Latest / The David Rubenstein Show / Nir Bar Dea

Transcript

Nir Bar Dea · The David Rubenstein Show

• 0:02
  Speaker 1: Most of the largest hedge funds in the world are
• 0:04
  Speaker 1: run by people with extensive backgrounds in finance. However, one
• 0:08
  Speaker 1: of the largest hedge funds in the world, Bridgewater, is
• 0:11
  Speaker 1: now run by somebody who spent six years in the
• 0:13
  Speaker 1: military before he even graduated from college and then went
• 0:16
  Speaker 1: on to business school. I had a chance recently to
• 0:18
  Speaker 1: sit down with the CEO near Bardea and ask him
• 0:21
  Speaker 1: how his background in the military is helping him transform
• 0:24
  Speaker 1: Bridgewater into one of the great hedge funds in the world.
• 0:27
  Speaker 1: I've always seen Bridgewater as a firm that focused a
• 0:30
  Speaker 1: lot on macro trends. And Ray used to talk about
• 0:34
  Speaker 1: global inflation or high interest rates and so forth. Do
• 0:38
  Speaker 1: you spend a lot of your time thinking about what
• 0:40
  Speaker 1: the Federal Reserve is going to do or what's going
• 0:42
  Speaker 1: to happen on the war in Iran?
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  Speaker 2: I and we spend all of our time trying to
• 0:47
  Speaker 2: unpack that.
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  Speaker 3: It's everything that matters about the value that we're supposed
• 0:52
  Speaker 3: to bring to the world and to our clients. And
• 0:54
  Speaker 3: I absolutely don't do what you're saying.
• 0:56
  Speaker 2: Brazil is built as a meritocracy.
• 0:59
  Speaker 3: If it's in the textbooks, if I have the answer,
• 1:01
  Speaker 3: I don't need it.
• 1:02
  Speaker 2: 1,200 employees.
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  Speaker 3: The whole point is bringing smart people and have them
• 1:06
  Speaker 3: explore the stuff that's not.
• 1:07
  Speaker 2: In the textbooks.
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  Speaker 3: We need the ideas wherever they come from to bubble up,
• 1:12
  Speaker 3: to debate, to argue where needed, and to create the
• 1:16
  Speaker 3: chemistry that takes the best of my ideas and the
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  Speaker 3: best of somebody else's ideas and writes a new textbook.
• 1:22
  Speaker 1: Let's talk about Washington for a moment. Do you spend
• 1:24
  Speaker 1: much time figuring out what the Fed is likely to
• 1:26
  Speaker 1: do or trying to figure out what it has done?
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  Speaker 3: We have an entire team focused on understanding not just
• 1:31
  Speaker 3: the Fed, the backdrop of what is happening with supply
• 1:34
  Speaker 3: and demand and capital, how that translates to fiscal and
• 1:37
  Speaker 3: monetary policy, and then also extrapolating what is likely to
• 1:40
  Speaker 3: happen in the U.S.
• 1:41
  Speaker 2: And around the world.
• 1:42
  Speaker 1: What about what Congress is going to do? You try
• 1:44
  Speaker 1: to figure out what they're going to do or not?
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  Speaker 3: Understanding the political situation and what it means about the
• 1:49
  Speaker 3: ability to govern is very important. We try not to
• 1:52
  Speaker 3: make guesses that are not grounded in understanding. So usually
• 1:58
  Speaker 3: what we do is we understand, hey, for a certain
• 2:00
  Speaker 3: set of conditions, if this happens, then this will happen.
• 2:04
  Speaker 3: We'd rather do that, meaning be ready for that thing
• 2:07
  Speaker 3: to happen and then anticipate what would happen subsequently. But
• 2:10
  Speaker 3: in today's world, where policymakers are such a big part
• 2:14
  Speaker 3: of what drives economies and markets. A big part of
• 2:18
  Speaker 3: what we're doing is trying to unpack Congress, political landscape
• 2:22
  Speaker 3: in Europe, US, China, Japan.
• 2:24
  Speaker 1: Well, let's talk about one issue that people are talking
• 2:25
  Speaker 1: about a lot these days, which is the size of
• 2:27
  Speaker 1: the US debt and deficit. We're running about a $ 2
• 2:30
  Speaker 1: trillion annual deficit, $ 40 trillion of total debt. Does that
• 2:34
  Speaker 1: worry you as a hedge fund investor?
• 2:36
  Speaker 3: Yeah, I think it's a part of a complexion of conditions.
• 2:41
  Speaker 3: that set us up in a way that creates a
• 2:45
  Speaker 3: lot of risk in the future.
• 2:47
  Speaker 2: It's not just that.
• 2:48
  Speaker 3: It's the idea that going into a future outlook that
• 2:52
  Speaker 3: is extremely optimistic, almost best-case scenario, we're going with an
• 2:57
  Speaker 3: arsenal and a buffer, slack, from what policymakers can do
• 3:02
  Speaker 3: that is very, very small. Meaning if anything goes wrong
• 3:04
  Speaker 3: on the path forward, that will be one of the
• 3:05
  Speaker 3: things that creates a levered downward effect on government, on households,
• 3:10
  Speaker 3: on corporates.
• 3:10
  Speaker 1: Do you worry about the value of the dollar? And
• 3:12
  Speaker 1: do your international investors worry about the value of the
• 3:15
  Speaker 1: dollar because they're investing with you in dollars, I presume?
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  Speaker 3: One of the benefits of being unbiased is we don't
• 3:21
  Speaker 3: want assets to go up or down, the dollar to
• 3:23
  Speaker 3: go up and down. But if you're asking, is that
• 3:26
  Speaker 3: something that we think is substantiated significantly, meaning the structural
• 3:30
  Speaker 3: weakness of the dollar, I'd go back to say two
• 3:33
  Speaker 3: things that I think are important. It's not just because.
• 3:35
  Speaker 2: Of the U.S. 's prioritization of the strength of the dollar.
• 3:38
  Speaker 3: The thing that's really happening is a shift in the
• 3:41
  Speaker 3: macroeconomic paradigm. The reason the dollar was so strong was
• 3:44
  Speaker 3: because for 100 years, the world has globalized with the U.S.
• 3:48
  Speaker 2: At the center. That globalization had tremendous benefits.
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  Speaker 3: It also had second-order consequences that caused political implications here
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  Speaker 3: in the U.S.
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  Speaker 2: That brought the change of regime.
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  Speaker 3: And as of three years ago, the macroeconomic paradigm has
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  Speaker 3: shifted completely from globalization to nationalism. Trump, the tariffs said, hey, no,
• 4:05
  Speaker 3: we're talking about efficiency and self-reliance. A lot of those
• 4:09
  Speaker 3: dollars or in foreign currencies, those investments remain local. So Japan, Canada,
• 4:16
  Speaker 3: South Korea are trying to keep their money inwards versus
• 4:20
  Speaker 3: sending it to the U.S.
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  Speaker 2: Those are foundational changes. Those are changes in.
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  Speaker 3: The paradigm that are going to remain for a long
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  Speaker 3: time and are something that investors have to take into
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  Speaker 3: account versus assume that everything's going to revert.
• 4:31
  Speaker 2: Back to the globalizing world that we came out of.
• 4:33
  Speaker 1: How do you keep up with what's going on in Japan, China, Australia, Africa,
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  Speaker 1: Latin America? How do you personally do that? Or do
• 4:40
  Speaker 1: you have teams of people that do it and they
• 4:41
  Speaker 1: report up to you? That's such a great question.
• 4:44
  Speaker 3: Credit to Greg and Ray, the understanding that we're going
• 4:47
  Speaker 3: to have to invest in every liquid market in the world.
• 4:49
  Speaker 3: And not only that, that even if you didn't, something
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  Speaker 3: that happens on one side of the world will trickle
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  Speaker 3: and cause effects and impact something that you care about,
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  Speaker 3: even if you didn't think it mattered.
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  Speaker 2: All the way over there. Made.
• 5:01
  Speaker 3: We're going to make an early decision to systemize its understanding.
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  Speaker 3: So the way we track all these things is that
• 5:07
  Speaker 3: through 50 years, we've built systems that automatically ingest millions
• 5:12
  Speaker 3: of data sources, apply logic to them, and then give
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  Speaker 3: us the output versus thousands and thousands of humans reading
• 5:19
  Speaker 3: every newspaper every day.
