Ben Gilbert: commitment

Transcript context

…It totally does. There’s a parallel story when Jim ultimately does retire in 2009, and Peter and Bob take over as co-CEOs, where a year or so before the “quant quake” had happened, where similar to the tech bubble bursting, there was, all of a sudden, very large drawdowns among all quantitative firms in the market and RenTech gets hit. During that period, Peter argued very strenuously that we should trust the model, stay risk on, this is going to be an incredibly profitable time for us. Jim pumped the brakes and stepped in, intervened, and took risk off. Peter goes to Jim, again around the CEO transition and says, Hey Jim, aren’t you worried that with me running the place now, I’m going to be too aggressive and blow it up one of these days? Jim says, no, I’m not worried at all. I know you were only so aggressive in that moment because I was there pushing back on you. And when you’re in the seat, you’re going to be less aggressive. He’s just such a master at insight into human behavior. It is so true, though. I even find this about myself, that I will naturally take the position of the foil to the person across from me. So if somebody’s being pushy in some way, I’ll find myself taking a position where if I pause and reflect, I’m like, I don’t think I expected to take this position coming into this conversation. But you know you naturally want to play the other side to balance out the person sitting across from you. Back to the year 2000 in this incredible performance. Ben, to what you were saying earlier about uncorrelated returns, not only did they shoot the lights out that year, they’re doing it when the market is down. We got to introduce this concept of a Sharpe ratio now, which for all of you listeners that are in the finance world, you’ll know this, but for everybody else this is a really important concept.…

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