Wednesday, February 7, 2018

What We're Reading ~ 2/7/18

George Soros remarks at the World Economic Forum [George Soros]

It's hard to predict how you'll respond to risk [Collaborative Fund]

How delivery apps may put your favorite restaurant out of business [New Yorker]

Older piece but interesting: Disney as a service [Redef]

QVC plans to survive Amazon and escape the cable TV death spiral [Bloomberg]

Why one firm passed on investing in Ecolab [Intrinsic Investing]

A new mental model for investing [MicroCapClub]

Germany is still obsessed with cash [Bloomberg]

Why Rimowa rules the luggage carousel [FT]

Investing in UK retailers: bargains or basket cases? [FT]

The new robot revolution in manufacturing [WSJ]

Ikea's success can't be attributed to one charismatic leader [HBR]

The American sedan is dying, long live the SUV [Bloomberg]

Like great coffee, good ideas take time to percolate [FT]

Monday, February 5, 2018

Ken Griffin Talk at Georgetown: Leaders of Global Finance Speakers Series

Ken Griffin of Citadel was interviewed at Georgetown University McDonough School of Business as part of the Leaders of Global Finance Speakers Series in September last year. 

He talked about how he doesn't think machines will completely dominate the finance industry.  He says that good old fashioned stockpicking won't die because there's so many qualitative aspects of the process that machines can't necessarily do like interacting with management teams, supply chain, competitors, etc.

"Computers will never, in my opinion, replace the judgment and intellect and the ability to connect dots that people do who are world class analysts in equities."

Griffin noted that machine learning is about pattern recognition and cited outlier events such as Brexit and the machines not knowing how to react or trade.  "Machine learning works really well when you have persistent, consistent patterns."

He says one of the keys to success in finance is to work in the industry because you're passionate about it and love it, not just because you want to make money.  This is because if you're just in it for the money, you're competing with people who absolutely love what they do and will work harder than you.

Griffin said that even his best colleagues at Citadel win 53% of the time and lose 47% of the time with their trades.  That's incredibly humbling, especially when that person is used to getting "A's" in all their classes their whole life. 

Regarding the low volatility last year, he thinks it's a part of the business cycle and one that normally comes in the 7th or 8th innings. 

Asked what hedge funds and private equity firms he admired, Griffin said Paul Tudor Jones (Tudor Investment Corp) he's always looked up to, as well as Ed Thorp. 

On the private equity side, he said he has great respect for Blackstone Group and Steve Schwarzmann, as well as Henry Kravis at KKR.

When asked what advice he'd give to people starting their own fund:  "You do not own your business, your business owns you.  #2: The best advice I've ever had in my life: Hire the best people you can possibly hire."

Embedded below is the video of Ken Griffin's talk at Georgetown followed by the Q&A session: