WSO Podcast | E113: 8 year Hedge Fund Pro takes a Sharp Turn
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In this episode, Sam explains his path from the Ivey School of Business to an investment banking analyst position at Credit Suisse in London, right during the financial crisis in 2008. We learn why he turned down a return full-time offer from Scotiabank and rolled the dice his senior year, what it was like when half his analyst class got laid off within 9 months at Credit Suisse and why he jumped to a hedge fund after two years in IB. We then delve into what it was really like trying to gain responsibility at a large hedge fund to start running his own P&L, how much his first trade was, the stresses of the job, and some important life lessons he learned along the way. Don't miss this one, I think a lot of you will really appreciate Sam's perspective and why he made such a dramatic change after so many years... Also, if you want to hear more about what Sam's up to, visit Samuel's blog at https://www.samuelandrew.com/
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WSO Podcast (Episode 113) Transcript:
Patrick (CEO of WSO): [00:00:06] Hello and welcome. I'm Patrick Curtis, your host and chief monkey, and this is the Wall Street Oasis podcast. Join me as I talk to some of the community's most successful and inspirational members to gain valuable insight into different career paths and life in general. Let's get to it. In this episode, Sam explains his path from the Ivy School of Business to an investment banking analyst position at Credit Suisse in London, right during the financial crisis in 2008. We learn why he turned down a return full time offer from Scotiabank and roll the dice his senior year, what it was like when half his analyst class got laid off within nine months of Credit Suisse and why he jumped to a hedge fund after two years in IB. We then delve into what it was really like trying to gain responsibility at a large hedge fund to start running his own P&L. How much is first trade was the stresses of the job and some important life lessons he learned along the way. Don't miss this one. I think a lot of you will really appreciate Sam's perspective and why he made such a dramatic change after so many years. Also, if you want to hear more about what Sam's up to visit his blog at Samuel Andrew, enjoy. All right, Sam, thanks so much for joining the Wall Street Voices podcast.
Sam: [00:01:26] Thanks for having me, Patrick. So she'd be
Patrick (CEO of WSO): [00:01:28] Great if you could just give the listeners a short summary of your bio. Sure. My bio?
Sam: [00:01:35] Where to start? Maybe a helpful place to start for, I guess, a lot of people listening to this is I did work in finance actually. My first day in investment banking was September. I believe it was 15th 2008, which was actually a pretty remarkable day. If I recall the actual day correctly, that was the day Lehman Brothers went bankrupt and I was working in London at the time. I was a first year analyst and coming out of the tube station in Canary Wharf. The Lehman Brothers building is right there. And I was shocked by seeing all these camera crews everywhere and reporters and people pouring out of the Lehman Brothers building with boxes of stuff and teary eyed and totally shocked. And I had no idea really what was going on. The reality was, I don't think anybody had an idea what was going on, but I showed up a couple of buildings over to the Credit Suisse office wondering whether or not my key fob was going to work. And sure enough, it did to my surprise and sat down on my desk and not really knowing what to do. And no real communication, I recall, came around and we just started working on stuff the staffer was telling us to do, and
Patrick (CEO of WSO): [00:02:52] That was like, that was like your first day out of training, basically. That was the first day out of training.
Sam: [00:02:57] So I had been in London a couple of months earlier to do the first year analysts training that would have been over July and August. Just for the listeners, you went
Patrick (CEO of WSO): [00:03:06] To school in Canada, right?
Sam: [00:03:08] Yes, I grew up in Toronto and then graduated from Ivy in 2008, OK, and then moved directly to London. And so what I just described was my my first foray into the job world and investment banking, and it was a crazy,
Patrick (CEO of WSO): [00:03:28] Crazy day to start.
Sam: [00:03:29] Yeah, but the reality is I didn't know any different. I had no prior experience. So for me, it was that was just the way it was, right? Right. And so this turmoil that everybody else, the VP's, certainly the managing directors were realizing just how crazy a world we were in. It was for me. It was like, Oh, this is just how things operate, right? And and so that's what started two years in investment banking
Patrick (CEO of WSO): [00:03:56] Where I see you got some restructuring experience. Was that because you were pulled in to that side of the business more because you're so busy?
Sam: [00:04:03] Yeah. So there was a lot of that going on. I joined partway through my analyst career. I joined the Financial Sponsors Group I Credit Suisse, which pre global financial crisis was doing all the LBOs and post-financial crisis. Somehow we retained all the same customers, the clients, which were the private equity firms, shockingly. And now we were doing all the restructurings for all the LBOs. We had helped finance them somehow that that relationship did not sour. So, yeah, there was lots of restructuring experience. Truth be told, my my two year career in banking, I only did three deals and those three deals lasted the entire two year period, one of which was particularly agonizing. That went on for eight months of my 24 month banking career and after banking, as is often the case through analyst programs especially set to your analyst programs even six months into the analyst program started meeting with the various recruiters. And I don't know
Patrick (CEO of WSO): [00:05:19] If you know, but now it's like literally right after training they get they get hit up so
Sam: [00:05:24] Well, funny. You mentioned I was I still get contacted by people kind of interested in the hedge fund space and what was going on. And now they're telling me I right out of college, they're getting recruited, which is nuts. But that's maybe a whole separate topic. So to continue on my bio, which maybe now let's brief. I then joined a hedge fund called Blue Mountain Capital in the 2010 Blue Mountain. At the time was a credit focused hedge fund. I joined the firm in London, where they were building out their European business, which was investing in credit performing credit kind of special situations, credit in distressed credit across Europe, which then proved to be a really interesting time to be investing in European credit, given kind of 10, especially 11, 12, 2011 and 2012. There was the European sovereign debt crisis, and so there was all sorts of interesting opportunities to do so. I got really ingrained into that world. The firm started doing really well and had already done pretty well, but then there was just a boom in assets. I joined there was about $4 billion of capital that in the span of four years, that probably tripled.
Patrick (CEO of WSO): [00:06:40] Oh yeah. Oh sorry.
Sam: [00:06:41] More so. So in the span of three or probably four years, that four billion grew to twenty two billion. And with that came all sorts of other opportunities for other investing. I then relocated with the firm to New York, which is where it was based and refocused my efforts on a long, short equity strategy which had been incubated internally. And I joined that team and helped build out that business and. Then in partway through 2018 and this had been building for a little while, I decided to leave for a whole bunch of reasons we can discuss. Part of it was a kind of realization of like, Is this really it? Is this what I'm what I'm supposed to be doing? And I wasn't sure about that anymore. And kind of my life had plateaued a little bit. I wanted a bit more of a challenge. And so I embarked on a different adventure and kind of left that world behind and took a hiatus from it. And a couple of years later, describing what I do is a little bit more challenging or not challenging, less or less simple. Previously it was. I work at this hedge fund and everybody knew, certainly in the in York and the Wall Street kind of parlance, it was like, Oh, I work at this hedge fund. This is the name of hedge fund. People know what it is. And there was an immediate kind of stamp of approval or certainly the stamp of approval that I thought. And and then now it's there's a no, it's you know, there's a number of different things I do. And so what I think more in terms of how I spend my time and there's three things I spend my time on. One, I still invest, though mostly in kind of private companies, businesses that I can play a kind of a role as a strategic partner investor. I also spend time writing, which is proven to be an amazing creative outlet. And to my surprise, people are interested in what I have to say, which I never thought was going to be the case.
Patrick (CEO of WSO): [00:08:46] And you have a site. What's what's the domain of your site? Yeah.
Sam: [00:08:49] So people can check out if they're interested in learning more what I'm about and what I've been thinking at Samuel Andrew. And feel free to check it out, reach out, subscribe and hit me up. And the third thing is, I've really gotten into endurance. Sports and marathons have been my my primary discipline for now and a few marathon goals and kind of ideas of what I could do thereafter.
Patrick (CEO of WSO): [00:09:18] Very cool, so I want to start all the way back at, you know, maybe even before college, but college for sure, you realize. Let's rewind because some interesting stuff we can. I'll definitely have some questions around how things evolved at the hedge fund. Your long hedge fund career. But I think just to give people a little bit of perspective of how you even started in banking and how you got it. Yeah. You know, I've super well known probably top business school right up in Canada, so it's not surprising they send a lot of bankers where you kind of freshman year gung ho knew you knew you wanted to do banking or how long did it take for you to realize this is the path and why London?
Sam: [00:09:59] So I had I had gotten a taste of it. I knew nothing. What investment, what investment banking was. I? My father was an architect and became kind of grew a practice based out of Toronto with a few partners of him that became like a pretty sizable business. My mother was a schoolteacher and turned principal. So the connection to finance in our family was just not there. Like, no idea kind of. Wall Street stuff was not a topic of discussion. But my older brother went to Ivy, and so through him and some of his friends, I got a bit of a sense of kind of this world. And quite frankly, what attracted me to banking was people just told me, this is a really hard job to get. And it was if you were at the top of your class, you're going to you're going to get interviewed by these banks. And if you're really good, you're going to be at one of the global banks. And if you know, if you really want to hit it, then you should be at one of the global banks in New York or London. That's not. Don't take that for gospel. That's not at all true, but that's what I thought, right? And I became a bit of a product of the environment, which the environment was not necessarily correct.
Patrick (CEO of WSO): [00:11:16] Well, that's that's very the groupthink around on Wall Street, Oasis. There's a lot of yeah, there's a lot of there's a lot of, you know, there's been a little more respect, I think, given to some of the boutique banks now, and they realize you can actually have an incredible career there. But for sure, for a long time, it was like bulge bracket or bust. We saw that luckily that that phrase is gone by the way. I see it as often. Yeah, good. So, yeah, for
Sam: [00:11:42] Me, I was gung ho on banking and gung ho on a global bank, and it had like
Patrick (CEO of WSO): [00:11:48] Freshman year. You knew that coming in. So, yeah, yeah. Yes. Yeah. So you you're technically not fresh, but our freshman sophomore, you kind of like got yeah. By the time, probably, you know,
Sam: [00:12:04] By the time recruiting started six months or so before recruiting started, I was clued in that this is what I was going to do and I was going to do it because partly because of the notoriety that came with it. Yeah.
Patrick (CEO of WSO): [00:12:17] And the competition, yeah, I
Sam: [00:12:20] Strive for a challenge and it was competitive and people said there's going to be hard. And so I, you know, I was like, OK, well, I'll show you, I can do this.
Patrick (CEO of WSO): [00:12:27] Right, exactly. That was the same way.
Sam: [00:12:29] So and to and to London in particular, there was I was fortunate to have a few offers in Toronto, in the U.S. and in the U.K. And the attraction to London was my mother is French. I had a French passport. I didn't need any visa or anything like that. I, although I spent virtually no time in London, I had spent a fair amount of time in Europe growing up, particularly France, with my mother. I somehow just like the idea of being in London and had this idea of like, Oh, I'll go to London for a couple of years and then I'll come back to North America and even thought I'd come back to Toronto and even kind of had this idea of which private equity firm I'd work at in Toronto. A couple of years later, in London, shortly after my first year in London, I was like, Wait, that was so naive. Like, London is so amazing. I'm having such a great time here. I'm not going anywhere. And so what I thought was going to be two years turned into almost six years.
Patrick (CEO of WSO): [00:13:28] Yeah, it's crazy, so in your first, let's talk about like your land, the traditional internship during your year summer, because the reason I was asking, did you know freshman year is because now kids like some of the recruiting happens sophomore year, early sophomore year or junior year internships. So it's like people have to know even earlier nowadays. And then when you did. Yeah. So yeah, so I did. Yeah, I did do the summer internship. And then was that like, you just crushed it. You worked really hard. Was that in London as well?
Sam: [00:13:55] No. So I did my summer internship at Scotiabank in Toronto and had an offer to return there and had a wonderful summer experience there. Wonderful. As far as
Patrick (CEO of WSO): [00:14:09] A summer banking, you like the people, you like the people.
Sam: [00:14:14] Let me run as a giant caveat. Sorry, I should use that wonderful,
Patrick (CEO of WSO): [00:14:19] But eighty hundred hour weeks. But you learn something like that.
Sam: [00:14:23] But there was an element of listening. If I'm going to do this, let's go all out. Let's be the global bank in New York and London is within grasp, so let's go for it. Ok? Even if it meant kind of risking and, you know, not accepting this offer to go back to Scotiabank full time. I was pretty confident in myself that I said, listen,
Patrick (CEO of WSO): [00:14:47] Did you have any so I get that like I was young and very confident at that age, too. I feel like people sometimes are overconfident. Especially if you've if you've done well in high school, you've done well in school. Yeah. Did you ever like look at the actual numbers in terms of like, OK, how many kids are trying to get into this and how many kids place and think to yourself, I'm there. I mean, were you like close to four?
Sam: [00:15:08] Oh, like no. No sense of how
Patrick (CEO of WSO): [00:15:15] You felt you in the interviews, basically.
Sam: [00:15:19] When after my summer internship, I was much more confident in the interviews. I also knew my grades were near the top of the class and they were they were not sorry they were. They were OK, good, OK. And I felt what I struggled with in recruiting for my summer internship. I just wasn't polished in my interviews. I got nervous. I didn't really know what to say or do right. And after a summer of experience under my belt, I, you know, I kind of figured out as much as you can figure out what investment banking is after a summer. Yeah. And so when the interviews came back around, I now knew what I was talking about.
Patrick (CEO of WSO): [00:15:58] Yeah, it's as much easier said. Tell me, did you feel like you turned down that full time offer? You had to actually let it explode? You take the risk going in senior year. Yeah. Did that turn out, did you? You ended up with multiple offers, but what was it like? Was it touch and go for a while there? Yeah.
Sam: [00:16:14] Funny story. If if you want to hear it, how I ended up accepting the Credit Suisse offer from London is so the Scotiabank offer had expired. And then there were a few other offers that let expire as well. And then it came down to I had an offer at Merrill Lynch in. Toronto and then an offer at Houlihan Lokey in. And L.A. know in L.A. and then Morgan Stanley were kind of telling me you're you're going to get an offer from, I think I'm getting all those right. I may have the banks or the locations like Iran. And then Credit Suisse was the one kind of outstanding. And the way the school was set up is by a certain date. All the offers had had to were had to be in and accepted, and it was that date. And I'd been kind of stringing along the various other offers that I have holding out for this Credit Suisse offer in London that make London. Yeah, and that's that's the one I wanted. And now it's I remember I'm at school. It's. Four or five o'clock? Yeah, probably three or four o'clock in the afternoon, Eastern Standard Time, which means it's eight o'clock in the evening in London, and I'm hearing this guy be like, What's going on here, man? Like, You know, this is the deadline. I'm, you know, I'm not, you know, I'm holding off on these other offers to accept yours. And I remember and then. I remember I was on the phone about to accept the Merrill Lynch offer and all of a sudden and we're all on the phone exchanging pleasantries and I get call waiting and I see it's a four number. And I say, Listen, hold on. I'll be right back. Switch over at this guy, Italian guy from London calling me saying sorry to get so late. I got tied up on something. But yeah, we're going to make. We've got an offer for you if you want it. And I was like, Are you kidding me? You realize
Patrick (CEO of WSO): [00:18:18] That was like within
Sam: [00:18:19] The second game, like I was on the phone with someone else about to accept a different offer. Wow.
Patrick (CEO of WSO): [00:18:25] Split second, I thought about that. Think of the minutes, like if it had been one minute, if it had been like 10 minutes later, I mean, you could have theoretically read it, like call the guy back, but it's still just the thought of like a 30 second difference or a 15 minute difference.
Sam: [00:18:40] Yeah, and it's great. You highlight that because now it's easier to see in retrospect where there's all these tiny moments in decisions in our life that totally change your trajectory. And that was one of them that until you brought it up now, I hadn't thought about. But yeah, my life would have been totally different.
Patrick (CEO of WSO): [00:18:58] Yeah, no. London, think of that. That's very different. So, OK, so you you get the job you want. You roll the dice. Well, you're confident you. You're obviously correct because you had multiple offers, so you were clearly nailing the interviews you. You kind of I guess we're super excited, probably you had a blast, yes, the rest of your senior year. Tell me a little bit about that. First, that transition into the reality of what it was like, like the move over to London must have been just like a whirlwind. Yeah, it was fun.
Sam: [00:19:36] Yeah, it was a shock. And I kind of as I described at the top of the hour discussion because of the date, especially the day I started what I was walking into, although I didn't know any different, it became pretty apparent that this is not normal course of business and I'd become friends. There were a hundred or so people in my analyst class. We all went through training together. Everyone was worried. I'm a pretty sociable guy. I, you know, I transplanted myself from an environment that I had a whole lot of friends into an environment where I literally know two people or two other people from my graduating class that moved to London with me. The three of us live together. One one of the other guys actually worked at Credit Suisse as well. Ok. That was the extent of the friends I had in London, so I became friends with a whole bunch of other people during training, and it was fun there from mostly continental Europe. Um, and but then quickly, we started since September by December. Probably a third of the class had been fired and then by kind of January into February, it was it was more and more. And I remember I sat there were six. How did you
Patrick (CEO of WSO): [00:20:51] How did they fire people with almost no experience and it's just random?
Sam: [00:20:56] Yeah, I think that's another one of those moments where I just got really lucky.
Patrick (CEO of WSO): [00:21:00] One of your roommates get fired. Nope. Ok, that's good. You have to cover that, yeah, we somehow all lucked out. Yeah. And so, yeah, they had fired by January. February was like almost half the class was gone.
Sam: [00:21:17] Yeah, about that. Yeah. That makes sense, and it's just a toxic environment. You know, I think banking in general has a very difficult environment and overlay what was going on in the markets then. I'd be curious what banking is like right now, given we're in for.
Patrick (CEO of WSO): [00:21:36] Even worse, the timing's environment, the timing is interesting, the timing is really interesting because then it was fall right after everybody had started, like went down here it's been. It was March where everything started unraveling and going crazy, right? And so you see banks coming out saying, Oh, we're going to guarantee the full time offers for all the interns for like, I don't know how much of a PR move or whatnot don't know if you've seen that a lot of banks that come out saying, we're going to guarantee the full time. I'm like, Yeah, that's that's for the jobs a full year. What about the kids starting? Yeah. What about the tip of full time starting right now? They're going to start virtually a lot of them. How many of those kids are going to keep their job? And it's been a little bit silent, it's definitely hasn't been across the street. It's been a little bit silent, so I'm worried that they're either going to start cutting quietly or whatnot, but. There's a lot of parallels 10 years later, but so, OK, so you're you survived somehow. Do you think there's anything to do with like relationships that you formed with in training with anyone more senior? Maybe the guy that had called you and gave you the offer? I don't know anything that kind of protected you like at all. In retrospect, like you, how you eat on how you performed in training, like on the exam.
Sam: [00:22:52] Yes, yes, possibly. But I don't know definitively
Patrick (CEO of WSO): [00:22:56] Because they were giving you like exams in the training.
Sam: [00:22:59] Yes, he had all sorts of exams and stuff that they told you didn't factor into your year one analyst rating. I don't know what you're told, whether or not that's true or not, I don't know. Yeah, OK. There were certainly in the later rounds, yes, but when I joined in day one starting mid-September and then by early December. Cuts are already being made. It's really hard in those couple of months to develop real relationships thereafter. By the time the rounds came. The following January into March, I had real relationships in the value of my work was showing up, and so I think that helped me.
Patrick (CEO of WSO): [00:23:43] Yeah. Tell me about something you do. Are you in touch with anybody who did get cut in those first rounds? Do you know what would have happened to any of them? If not, that's OK. I mean, I know you probably know
Sam: [00:23:54] You don't know it. I mean, not now. 12 years on and a
Patrick (CEO of WSO): [00:24:00] Long time ago, I wasn't. I wasn't sure if maybe there was like one that you kept in touch with and he ended up OK. He or she? Ok. Anyway, so you're you're going through this kind of scary time and. Are you still working crazy hours or are they just pitching like crazy? Like, what's the what's the what's it like day to day? I know what it was from 02 to 04, when I was in banking. It was kind of like right after the Oh one. Yeah. Yes. Yes.
Sam: [00:24:29] Similar crisis. A similar but different. Yeah. So my first couple of months was, as I described, a shock for many reasons, but one that also shocks you come out of. College with this view, this kind of empowered view of knowing how the world works, and I can add this much value, I've got all these suggestions which is all great and that you keep that energy, but you get cut down to size pretty quickly. Like my first task, I remember was to go to the pharmacy and take pictures of the product on the shelf for a presentation we were putting together. That was literally my job, and I remember being told that I was like, What are you guys talking about? Like, I'm here to build a model like I can build a restatement model and like a and what have you like?
Patrick (CEO of WSO): [00:25:21] Go, just go take a photo and like, No,
Sam: [00:25:23] Here's a camera. Go take a picture of these products. Oh, my gosh. Oh. Ok, I don't see what I just. Why did I do all those interviews like do all this work in college to go take pictures?
Patrick (CEO of WSO): [00:25:38] You eventually
Sam: [00:25:40] Say yes. And then I eventually, you know, there's a first few months as an analyst, you're doing that type of work. Maybe it's changed now, but it was not a real grunt work, and it was printing pitch books and so on and so forth. And then occasionally you'd get something more interesting, model oriented. And that was what I was really interested in doing all sorts of the modeling stuff. And then that's what you wanted. And there's an element of like, be careful what you wish for because sooner or later, that's all I was doing and I was inundated by it and I was building focus.
Patrick (CEO of WSO):: [00:26:16] If you were good, then they just gave you more, right? Yeah, they'll give you as much as you can handle.
Sam: [00:26:20] Yeah, I ended up on this one deal that was this company. You see Saul, which is the believe it still is the case. The largest aluminum manufacturer in the world is a Russian company owned by. It was going public. We were taking it through this form of restructuring. It was massively overleveraged. And then, as you know, commodities came crashing down. It had to restructure a whole lot of its debt. It had to it was going to IPO to do all this.
Patrick (CEO of WSO): [00:26:54] Let me guess you had you had to basically run about five hundred capital structure scenarios through the year through some complex waterfall model with like five hundred layers of debt. And yes, that
Sam: [00:27:05] And then also we had with the company, we work through this kind of this operating model of optimizing kind of the raw material that's used to make aluminum where that comes from, the cost of shipping that through the different facilities, what the cost is of each of those different facilities. And depending on the transportation costs you'd shift, you send it to different facilities and then even just the
Patrick (CEO of WSO): [00:27:33] Revenue goal was insane.
