Loading summary
Transcript183 lines
- [00:04]
Jenny
When did making plans get this complicated? It's time to streamline with WhatsApp, the secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets mom 60th and never miss a meme or milestone. All protected with end to end encryption. It's time for WhatsApp message privately with everyone. Learn more@WhatsApp.com Starting in trading is really humbling. We lose 40.
- [00:35]
Doug
So you're about to make a trade based on a friend's text but which you do you listen to is it.
- [00:42]
Jenny
We could buy a house in Tulum.
- [00:46]
Doug
Get optioning those options. We could lose everything. Or let's do a little research. Get your head in the trade and make the investment decision that's right for you. Learn more@finra.org TradeSmart 5% of the time what does that feel like to lose tens of millions of dollars in seconds?
- [01:09]
Jenny
The very first time it happened that way. That was rough.
- [01:12]
Doug
Do you think you can get rich if you don't take risk? Jenny just is a self made billionaire co founder of the legendary investment company Peak6 that has made money every single year 28 years. If you want to figure out how to bet big on yourself and whether the next right decision for you is to go left or to go right, you're going to want to listen to this episode.
- [01:36]
Jenny
Time is massively important. It's definitely a marathon, it's not a sprint. When you have that great year, think about it over a three year time frame. Don't think about it as today's money.
- [01:47]
Doug
What can poker tell us about reading the room?
- [01:49]
Jenny
In life you have to be thinking about the other cards at the table. Then you have to think about what they're thinking about your cards. If I'm sitting across from someone and I want something to happen, I want more money, I want a different position. I have to think about what they're thinking.
- [02:03]
Doug
What's the most amount of money you've ever lost in a single day?
- [02:08]
Jenny
It's a lot.
- [02:13]
Doug
So you're a self made billionaire, right?
- [02:16]
Jenny
That's correct.
- [02:17]
Doug
That's probably what you lead with when you come into conversations. You're like Cody really first question but I think it's really cool because one billionaires are super rare. But to be self made then throw on you're a woman, not that many. And then you did it in finance and investing. But what's kind of cool you didn't start out that way and you've said a line I loved, which is you said failure shaped you more than anything else. What does that mean?
- [02:43]
Jenny
Starting in trading is really humbling. We lose 45% of the time. So it's over and over and over. And that repetition, you know, that compounds. I always talk about compound experience. Each one of those gets you a little smarter, a little braver, a little bit more nimble. I think I was really lucky to start in trading on a trading floor in person and sort of feel what it was like to lose those dollars. But I did it when I was young, multiple times a minute. So doing that allowed me. Then as I grew, I became put on my big boy pants and did a little bigger and a little bigger. People think of me as a risk taker because of where I came from, but I became one.
- [03:41]
Doug
A lot of people maybe don't know what trading is. And so really what this means is that you are either trading for your own book, your own Wal you could think of, or somebody else's, but you're on the line. Like every decision you were deciding, I'm going to put a dollar and bet quote unquote on X to happen. And if X doesn't happen, I lose money.
- [03:59]
Jenny
That's right.
- [03:59]
Doug
So like to put this in perspective for people, what's the most amount of money you've ever lost in a single day? Do you know?
- [04:07]
Jenny
It's a lot. Tens of millions.
- [04:12]
Doug
Yeah.
- [04:13]
Jenny
In seconds. Right. It's not even, you know, a whole day doesn't have to go by for that.
- [04:17]
Doug
Like, can we break it down, Cody? The 10 seconds. Bad enough. Wow. What does that feel like to lose tens of millions of dollars in seconds?
- [04:26]
Jenny
When it first happened, the very first time it happened that way, that was rough. Right? Was all that stuff leading up to this, you know, fantasy. So a lot of second guessing, but you get better and from it and you obviously don't want to do that again. But literally just yesterday, right. So we've been doing peak six for 28 years now and there's always a situation in the market. Right. It's why the smartest actually don't win. Long Term Capital Management is a great story for people to read about and they were the smartest and they didn't win. So being humble about when things are going well and acknowledging what was luck, what was skill, and then recognizing a situation where that same thing, it's going to happen again. What am I going to do then when it does? I just have to assume it's going to happen. I think that is the. So now how do I get comfortable because the first losses weren't that big, obviously, but the more you put out, the more the chances for a big loss are. So.