• 5:20
  Speaker 1: Everybody talks about artificial intelligence these days, or now, as
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  Speaker 1: some people say, super intelligence. You have a fund, as
• 5:27
  Speaker 1: I understand it, that manages money with artificial intelligence. And
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  Speaker 1: Do you have nobody human to override the artificial intelligence?
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  Speaker 1: How does that work?
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  Speaker 3: So we've been on this march of checking what technology
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  Speaker 3: is capable of. In 2012, Greg Jensen, my partner, who
• 5:42
  Speaker 3: was one of the first investors in open AI, the
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  Speaker 3: first check to Dario and Anthropic, started asking himself the
• 5:47
  Speaker 3: question of when will technology not only be able to
• 5:49
  Speaker 3: execute human ideas, will we be able to ideate, which
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  Speaker 3: is the thing that humans were doing in a unique way.
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  Speaker 3: In 18, we've hired Jeff Zekun, who's now one of
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  Speaker 3: the most senior scientists in DeepMind, And that led us
• 6:01
  Speaker 3: in 23 to say we think AI can ideate, generate
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  Speaker 3: the ideas that create alpha. And what Greg and I
• 6:07
  Speaker 3: decided back then was instead of putting that in the
• 6:10
  Speaker 3: hands of humans, to build a factory around AI intelligence.
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  Speaker 2: We raised a fund from the largest institution clients in
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  Speaker 2: the world.
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  Speaker 3: And yes, that fund starts with AI generating insight and
• 6:23
  Speaker 3: then doing everything up to execution with humans doing risk
• 6:26
  Speaker 3: controls and oversight because There's so much that we're learning,
• 6:29
  Speaker 3: but the entire process happening through AI, the ideas that
• 6:33
  Speaker 3: the AI is coming up with are different than the
• 6:36
  Speaker 3: ideas that are human are coming up with. And that
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  Speaker 3: just blows your mind thinking what the future holds.
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  Speaker 1: With artificial intelligence, the debate right now in the United States,
• 6:44
  Speaker 1: at least, is should we regulate it or not regulate it?
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  Speaker 1: You wrote a piece about this.
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  Speaker 2: What is your view?
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  Speaker 3: Because we're so bullish on the positive implications of AI.
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  Speaker 3: We also recognize that anything that could change the world
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  Speaker 3: that much for the positive could also have severely negative implications.
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  Speaker 2: Let's go through that quickly.
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  Speaker 3: From models that exist today, being put in the hands
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  Speaker 3: of humans with bad intentions, it's like putting a weapon
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  Speaker 3: in many people's hands. You can see the rate of
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  Speaker 3: cyber attacks that are AI-based is wildly out of control.
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  Speaker 3: Very likely negative outcome that could happen. Second thing is
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  Speaker 3: where everybody's focused is any model that is more intelligent
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  Speaker 3: than humans. And people should pause and reflect on the
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  Speaker 3: idea that there has never been an inferior intelligence that
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  Speaker 3: controlled a superior intelligence. Even if you think there's a 10%
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  Speaker 3: chance that would happen, I mean, 9% is not going
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  Speaker 3: to happen. That 10% has catastrophic potential outcomes. And the
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  Speaker 3: third risk is that even if you avoid both those things,
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  Speaker 3: they don't happen. You harvest the full benefit of AI
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  Speaker 3: the societal impact that will happen. Look, our estimates is
• 7:55
  Speaker 3: that AI can dislocate 18% of American labor. So think
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  Speaker 3: about the magnitude of the societal breakdown that could happen.
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  Speaker 3: So if you wanna avoid those things, what Greg and
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  Speaker 3: I wrote is you gotta do two things. One, you
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  Speaker 3: gotta regulate AI for safety because any blip will completely
• 8:14
  Speaker 3: halt the development of AI. Could happen tomorrow, could happen
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  Speaker 3: right after this interview. And the second thing is you
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  Speaker 3: gotta prepare society learning the lessons from what we failed
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  Speaker 3: to do with globalization. Because in the end of the day,
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  Speaker 3: let's remember that this entire technological revolution is for humans.
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  Speaker 3: Meaning if it doesn't end up benefiting society and humans,
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  Speaker 3: what's the point?
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  Speaker 1: Now, one of the hardest things about being a hedge
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  Speaker 1: fund investor, I believe, is admitting you're wrong about something.
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  Speaker 1: People have a view. They say, this is what we're
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  Speaker 1: going to do. How long before you realize the market
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  Speaker 1: is moving against you before you say, You know, we
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  Speaker 1: didn't get it right.