Sam: [00:27:34] Oh, and then different aluminum prices, and that was just a total mess. And that was very similar to my experience, six plus months of my life, where that's the only deal I worked on. And we had update meetings every Monday in Moscow, which I obviously did not go to. And it meant that there was all sorts of iterations of analysis that had to be done and updates the presentation over the weekend from Monday morning, which meant pretty much every not for the full six months, but. I forget now, but easily three months of it, practically every Sunday, I pulled an all nighter.
Patrick (CEO of WSO): [00:28:14] And then, yeah, you have to be there Monday through Friday. You can't like not show up on Monday, right?
Sam: [00:28:18] Even people would roll into the office Monday morning and I was still there in my jeans and a T-shirt from my Sunday.
Patrick (CEO of WSO): [00:28:29] It's a good luck, man. It's a good luck. What are you doing?
Sam: [00:28:32] Not ideal. And so that kind of built for me.
Patrick (CEO of WSO): [00:28:38] Did you at least get to go out Saturday nights with your buddies? Yeah. Yeah. Occasionally, Friday or
Sam: [00:28:45] Saturday, we'd have these blowout nights and you'd wake up the next morning, viciously hung over and have to go. And it was OK. I guess I got to go to the office now.
Patrick (CEO of WSO): [00:28:56] Yeah, yeah. I remember those days you're getting little sleep and then you go a party and you're just like, What did I do?
Sam: [00:29:03] Yeah, you just need some sort of stress relief. Yeah, right. And that's the easiest, most accessible one. And that's what you do, or that's I guess, what we did. Yes, so I had that experience kind of on on repeat and going into banking, knowing this, what I understood of banking already probably wasn't what I wanted to do long term. I viewed it more as a stepping stone into investing even back from my college days. That was kind of the trajectory I saw. There were many other alumni of the School of Ivy that had done a similar thing, so that path was pretty well laid out.
Patrick (CEO of WSO): [00:29:43] Yeah, you didn't say that in the banking interviews, but you kind of had that. No. Yeah, but yeah, you knew you wanted to be an investor. You want to be by side. So tell me about your thought process, private equity versus hedge fund and all that stuff. Did you do like on cycle private equity recruiting at all? It's understood that.
Sam: [00:30:01] So I did that. That kind of came first interviewed with a bunch of the the large private equity firms and. I was kind of into it, but it it seemed from the outside like a repeat of banking, everyone's wearing suits, there's titles, there's structures, there's deal teams, there staffers. And one thing that I didn't like about banking is the, you know, you're rewarded for taking kind of a company from A to B. And once you've done that, a number of times, it was so process oriented. It was like, you know, just figure out how to make the sausage and then just keep making that sausage over and over again. And that just just after a while, once you figure it out, I feel like I've kind of learnt what I wanted to learn here, and some people really strive in that environment. And it's just like, I just didn't interest me all that much. And that was just a personal realization
Patrick (CEO of WSO): [00:31:04] That you felt like your private equity would be similar, right? You'd be doing the LBO.
Sam: [00:31:07] And I felt I felt private equity was like, I'm just going to do this a lot more the same thing. And then I started speaking to friends that I'd made that worked at different hedge funds. And some say, Well, listen, we send me your resume. I, you know, I can get you an interview or let's talk more about kind of different investing. And then. Yeah. Then I started interviewing at a few different hedge funds, had
Patrick (CEO of WSO): [00:31:31] You been investing personally on the side already?
Sam: [00:31:34] I had in college and then by the time banking rolled around, no time just didn't have any time. And so no.
Patrick (CEO of WSO): [00:31:41] So how did you get ready for the interviews to develop your a couple of long pitches, a couple of short pitches, kind of thing? Or no?
Sam: [00:31:48] I remember. Yeah.
Patrick (CEO of WSO): [00:31:51] Like, I'm sure when you walked in there like, hey, get tell me, tell me a company like or whatever or something like that.
Sam: [00:31:56] So you had to be, yeah, from memory. I think most of them were not necessarily stock pitches per say, but a lot of it was, OK, let's talk about something you really know. And they, you know, we talk about a deal I was working on, which since I'd spent six months on this one particular deal and knew everything about it and they'd say, OK, let's kind of look at it from the perspective of an investor or what do you think about this company? Why would you buy what valuation, how? So that became a lot of the discussion, or it was the impromptu stock pitch or more similar to my understanding of. Um, consulting interviews where you do these on the spot case studies, yeah. Of, you know, I've got this company kind of does this, what would you want to know about it? And you have this back and forth discussion.
Patrick (CEO of WSO): [00:32:45] You knew enough about like having done restructuring, having done a little a little bit of everything you you felt pretty comfortable being able to kind of dig in in terms of thinking that like an investor and you did OK on those or did you did you like practice with anybody like any mentors that helped you? You kind of get ready for those or just your natural? Yeah, yeah.
Sam: [00:33:02] I had a few friends who were already private equity firms, or you can talk to them what the interview process was like. We discuss kind of what to say, what to highlight. My roommate was also him and I. This was the other guy from Ivy who we lived together. He worked at Credit Suisse. Him and I were going through interviews at the same time, so we would go back and forth. Yeah. And he's still there. Well, he ended up actually so we both interviewed at GSO and he ended up getting the job. I did not. And 10 years later, he's, yeah, we're still great friends and he's still there.
Patrick (CEO of WSO): [00:33:41] That's awesome. So, OK. So yeah,
Sam: [00:33:45] So that was more the type of interview that
Patrick (CEO of WSO): [00:33:49] I had and the questions were like, OK, where in the capital stack would you invest? Where the value? What's the what's the fulcrum?
Sam: [00:33:56] Yeah, yeah. So there was that was kind of the credit oriented interview. Some of the stuff was more equity oriented, what they were, what they were really interested in discovering. And then I later did a whole lot of these interviews at where we were considering hiring different people in at least the first. For someone that junior, it was more. Let's let's just have an open conversation of which the candidate is going to lead the conversation on how they go about thinking about a business and a potential investment. And let's just see where this goes. It doesn't really matter what you talk about. Mm hmm.
Patrick (CEO of WSO): [00:34:33] It doesn't matter what company or anything. It's more about your thought process than the thesis.
Sam: [00:34:36] And yeah, it's the kind of how would you go about developing a thesis? Mm hmm. Right. And what kind of differentiates you from everybody else out there? Right. What differentiates your kind of thesis or your edge from what kind of what the market per say is thinking about right? And what are the levers in the company thinking through the revenue drivers price versus volume, what the cost structure is like fixed costs versus variable with the cash flow is like. So getting into some of those kind of technicalities, but understanding kind of high level what makes a good business and what attributes of whatever it is we're talking about, make it a good business or bad business. And then how can we balance that where with valuation? Totally. Those were generally kind of the point to to hit on and then thereafter, both in. Part of my interview process, which was I was kind of a year or so into banking, then you'd get a case study and that's really when you get more into detail, they'd tell you the company to look at and come back and pitch this to us.
Patrick (CEO of WSO): [00:35:47] Got it. Ok, so obviously went well. You got an offer. Was this like your second or third interview at a fund you actually wanted? Or was this did you kind of get better and better as you went along?
Sam: 00:35:58] Was it? Yeah, you certainly get better and better as you go along. I interviewed with a few private equity firms and then got fairly far. And then. There are a couple intervening,
Patrick (CEO of WSO): [00:36:11] But doesn't it be exactly it wasn't like your first interview? No, it was like your second or third, basically.
Sam: [00:36:17] Yeah.
Patrick (CEO of WSO): [00:36:18] Ok. So you you get the offer. Are you like ecstatic? Is it like a year? Is it a year before you finish that courtesy?
Sam: [00:36:27] Or it was probably eight months or so?
Patrick (CEO of WSO): [00:36:30] Ok, so not really.