- [05:46]
Doug
Yeah, I mean the first time did you like when some, when you lost a bunch of money or you're like, I need to go to the bathroom and then you just go get sick in the bathroom or you just like do. Because I imagine like as you get older and better at it, those peaks and valleys, if you're going to stay in the game, if you can handle it and figure out mentally how to get through it, which I think by the end of this podcast, given everything I've read from you, we're going to help people get there, be able to manage the peaks and troughs. But I imagine in the beginning the highs are high. You're like, you know, bottle service at Tao on Jenny. You know, I know what you traders did in finance.
- [06:19]
Jenny
Yeah, that's right, that's right.
- [06:22]
Doug
But I imagine the lows are really low.
- [06:24]
Jenny
They are, yeah. And it's, it's really about recognizing you don't have to have the highest high because you don't want the lowest low. And that's really hard for traders. And you know, we've had 28 years, never had a losing year. You know, let me knock on something so. And that's really unheard of in our business. But that's also. Did we have the biggest year of anybody? Probably not. But methodically reinventing ourselves and thinking about how that next market opportunity, new advances in tech, new advances in people who are, how we're approaching the problem differently. Each one of those. We don't just assume that we're going to. We kind of think in three year cycles roughly of the next. Jenny and Matt, Matt is my co founder. Could be in the garage, especially today with AI. So they could be there. How do we, we probably have to. It's been three year cycles. We probably have to shrink that cycle down. But a lot is possible with very few people these days.
- [07:31]
Doug
What does it take to not lose money for 28 years in investing? That's. I mean it's like you and what renaissance. And I think they even had one year that was down. What does that mean? Like for somebody who's never really like a risk budget or like risk allocation, how could they conceptualize managing risk?
- [07:50]
Jenny
You have to assume that the worst possible scenario and you can also assume the best because people are already thinking about that. Right. So I assume you're already thinking about what the best outcome is. But what is the Worst possible. And then what is the slightly less than the worst possible? Like there is a wide range of outcomes. I think people are quite binary in their thought process. And what if. And then using examples from the marketplace that have happened before, people don't want to think GameStop's going to happen again. And you turn around and then there's another one. So even the smartest in the world at the time when that was happening, were betting against that stock could actually go higher. It can.
- [08:36]
Doug
So you bet against it.
- [08:37]
Jenny
Do we bet against it? No, we get what we often do. In those cases we get out of the way and then we'll figure out a good way to play it. Because we're active in 3 to 4,000 public company names in their options every single day. So we have a very broad portfolio. So there's a lot of things and we like to be where the volume is for sure.
- [09:05]
Doug
It's a really good way to think about it because by binary, basically meaning everybody thinks either I'm going to lose everything or I'm going to win everything. And they're really at the broad end of both specs spectrum.
- [09:15]
Jenny
That's right.
- [09:16]
Doug
As opposed to thinking, well, what would it look like if we just continuously won a little bit over time or simultaneously continuously lost a little bit over time?
- [09:24]
Jenny
Same thing. Yeah.
- [09:24]
Doug
Interesting. You know what I think is really interesting about you is a lot of what you talk about is I even hate to use the word mindset because it's like almost touchy feely and you're the opposite of that. You're very quant. But you know, your, your mission right now I think is just sort of what I would call break low risk mindsets. Can you talk about why, for instance, so many people take little risk, don't take enough risk and what you would tell them if they were listening to this?
- [09:56]
Jenny
First of all, it's very unique to the person, like what taking risk to you means. It's different than what taking. To me it's a very personal thing and I think people have to be okay because they compare themselves. So if you self assess, where am I on this? Give yourself a risk scale, 1 to 10. And then what is the purpose? Do I have a purpose for taking more or less risk? And I think for most people that are listening to you or are coming and listening to me, they are yearning, right? There is a desire. As much as I look like I take a lot of risk, nobody would have called me a risk taker when I was younger. You can actually learn it. You have to start. So what is a small risk for, you know, if you're a young kid in school, it might be raising your hand in class. Right? Okay, I got over that first hurdle. Now how do I get over the second hurdle? How do I get over the third hurdle? But I have to make it a conscious exercise for myself, which is why when we talk about poker, I like poker so much because every hand is taking a risk. Right. I mean, for a lot of people, just getting to the poker table is a risk, so. Especially for women.
