaction on my terms, as opposed to other people’s terms, which, by definition, is not great management. And there’s also an element of trying to treat other people like I’d like to be treated, which for the most part is “just leave me alone, leave me alone, set my rules, or leave me alone.” And again, that works pretty well for a portfolio manager, but it works horrendously for virtually every other task you might have. So I think if I think about my time running the fund, I just didn’t really do a great job of that. I’m not a good hirer. And I always think about the sort of the substitution heuristic when it comes to hiring, and that’s the idea that if you have a complicated question, you are programmed to substitute a question in the vicinity – so a similar question, that’s much easier to answer. So if I think about sort of hiring for me, “should I hire this person? Are there going to be any good at what they do? And how do they fit? Yada, yada, yada?” That’s a very complicated question to answer. But I would generally substitute, “Do I like this person for that cut?” Which is a very easy question to answer. Do I or do I not? It’s a binary thing, and you can know that within about 30 seconds of meeting someone. And that doesn’t necessarily lead to the best hiring decisions, which I’ve found throughout my career. So I don’t really know how to fix that.

Maggie Lake

It’s called affinity bias, right? We hire the people that are most like us, but most people think it’s because we want to be surrounded by people who are most like us. But you’re suggesting it’s because we’re avoiding a much more complicated question, which is a nuanced way to think about it. And you’re probably right, because that’s unknowable. That’s, that’s hard to answer that one.

Todd Edgar

Wonderful. That might be true. But does that help in any way? No. Just what do you do to fix that? I don’t know. I guess in a way, I’m somewhat fortunate in this. What I do for a living, unless I want to be running a fund again, doesn’t really require me to be really good manager. So I do have a couple of people working for me now, but they’re more on the tech side of things. And I think are anti-social as I am, so happy to be left alone for the most part, and I’m perfectly happy to leave them alone.

Maggie Lake

Are you antisocial though?

Todd Edgar

I don’t know. It goes back to the thing we talked about before with respect to my daughter. I am not antisocial with people I know and like. But I am antisocial people I either do not know or don’t necessarily like. A joke I’ve made about myself before that you know, “if there was a hell and I go there, it would be like some big gala where I have to mingle and talk to people.” I don’t know, I would absolutely hate that. I do absolutely hate that.

Maggie Lake

By the way most of us do. I think very few people totally thought they were out there. I’ve seen them and I marvel at them. But I think I’ll think a lot of us suffer from that. Although when you’re running your own fund, you get the opportunity, as we just said, because you’re just trading down to the simple question to say, “Do I like you?” So you’re presumably hiring people you like. So the anti-social part doesn’t really fit that description. Let me ask you a question. When you were working when you were younger, did you need people to tell you that you were doing a good job? Did you like feedback? Or did you really not feel the need for it?

Todd Edgar

That’s a good question. I don’t think I really needed it, and I guess again, that’s a portfolio managers love – your feedback, your p&l. If I’m going a good job, it’s positive, I’m doing a bad job you know. Obviously, there’s some performance variance in there, and you can crunch those numbers. But I guess that’s part of what draws myself and probably a lot of other people to this job, which is that the feedback is very effective. It doesn’t have to be human.

Maggie Lake

But managing that is a big part of communicating constantly, that feedback. And that seems to be the thing that – because if you don’t need it yourself, you don’t understand that other people do, right?

Todd Edgar

Well, you can understand it intellectually, which clearly I do, but it’s just not me I’d rather not do. It’s just I find that painful. That’s just stuff I don’t want to do, and that’s not good management at all, I realized that.

Maggie Lake

Well, by the way, it’s amazing you realize that because there are some people to this day, who are managing people who do not who have never really understood that they’re terrible managers. I mean, it’s kind of the way organizations are set up, you get promoted to your level of competency, right? And most of the time, that’s managing people, right? And most of the time, managing people tends to be the thing that people are not good at. It’s really, really hard. It’s a really underappreciated, really hard skill. Do you think it’s one that can be learned? Could you have chosen to sort of double down and say, “This is where my weakness is, I’m going to be a better manager.”