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  Speaker 2: Let's get out of here.
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  Speaker 3: We are clear from the beginning, from before we deploy
• 8:55
  Speaker 3: that idea, what's our expectation of how that idea should perform.
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  Speaker 3: And the second it breaches those rules, it's not a
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  Speaker 3: matter of opinion or sticking to your views. It's a
• 9:05
  Speaker 3: systematic point of, hey, let's step back and see. This
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  Speaker 3: is not something we've expected. But the deeper point, you
• 9:11
  Speaker 3: want to be a learner. We talked about having a
• 9:13
  Speaker 3: community of the steepest learners at Bridgewater. That's the only
• 9:16
  Speaker 3: way to understand how the world works.
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  Speaker 2: You have to love that moment.
• 9:20
  Speaker 3: Meaning you have to love the moment where you understand
• 9:23
  Speaker 3: that something you thought was right was wrong because that's
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  Speaker 3: the moment of learning. That's the moment that will make
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  Speaker 3: you definitionally better. So we aspire to teach people to
• 9:33
  Speaker 3: fall in love with that moment instead of to defend
• 9:35
  Speaker 3: themselves from that moment.
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  Speaker 1: So you have a very unusual background for a hedge
• 9:40
  Speaker 1: fund CEO. I haven't met any other CEOs of hedge
• 9:44
  Speaker 1: funds that work. in the IDF for six years. How
• 9:47
  Speaker 1: did you come from the IDF to the hedge fund world?
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  Speaker 3: I think to understand my path, you really have to
• 9:52
  Speaker 3: go back and understand the context that I grew up in.
• 9:55
  Speaker 3: Third generation, the Holocaust survivors, grandparents that came from Poland, Libya,
• 10:01
  Speaker 3: this very unlikely marriage that gave birth to the first
• 10:05
  Speaker 3: type of Israeli, my parents, this mix match of these cultures.
• 10:09
  Speaker 3: And in the 80s when I'm born, I get to
• 10:11
  Speaker 3: see the tail end of what it's like to take
• 10:14
  Speaker 3: a desert and turn it into the state that Israel
• 10:17
  Speaker 3: is today. paving roads, building skyscrapers, all of that. And
• 10:23
  Speaker 3: it really shapes the kind of person I aspire.
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  Speaker 2: To be, which is both how I see the.
• 10:30
  Speaker 3: Role of previous generations before us, but also my conceptualization
• 10:33
  Speaker 3: of what I think is possible. I was a very
• 10:35
  Speaker 3: unexceptional teenager, bad student, had really significant problem with anything
• 10:41
  Speaker 3: that required conforming.
• 10:43
  Speaker 1: Were your parents professionals in Israel?
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  Speaker 3: My father started as a construction worker, just like the country.
• 10:48
  Speaker 3: He started from nothing and then ended up being a
• 10:50
  Speaker 3: very successful CEO, the CEO of the largest food manufacturer
• 10:55
  Speaker 3: in Israel.
• 10:56
  Speaker 2: And my mother was a teacher.
• 10:57
  Speaker 1: And when you went to high school, you didn't complete
• 10:59
  Speaker 1: high school at the time, as I understand it, and
• 11:02
  Speaker 1: you went into the IDF. And under the IDF, you
• 11:05
  Speaker 1: have to give two years to the IDF, but you
• 11:08
  Speaker 1: gave six years. Were you worried that you were going
• 11:10
  Speaker 1: to be killed in the IDF?
• 11:11
  Speaker 3: If it's the opportunity to start all over again, from
• 11:13
  Speaker 3: being a failed high school student to something that has
• 11:18
  Speaker 3: a chance to be successful, which is what the IDF
• 11:20
  Speaker 3: did for me, it was a no-brainer. And yes, there
• 11:22
  Speaker 3: were many extremely stressful times during my military service.
• 11:27
  Speaker 1: After six years in the IDF, you decide you want
• 11:29
  Speaker 1: to go to college.
• 11:31
  Speaker 2: Had you completed high school? I did not graduate high school.