- [11:17]
Doug
So you think young Jenny, she wasn't a risk taker?
- [11:20]
Jenny
I don't think so.
- [11:21]
Doug
Was she tough?
- [11:22]
Jenny
She was tough, yeah. She definitely was tough. I grew up with four brothers. Oh, yeah. Not a lot fazed me. You know, I went down to the trading floor and, you know, it's a sea of men. And the first day a gentleman came up to me said, don't worry, I'll protect you. A guy on our team. And I was like, from what.
- [11:41]
Doug
Sea of dudes?
- [11:42]
Jenny
Yeah, but, yeah, so that was the good fortune, I think, that I had that I didn't let the outside get in the way. I was always a high achiever in school, but I did what I was told. I didn't sort of go on my own and take risk per se.
- [12:01]
Doug
Do you think that most people understand the risk level that they are? Like, is that just. It seems sort of nebulous in some ways. It's like a hard concept to wrap your hands around.
- [12:14]
Jenny
Yeah. We've been talking about building sort of a risk.
- [12:16]
Doug
Like a framework.
- [12:17]
Jenny
Yeah, a framework. Because just putting a stake in the ground somewhere. Do most people understand. I think if they really were vulnerable with themselves, they do. And I think for people who actually who call themselves risk taker, they also know there's another level. And by the way, risk doesn't have to mean jumping out of a plane. It doesn't have to be betting all your money. Right. It just has to mean being. Taking more risks than you are today. I was always looking in my rear view mirror when we were building our company and when we were winning, I was like, when's the loss going to come? Right. And so I didn't want to take that next risk. Hiring our. Gosh, hiring our 10th person. I was like, no way are we ever having more than 10 people. So like, that was a really big risk to me. And so, like, I contextualize all the time what I do. Can I take more risks than I do today? Yes. I mean, when we've been just Recently. Right. In the last couple years. Investing in AI, like how big and where and. Right. And it's, you know, it's another level for us. I have a funny story really quick. This one. I love this because I said no to Jamie Dimon. So we were. We had a plan A, and 28 years later, we've never done our Plan A. We were trying to get a bank to be our partner to do over the counter equity derivatives. That was what we were. That's what we left to go do. That's what we did when we left o'. Connor. And it was taking forever. And in the meantime, we started Plan B, which is a business been around for 28 years now. But it's not that we didn't want this other business to happen, but it was going on and on. We'd hired some people to work on it while we were focused over here. And Jamie Dimon was up for Chicago at the time. And so we got to the 11th hour with him and it was dragging. It was dragging. It was dragging. So this is 1999 and. Right. We don't have our phones or. I had a little calendar on my desk. I circled the date and I was like, if we don't have an answer by this date, we're out. And they just didn't have an answer yet. Right. And we called, we said, we're out.
- [14:30]
Doug
So I bet Jamie doesn't get told no very many times.
- [14:34]
Jenny
No. Yeah. Well, for sure, less so today than then.
- [14:39]
Doug
But that is a hack right there. This is totally unrelated, kind of, but like, I'm divorced and remarried happily. But my first marriage, like, we just couldn't figure it out and it was not good. And I put a date on the calendar, same thing. And I was like, we will either work through this and we will get. Or if doesn't come to the table in the way that we need to. This is the out date.
- [15:01]
Jenny
Yeah.
- [15:02]
Doug
And I remember when the date came up, I was like, what am I going to do, not keep my word to myself?
- [15:05]
Jenny
Right.
- [15:06]
Doug
I think that's a pretty important word.
