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She has a really fascinating background, very eclectic, a combination of math and law. You, you get a, a BS in Mathematics and a JD from Boston University Math and Law. It is something, math has always come easy to me since a child. I didn’t get an advanced degree in math. Not the usual combination. What happened?
So I took it upon myself to go off and took a course in bond math, took another course in derivatives and realized the underlying fundamental concepts were barely, I mean, it wasn’t even high school math in most cases. We just get to focus on assets and asset riskmanagement. RITHOLTZ: And if only you could do that.
” Matthew: It’s very riskmanagement based. And most people have very underserved in a riskmanagement perspective, so you can place the right insurance products along with investments and get a whole financial plan going. You’re obtaining clients. Do we have their income and tax information?
One, one is true and I’ve always said is that I wanted people to stop, ask if I could doing math. And no one asked me if I can do math anymore with a degree from Booth, particularly in econometrics and statistics. So people really ask you, you take French and can you do math. Two reasons. Absolutely.
And I did the math, and I think at that point in time, roughly speaking, assets in ETS were roughly just 10 percent, 12 percent of assets in mutual funds and I was pretty convinced that that number was to increase significantly. I think I mentioned earlier, I have like a four-and-a-half-year-old that keeps me really entertain.
So I, I did a math degree at Oxford, which is more pure math. You know, pure math can be very theoretical and detached from the real world, and it’s getting worse. Some people look at a casino as entertainment and hey, we’re gonna spend X dollars, pick a number, 500, 2000, whatever it is. Riskmanagement.
I — I loved math, but really, I was going to go down that literature route more than anything else and — and study Spanish literature. BITTERLY MICHELL: … riskmanagement. What did you do to entertain them? I wasn’t that typical person that did a number of, you know, internships during the summer, had that ….
.” It’s really helpful to have had five other meetings with people who sit at analogous funds that had losses that were just as big, and in fact, they may have contributed to those losses more and be able to tell him, first off, your fund, just by my math, has a $250 million management fee. So why rock the boat?
So like a component of it was like the standard derivatives math, right? And so like, you know, I got there and I learned derivatives math, right? It was derivatives math, it was like working with the traders on like riskmanagement. What’s keeping you entertained?
DAVIS: A big part of it is really around when there’s more complicated corporate actions that are happening that entail a level of risk. There’s conversations that happen with our riskmanagement department to make sure we’re comfortable in terms of what kind of exposure that creates in the fund.
RITHOLTZ: So hold the duration risk aside with those two, but just for an investor in treasuries, I know you’ve done the math before. If you’re giving up that 1% big fat yield in 2019, 2021, let’s say you give up three years of 1% and get zero, how does the math work over the subsequent couple of years?
Even the guy you think of so highly, you know, after three hedge funds open and close, you got to wonder if there’s some riskmanagement issue there. And all these formally high performers are now just so big, they’re very happy collecting the management fee and the performance fee matters less. RITHOLTZ: Yeah.
BORISH: So one of the geniuses of Paul in really understanding futures markets in general is that most of the innovative riskmanagement approaches came out of the futures markets because of the using margin. So now what do you do with riskmanagement? What were you trading and what was he looking at?
And so the other thing is, is that, and I think it’s our core riskmanagement culture, is that we think that till risk is way more probable than everyone else does. We ask all of our guests starting with what have you been entertained with these days? But remember Europe, like you said, you said a very key thing.
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