Todd Edgar

Yeah. 100% I think I bought a bunch of books, read some of them, and found them boring. Yeah, that’s what an MBA is. I have a good friend of mine from Australia who went to the INSEAD course, he loved it. Like actually, my dad did it too, funnily enough, and my dad also loved it. My dad is a very good manager. Yeah, they loved it. But I was like, that would be again, if my hell is maybe going from a room, people don’t have to talk to they don’t know, and then do an INSEAD course about management, that would probably be a couple of different circles at the same hell, I think. But absolutely, you can absolutely do it. I mean, there’s a whole massive industry of management training that teaches you that stuff. So I think you can do it, it’s just not my thing.

Maggie Lake

Yeah. So your fourth trade is one of your best. And that’s really, really liking to read. Yes. Why is that one of your best trades?

Todd Edgar

Well, I sort of touched on a lot of the things we’ve already talked about, which is, there’s a level of intellectual, as there’s always a paradox in saying intellectual humility, because it’s actually quite an arrogant thing to say, but there is an element of intellectual humility in that. There is an enormous amount of stuff that I don’t know and I want to know, so how am I gonna find that out? It’s by reading. That’s it. That’s the only way to do it. And then in terms of, and this is a more recent buzzword that I’m sure you’ve heard, the idea of being a lifelong learner, and how that keeps brain plasticity and all that wonderful stuff. I think that’s sort of true. I think that’s sort of the idea of wanting to keep knowing and learning new things until you die. I think that’s an incredibly powerful, interesting thing. Again, how are you going to do that? It’s not; you have so many conversations in a day. And getting back to all the things we’ve said, chances are, you’re talking to people who are somewhat similar to us. So there might not be as much variety of thought there that you get by picking up a book. And then thirdly, and the most obvious is that a big part of investing, especially in a macro sense, is just knowing what’s going on. And again, how do you do that? You do that by reading a lot. So it’s funny, my youngest son is actually the only one of my children who is interested in what I do. And he’s always asking about the stock market, blah, blah, blah. But unfortunately, my youngest son is also dyslexic so he finds reading very challenging. He’s like, “I want to do your job, dad, but like, other reading,” I’m like, “I get, it’s cool, you know, do different ways and audiobooks. Don’t worry, we’ll work that out for you if you’re interested.” So having that’s a good example of having that be a challenge for you. And I’ve always been the opposite. I’ve always loved to read. So having a big pile of crap that I’ve got to read is exciting. I mean, there’s gonna be something in there that might be interesting and might make me smarter. And that gets me out of bed every morning.

Maggie Lake

So what do you read? Is it all economic reports and finance related? Or is it varied?

Todd Edgar

I read mostly, I mean, a ton of fiction. So yeah, but I’ll read pretty much what you’re gonna think. Thankfully, a pretty quick reader so I read a lot of books every month, and they are very varied. And there’s obviously other periodicals and general economic stuff that that that anyone sitting in my chair will plow their way through on any given day. So there’s that too. So, enjoying that, because that you sort of got to do it. And if you don’t enjoy it, that would be that would make for a fairly short career, I suspect.

Maggie Lake

Yeah. But the thrill about being able to connect dots because there’s something that you read, you know, it’s sort of a light bulb goes off when you get that – and sometimes it’s just a couple lines – but yeah, I totally agree with that. It’s just like opening up a sort of new line of sight, which is kind of extraordinary, you know. With this day, with everybody with the phones attached to them constantly, I’m always screaming. Before we came on, we established we both have teenagers, some of them the same age, or kids in the same sort of vicinity, and I’m constantly freaking out on them about just being on their phone all the time. We all do it, but I feel like it’s robbing everyone of so much time that could be spent elsewhere. It’s like it concerns me.

Todd Edgar

Yep, I couldn’t agree more and even more so, there’s that and there’s also the just the attention span thing. Having a decent attention span is another cliche, it’s a superpower. And I catch myself, I do it too. And there was even that to the point where I’ve, if I want to sit and read and concentrate on something, I leave my phone on my desk and go to a different room and do it there because it’s so it’s stupid. It’s by design, it’s stupidly addictive. That is what’s designed to do.

