Denise Shull is President of The ReThink Group, a consultancy providing advanced market, risk and behavioural intelligence. She holds a Master’s degree in Neuropsychology from The University of Chicago. These are her musings and impressions of what happened during one afternoon she spent at SAC Capital Advisors for a job interview:
Personally, I’ve never been into art, but while I sat in the lobby of SAC Capital unable to take my eyes off the gargantuan gleaming purple heart hanging high above me, I realised I should probably reconsider.
After being referred to the firm by two trading psychologists, I’d been discussing a “Management Consultant/Executive Coach” position with Jordana Upton, a Vice President in HR at SAC. I found myself curious about the origins of an Addams family-suitable gothic basketball hoop while waiting to be interviewed by Mr. Cohen’s Chief of Staff, Marshall Kiev, and Perry Boyle who I understood to be the Director of Research and member of the Executive committee.
The job description I had received read: “The Management Consultant/Executive Coach is a newly created position which will report to the Firm’s President, with frequent dialog with other members of senior management. The purpose of the role is to work one-on-one with our discretionary long/short equity portfolio managers to help them identify the traits and behaviours that hold them back from performing at their full potential and come up with strategies to achieve success. The consultant will then work with the portfolio managers to implement and monitor progress against those strategies.”
I didn’t pay much attention to the end of the first sentence – “with frequent dialog with other members of senior management” and focused on the purpose of one-on-one work. Frankly, I’m not the least bit reticent about my ability to “identify”, “come up with strategies” and “implement” in this realm.
Unfortunately for me but maybe fortunately for SAC, that first sentence turned out to be the key. First with Messrs. Boyle and Kiev, the subject of “sharing” entered our conversation.
Next in an almost 90 minute discussion with Ms. Upton and the Director of Human Resources, Dawne Cohn, I was asked directly how I would handle finding out that one of the portfolio managers was involved with illegal drugs or insider trading. It wasn’t ambiguous. We discussed, at length, the dual role of coach and potential informant.
This startled me. I had actually heard from a former SAC employee that Ari Kiev (the father of Marshall), the legendary psychiatrist who worked for SAC for almost two decades, was often seen as merely a “management conduit”. I still hadn’t anticipated that responsibility to be explicit.
Unless you want to begin experimenting with biomedical engineering, if you truly want to help a money manager improve, it’s imperative that you earn their unequivocal trust. They need to know they can safely tell you ANYTHING. If you don’t have that, then all the behavioural strategising in the world isn’t going to result in bankable performance increases.
Boyle asked the best questions. What would I do with someone who was great but didn’t want to risk any more capital and vise versa? What would I do with a volatile individual who risked every penny he was given – even when his capital had been reduced due to repeated blow-ups. Now this is the kind of stuff I can fix.
Kiev mostly sat back. He leafed through Market Mind Games, turned immediately to the index and chided me for calling Cohen “Stevie”. “He hates that, you know.”
Despite my developing reservations about the job, I executed my best impression of the good old gridiron try. I followed up. I let them know competitors were asking me about the position and I explained again why ReThink’s team approach works best.
Not surprisingly, I didn’t get the job. I wasn’t a “cultural fit,” per Ms. Upton.
I don’t know for a fact who did get the job.
There are however a couple of things I do know.
SAC is very serious about being notified of illegal behaviour in the ranks – very serious.
Likewise, Cohen’s tape reading talent is real. I have a little bit of that talent myself and I have seen it with my own eyes in people like Dimitry Balyasny, CEO of Balyasny Asset Management, whom I had the privilege to sit next to back in the ’90s at Schonfeld Securities.
And I’m certain that the SEC doesn’t understand that this is truly an art and is also now being described by the neuroscience research on trader intuition as “theory of mind”.
The formerly open secret, now in the Wall Street Journal, is that Cohen is the target of an insider trading crackdown by the Justice Department. It’s easy to see that the ability to predict future price movement from current price movement can ONLY look like criminal behaviour to a regulator. But that talent doesn’t make “Stevie” guilty of anything.
As for the portfolio managers at SAC, the widely reported dictatorial culture at the firm certainly breeds desperation. Boyle, despite having an appreciation of the power of the unconscious mind, was likewise also just a bit too quick, in my opinion, to consider canning Mr. No-More-Risk and Mr. Too-Much-Risk.
If the psychological context of being inside SAC on a daily basis feels like an arctic chill then finding warmth via assembling the ingredients of a bonfire can seem like a good idea. If the management consultant discovers a smouldering fire and indeed executes on the “dialog with senior management” element, is the firm required to “confess” what it has discovered to regulators? What if I had gotten a maybe not so proverbial stab at helping the PM’s “perform at their full potential” and I did, despite the suspected subtext, manage to gain trust, would the SEC require ME to offer it up?
…which brings me back to the purple heart and the multi-billion dollar question.
Is Steve Cohen a trading-addicted introvert who admires bravery? Or, does that cherubic face hide a cold-hearted, control-freakish, exceedingly cunning crook? Isn’t that all anyone, even the government, really wants to know?