• 11:35
  Speaker 3: And after the IDF, this is at the age of 28,
• 11:39
  Speaker 3: I decided to then do my bachelor's degree. And I
• 11:42
  Speaker 3: have to go back and do some of the finals
• 11:44
  Speaker 3: that the 18 year old do in order to get
• 11:47
  Speaker 3: accepted to college. And I only then start my undergraduate
• 11:50
  Speaker 3: degree in Herzliya.
• 11:52
  Speaker 1: So you go into college and then you did it
• 11:53
  Speaker 1: very well in college, is that right?
• 11:55
  Speaker 2: You know why?
• 11:55
  Speaker 3: Because when you're very worried about something and you think
• 11:58
  Speaker 3: you're going to be terrible, you overdo it and then
• 12:01
  Speaker 3: you end up, think you're punching a brick wall, but
• 12:04
  Speaker 3: you're punching through a paper wall and it went very well.
• 12:06
  Speaker 1: How old were you when you graduated from college?
• 12:07
  Speaker 2: 30, 31.
• 12:09
  Speaker 1: Did people tell you you better rush and get something
• 12:12
  Speaker 1: done because you're already 31 years old?
• 12:13
  Speaker 3: Very much, because I actually finished my undergrad at Wharton.
• 12:16
  Speaker 3: So I started it in Herzliya, and because I was
• 12:19
  Speaker 3: a very good student, they allowed me the opportunity to
• 12:21
  Speaker 3: finish it at Wharton. I used to have students from
• 12:24
  Speaker 3: Asia take pictures with me because I was a gray-haired
• 12:27
  Speaker 3: student and the undergrad at Wharton. So I definitely felt
• 12:30
  Speaker 3: the pressure of being a full generation above the people
• 12:34
  Speaker 3: that were my peers.
• 12:35
  Speaker 1: You finished your college at Wharton, and did you go
• 12:37
  Speaker 1: to Bridgewater right away?
• 12:38
  Speaker 2: No.
• 12:39
  Speaker 3: Anything that required conforming was a real problem for me.
• 12:42
  Speaker 3: I know I want to get more of the globalized
• 12:44
  Speaker 3: perspective that I can get here, but I'm thinking if
• 12:46
  Speaker 3: I go to McKinsey or a bank, it's not going
• 12:48
  Speaker 3: to go well.
• 12:48
  Speaker 2: It's going to be a disaster.
• 12:49
  Speaker 3: I go to the Israeli mission to the United Nations
• 12:55
  Speaker 3: with Ambassador Poursor. This is during the Iran negotiation. And
• 12:58
  Speaker 3: then I think I'm thinking I'm going back to Israel.
• 13:00
  Speaker 3: And by total coincidence, I get a reach out by
• 13:03
  Speaker 3: Ken Kaniyotamur, who you've interviewed, one of our chief investment officers,
• 13:07
  Speaker 3: that says, why don't you come interview here? And what
• 13:10
  Speaker 3: happens at Bridgewater is the same thing that happens in
• 13:12
  Speaker 3: the IDF. It's clear that despite me being incredibly different,
• 13:16
  Speaker 3: how I look, how I dress, how I speak, that
• 13:19
  Speaker 3: organization is seeing through those things and only cares about
• 13:22
  Speaker 3: the things that I'm saying, which means that I might
• 13:25
  Speaker 3: have a shot here.
• 13:26
  Speaker 1: So you come to Bridgewater and you're An intern, essentially.
• 13:30
  Speaker 1: And you're the oldest intern they've ever had, presumably.
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  Speaker 2: Absolutely.
• 13:34
  Speaker 1: So at what point do you realize, hey, you're pretty
• 13:37
  Speaker 1: good at this?
• 13:38
  Speaker 3: I'm waiting for that moment to come. Truly, at some level.
• 13:42
  Speaker 3: I mean, the thing that happens immediately is I understand
• 13:44
  Speaker 3: that I'm bringing a baggage that others don't have. The
• 13:48
  Speaker 3: military experience, the perspective. And I also understand that there's
• 13:52
  Speaker 3: so much, truly, that I don't understand at all. So
• 13:55
  Speaker 3: there's a learning experience at the same time that there's
• 13:58
  Speaker 3: this sense that I can contribute. That equilibrium has basically
• 14:01
  Speaker 3: stayed up until today. I really feel very far from
• 14:05
  Speaker 3: mastering what it takes to do this well.
• 14:08
  Speaker 1: What was your expertise that enabled Ray and others to say,
• 14:12
  Speaker 1: this guy is really a potential CEO?