- [15:07]
Jenny
Yeah. And I think when you do it, the first time you do something like that, it's definitely motivating and it's inspiring. You're like, all right, I did what I said because it's time. Right. That's a ways out. You don't know how you're going to feel or think or anything about that. Obviously you have the luxury of changing your mind if you want, but sticking to it definitely changed. Yeah. My trajectory.
- [15:33]
Doug
You inspired Me right now, actually, we, we do like, our members do like $300 million in small business transactions a year. And we have some banking relationships, but I want one deep banking relationship. And when I tell you, working with these SBA banks, what the piecemeal nonsense they want to do where you can't actually see through to who bought, you know, the business, and they're like, well, why don't you email us when they, you know, close? I'm like, we have 100 million eyeballs a month.
- [16:05]
Jenny
Right.
- [16:05]
Doug
We're doing so many, we're doing more transactions in cumulative than some quarters. You are?
- [16:10]
Jenny
Yeah.
- [16:11]
Doug
That doesn't work. And I think I need to put a calendar on the date to say if we don't do it by this date, I'm going to buy a bank.
- [16:17]
Jenny
Right.
- [16:17]
Doug
And then I'm going to have no partners.
- [16:19]
Jenny
Yeah.
- [16:20]
Doug
And it's another example of an industry that is so outdated for small business. It is so hard that I'm like, you know, fine, I could buy one. And so. All right, now, next time you talk to me, if I don't either have the partnership I want or have bought a bank, you have to yell at me.
- [16:36]
Jenny
There you go.
- [16:36]
Doug
Which is annoying. I don't know if you were like this, but my mom, like when I was growing up, she would always say like she was, she was worried about risk. Actually, risk was bad. And I think if you were to ask her, she would still kind of think risks a four letter word just like the rest of them, for sure. And why would you do something that takes more risk? And you know, I think she's a woman, you know, my family, she was a schoolteacher. She, she really wanted things that were, quote, unquote, guaranteed.
- [17:03]
Jenny
Yeah.
- [17:04]
Doug
And, and I'm wondering, you think that there is maybe this one skill or even a game that can help women break out of that. You want to talk about what it is?
- [17:17]
Jenny
I've been a quiet person for 24 years. I was a quiet person until I learned the game of poker. And I didn't necessarily have to be out there for our companies, but I have been trying to help women accomplish more what they want to do, which for me it was clearly taking risk around money was like the biggest inhibitor. And when I saw poker, it was the closest thing I've seen to the training I got as an options trader. Right. Because people aren't just going to become options traders. First of all, there's not that many in the world, men or women. And I'm going to go study options trading is unrealistic. I think playing a card game, however, is not. And the irony of the whole thing is our firm is filled with poker players. In the financial world, you've, you see them all the time. And I just ignored the game because only the guys were playing. First of all, I thought it was a waste of time. And little did I know there's a little secret. They've been doing it for literally hundreds of years. And so I'll just tell the backstory real quick. So my daughter was 14 at the time. So it's in 2019, playing a tennis match, losing. Her dad was a college athlete, frustrated she's losing to someone she looks like she should be able to beat, and comes home and sort of chirps to me because he doesn't want to to her and says, she may as well be hitting against a wall. She doesn't realize she's playing against someone who is thinking and strategizing. She needs to learn to play poker. And he wasn't really. He was more of a blackjack guy. And I just thought he was being ridiculous. And I walked away. And like two weeks later, I was like, should I teach my 14 year old daughter to play poker? And then of course, that annoyed me because I would never have said, I have three sons as well. I've never said that about them. And by the way, they already knew how to play because they all just seemingly figure it out. And so I did an experiment, right? What does a good entrepreneur do? And 10 girls, 10 moms. And it's the only reason I'm sitting here, honestly. So the transformation in those girls from lesson one, literally four, one hour lessons to lesson four was like literally the skies opened. It was so extraordinary. Now that at the time was really all about confidence. That's what I saw. But as we proceed to move forward, actually was going right into Covid. I was like, well, we'll do more of this. We had like three states, 17 clubs, something like that. And this is all about being in person. We, you know, months in, we're like, I guess it's not about being in person anymore, so we better figure this thing out. So we actually go to peak six employees. A few thousand employees said, we want to teach your daughters and your sisters and your nieces. And the women were like, so good for them. Why aren't we learning? And I was like, great idea. So we start doing it on Zoom, of course. And Morningstar, large international firm, heard what we're doing, asked to do it. And today, now we've taught at over 300, I think it's like 370 companies, 60 countries. And through that process, I started to learn. And that's when I saw that same repetition. Playing that hand, making that decision with imperfect information, playing people. Right. Because we're trading, there's a customer on the other side. Even if I don't see them, there's somebody there. What are they doing? Why are they doing it? A thought process that I hadn't seen outside of trading was right there in this card game. And when you think about how men espouse the game for so many years, but our presidents. I just met a man the other day who would play with Obama in the White House when Michelle was on vacation.
