Friday, September 2, 2016

- Trump's Lack of Civility

In this piece, John Fund commits the oldest analytical sin known to man – he says that Donald Trump could win the election, only if he acts just a little bit more like John Fund. My favorite quote is this one:

“I’ve kept my job this long by knowing I must never bring him bad news”

Donald Trump’s secretary may believe that’s how she’s held on to her job all these years, but I can all but guarantee that it isn’t really how she’s held on to her job all these years. Yet, John Fund buys that story hook line and sinker, because he doesn’t really understand the many different ways there are to get to a billion in the private sector, or how personality really shapes outcomes when it comes to executive decision making.

All the folks at NR, excepting guest contributors like Dennis Prager who already has a job, imagine themselves the heirs to the William F. Buckley legacy. They believe (or at least hope) that the world would be a better place if everyone acted a little more like the late WFB. But some people simply aren’t cut out for that kind of relatively stoic intellectualism. And that does not make them doomed to failure in any area, least of all politics.

Let me tell you about a few of them that I know, who have managed to make their small way in the world regardless.

Louis Bacon is a self made Billionaire. He has an irascible personality, is fanatically private, and as professionally driven as any man I’ve ever met. He worked hard and was very generous with the pay of his staff, but demanded a level of excellence from them that left marks. Saying his firm was a pressure cooker totally understates it. Take a pressure cooker, fill it with gunpowder and kerosene, turn the heat up to high and go at it with a pair of additional blow torches, and you have a vague idea of what a typical morning in the place was like. The saying was that it took a year to recover from working at Moore Capital. For some it took longer. I think my favorite LMB story summarizes the personality of the man very effectively.

One of the responsibilities of my team was to put together a daily book of research for the boss. It involved collating thousands of data sets and analytics from hundreds of different sources, and collating them into a few hundred charts and reports describing dozens of markets. These were placed on LMB’s desk every day in a large red binder, and were the very first thing he looked at when arriving in the morning.

I had one young technician whose entire job was to babysit the data set’s arrival, run the analytics, and ensure the reports were all up to date and correct. That’s it. That was his entire 6 figure job. He didn’t even have to print the thing, we had another guy for that. His expertise was in running the systems that performed all the work. And the fact that we paid him so well was testimony to both the complexity and the relative importance of that piece (really thousands of individual pieces) of research.

That kid would typically arrive in the office near the close of the trading day when the data would begin to trickle in, and stay until the research book was complete. If that were at 8PM he had a short day. If things ran poorly or if some data was late, he would often stay until 2 or 3 AM. If things went really badly, I would usually get a call at about 3:30am asking me what he should do.

One morning after what I thought was a smooth run, I went to the office a little late. On days when I knew we’d had an issue I’d be there about 5am, but I hadn’t had a call the night before and I was a newlywed at the time, so my morning ran a little later than normal. I sat down at my desk on the trading floor about 7:45 and noticed that LMB was already there. I knew this, because sitting on my desk was a piece of the research from the night before, torn from the book we’d delivered, with a red circle around a single missing data point - just a single missing dot, on a page with hundreds of dots, in a book with hundreds of pages just like the one I was looking at. And scrawled in marker across the entire page in large, red, angry letters were the words “What the F*** is this!” with an arrow pointing to the red circle where the data point was missing. And down at the bottom in equally angry letters, the initials “LMB”.

That missing datapoint, just a single number, was a tiny tertiary blip on an obscure currency market that wasn’t seeing any particular action. But LMB knew it should be there and wasn’t. That the guy I paid to notice such things had missed it was something of a miracle. That LMB caught it wasn’t unlikely at all.

The next Billionaire I met was Bruce Kovner, who was also self made. Bruce couldn’t be more different than Louis Bacon. He was handsome, charming, impeccably dressed and well cultured. Louis liked pheasant hunting and privacy, while Bruce preferred the opera and rare books. Bibi Netenyahu was his close friend, and at one point, Bruce was Chairman of the AEI.

Bruce was an inside the box, big picture guy who delegated responsibility, but (typically) not the pay that went with it. My job there, which had the same description as my job at Moore Capital, paid about 50% what I made at Moore, and gave me only a fraction of the budget. Other transplants between the two firms had a similar experience. Bruce was more worried about getting value for his dollar that LMB, who was only ever worried about perfection, and would be happy to pay to get it.

But the effect of this is that where Moore Capital would have a single brilliant person working themselves to death to meet the LMB standard, Caxton Associates, Bruce’s Firm, would have three people each doing a mediocre job in comparison, in order to get a similar result. This left his firm with less pressure, more employees, and more of an ‘office politics’ focus. LMB only ever wanted profit, and didn’t care if you showed up for work in a green tutu if you were making enough money. Bruce tended to favor the people he favored, whether they were doing a good job or not.

You could call that loyalty to his friends, or you could call it kindness (you couldn’t call it generosity because he paid so poorly). But favoring personal relationships and office politics over hard numbers, doesn’t always have the kind of outcome you hope for. Yes the culture was more genteel and polite, but it was also more backstabbing and you never really knew exactly where you stood.

I won’t get into my personal experience there, or the specifics of why I had to leave. It should suffice to say that when I did, I was running a wildly successful strategy producing the kind of results that most firms would have given their eye teeth to see. And two weeks after I left Caxton, Paul Tudor Jones did that very thing.

Paul Tudor Jones was the third self made Billionaire that I worked for. He was an eminently grounded, family focused man who waited in line for his lunch at the corporate cafeteria more days than not, just like everybody else. More than anything he encouraged frank and open discussion among his decision makers. He wanted to hear what you really thought not what you thought he wanted to hear. On this score he really walked the walk.

