Nowadays, the most common road into finance is through an Ivy League college and impressive internship. But some of the biggest names in finance have much more unorthodox and interesting origin stories.
For DoubleLine Capital founder Jeff Gundlach, his success in finance can be traced back to one episode of Lifestyles of The Rich And Famous.
In a new, pilot segment with Bloomberg View, Barry Ritholtz interviewed the bond expert about the start of his financial career. Gundlach studied theoretical maths at Yale, but decided to pursue drumming in L.A. instead. Unfortunately, being a rock star didn’t really pan out.
“I had basically cardboard boxes for tables, sat on the floor, and I had a black and white TV with a coat hanger for an antennae. And in those days there were basically three channels, ABC NBC and CBS. And I needed a pair of pliers to turn the dial,” Gundlach told Ritholtz. “And one day, I think it was on ABC, Lifestyles of The Rich and Famous comes on, and Robin Leach said ‘We have a special show this week, we’re going to be counting down the top ten paying professions in the business world.’ And I said, ‘Hey, I’ll watch this, and let’s see what my career is going to be.'”
In 1984, the top paying profession was investment banking. Gundlach then sent his resume and an aggressive cover letter every investment banking firm that advertised in the Los Angeles Yellow Pages.
Out of 23 total firms, Gundlach ended up getting one interview with TCW Group.
“I went in and they said, ‘You have an interesting background, what do you think you would want to do, equities or fixed income?’ And I said, ‘I don’t know what those things are.’ And the guy looked at me, fairly incredulously and said, ‘Look, equities — stocks, fixed income — bonds.’ I didn’t know what bonds were. I knew what stocks were,” Gundlach said. “So I said, ‘I wanna do stocks.’ And the fellow said, ‘Yeah, you’re background is all this maths stuff, we could probably use you better in the bonds. So we’re going to put you in the bond thing.'”
A week or two before Gundlach started at TCW, he went through Inside The Yield Book by Marty Leibowitz. Using his experience studying maths at Yale, Gundlach derived all the bond formulas in the book from scratch.
“The first day, I knew more about bonds than the people I was working for, because I had basically gone right into the real core of it. And it turned out that within six months, I was managing few hundred million dollars for a major corporate pension plan,” he said.
Things with TCW eventually turned sour, and Gundlach went on to found DoubleLine Capital in 2012. He’s known today as one of the finance industry’s leading experts on bonds.
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