So You Want to Start a Hedge Fund? Watch This First

Sep.22 -- Scott Goodwin was a credit trader. Jonathan Lewinsohn’s expertise was in research. Together, they planned for years to start a hedge fund. Finally, in 2017, they did, and Diameter Capital Partners has become one of the most successful firms in the business. Here, in this special excerpt from their interview with Bloomberg’s Erik Schatzker, Goodwin and Lewinsohn detail the lessons they learned along the way, as well as the dos and don’ts for aspiring young hedge fund managers.

[AJ-iunw]

Guy on the left is the numbers guy. Guy on the right is the networking guy. Together, they are unstoppable.

[kingvdarkness]

To be successful in finance:
Good memory - to recognise patterns
Sell fast - don't be emotionally attached, you can always buyback
Focus on your growth curve
Doubt yourself
Find mentors who you can learn from
Being focused on where deals can be made - where can you make more money or make more savings?
Be competitive

[adamfaliq]

1. Memorise every trade and key statistics you do 0:53
2. Dont be attached to any position 1:18
3. Understand momentum and sizing 2:00
4. Don't set up to be a hedge fund manager 2:40
5. Be honest about your career trajectory. Dont stay in a position where your trajectory has flatten 2:50
6. Put yourself out there, constantly think of the consequence if your hypothesis is wrong 3:00
7. Practice intellectual honesty 3:07
8. Find mentors that you can learn from through osmosis 3:20
9. Dont be discouraged 3:50
10. Key ingredient 1: Curiosity 4:10
11. Key ingredient 2: Always be thinking how a business make money 4:30
12. Key ingredient 3: Focus on efficiency 4:44
13. Key ingredient 4: Love what you do 4:55
14. Key ingredient 5: Be super competitive 5:00
15. Key ingredient 6: It's not rational to not be afraid 5:10

[patriciacarlos]

A weak dollar can signal an economic downturn, making me to ponder on what are the best possible ways to hedge against inflation, and I've overheard people say inflation is a money-eater thus worried about my savings around $200k

[mychillbase]

Everything is true. I made 1245 billion last year. I am 9 years old. Facts.

[Adam_G]

Some of the most honest and authentic advice in finance.

[TonyGriffin-zdsv]

Thank goodness you brought this up! Truly, investing has changed my perspective on how one can succeed in life; working multiple jobs isn't the optimal way to attain financial freedom and unfortunately, we discover this later in life. Currently earn as much as 10 grand weekly and this has improved my financial life. Great piece!

[rowlzroyce]

99% of this was generic investing advice and had nothing to do with starting a hedge fund. Like two lines about mentors and not focusing too much on far out goals was specific to finance careers and management, the rest could be applied to anyone starting to learn about stocks. Not helpful to anyone who’s at the level of seriously considering starting a hedge fund. If you’re considering starting a hedge fund and haven’t grasped some of the simple concepts they mentioned like not getting attached to a stock and being able to sell without emotion, you probably shouldn’t be watching videos on starting hedge funds.
Click bait title imo

[minutescouldsaveyoupercentormo]

these guys look exactly like what hedge fund managers would look like 😂

[sherryie]

It really made no sense to me when he said ''It doesn't matter whether I'm right or wrong, whether the market goes up and down. I'm good regardless''. People are really losing a sh*t ton of money out here. I personally have been buying stocks since the beginning of the year and yet nothing's changed, but I've been reading articles of people still in the same market pulling off over 350k in just a couple months. Its tough out here!

[annajones]

Guy on left is a math finance major and masters degree. Guy on right is a business major and can not do math but partied all the time

[throttlebrah]

If you want to rule the world, be good at both Finance and Tech

[algotrader]

They started in 2017 right in the middle of the longest bull market and they are "successful"? Lets see how "successful" these hedge funds will be when there is no more fed support and market goes sideways for a decade.

[consensualcode]

"Average client's forty-five years old, from the Midwest, two hundred and fifty thousand dollar annual income, three million net. Has a local broker, but loves a New York guy who sounds good on the phone. The card's not gonna tell you any of that. Only says their name, address and occupation. You gotta feel them out"

This is an excerpt from the movie the Boiler Room which still rings true today. Hedge funds historically on average don't beat the market but still charge exorbitant fees.

[noaboa]

Being competitive isn’t the same as being loud. I think it’s important to have a standard of urgency but in a field where urgency can double sword as kryptonite there has to be balance so you aren’t working from a constant burnout state. Flow state is very real and comes from a personal confidence and excitement to problem solving and research.

[slvfelix]

Excellent interview and advice on why is important to understand the why in business

[vyacheslavblohin]

Thank you for the knowledge it really gave me a good place to start🌎

[patrickblair]

Pattern in a market? What about your due diligence... That momentum trading (or whatever they call it) or trading in technicals, seems to be a gamble...

[Kevin-iwsd]

the brain volume of the left guy though ....

[PedroPerezx]

Thank you for the advice. This was helpful.