Maggie Lake

And because of that we have so much information coming at us, more than we can consume. I always joke when I listen to a Raoul interview he’s like, “Yep, read that book. Read that book.” I’m like, “What? How? Where’s this guy stealing like weeks out of a month to find all this time.” But how do you curate what you want to read? Do you get recommendations? Do you go seek it out? Is it just somehow accidentally land on your lap?

Todd Edgar

I read a lot of book reviews, in all seriousness. I subscribe to book review magazines. And so I’m trying to stay on top of it things that way. And then when it comes to the more work focus stuff, there’s a habit of yours to a certain extent you find stuff that resonates with you. I think ultimately, I’m also just a bit of a sucker for good writing. So if I like to read it, I’m going to read it. Again, there’s a, there’s a heuristic there that you want to be a little bit careful – just because someone writes well, doesn’t mean their ideas are actionable and vice versa. If the guy writes horribly, and his ideas are awesome, you don’t want to dismiss that. That is that’s not particularly scientific for me. If I like to read it, I’ll read it. If I don’t want to read it, I won’t.

Maggie Lake

You can read stuff faster when you like it, too. But I find it all settles. If it’s good writing, not great ideas, good ideas, bad writing, somehow all settles in the back, when you get to stew on it for a little bit. I feel like the good stuff comes up.

Todd Edgar

Yeah. And again, ultimately, what’s the point of any of it? It’s to develop a worldview. And generally, again, getting back to the comment I made before about if I do a trade where the guy says buy dollar yen, you get by DOLLAR YEN, you don’t own it, you’ll probably mess it up. Whereas if you have a worldview that then lead you in that direction, you probably do a better job of risk managing it. So the reading is really just develop that worldview. And the analogy again, I used to always use with investors was the sort of the idea of the rubber band ball. So yeah, the ball hole, the rubber band, I mean, as you’re What are you doing to read? Is you adding a rubber band or subtracting a rubber band? And then that rubber band ball that you have is the the basis for your views. And that’s it.

Maggie Lake

Spoken like a macro trader. And macro investor. Do you consider yourself a creative person?

Todd Edgar

Probably a little, but not very good at it. I think there is a large element of imagination that’s required to do this job well. And if I sort of, tend to be pretty quick to beat myself up about things and one of the regular things I beat myself up about is the lack of imagination. I think there’s an enormous creative element to investing, which is thinking about things in a different way. And I’m not awful at it but I wouldn’t necessarily think I’m particularly great at it. I guess when it comes to writing I’m an okay writer, I wrote a monthly note still, because I like the discipline of it. And you know, there’s a lot of people who do a much better job than me but there’s a lot of people do a probably worse job than me. So I put myself sort of firmly in the middle of pack in terms of writing ability. Although, I do try and sort of make it personal and have my personality shine through, so I think I do an okay job of doing that. And then when it comes to other stuff, you know, I’ve been hacking away at the guitar for the last seven years, and I thought I would be better at that but I never will be.

Maggie Lake

I think it’s the sometimes the pursuit of that. James Altucher did this podcast with us and he said something that really stayed with me and it seems to me to connect to your love of reading or the fact that reading is essential. And he was coming off a really bad period, just a disastrous period, we lost tons of money, and it was his really dark place. And he took out a paper and said, “I’m gonna write down 10 ideas. Every day, I’m gonna write down 10 ideas.” And it was really it was it was a slog, you know, it wasn’t something that was coming easily to him. And he felt like that sort of forced discipline of creativity and content, and just thinking, really was what dragged him out of his spiral and put him on the right foot. And I just thought that was such incredibly sage advice for everyone and seems to me to be very connected to your reading. For him it was 10 ideas, for you it seems to be reading. But that idea of challenging yourself to learn and think outside of the sort of moment that you’re in seems incredibly powerful.

