Black Wednesday – How George Soros Tried to Crash the Pound
Trading guides, webinars and stories
Trading guides, webinars and stories
Brandon Stanton was recently a guest of The Tim Ferriss Show, where he talked about his experiences first as a bond trader. Then about his experience as an artist with more than 25 million followers. His career as a bond trader started out as a bet he took on Obama winning the 2008 presidential election. During the primaries in 2007, Brandon was in his early twenties. Studying history major, having no money, and being absolutely convinced that Obama was going to win the election. He took out $5,000 in student loans and put the whole sum on Obama’s victory. The transaction was executed by an Irish exchange called Intrade The Prediction Market Limited, which has undergone since. Brandon made around $1,200 with a single transaction and shared his experience with his friends.
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One of his friends was a bond trader in Chicago. That friend studied finance his entire life and even had a degree from an Ivy League university. He told Brandon, “You know, the one differentiator between successful traders and unsuccessful traders in our office is their comfort with risk taking. Based on your story, I would like you to talk to my boss”. Indeed, he arranged the interview and Brandon Stanton had one month to get prepared for it. As a fresh graduate, he had no clear plans on what to do with his life. He thought this was an opportunity he wouldn’t have had any other way. Brandon read 20 books on the markets and quickly became well versed on how they worked. He was fascinated by the markets and he got the job eventually.
In fact, Brandon was deeply impressed by how the markets change. They seemed tangible, even mathematical when he was watching CNBC. When he delved deeper, he realized that if the computers are removed, a market was rather a crowd of people haggling over something which was impossible to value. The process of picturing a bunch of people arguing about what something is worth and thinking about the outcomes depending on psychology made trading an interesting, attractive activity to Brandon Stanton. Shortly, he became obsessed with the markets and couldn’t think of anything else apart from trading.
He was a relative value trader in fixed income securities in the Asian markets. His firm placed very highly leveraged trades, so the traders made huge gains or huge losses every day. Brandon Stanton also got an adrenaline rush every time he hit a new high or low. He spent 2 years using all of his intellect and all of his creative energy trying to figure out how to be the most effective bond trader. In the second year, his firm went through the financial crisis, which also meant he lost all money he had ever made. The trading style used by the proprietary firm was calibrated to work during periods of low volatility and that worked out well between the late ‘90s and 2008.
However, when the financial crisis hit in, volatility went through the roof. The firm which had been around for more than a decade was out of business after a year Brandon Stanton was fired. He got fired because he became an unproductive member of the firm. The markets changed and he wasn’t adaptive enough to figure out the new conditions. He refused to fully embrace the fact that what worked for him extremely well for a year had stopped working. He went from making a lot of money by the end of the day to losing a lot of money by the end of the day.
Today, Brandon Stanton still finds trading interesting philosophically and likes to observe how wanting more and being afraid to lose are driving the markets. Still, back in 2008 he felt he buried himself so deeply in bond trading that he did it to the exclusion of almost everything else. So he chose to do his next big thing outside of computer screens and opted for a life outside of the books. He picked up photography and started to learn it from scratch. A decade later, he has built up a huge art project. Spending all his time on interviewing people and offering points of connections with them.