Sam: [00:36:33] Yeah.
Patrick (CEO of WSO): [00:36:34] Ok. You had to finish that out. Was it tough to finish that out and work those hours when you knew you had that other offer lined up and where? The bonus is horrible because it was 2009 2010, I assume they weren't.
Sam: [00:36:45] It was still good. Again, I had no prior bench. It was a whole lot of money that more money than I was making before, which was zero. Right. So it's still good on an hourly basis. It was bad regardless of how you cut it. Uh, yeah, in the last several months, if banking of that, I was coasting and I think everybody became aware, it becomes pretty obvious who's leaving. And so when I submitted my resignation letter and I was like, Yeah, gotcha. It's not surprised by this.
Patrick (CEO of WSO): [00:37:15] Yeah. And did they? Oh, so you didn't tell them before, like, you got the bonus, you have the bonus clear and then you told them.
Sam: [00:37:21] Yeah, that was kind of at least then what everybody did. Got it.
Patrick (CEO of WSO): [00:37:26] Ok. And then. So he moved on. Tell me about that transition, what was it? What was I mean, it sounded like it was super interesting. You were special situations. Credit analyst for investing in European credits. Sovereign debt crisis in Europe. The Tell Me. I know you can't tell, like maybe specific trades or anything like that, but I was there. What was the learning curve like? Did you have like a mentor when you first joined? Like the day to day. Like, I assume there's no training where they just like, Hey, look at this. Like who? Yes. Who took you under the wing? Like, what's the problem? Yeah, I know very little about hedge funds because I never did.
Sam: [00:38:04] Unlike banking, very unstructured. Right, and there's no formal training, there's no this is your title, and then a couple of years later, you've got this other title. It's very little hierarchy. And, you know, if if you can roll with this, you can figure out how this works and make money like you get a whole lot more autonomy early on, and that's kind of what attracted me. We're talking about kind of hedge funds or private equity versus hedge funds, and the conversation went kind of sideways but sideways. But there were other topics discussing. But one of the things that attracted me about joining a hedge fund is having that autonomy and that responsibility early on. If I merited it and didn't have to wait for some arbitrary time horizon and and and then kind of job title.
Patrick (CEO of WSO): [00:39:02] So tell me about that position because you were there for a long time. Yeah. I love to hear like there
Sam: [00:39:06] For eight plus years, almost nine years, which in hedge fund terms and it's practically an eternity veteran. None of my none of my friends stayed at a hedge fund, at least so far that long. So when I did join, I had an incredible mentor, this woman who became a partner at the firm and kind of took me under the wing and I work directly with her and she kind of showed me the ropes. And then as I got more comfortable, I was given more latitude and then I started putting. I got a chance to put on my my first position.
Patrick (CEO of WSO): [00:39:42] How much was that? Do you mind sharing? Does that a career?
Sam: [00:39:45] No, I don't. I mean, so this was within the European portfolio and at the time. The European portfolio was like a few hundred million, and I mean, part of this was them just giving me like the position size with kind of meaningless it was. We manage Europe at that time was several hundred million in this position, my first position was probably we grew it to 20 million. Like, huge from, you know, like my standpoint.
Patrick (CEO of WSO): [00:40:13] Oh my gosh, I'm responsible for that idea. And it's yeah, but I hope it goes right. Yeah.
Sam: [00:40:18] And it's kind of like twenty three, twenty four year old, I was like, Oh my goodness, this is huge in scope of like the firm overall, like small, right? It was small. But you know, fast forward a few years, then all of a sudden the position sizes are getting many multiples of that, and it's it's starting to have a real impact. And so you start really realizing the impact of some of your decisions. And, you know, people kind of looking at you of, Hey, what's going on here? We've lost a lot of money here or Hey, great job, we've made a lot of money here.
Patrick (CEO of WSO): [00:40:52] Yeah. So tell me a little bit about you talked about like, it's pretty flat. So you had that mentor initially. How long was she kind of served? She went all the way up as a partner, so she was getting promoted or I guess, promoted. You know, you can call yourself a hedge fund analyst. It doesn't really matter. You're kind of working as a team. It sounds like it's more flat. But was she kind of always ahead of you pulling you through? Or was it just when did you kind of just start? You started? That was your first trade. Then what did you actually start doing? A lot more of that. So you were under the sovereign book like the two hundred summer book for a while,
Sam: [00:41:25] Which yeah, I think I mean, the Europe portfolio quickly grew to over a billion, OK?
Patrick (CEO of WSO): [00:41:31] And and how many how many other investment hedge fund analysts were there with you alongside you?
Sam: [00:41:38] Ten in know, in London, there was four of us, maybe. And so there was kind of the billion of capital that was for Europe, and then there was other pockets of capital that was technically based in the U.S., but that we could tap into for other investments in Europe. So the amount of capital was like pretty fluid. Yeah. And so if there were some things that would fit in, the European portfolio would go in that it would also fit in other portfolios, technically other funds. And then if a certain opportunity came up that didn't really fit the profile of the European portfolio, then there was the kind of bigger distress portfolio that was technically based in New York could invest in it.
Patrick (CEO of WSO): [00:42:21] Tell me a little bit about how you just had the confidence. Like, it's one thing to get ready for an interview. Talk through an investment. Talk to a company. Tell me how. Like then, all of a sudden you're thrown into like, learn credit. You had a little bit of restructuring, so I guess that helps. But tell me how you got confident enough. Was it just was it a year before you kind of put it this vision? Was it only six months, three months? And then the first?
Sam: [00:42:45] Yes. Sorry, go ahead. You know? Yeah. So my my first position, I probably put on. Within eight months of being there. So there were other positions that I was working on and working in tandem with this wonderful mentor of mine who her and I continue to be great friends. Mm hmm. And. So those were kind of co-owned positions. She was certainly the lead, she was the one making the decision, but she was instrumental in me and me understanding what was going on and kind of guiding me towards the analysis we should be doing and helping me think through the conclusions we should draw from the analysis we were doing and where we could potentially be wrong and then translating that analysis into different instruments in the capital structure or derivatives of that in the form of CDs. So that was kind of a big insight for me because what I found, at least my experience in banking and call it before that, you know, your value, always valuing the company as a whole enterprise value the equity value. But when it comes to credit, then there's an element of that. But you also need to figure out the price of a specific security within that capital stack. Yes, right? Levered loan, high yield bond and some sort of subordinated bond.
Sam: [00:44:13] And so you can't do a DCF to get to a price of the bond, right? And so there's an element of absolute value of what the business could be worth, what the fulcrum security is. But then there's also an element of relative value of OK, well, if these bonds in a similar company are trading at this value, then these other bonds should be trading here. And the type of investing within that period and that period being kind of 10, 11, 12 changed a lot as well. So there were periods where. You know, you could buy a high yield bond, you know, maybe be your double berated in a average business with a few turns of leverage that was yielding 15 percent and you're like, this is, you know, this is a great investment for kind of a risk relative to the reward we were getting. And then thereafter, there was a lot more kind of distressed stuff we were doing. And so there was a kind of. Rapid learning curve across, you know, performing credit kind of things on the and then distressed on the one side and then kind of a lot of stuff in between. It's really
Patrick (CEO of WSO): [00:45:29] Cool. You know, if I learned a lot. Yes, to tell me, like, so you were there? So you put on that first position, was it a winner?
Sam: [00:45:39] Yes, we made money on it. It was a short I shorted the bonds of this company called back bore and. Yeah. They went.
Patrick (CEO of WSO): [00:45:48] Yeah, yeah, we made money on it. The tour down, did you guys, did you guys cover?