- [21:33]
Doug
Naturally, yes.
- [21:34]
Jenny
And I think Trojan horse, honestly, for women to learn this game, play this game, build those skills. By the way, this isn't something that you are naturally. Someone might be naturally good at it, but there's zero reason why you cannot be good at poker. And then once you start to understand the core of it, how it translates not just to business, but to life too, whether it's relationships, decisions that you have to make in life. You can see how that hand you just played looks like that negotiation you just did, how that hand you played looks like that meeting you were having. Like, where's the power? Right? Is a person with all the chips? Certainly. But what if a couple people have the chips at the table now? Where's the power? Where's the position that they're sitting at the table? Each layer is quite an extraordinary way of unfolding stories in your life. And when you start talking to people about why they played a hand a certain way, there's so much to gain about how other people think and how they approach. My last bit is the most fascinating thing. We've been doing this because obviously we're teaching mostly women. We will teach men. We're teaching some of your men today. But most men already know how to play, and we're teaching people from scratch. But the surprise, the surprise when they start playing the game, what's actually happening and how quickly they can translate it to what they do at the office every single day.
- [23:15]
Doug
Buying a business or launching your own venture can feel impossible if you're stuck figuring out the website, logo, email marketing all at once. But here's the good news. GoDaddy Arrow is here to help. So just a few prompts. It builds a professional website, a logo, an email, even social content, all tailored to your business. It's like having a whole launch team in your laptop instead of months of grinding. You can go from idea to launch ready business in minutes. No more waiting, no more guessing. Just a real online presence that you can grow with. Day one, suddenly the thing that was just a tiny idea in a notebook is online, polished and ready to scale. So if you're ready to take your idea to Life, head to GoDaddy.com CodeSanchez and try GoDaddy Arrow today. Yeah, I mean, I also think it's, you know, it's got a cool factor too.
- [24:00]
Jenny
Oh yeah. You know, doesn't hurt the swag at all, you know.
- [24:03]
Doug
No, it does not hurt that. And I always thought about it as gambling, you know, and I don't, I don't like gambling because I don't like risk, right? So I'm like, I'll bet on myself all day, which if you think about it, is another type of gambler. But, you know, it wasn't until I first started talking to you that I thought, huh, this is interesting because you and I talked last time about, you know, the thing that I think that keeps me up at night because I know there are people listening right now and we could give them every tool and every tactic and every how to. But if they don't have the right mindset, if they're not willing to actually take action, which is a risk, and increase their risk tolerance. Because my belief is by and large it's harder to get rich if you don't take some risks. It just seems harder. And that part I've never had a really good solution for how we could teach them that. Because it's all the touchy feely stuff, right? Like manifest and fluffy and blah blah, blah. And I'm not so good at that. And so, but then I, then I read this thing the other day that I would, I want your take on. The quote was making money isn't hard. Unlearning everything you know about it is. Money goes to people who treat life like strategy, not survival. This isn't about luck. It's about leverage, understanding the rules, then bending them in your favor. Do you think that's true?
- [25:23]
Jenny
I think there's a lot of truth to that.
- [25:26]
Doug
I think there are a lot of things we're told about money that may or may not be true. And I'd be curious your take if I could rapid fire some like money sayings to you and you could tell me what do you think about that? True, false, and what are your thoughts? Okay, here's the first one. You should just save and skip the coffee.