• 14:14
  Speaker 2: I was a plumber of people. I was a manager.
• 14:16
  Speaker 3: So I grew on the ground of the research department,
• 14:20
  Speaker 3: which means that I learned.
• 14:21
  Speaker 2: Deeply how the process worked. Didn't have the ideas.
• 14:26
  Speaker 3: You should not give me your money to manage, but
• 14:29
  Speaker 3: you can give me your money to manage through managing
• 14:33
  Speaker 3: other investors. I grew as a manager and as a
• 14:35
  Speaker 3: person that visualized how our investment process works.
• 14:38
  Speaker 1: Is Bridgewater a firm that is closed to investors now? Yes.
• 14:42
  Speaker 1: So you're not taking new money?
• 14:45
  Speaker 3: Our Alpha funds, the main funds, which are Pure Alpha
• 14:48
  Speaker 3: and Aya, which is the same concept of Pure Alpha,
• 14:50
  Speaker 3: but with AI-driven insights. are both closed to investors, and
• 14:55
  Speaker 3: we've been returning billions of dollars over the last couple
• 14:58
  Speaker 3: of years, and we're going to do that again this year.
• 14:59
  Speaker 1: So if somebody wants to invest with you, it's not
• 15:01
  Speaker 1: easy to do because you're not taking more money. Right.
• 15:04
  Speaker 2: There are some products that are raising capital.
• 15:06
  Speaker 3: We're also trying to make some of the concepts, especially
• 15:09
  Speaker 3: in the beta space, accessible to people through ETFs, but
• 15:11
  Speaker 3: the main funds are closed.
• 15:12
  Speaker 1: But in your current job, you are overseeing how many
• 15:15
  Speaker 1: employees do you have?
• 15:16
  Speaker 2: 1,200. All right.
• 15:17
  Speaker 1: So your job is to oversee them, make sure they're happy,
• 15:19
  Speaker 1: performing well. Do you ever second guess their investment decisions?
• 15:23
  Speaker 1: You say, well, I don't think you should be investing
• 15:24
  Speaker 1: that way, do it this way, or you're not doing that?
• 15:27
  Speaker 3: I try to focus on question on the process. I
• 15:30
  Speaker 3: think that's where my relative advantage is, meaning I looked
• 15:34
  Speaker 3: at what the process is and I asked myself, would
• 15:36
  Speaker 3: I trust the outcome of a process that looks like this?
• 15:38
  Speaker 1: So today, your job is to manage the employees, make
• 15:42
  Speaker 1: sure the returns are reasonable. But do you go out
• 15:45
  Speaker 1: and meet investors that you already have? And you ever
• 15:47
  Speaker 1: try to go out and get new investors or you're
• 15:49
  Speaker 1: not looking for new investors?
• 15:50
  Speaker 3: Yes, I think that one of the most expanding experience
• 15:53
  Speaker 3: that I've had as a CEO relative to the managing
• 15:55
  Speaker 3: research is the engagement with our clients. 80% of our
• 15:58
  Speaker 3: clients have been with us for 15 years. Coming as
• 16:01
  Speaker 3: a CEO to the middle of those relationships, which are
• 16:03
  Speaker 3: like knives sharpening knives, these are the smartest people in
• 16:06
  Speaker 3: the world, has been eye-opening, especially at a time where
• 16:11
  Speaker 3: the world is going through what the world is going
• 16:13
  Speaker 3: through now.
• 16:14
  Speaker 2: Where things are so fragmented.
• 16:15
  Speaker 3: Think about me as an Israeli in the Middle East
• 16:18
  Speaker 3: with our Saudi clients, with our Emirati clients, with our
• 16:22
  Speaker 3: clients in Qatar.
• 16:24
  Speaker 2: There's so much in that.
• 16:26
  Speaker 3: Experience that has been reaching Bridgewater, those clients, and me
• 16:29
  Speaker 3: personally in a way that has been one of the
• 16:32
  Speaker 3: biggest gifts in this job.
• 16:33
  Speaker 1: So you manage money, as you just indicated, for countries
• 16:36
  Speaker 1: in the GCC, the Gulf Cooperation Council countries. Is there
• 16:40
  Speaker 1: a disadvantage or an advantage to being an Israeli if
• 16:43
  Speaker 1: you're trying to talk to somebody from Qatar or Saudi Arabia?
