Global Macro Future "Stars" - Where Are They Coming From?
What professional backgrounds are today's and tomorrow's top global macro minds coming from? And how much does the environmental backdrop help explain this? Pretty simple question, but I think it's interesting to note the following trends for context.
The first generation of global macro investors (e.g. Soros, Steinhardt, Robertson, Rogers) came from a wide array of backgrounds.
The second generation (e.g. Kovner, Tudor, Moore, Dalio) of global macro investors overwhelmingly came from commodity backgrounds. And had Ivy League educations. The fact that commodities were booming when these guys, coincidentally, started their careers in commodities helps explain how important the environmental backdrop was in shaping their respective careers.
This third generation of global macro investors overwhelmingly came from two backgrounds: 1) prop trading, or; 2) PhDs with central bank/IMF experience. Prop trading flourished during the aughts because Glass-Steagall's repeal lowered regulations and capital requirements for the industry. IMF economists flourished during the late-90s/early-00s because the EM world was re-structuring then (i.e. defaults, Structural Adjustment Programs; e.g. Turkey, Argentina); when IMF economist demand waned and hedge funds boomed in the aughts, many of these economists transitioned to global macro. Lastly, central bank economists became increasingly desirable in the global macro world, during the 90s/00s, because central bankers increasingly drove financial prices during this time.
So today we see strong demand for prop traders and PhD economists from global macro funds. But if we rewound the clock, we'd see that different backgrounds used to be more coveted. And looking forward - S&T is dying and, surely, the cult of central banking will wane. So there will be new and different macro factors driving shifting demands for the next generation of macro investors. What are these trends today? And what will they be in the future?
In other words, where are today and tomorrow's global macro greats going to come from?
r/WallStreetBets
This might have been a fair statement last fall but at this point I don't think anyone seriously expects central banks to adopt a less engaged role. Congress is so dysfunctional that it prefers to vastly expand the Fed's powers by running the SB and PP loan programs (instead of allocating money to SBA to do that), on top of the Fed's already extraordinarily aggressive shift to buying corporate credit. I don't think the central role of central banks is going anywhere.
follow
Global macros are back in the limelight this year. They should thrive in this enviroment and the people who are 'stars' currently are still the same group of people. The Rokos, Brevan, Moore , Odey come to mind they did very well in this melt down. But this is the same generation of the people from your comparative 2nd Gen and 3rd Gen PMs. Speaking from experience, they've been arming themselves with the quants/data scientists to dig through global data and 'big data' sets for say retail sales/inflation data/empolyment data/commodity demands etc just to name some themes. The same group of ppl arming themselves with all the ex central bank governers and ECB chairs etc on their board of advisors. I can't really see how this is going to shift. These people are young enough to kick about for another good 20 years or so.
There has been a lot of development away from the traditional Macro though. The RV and stat arb businesses has moved on with a lot of techonology advancements. Though just inthe last few month they have suffered a bit but the trend is still there.
Great answer, thanks. You mention technological progress and its impact on Macro RV. Would you say that Macro RV is becoming more and more systematic or model driven then? How can a trader maintain an edge vs the purely quant driven funds?
Also, you mention big data for global macro. It seems to me that so far big data was more about single name equities. The law of large numbers works better here since there are so many companies, so a slight informational advantage on a large number of stocks could be turned into trading profits. Would you say that this could also work for Macro? Obviously there are only 10 G10 currencies, but there are 1000s of stocks... Could it really be a source of fairly consistent profits if big data aloows you to, say predict inflation by 0.2% better than the market?
.
Odey is a macro star? The guy's been short for 5yrs fighting the Fed and had been annihilated. Then he makes money one month because of an unforeseen pandemic and you applaud his savvy? Are you for real?
Ipsa eligendi minus tempora asperiores. Sed provident molestias repellendus voluptas optio dolores. Enim assumenda unde unde voluptates in porro aut quia. Consectetur sit rem provident aliquid dolore aspernatur. Veniam id itaque recusandae rerum voluptatem. Quas omnis dolores consequatur quaerat totam corporis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...