Sam: [00:45:51] Yeah, the bones probably traded down like 10, 15 points didn't. We covered and I felt good. And then after that, I was like, This is really cool. And then more positions came and then so I a
Patrick (CEO of WSO): [00:46:02] Lot of ideas kind of morph from previous ideas and like, you're constantly kind of,
Sam: [00:46:07] Yeah. So in I was responsible for a few sectors in Europe. Mm hmm. And then I started within those sectors. There were some distress things, and then I started working with some of the kind of special, distressed focused analyst PMS who are based in New York. And so we started working together and then there were a few equity ideas that are starting to come up with. And we had just kind of launched a long, short equity strategy in New York. And so I started pitching ideas to that portfolio. So at one point, I kind of find myself with sort of three different bosses like the kind of direct boss in London in this other distressed portfolio manager I was working with in New York and then this long, short equity portfolio is working with.
Patrick (CEO of WSO): [00:46:51] Was that because you were a manager with ideas that apply to different, different parts? Yeah. And so they were just like, Yeah, sure.
Sam: [00:46:57] Yeah, I just like I kind of figured out how some of the performing credit stuff works and the stress stuff work. And I was I'm interested in distress. There's a whole lot of stress going on. I was like, Hey, this kind of distress opportunity is coming up in is happening. I emailed them and we talk about it and about, OK, if you want to look at this, go for it, and then there was some other equity thing that I'd like. I think this is kind of interesting. Then I pitch it to them and maybe, okay, yeah, go for it.
Patrick (CEO of WSO): [00:47:25] How did you how did you kind of evolve with, like the first few years there in terms of. Trying to come up with a good idea is trying to be responsive like the hours, because with banking, it's like you're told when you go to the bathroom, when you can stand up and sit down. I assume with hedge funds there's there's no structure. It's very unstructured. So it's the ideas you're coming up with. So you could be working 24 hours a day or at least think dreaming about it in your little sleep you get. And it can be probably very stressful because your positions are moving every day, right? So, yeah. But how you manage that?
Sam: [00:48:00] So you certainly take take work home with you. Not in the sense that you had to work around the clock, but it became pretty hard to detach yourself from the positions you had. You were kind of always thinking about it, and I'd go about my daily life and you just became very observant of trends and businesses and kind of what's going on and you walk into a store and go, Wow, there's a lot of people in here. What are they selling? That seems to be pretty cool. I wonder who owns this business? And you know, there was always that stuff going on or realizing like, Oh, this business could be a competitor to some investment that we have on. Like, I didn't think of that. We should kind of reconsider. So your mind is always going on, you know, a new investment idea or threat to an existing investment idea and kind of spotting trends as to the actual idea generation. Early on, it was a combination. Early on, it was often someone at the firm telling me, like, this looks interesting. You should look at it. Got it. And then that then later evolved into me coming up with my own ideas, and
Patrick (CEO of WSO): [00:49:09] Is there any guidance at all in terms of like when they expect that to happen? Like you, obviously they liked what you were doing. You were there for so long and they're probably your idea. There were enough we're hitting where. Yeah. You know?
Sam: [00:49:24] I don't recall a specific expectation of by this date, you need to have positions on, and maybe that's because it was happening naturally. Yeah.
Patrick (CEO of WSO): [00:49:34] And so, like, tell me how how it grew. Like, did somebody sit you down like when they're paying you your bonus at the end of the year? I mean, there's a boss, you have a boss. Yeah. So are they telling you like you did a great job this year? Here they got these massive checks. Like what? What was it like? Like, I mean, because because banking, I assume you're getting paid a lot more in the hedge fund and you don't have to tell us the exact rate. But is there a range like where you get and you're still in London like a hundred thousand or so?
Sam: [00:50:01] So the range over the course of my career, the rate, I mean, the payouts changed dramatically since in the initial kind of couple years it was the some were after probably like a six or 12 month period. There was this realization of, OK, this guy seems pretty smart and he's really into this. So we want to keep them around and we're going to kind of mentor him. But there wasn't the expectation of delivering P&L. And then probably by my second year, there are certainly my third year there. There was an expectation of creating P&L.
Patrick (CEO of WSO): [00:50:36] And like, did you ask for that? Or they just started saying, Hey, we're going to give you one. It was. It was like, Hey, you're going to start managing this. So those meetings, like where where was it like communicated to you that you earn that? Or like all of a sudden you're
Sam: [00:50:50] So you'd have the various kind of review and the P&L was very apparent, right? We had all these systems where everybody at the firm could see who had what position and how much money it was making or losing. So that was very transparent. Yeah, right. And so it became very evident to everyone at the firm like who's making money, who's losing money. What was less transparent is how that converted into your payout at the end of the year. There was some sort of magic box that no one ever really knew, and that's why they went into it and what came out of it.
Patrick (CEO of WSO): [00:51:23] And then you mind sharing your best year, what you made. I mean, probably crazy at the end, right, you're there for eight years.
Sam: [00:51:32] No, because my best year was not at the end of the year because there were a number of have a really big year. There were a number of things that had to align. One, I had to produce pal to the strategy I was working in specifically. So I did the kind of the credit stuff in Europe. And then when I moved to New York, which I spent four years in long short equity in New York, still at the same firm of Blue Mountain. But we had this under a second mentor, this one of the probably the best bosses I've ever had and who he was instrumental and kind of forming a lot of my thinking in my investment acumen and. Yeah. So, you know, I had to do well, the strategy had to do well in the firm overall had to do well, you kind of those three things had to hit. And so in years where my piano may have been better, but if the firm didn't do well or strategy didn't do well, then like the payout wasn't there.
Patrick (CEO of WSO): [00:52:32] Like, not there to like, but it's still there, I mean, you guys still got a bonus, it just, yeah, listen, it wasn't multiple, it wasn't multiple. Instead of being three hundred percent of your salary, it's like 80 percent or 100 percent or something like that, you know?
Sam: [00:52:44] Yeah. And there were there was a massive range in what the different people, I suspect, like no one ever really talked about this, but I suspect there was a pretty massive range in what the different people at the firm were making. And understandably so. There were a few people who every year were driving big P&L drivers or. Maybe not every year, but what became pretty, what became kind of evident and I suspect, is the case that, like most funds, is you have a, you know, you have a small small number of people and it's, you know, and as a result that small number of positions that make the majority of the P&L in any given one year. But the people who are the contributors of that kind of change every few years.
Patrick (CEO of WSO): [00:53:27] Interesting. It's really cool. So you were able to see that even early on, they let you see that.
Sam: [00:53:33] Is that cool? Yeah, I mean, like you knew every if not every day, certainly every week we'd be reviewing pal. Looking at the different, any
Patrick (CEO of WSO): [00:53:43] Point in your eight years, did you feel like you had a bad run and you're like, I'm going to lose my job? Yeah. Yeah. What year was that? You're four or you're five. You see,
Sam: [00:53:54] That was probably so. And by that point, I was in New York and
Patrick (CEO of WSO): [00:54:01] Like your six or seven.
Sam: [00:54:03] Yeah. And since I switched into this new role and the long short equity,
Patrick (CEO of WSO): [00:54:07] Maybe you're doing too many shorts in bull market. No part of it was, you know, I.
Sam: [00:54:13] Yeah. So I listen. I got my face ripped off shorts and. But yeah, there was a time where I just. I felt like I wasn't, you know, I wasn't finding enough positions, and so I didn't have enough risk on. And so it wasn't the fact that my positions were bad. It was more like I wasn't getting enough positions on and
Patrick (CEO of WSO): [00:54:35] You're too much in cash.