Todd Edgar

That’s a massive part of why I still write a monthly note, which when I was running external money I had to do, and I tried to have other people do it for me and it never worked very well so I always did it myself. And when I did it for my external investors, I found like it was like a homework assignment and I used to absolutely hate doing it. And it was more of a marketing document as well, so it was like, “I think it’s doing well,” you sort of want to spin it. And if you want to figure it badly, you sort of want to spin that too. And it wasn’t an honest document, whereas now that I’m doing it just for myself. And I still send it to literally 1000s of people, so if anyone wants to be on the list, send me an email. The big part of why I do it is exactly that, because it forces me every month to sit down and write a long form piece about what I’m thinking. Right now, I’m not really thinking I haven’t had a particularly good quarter. I don’t really know what I’m thinking. But in the next 15 days, I’m going to come up with something and writing that down as well. You don’t want it to stop. So it’s got to be at least somewhat well thought out, because you can have ideas in your head. And I think there’s sort of degrees of testing those ideas to a certain extent. So I can have an idea in my head and if I don’t mention to anyone, it’s just an idea in my head, and I can think that I’ve examined every angle of it but I probably haven’t. If I have a conversation with someone about it, that takes us to the next level where I have to defend it to a certain extent. I think the level after that is actually writing about it, because then you really have to, you see very quickly where it’s thin. And then that forces you to either thicken it or abandon it, and that’s, that’s a good process.

Maggie Lake

It is. It’s one that journalists know well. And an editor gets in there and they inevitably tear apart the part of your story that you know that you just put it there because you’re on deadline. And you’re like, “Okay, that sucks. I’ll just hide that there.” And if you’ve got a good editor, it’s the first thing they ask you about.

Todd Edgar

I do the same thing, albeit not every day for 10 ideas. I do monthly for exactly the same reason.

Maggie Lake

So you see, you’re incredibly introspective for someone who’s had this very successful career by anyone else’s estimation, and you seem very willing to be critical of yourself. I don’t know if overly critical maybe, even that that’s probably for the purposes of this, but that that’s the vibe I’m picking up. Why is that?

Todd Edgar

Oh, definitely that way. Obviously, at some level I know I’ve been very fortunate. Another level I’m like, “I really effed that up, I really should have done a lot better.” And I really do feel that way. And I guess in a way that’s not great because it maybe lessens overall happiness, perhaps. On the other hand it is good because it keeps you going.

Maggie Lake

You’d be done if you think it was all.

Todd Edgar

That gets back to the lifelong learning thing. Great. I mean, what do you do then? I mean, like, I was talking to someone about this yesterday, I always think about. This is oddly specific and if this ever gets back to the person in question, I apologize because this may not be true. I always think about David Schwimmer, the guy from Friends and like, what does he do every morning? Does he wake up? Does he wake up and go to “Today’s the day I’m going to get another role!” then he goes to bed, “Not today.” And then he wakes up next day goes, “Today’s the day I’m going to get another role.” Think about Hollywood actors who have been very successful and then just disappear, what are those guys do? I mean, like, literally, what do you wake up in the morning and do? You have all the money in the world but what a horrible life.

Maggie Lake

This is the huge challenge, talking about having a growth mindset, of shifting your identity. I mean, there’s probably anything harder than reinventing yourself. Reinvention takes an enormous amount of – a mix, I think, of – like creativity, energy, humility, self confidence, you know, to sort of become something else after you succeeded. It’s possible but it’s really hard. I don’t know. Have you felt that in your journey?

Todd Edgar

Yeah. Especially the closing the fund and maybe your family office thing and things. That was really hard because you put your sort of heart and soul into it, in my case, a decade, a sort of accumulation of everything you’d worked towards. As I said, I don’t feel that we did as good job as we should have and it was of I think we had an opportunity to do something incredible and we fell well short of that. So I will regret that forever. Like said, there’s no going back, it’s done. So there’s always there always be that regret that at the end of it, I always well, not always but again, this is a topic that I’ve thought about a lot and I’ve been asked about a lot. I have two little throwaway lines about this, you know, the move from external, managing literally billions of dollars of external money to just manage my little family office. You know, the hedge fund side of things I sort of say, I get most of the time. I’m glad I did it. But I’m glad I’m not doing it anymore. The other thing is that it’s way worse for my ego, but probably better for soul. So balancing that.I don’t know that I’ve done an awesome job. Most days, I have, I think, but like, not an awesome job, but I’ve done an okay job in not being too regretful. But there’s some days