• 16:46
  Speaker 3: I think like anything in life, in some places, which
• 16:50
  Speaker 3: are not depending on which country it is, it depends
• 16:52
  Speaker 3: on who is the person on the other side.
• 16:54
  Speaker 2: It's an advantage, and in some places it's a disadvantage.
• 16:56
  Speaker 1: And do you expect to see peace in the Middle
• 16:59
  Speaker 1: East in our lifetime?
• 17:00
  Speaker 2: I am extremely worried.
• 17:03
  Speaker 3: As a Jew and as an Israeli, we've talked about
• 17:07
  Speaker 3: the changes the world is going through. And if you
• 17:10
  Speaker 3: think about when was the last time changes like that happened,
• 17:12
  Speaker 3: I would have said the change in the global operating system,
• 17:16
  Speaker 3: probably the beginning of the previous century, a productivity miracle
• 17:19
  Speaker 3: of this size, probably.
• 17:21
  Speaker 2: 200 years ago.
• 17:21
  Speaker 3: Both those things have the potential of creating social.
• 17:26
  Speaker 2: Destruction.
• 17:27
  Speaker 3: And you know and I know the most vulnerable small
• 17:31
  Speaker 3: populations are most at risk when society is falling apart.
• 17:37
  Speaker 3: And I look at what's happening in Israel and I
• 17:40
  Speaker 3: look at what's happening here with Jewish people in New York,
• 17:43
  Speaker 3: and I'm very worried about it.
• 17:45
  Speaker 1: What do you think the future of the hedge fund
• 17:47
  Speaker 1: world is? Do you think this industry is going to
• 17:49
  Speaker 1: keep going this way or do you think it's leveled
• 17:51
  Speaker 1: off at this point?
• 17:52
  Speaker 3: Given the level of uncertainty, when you stand here today
• 17:55
  Speaker 3: and you look forward, you're.
• 17:56
  Speaker 2: Saying, well, AI could be amazing.
• 17:59
  Speaker 3: It could hit any one of the limits, safety limits,
• 18:02
  Speaker 3: fiscal limits, geopolitical limits, outcomes could.
• 18:05
  Speaker 2: Be very different.
• 18:06
  Speaker 3: Both the ideas of understanding the world and then generating
• 18:09
  Speaker 3: uncorrelated alpha, which is something unique to hedge fund with liquidity, makes,
• 18:16
  Speaker 3: I believe, the next 10, 15 years probably the most
• 18:20
  Speaker 3: meaningful time to try to do what we're doing.
• 18:23
  Speaker 2: And the question is, can you do it well? It's
• 18:24
  Speaker 2: a very difficult thing to do.
• 18:25
  Speaker 1: How do you feel the social benefit is of running
• 18:28
  Speaker 1: a hedge fund?
• 18:29
  Speaker 2: I actually feel, with zero cynicism, a real....
• 18:34
  Speaker 3: Ability to convert this platform to impact. Greg Jensen, my partner,
• 18:37
  Speaker 3: and I are very focused on making sure that our
• 18:41
  Speaker 3: synthesis of the risks of AI and what should be
• 18:43
  Speaker 3: done about them are clear to policymakers. And I believe
• 18:47
  Speaker 3: that could have profound impact on society and also more
• 18:50
  Speaker 3: locally leading a thousand people that I love.
• 18:55
  Speaker 2: Is an ability to impact people's lives in very significant ways.
• 18:59
  Speaker 3: I joined an organization called Global Citizens, which is the
• 19:03
  Speaker 3: largest movement of its kind, trying to eradicate some of
• 19:06
  Speaker 3: the world's toughest problems like extreme poverty, taking that understanding
• 19:09
  Speaker 3: of the world and then marrying it with advocacy groups
• 19:13
  Speaker 3: that do something about it are things that if I
• 19:16
  Speaker 3: wasn't in this job.
• 19:17
  Speaker 2: I wouldn't be able to do.
• 19:18
  Speaker 1: So for somebody who's young watching this, what is the
• 19:20
  Speaker 1: best way to get a job at a hedge fund
• 19:23
  Speaker 1: like this?
• 19:23
  Speaker 3: The thing we're looking for is people that are very
• 19:26
  Speaker 3: fast learners and are coming at it from a different direction.