I once watched another staffer at my level of seniority tell him his ideas on the gold market at a particular moment were ‘idiotic’. It’s a big thing to call your legendary billionaire boss’s idea idiotic to his face. Say that to LMB and you’d get an earful, but he’d listen to your view and if you turned out to be wrong, it might get you fired. Say something like that to Bruce Kovner and no one in your family would ever work in finance again.

Paul was the Billionaire I most liked. He was approachable, easy to get along with, and had a measure of charm. He and I spent one quiet afternoon talking at length about hunting big bears in Alaska. LMB was a hunter too, but if I ever brought it up to him during open market hours, I had better have a way to generate profit from it. No one could even lay eyes on Bruce without a meeting scheduled and he tried to avoid associating with the underlings, so all personal talk was off the table.

Paul didn’t think that way. Paul was a balanced man with a balanced life, who thought ‘a life’ was as important as anything else. He was a man with personal humility who recognized that you make many decisions in life and a great many of them are going to be wrong no matter what you do. “Be less wrong than the other guys” says a lot about the culture of his shop. “Fail less” would be another way to say it. And if it weren’t the fact that I went to work for him 2 weeks before the banks ‘broke the buck’ in late 2008, changing the quant markets forever, I’d probably still be working for him.

So here are three self made Billionaires, who all work in the same job, but who couldn’t be more different. Their personalities and the consequences of their likes and dislikes, shaped the organizations they ran, but all were wildly successful. Bruce Kovner is the one who is the most like William F. Buckley, but his firm was the least well run, and the most inefficient. So being like WFB may have it’s genteel upsides, but it’s not the end all and be all of every situation.

And lest we forget, WFB may have been a brilliant mind, but he couldn’t get elected Mayor of New York City, and even Napoleonic Mike Bloomberg managed that. It’s becoming cliché to say but Mitt Romney did it the NR way and John fund very much approved, but Obama trounced him because that isn’t what drives American decision making anymore. So deep intellectual posturing doesn’t seem to me to be the clear path to success that the NR team wishes it would.

As I have often said, I have my problems with Donald Trump. But I think we’d all be better off if the folks at NR would simply recognize that in politics like business, there are lots of ways so skin a cat. And not everyone who wins, does it by being like William F. Buckley. Trump may be a bit garish to the beltway ear, but he is an effective persuader and understands media. He is fighting fights that the right has been afraid to fight on their own, and doing so effectively. So if we all need to deal with a little gold lame to get the right engaged in the intersection of culture and politics, it’s a pill I’m perfectly prepared to swallow. NR should start doing the same and quit pretending that it’s a question of political principles.


Hell_Is_Like_Newark said...

I have become convinced that the members of Conservative Inc. are worried they won't have a job should Trump win. Kinder, gentler, conservationism (which is just progressivis.. but done more slowly) will end up on the ash heap of history and their pundit careers with it.

My elderly Father has been a reliable reader of National Review and the Weekly Standard for decades. He even bought me a subscription when I was in college. A couple weeks ago I was visiting my parents. I watched my Dad's face turn into disgust while reading The Standard. He threw the magazine down an exclaimed how sick of the anti Trump articles in both magazines. I am curious if there are a lot more people like him doing the same?

MikeCLT said...

Hear, hear Tom.

I agree with HILN re the job prospects for Conservatism Inc. should Trump win. My experience with my own father and NR is the same.

ikaika said...

spot on Tom. the schoolyard fight between "Conservatives" and whomever disagrees with them is laughable. Hannity has been picking the scab for a while now and an awful "slap-fight" and hairpulling event has emerged.
With Glen Beck explaining that a conservative candidate must be able to recite the constitution while espousing christian faith has pushed me to the side of the alt-right. Its not really the alt-right for me, but I am sick of phony rules of engagement.
I am gobsmacked by the audacity from the right that a candidate can only garner their support if they read, speak and breath like them. We've had candidates and presidents that were NRO and COnservative Inc approved. These very same candidates appointed liberal justices to federal courts and tried to incorporate elements of liberalism to soften conservatism.
Mark Levin is full of piss and vinegar as a commentator, but won't support a candidate that has a same unapologetic approach.. because he can't recit the constitution of some other such tripe. George Will can recite the constitution, but he'd be the last guy I'd want in the oval office.
Cinncinnattus would have been run out of town if conservative inc had its way.

Hell_Is_Like_Newark said...


The incident that finally push me over was the Christian bakery fined out of business for the "crime" of refusing to cater to a gay wedding. Conservatism inc. has done nothing to push back against the tyranny of the Left. Free association now is all but dead.

For the Alt-Right, free association is paramount.

ikaika said...

Agreed. American Men have been abandoned and the freedom associated with the American Ideal has become toxic.

Interesting drudge headline today: Army of Men' Out of Work... this is your alt-right.
Not necessarily conservatives, but Americans. Something that both parties have mutually excluded. Clinton leads "likely voters"... who are the unlikely voters?
I've been saying it for a while that Trump will win by a landslide. You harness enough out of work or underemployed pissed off MEN (not liberal men) it will be a tidal wave.
The only way Trump loses is if he softens and follows the advise of all those that have lost before him.

chess said...

Ikaika... If Trump wins its because he is a lap dog for Putin....And Gucifer 2 and Snowden and Assange.... ..Resistance is futile.

ikaika said...

is it worse to be a lap dog for Putin or Lap Dancer for Clinton?

chess said...

I suspect she hits from the other side of the plate. All i know is that Baba Striesand will leave this country if Trump wins. Oh the horror. The inhumanity of that fat ass hag leaving.
I dont believe any polls anymore. I still remember Romney leading in Florida by five until the actual election night when NBC called Florida too close.
I find it interesting that dems who i think have cheated for quite awhile start yelling when they think they might get out-cheated....