Maggie Lake

Maybe the transition’s not over,

Todd Edgar

maybe, maybe, who knows. But I think that’s you’re getting back to that. I think that’s going to be true for any transition you make you always have an realistic or not realistic, you always have regrets about I could have done should have done a certain thing. And you know, they could be utterly unrealistic. And probably they’re also cherry picking, because you’re sort of you tend to mentally know, think focus on the things that could have been better, things better, but not focus on the downside of doing that or not. Yeah, maybe even more probabilistic things that would have been worse. And that’s just, again, just human nature. So you’re getting back to your original point, which was sort of, you know, introspection, and maybe being a little bit hard on oneself, but what that leads to the end that you are who you are, and probably reasonably perspective and probably always be reasonably hard on myself. But there’s, there’s certainly downsides to that. But there’s also some upsides, I think,

Maggie Lake

I think the upside is freedom.

Todd Edgar

Well, freedom, drive, I think, as well. So I think having that sort of, I guess, the idea that you still quite like what you’re doing, and you still feel a little bit fulfilled, is that strong, but you know, there’s unrealized potential. Yeah, there’s still, it’d be very easy again, if you can David Schwimmer but like, again to be like up in the morning, okay. The day is the day that like, you know, or the flipside of that is just to say, Well, I’m done. Now, I’m gonna go play golf. Yeah. That’s why don’t like golf that picks up where she likes to say, I’m going to be professional surfer. Now. I don’t know. Like, I always think about sort of when I go on surfing trips. I love surfing more than anything. But, you know, day to day one on pump day two, I might still awesome. Day three. I’m like, I’m tired now. Okay, what now?

Maggie Lake

Yeah. So I think that I mean, as somebody who’s who’s gone through a transition to I think that this is where the being a lifelong learner comes in. Because there’s a point where the transition, the introspection and the hard work you’re doing now, and maybe still doing gives you those lessons and insight about yourself. And then at some point, it will, it does free you up with with just more knowledge to be ready. As Sergio said to me, Silva said to me, he was there’s always luck involved. But when you’re ready, you’re ready when the opportunity comes, right. Like there’s a sort of Lucky intersection of something that will, you know, define your next chapter. And you’re kind of met by doing all that hard work and introspection, you’re mentally ready and sort of free to do whatever that is, you know, and maybe it is professional golfer surfing, or maybe it’s having something to do with the career you had. But I think that’s a sort of fabulous way to look at it.

Todd Edgar

So I think there’s a, there’s a, you have to be, we have to realize it’s not static either. So you have to sort of fit what you’re doing to how you feel at that given point in time. As far as talking to look cheap. having this conversation yesterday with a friend of mine, we’re talking about our fathers. And he’s my age as well. And he’s doing doing well, but still working very hard, as am I. And he was talking about his dad who retired. And he was a Si, si over division of a big public company in Australia. So successful guy. And he retired when he was roughly our age among my friends a little older than maybe he retired when he’s 52, and then spent the next 17 years as a very active board member on a golf course. And my friend was I don’t know how he did that. And I sort of would agree, but there may be and we both agree. We both also agree though, there may be a time though, when you wake up one morning and maybe the fire is not burning quite as strong as what it was for whatever you’re doing. Today, it was the day before and then each day it gets a little less sort of intense and then you can do something else. So So I think it’s sort of a, you know, again, introspection and somewhat self knowledge around this stuff where you sort of think okay, well, you know, I’m pumped to get out of bed to do What I do today, and if tomorrow, I’m not pumped to go better do I probably should do something else. And that’s, that’s where having been fortunate in your career and having the wherewithal to actually make them because most people are not given. That’s not a choice, the vast majority of humanity that is not even close to being a choice. So you have to be cognizant of the fact that you are ridiculously blessed to even be able to think that way. And then don’t don’t fuck up their blessing, frankly.

Maggie Lake

That’s actually what I was gonna say. Yeah.