• 19:31
  Speaker 3: Because think, there's so much that already exists. There's so
• 19:35
  Speaker 3: many of the same people that would think about exploring
• 19:37
  Speaker 3: in similar ways. So if you're an explorer, meaning you're
• 19:40
  Speaker 3: looking for what the next textbook will say, and you're
• 19:44
  Speaker 3: coming at it from a different direction, you're what we're
• 19:47
  Speaker 3: looking for. And that's where actually having a different background
• 19:50
  Speaker 3: coming from Israel, being a little bit older, having a
• 19:52
  Speaker 3: different life experience is actually a real benefit. We almost
• 19:55
  Speaker 3: don't hire in business schools at all. Mostly hire either
• 20:00
  Speaker 3: out of college, and we look for colleges elsewhere. in
• 20:03
  Speaker 3: colleges around the world, or more senior executives, what we've
• 20:06
  Speaker 3: done over the last couple of years, we've opened processes.
• 20:09
  Speaker 2: Now that are to anybody in the world.
• 20:12
  Speaker 3: We just wrapped up a competition where we asked the
• 20:15
  Speaker 3: general public a question, and we looked at people's logic
• 20:19
  Speaker 3: independent of where they came from. And we've hired some
• 20:22
  Speaker 3: people out of that process.
• 20:23
  Speaker 1: You have young children. How do you instill your values
• 20:25
  Speaker 1: in young children? And would you like your children to
• 20:28
  Speaker 1: grow up to be hedge fund investors?
• 20:30
  Speaker 3: The only thing I know to be true about my
• 20:32
  Speaker 3: life is that The thing that helped me the most
• 20:34
  Speaker 3: was actually being such a mess in the first part
• 20:39
  Speaker 3: of my life because it made me fail so many
• 20:41
  Speaker 3: times and enter my professional life thinking I've got nothing
• 20:45
  Speaker 3: to lose, basically. Resilient in a way that made for
• 20:51
  Speaker 3: all the successes that followed. The problem with being a
• 20:53
  Speaker 3: parent is that you want to prevent them from any
• 20:55
  Speaker 3: pain when they grow up, where frequently what they.
• 20:58
  Speaker 2: Need is to fail, to cry, to hurt.
• 21:02
  Speaker 3: So conceptually, intellectually, my advice to my kids is make
• 21:05
  Speaker 3: sure you build resiliency. And the challenge is that I
• 21:10
  Speaker 3: can say that intellectually and then I prevent any pain
• 21:12
  Speaker 3: from them in life.
• 21:13
  Speaker 1: Would you say you're happy at what you're doing? I mean,
• 21:15
  Speaker 1: it's a big responsibility and happiness often is complicated.
• 21:19
  Speaker 3: I do feel constantly extremely, extremely fortunate. It's very present
• 21:25
  Speaker 3: and clear to me that my life is a snowflake.
• 21:30
  Speaker 3: in the grand scheme of humanity.
• 21:33
  Speaker 1: You could do this another 40 years, but do you
• 21:35
  Speaker 1: ever thought, maybe I'll do this for 10 more years
• 21:38
  Speaker 1: or 15, and I'll still be relatively young and go
• 21:40
  Speaker 1: do something in government or something in philanthropy?
• 21:43
  Speaker 3: I have this lingering thought in my head every time,
• 21:47
  Speaker 3: especially seeing what a transition looks like, that one of
• 21:50
  Speaker 3: the most important decisions a leader has to make is,
• 21:53
  Speaker 3: am I still the best leader for this organization? I hope,
• 21:56
  Speaker 3: I want to, I wish for myself that I ask
• 22:01
  Speaker 3: that question every day, and the day the answer is,
• 22:04
  Speaker 3: you're not the best leader for this organization, that I'll
• 22:07
  Speaker 3: have the character, because this is so addictive. There's so
• 22:09
  Speaker 3: much in this that it's hard to let go. I'll
• 22:11
  Speaker 3: have the character to step down. And I honestly don't
• 22:15
  Speaker 3: know if that'll happen in a month, in a year,
• 22:17
  Speaker 3: in 10 years, in 15 years.
• 22:21
  Speaker 1: Thanks for listening. To hear more of my interviews, you
• 22:23
  Speaker 1: can subscribe and download my podcast on Spotify, Apple, or
• 22:27
  Speaker 1: wherever you listen.