The Invisible Hands: Top Hedge Fund Traders on Bubbles, Crashes, and Real Money, Revised and Updated

Chapter 4

The Philosopher

Erudition drives “The Philosopher’s” process. In following the philosophies of Karl Popper as much as George Soros, the Philosopher seeks not what is true, but rather what is more fit, in the sense of a range of conjectures that can be evaluated. In other words, he focuses on what is priced into the market and how that pricing may change, rather than on what the “right” answer might eventually be. In this vein, he is the ultimate hypothesis tester. You can sit down with the Philosopher and discuss history, economics, politics, philosophy, and a host of other topics, but in his trading world, probability reigns supreme.

When the world financial system broke down in 2008, policy makers responded by implementing creative strategies to halt the collapse, and suddenly the plumbing behind the system—the money markets— became critical to understanding events and their consequences. Long neglected as an unsexy area of global finance, money markets became a focal point.

The Philosopher's savvy is rooted in his unique approach, which combines his deep knowledge of the financial system with a ruthless attention to philosophical logic. Starting off as a money markets bank prop trader taught him the inner workings of the plumbing that underpins the global financial system. He learned the ropes taking true, directional macro risks, then going on to work with some of the biggest names in the hedge fund business, and ultimately striking out on his own, where he now sits ...