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Morning Coffee: Top hedge fund rewards curious personality traits. Why bond traders should play tennis

Bridgewater, Bridgewater Associates, Ray Dalio, radical transparency, jobs, recruitment, hedge funds, alts, alternative asset management, asset management, fund managers, asset managers, buy side, Wall Street

Bridgewater employees are each other's harshest critics.

What kind of person do you need to be to get ahead in a major hedge fund? How about analytical and driven? Numerate and curious? Or “living in truth” and “assertive and open minded at the same time.”

The first two sets of options were concocted by us, the third by the hedge fund personality-meister Ray Dalio, founder and chairman and co-CIO of hedge fund Bridgewater Associates and soon-to-be-author of his grand opus, “Principles: Life and Work.”  

A practitioner of his self-concocted ontological precept of, “radical transparency” (saying the same thing to everyone, especially when you disagree, resolving tensions in the open), Dalio is known for being rather demanding as a boss. Various Bridgewater executives have left in the past year, including Jose Marques, head of trading and Job Rubenstein, the former Apple executive brought in as co-CEO.  

As part of Dalio’s transparent ethos, all 1,500 Bridgewater employees are constantly rating each other across more than 100 attributes on a 1-10 scale via Dots, a proprietary iPad app that is a crucial element of Dalio’s “radical transparency” and “algorithmic decision-making” philosophy. Now Business Insider has published a copy of the iPad screen derived from a Bridgewater Associates TED presentation showing exactly what those attributes are. You can see this below.

Some of Dalio’s dot-features are pretty standard (creativity, practive, results-orientation). Others are not. Who knew that you had to be wise to work in a hedge fund? Or that being “willing to touch the nerve” and “sizing people up” were things? Our favourite though is the quality we mentioned at the start – being “assertive and open-minded at the same time” – two things often in conflict. If you can manage this, you’ll do well. Maybe Dalio’s onto something after all?

The personality traits Bridgewater rewards you for:

Bridgewater Associates dots

Source: Bridgewater/TED (via Business Insider)

Separately, a Bloomberg reporter noted some similarities between the blue U.S. Open tennis courts in Queens and the trading floors of Wall Street.

Both in the market and on the tennis court, everybody is watching the conditions – in tennis, the surface and the weather impact game play. The indominatable lefty Rafael Nadal dominates clay while the easy power and finesse of Roger Federer, known simply as Fed, were made for grass. Grass courts play faster, especially in the heat, and the ball stays lower, a difficult combination for an opponent trying to return one of Fed’s slice backhands.

In fixed income, the reporter says everyone’s watching that other Fed. The U.S. central bank is gradually raising interest rates from the historic lows it maintained after the financial crisis, creating an attractive environment in which to sell debt, per Bloomberg.

Tennis players are taught to develop a point, wait for the opening and strike when the opportunity arises. Bond traders use options, waiting for the bond price to reach a certain level before striking, or buying or selling the securities. Like a barrage of cross-court forehands, it requires patience and an instinct for the window of opportunity.

Bond traders and tennis players are clearly in the intersection of a venn diagram. To suggest that being good at one will make you good at another might be pushing the thought too far.

Meanwhile:

The Bank of England expressed “significant concern” to Deutsche Bank in a letter concerning its U.K. branch authorization ahead of Brexit. (Business Insider)

To the chagrin of Dublin and Paris, Goldman Sachs is considering quadrupling the amount of staff it has in Frankfurt. (Bloomberg)

Trump’s deteriorating relationship with ex-Goldman no. 2 Gary Cohn has ominous implications for the one thing Wall Street cares about most. (Business Insider)

Lloyd Blankfein, the 62-year-old CEO of Goldman Sachs, tweeted a picture of his old Harvard ID. (Business Insider)

MiFID is hitting the buy side much harder than it is the sell side. (Bloomberg)

If you’re a fixed income analyst and you’re all out of bond trading ideas, then you’re in trouble. (Bloomberg)

Two frat brothers starting a hedge fund allegedly took an illegal shortcut to show they were top-notch traders: buying illegal tips from their friend at Amazon.com. (Bloomberg)

Mind-reading brain-computer interfaces are already here. (Bloomberg)

A couple of 30-something guys quit their jobs at J.P. Morgan and Goldman Sachs to co-found a farmland-focused PE firm that now manages $575m. (Business Insider)

Standard Chartered placed a $400m bet that diamonds are forever – and lost. (Bloomberg)

Britain’s best-known fund manager has apologized to investors after losing hundreds of millions of pounds on a series of disastrous stock-picks. (The Telegraph)

Step aside, Robert De Niro. This 48-year-old intern is a mother of three. (Spectator)

A day in the life of a Kombucha-drinking, wall-climbing Silicon Valley intern. (Business Insider)

Photo credit: RichVintage/GettyImages

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