Sam: [00:54:37] Yeah. And so I was like, Whoa, this, you know, this could be the end of me here. Like, I'm just not, you know, I'm here. I'm working my hardest. I've ever worked, but I'm not coming up with great ideas. And it's hard because you want to put positions on to show that, like, Listen, I've done all this work and I've got these new positions in in the portfolio. But if those positions end up losing money, you know, you've sunk yourself into an even bigger hole. You're better off how you would have been better off doing all that work and literally doing nothing and you would have been better off. And it's probably so has
Patrick (CEO of WSO): [00:55:09] That 14, 15, 16. Everyone's like, it's over. The market's overvalued, overvalued, overvalued. Everyone's waiting for that turn. Yes, never case.
Sam: [00:55:18] Psychologically, that really starts playing mind tricks with you. Yeah, because
Patrick (CEO of WSO): [00:55:23] You think it's coming. I got I got a hold out.
Sam: [00:55:26] Yeah. So ah yes. But our form of investing especially long, short equity, we were very much fundamental long term investors. We had a very concentrated long portfolio and we. You know, we weren't like macro investors, we were aware of what was going on at the overall level, kind of at the economic level of markets level, but we were never trying to call where the market was going.
Patrick (CEO of WSO): [00:56:02] Makes sense. It's just super interesting, because I never I mean, you were there for so long. You really get to see such a wide variety of like different groups and from London to New York. It's really interesting. It's really, yeah, I bet there's very few people that have kind of seen the inner workings of a large hedge fund like that from different perspectives and different.
Sam: [00:56:22] Yeah, yeah. And having seen it grown so dramatically,
Patrick (CEO of WSO): [00:56:26] Is that a lot of pressure when the when the assets under management came, they grew so much? Or were you guys able to hire enough kind of where there was enough manpower to help kind of get more positions to work? Or was that part of the problem when you came to New York, which like, there's just so much money to put to work and you just didn't feel? Good, because I know that's mean,
Sam: [00:56:44] We listen we hired a lot of people. I had an incredible experience at the firm and like, look back on my experience with the fondest of memories. And there were a few people at the firm that were instrumental in my professional development and also development as an individual who I'm still in close contact with today in terms of how the firm was managed. You know, as is the case with any business, there are going to be great decisions made, there's also going to be poor decisions made. And that's just a product of building a becomes a pretty big firm.
Patrick (CEO of WSO): [00:57:33] So tell me why. Tell me kind of. What prompted you, I guess, in terms of next steps and you're thinking you said earlier, like, is this it? Yes. When did those thoughts start? Was it do those start thoughts start creeping in when performance started kind of going down? Or were you able to recover and then you were slow?
Sam: [00:57:56] No, I wasn't performance related. In fact, if anything like my performance is better,
Patrick (CEO of WSO): [00:58:00] It was getting better.
Sam: [00:58:01] Yeah. And listen, like everybody hits a streak of bad performance,
Patrick (CEO of WSO): [00:58:06] No, I know.
Sam: [00:58:07] It's like it's inevitably going to like, you're going to lose money. It's just it's part of the business and you need to be able to handle that. And for me, more what it came to was and maybe there was an element of maturity or maturing in this, but I started having the realization like, is this really what my life is going to be like showing up to an office in Midtown Manhattan or like any place for that matter and kind of staring at computer screens all day and. You know, we're starting to realize that there wasn't that much meaning and what I was doing, and maybe the meaning was never really there, and it took me a while to discover it or the maturity thing I alluded to. Maybe that was part of it, but I was kind of the sensation that my life had plateaued. You know, I had kind of.
Patrick (CEO of WSO): [00:58:53] What about relationships? I know you said you have a covenant, but like in terms of relationships, were there any long term relationships, any broken faces along the way or so? So no,
Sam: [00:59:02] No broken marriages. But that was that was part of it as well, that my job had started to consume my entire life. It's all I did and there was no. You know, meaningful intimate relationships for a solid decade. Mm hmm. Right. And it was a combination of me not prioritizing it and prioritizing work.
Patrick (CEO of WSO): [00:59:27] And do you feel that's like done lasting damage to you, like emotionally? I don't know. We don't want to make it like Dr. Phil here, but I just think it's an important question.
Sam: [00:59:41] I've been working on a on an essay that'll be on my blog shortly that delves specifically into this. And so permanent. Did it have a permanent effect on me? No, because I realized it. But it's taken a lot of work over the last couple of years. And what I. So I left, I left the firm. I then spent the better part of a year plus kind of totally detaching from that world and traveling kind of all over the world, doing a whole bunch of stuff that I wanted to like. I wanted to have an adventure. I wanted to go out and do some. Kind of weird, funky things like I never would have thought of before, I never had a chance.
Patrick (CEO of WSO): [01:00:28] Like what? Like what? Like skydiving or whatever. Like just getting older. So there was, yes, I did go skydiving.
Sam: [01:00:34] There was a whole lot more than that that I wanted to feel kind of liberated and free to do things kind of at the drop of a hat. Right. There was an element of I just need to detach myself from this hedge fund cocoon that I had been living in, that that was everything in my life that there's more to life than than just that. So you think it was maturity?
Patrick (CEO of WSO): [01:00:59] Some of it was like a need for something else. Some of it was maybe you're just you woke up one day. Was it like a sudden change?
Sam: [01:01:05] It was gradual. I I had been considering leaving for a solid year, probably before I did. And there were elements of like kind of my departure of all of a sudden a whole lot of things came together that I was like, OK, this is.
Patrick (CEO of WSO): [01:01:20] I'm going to take time and you had been saving and you didn't, did you own any real estate at that point?
Sam: [01:01:24] No, no, I was totally liquid. Yeah, great.
Patrick (CEO of WSO):: [01:01:29] So you had freedom? Yeah. And in that sense, it's not like.
Sam: [01:01:33] Yeah, but listen, it's not like I made a kind of fortune and it was like, Oh, I can work like, that's not. I don't want to give that that impression at all. Yeah.
Patrick (CEO of WSO): [01:01:45] Do you mind sharing around like had you made millions of dollars like, you know, five million plus or under that?
Sam: [01:01:51] No, no. That.
Patrick (CEO of WSO): [01:01:53] Ok, so you were like set for life necessarily. No, no. There was a realization that like.
Sam: [01:01:59] Listen, I'm going to have to go back to work at some point, right? But you're also like, what? What's the point? I remember being asked, What are you doing with your money? I was like, You know, not much. I mean, it was invested and so forth. But what's the point of this money for? I can do anything with it. Yeah. And I was like, Yeah. And also, I started to realize like this whole idea of I'm going to have, you know, I'm going to work from the time I get out of college until I can retire at like 60 or have one career. I was like, This is nonsense. Like, why can't I enjoy like a year of retirement now? There's all sorts of things that I can do now that I'm not going to be able to do at six years old, right? I want to like, I wanted to become a great skier. And I spent in twenty the year I took off. I spent like over 50 days skiing. That's just something I wanted to get really good at. And it was amazing, and I wanted to have the ability to kind of go on trips at the drop of a hat and do those trips alone. Meet interesting people along the way. I wanted to be in kind of an unstructured environment. And what came out there was a whole lots of insights that came out of that. You were asking me specifically earlier around, were there lasting kind of relationship damages or something you felt
Patrick (CEO of WSO): [01:03:21] Like like, for example, when you would start having a did start having a real relationship? There are things where like, you felt you were underdeveloped in that area.
Sam: [01:03:30] Oh yeah.
Patrick (CEO of WSO): [01:03:32] Like immature. Like, you're still a 22 year old.
