Tuesday, August 4, 2015

Runner, Hedge Fund Manager... Same Difference

Invest in yourself. Your career is the engine of your wealth.-- Paul Clitheroe

At first glance it may seem like a stretch to compare hedge fund managers and runners. One might say it's like apples and oranges. My come back would be yeah, it's still all fruit. Many businesses can get some basic fundamentals and carry it across to myriad other businesses. The old adage the devil is in the details apply across the board but any project will begin with a 30,000 foot view from the top. I spent a great deal of my life dreaming of starting a hedge fund so after I left that business I find great difficulty letting go of the principles of hedge fund management.

The amount of time a manager spends obsessing over profit and loss is probably the same amount of time a runner spends thinking about running. I can't imagine any other activity in this world that is done by choice, four to five days a week, for 30 minutes to 2 hours each time that doesn't creep into conversations and thought processes throughout the day. I've isolated ten similarities that after reading them you will think crap, he's right. Or you will say wow, this guy needs help.

1) Specific Style- the best funds aren't jack of all trades. They are experts at something and they have capitalized on it. Once we decide what type of running we want to do or our best attributes, running becomes more pleasurable. Scott Jurek found that he wasn't very fast but he could endure better than most and he had a high pain threshold. Without recognizing that he would have never been heard of.

2) Risk Averse- many hedge funds now have blown up completely. The original idea was to "hedge" your bets and not lose money. Although as runners we love to cut loose into the woods on a new trail but we are very aware of how much energy we've spent getting to that point. I don't hear very many stories about a runner dying out ona random highway with nothing left to go on.

3) Desire to Grow- very few funds are done with adding on. I don't know any runners that aren't ready to run longer or faster.

4) Obsesessive- hedge fund managers spend all of their time trying to make a profit for themselves and their investors. Runners spend all of their time thinking about routes or races, slowing down or speeding up. We constantly think about what's next and how to make it better than what just happened.

5) Market Aware- generally you can't tell a manager anything about the market they're in. Runners, similarly know tons about the runners body. I never knew what plantar fasciitis was until I ran.

6) Information Starved- usually a hedge fund manager wants the upper hand and any additional information is golden. Very few runners do not own a few running books or haven't just googled some article.

7) Lineage- great managers generally come from a great teacher or a great firm or any firm for that matter. Few runners, if any, crawl out of bed one morning, start running, and has a 10 year career running with no correspondence from another experienced runner.

8) Anybody Can Do It- contrary to popular belief, it takes very little capital to start a fund. Really the idea is all one needs. Of course I'm oversimplifying but you get the gist. Runners don't need to have a particular background in order to be a successful runner. By successful I mean someone who considers themselves a runner happy to be running.

9) Niche Community- hedge fund people, historically, lived in a different place than other financial service people. They looked at different information and spoke about different things that no one sales understood. Runners are the same. Just try saying "Fartlek" to a non-runner.

10) Just Different- people that started hedge funds are cut from a different clothe. They are not the folks that want to work for anyone really and certainly not the rest of the financial world. Runners are different from gym people. We are different than "cardio" people. We need to run because we are just different.

Sure, this might have been a stretch but if you read this much it can't be half bad. I'd like to know your thoughts on this leave a comment if you'd like.

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