Sam: [01:03:34] I barely had my relationship training wheels on. And so one of the things that I found started to that I had adopted from being an investor that permeated all aspects of my life, which was detrimental. Great attribute as an investor. But the problem with me, it permeated all aspects of my life was that. And to be a good investor, you want it to. Detach the emotional connection to a decision. Right, and there was it was too easy to think like, Oh, I'd spent all this time researching this investment, putting it on that, like, how can I possibly cut this? Like, I'm this is my baby. I've like, worked so hard for this. And so I prided myself on optimizing decision making and making unbiased decisions, which served me really well in my investment career. The problem is that that then started to permeate all aspects of my life, particularly like relationships, dating where I would assess a relationship, a date like I would an investment in the work. Kind of like pros and cons. I'm like, I wouldn't let myself feel those feelings could because I thought, Well, those feelings will just. Obfuscate, you know where the perfect
Patrick (CEO of WSO): [01:04:55] Decision, right? Yeah, the perfect decision.
Sam: [01:04:58] And that's nonsense when it comes to relationship, but it took kind of gets stepping outside of that world and taking the year off to realize that and think, Wow, I was really doing that. And that served me no benefit in intimate relationships and relationships with other friends. I really lacked empathy and kind of connecting with people like my emotional
Patrick (CEO of WSO): [01:05:24] Were trained to like, completely throw the emotions in the trash. Whether or not,
Sam: [01:05:29] Whether or not I was trained to do that, or I somehow developed the idea that this is what you need to do to be a good investor. Like, that's that's what I did.
Patrick (CEO of WSO): [01:05:40] I think it's pretty common knowledge. People say, like you remove emotion from decisions like you have to have control of your emotions. And it's like even like with poker, if you get upset after you have a bad beat and then you go on tilt and you start pushing, it can become you can lose a lot of money that way. I think I lost you for a second. Yeah, I was just saying that it's kind of like poker when you if you have a bad beat and you feel like you need to push all and you get you get really flustered and angry. And so then you start playing more hands than you should. So it's almost like you've got to remove the emotion from it and just play optimal poker. Yeah, and
Sam: [01:06:14] Train yourself, you see. So that was all my I was a lot of my training and that served me well investing and still does. But now having a more of an awareness of when that's creeping into other relationships where it really serves the benefit.
Patrick (CEO of WSO): [01:06:29] What do you think any advice you'd give to young professionals that just starting out in their hedge fund career or thinking to go in there in terms of how to maybe keep some some semblance of balance?
Sam: [01:06:40] Yeah. Which I was not good at.
Patrick (CEO of WSO): [01:06:44] I don't think many people are. I think it's really
Sam: [01:06:46] Hard,
Patrick (CEO of WSO): [01:06:48] Especially in a job like that where it's high
Sam: [01:06:49] Stress. And yeah, but to be truthful, I spent. I find it ironic how. I've spent. So little time thinking through some of the most important decisions of your life, right, who you're going to spend your time with and within that kind of intimate relationships and what your vocation is going to be. Right, yet I would analyze to the nth degree all the different permutations of an investment or so forth which like, yes, we're important, but in the grand scheme of life where they have that importantly. No, not really. And you weren't through kind of college in my career initially, like you're not really trained to think about those bigger life questions. Right. And so I rarely and for certainly the big part of my initial career, I really like to step back and thought through more. What is it that I want to do? I found this path kind of going back to my days in college where like, oh, go to banking and go join this hedge fund, then climb the ranks of B, a better hedge fund guy. And then that's it. And it kind of got more like, I got there. I did that and it was like. So tell me how like so like, so what? And so the advice I would share to people kind of starting along that path is it's difficult at the outset because you don't have any experience.But as you start to accumulate more experience instead of what I did of just seeing what was the next milestone, 12 to 24 months ahead of time, the next job, the next promotion, the next bonus, whatever. Really think through like, is this really something you want to be doing and why you're doing it and if are you doing it from a place of insecurity or a place of inspiration? And I think a lot of my decisions were made from a place of insecurity, right? I at the time, I didn't realize it, but a lot of what I was doing, whether it was the banking job, the banking job at a global firm, the banking job in London and the hedge fund job then at the big hedge fund and like more responsible and so forth is because I saw the validation of all the people in that world, right? It made me feel good, but not only gets you so far right and then eventually that applause runs out and you're kind of left thinking like, OK. I kind of what now?
Patrick (CEO of WSO): [01:09:17] And that's to what is, yeah, what's now for you and I know you said it's hard to describe what you've been kind of investing. You've been investing some startups stuff like that.
Sam: [01:09:28] Yeah. So to be honest, I don't totally know what now is and being OK with that previously, you know, since college, until recently, I knew what now was. I knew what I was doing. Or so I thought, right? It was. I could fool myself into thinking, Oh, this is what I'm supposed to be doing, because it made sense you'd latch onto it. It was, you know, that was your identity, right? I put a lot of weight in my identity as a hedge fund guy. And then once you shed that, it's like, Oh, wait, like, what am I? What am I actually doing now? And. So there's been a one just being OK with not knowing exactly what you want to do is fine. And I would argue it's actually, you know, could be better than fooling yourself into thinking you're doing the right thing because it's because that's the easier alternative. And it was for me for the longest time.
Patrick (CEO of WSO): [01:10:25] I think that's I agree with I think it's important to always have that introspection and kind of broader perspective. I think it's hard, though I think it's easier said once you run in your shoes. I do, because just because you totally you have the a little bit of the cushion for the kids who don't have who have a lot of debt, you know, for the kids who just need to grind like, I get it, like if we're putting their head down and just just getting that check to help help their family or whatnot, you know what I mean?
Sam: [01:10:54] Absolutely. And by no means am I suggesting, don't do that. I'm encouraging along the way. Think through why you're doing it. And that's huge. And that's that's what I missed out on. Right now, I have you. I don't really have a regret about the decisions I made or I had this wonderful experience and it required that experience to get to the place that I am now. And I'm sure and I'm much happier in where I am now than I have been in years.
Patrick (CEO of WSO): [01:11:24] It's great. I've kept you for way too long, but tell me a little bit. So any any kind of parting advice before we call or anything else you want to talk about before we we call it Samuel Andrew. If you want to read some of Samsa Sam's post, but anything else? Like any parting words of wisdom, not to put you on the spot. Yeah.
Sam: [01:11:50] Parting words of wisdom is. And. Trying. You were far more in control of our environment and our situation than we think we are and realizing that you do have the choice to whether it's going to banking and hedge fund job or whatever career or the choice to not do that, you're continually making that choice every day. You're showing up to work and realizing that if you're not. Enjoying the environment that you're in. Life's kind of too short to keep doing the thing you're not enjoying doing and. Making that choice again and realizing that like, you know what, what's the worst case that could happen? And then realizing in my case, like the worst case wasn't that bad. I say, OK, I take six months out of this 12 months out of this, I was able to get this job before I'll be able to go back and get it. And so what if I'm, you know, I've missed out on a year of compensation or I've missed out, you know, my peers are now ahead of me. Like, So what I'm going to I'm going to work for a big part of my life and kind of putting that in, you know, putting that in perspective because I think we become and I fell victim of this of being a bit too short term oriented that it's hard to leave because this next payout is coming or this next promotion is coming. But thinking of that payout or that promotion over the course of your entire life, you start to realize that like, wait a second, this is actually not as meaningful as you think it is. And so having that larger perspective to choose things over again.
Patrick (CEO of WSO): [01:13:48] It's great. I love it. I think I think. The listeners need to hear that oftentimes, especially people in our audience, so thank you for taking the time, sharing your wisdom and really appreciate it is really interesting perspective. So thank you. Yeah, well, thank you. And thanks to you, my listeners at Wall Street Oasis. If you have any suggestions whatsoever, please don't hesitate to send them my way. Patrick at Wall Street Oasis. And till next time.
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