- [25:46]
Jenny
I think you gotta have your coffee. But you know, if you're not saving somewhere, we're really good at defense as well as offense, so. And I think you have to have members of your team on both sides and. But if you're not enjoying yourself along the way, none of it's worth it. Yeah.
- [26:14]
Doug
What about if you deserve it, you'll get it.
- [26:17]
Jenny
That's a little tougher for me. I would say on above average I'm talent. Right. But. And we've done a lot of experiments at Peak 6 on types of people we've hired and maybe deserve is the same as the hard worker. I'm not sure I don't hear it that way. But the hardest working people are the people that have succeeded on our team. And people stay because they know they're rewarded for working their butt off. And the version of them that comes. Right. It's not the most obvious person. I think Peak 6 has done a really good job of bringing a wide range including a lot of females more than anybody else in the market in terms of capital allocators. People are actually making decisions around money. We kill them. And honestly I think one of the reasons why we succeeded is because I brought a different viewpoint. You have to remember the 1997 for my co founder to choose a female that wildly unheard of. Well, there was very few to pick from to begin with. Did I deserve it? Right. I worked my ass off.
- [27:33]
Doug
Yeah, I like it. Yeah. I was watching a video the other day and it was like, I just want you to keep repeating like I will be rich. I deserve to be rich. I was like, we're going to need to add a few steps to this process because I don't think that's going to.
- [27:44]
Jenny
It's not going to get you there.
- [27:46]
Doug
Yeah. It was like a lot of conviction, you know, the young woman had. But then I saw it had a million and a half views and I sat there thinking, oh man. You know, sometimes we've got to ask ourselves, are the people that we're listening to the ones who have actually done the thing that we're trying to get? That's why I think it's interesting when people who have made a lot of money, had a lot of success, are willing to talk about it? It's not that common.
- [28:09]
Jenny
Right.
- [28:09]
Doug
Does it still feel weird for you to talk about like when people call you a billionaire, are you like it feels awkward.
- [28:17]
Jenny
Yeah, it's weird. But I also think I also know like to represent like it's important. Totally. So yeah.
- [28:26]
Doug
You know what's crazy. We've had three female billionaires in here in the last week.
- [28:30]
Jenny
Wow.
- [28:30]
Doug
Is that crazy? Because there's not very many. So then I was like, what's our percentage? We got a high swing ratio. I was like, this is pretty good. What do you think about Be patient. Wealth comes with time for sure.
- [28:44]
Jenny
Time is, is massively important. You know, it's definitely a marathon. It's not a sprint. I do think there are moments that are not exactly that unexpected days. We make a lot more money than we should have. We tell our traders too. When you have that great year, think about it over a three year time frame. Don't think about it as today's money. Right. We don't want. Because traders can be like athletes in many ways. Way too much money at too young of an age. And we're really proud that people tend to stay a really long time with us and being a role model who's conservative around spending. Right. We're really also super conscientious there maybe too much. So we've definitely been criticized for that in the past. Like we're watching the pennies to closely. It's like, well if you don't want me to watch your pennies I won, I'm going to watch mine. So.
- [29:50]
Doug
What you said you do a lot of experiments at peak sinks. What are some experiments you do with your employees or to determine strategies? Because it does seem like you're a very systems oriented thinker.
- [30:02]
Jenny
Yeah, we are. Well, we like to know what is working. It's really hard to discern what actually it is. I'll give you this is a fun example. So my co founder grew up playing hockey. Six years in we got married as an FYI. So I know him very well, but always interested in the NHL. And so when the opportunity was there to potentially be part of a team, we were looking at it at the time. So let's call it early 2000s. There were like six guys talking about hockey statistics on the Internet, you know and so. And he was one of them. But they're all really bright. And we said, well what if we took all of those people and we just brought them in as a class and is there something about their approach the way they think that might make a different type of options trader? We did that with poker players many years ago. Before I knew poker we'd done that with taking the smartest people that would possibly come to us. That was a complete fail by the way. But anyway, so back to our hockey people. So they came on and they were okay, they weren't great traders, but they were there working on hockey analytics. So if indeed we ever had a team or not. Anyway, they ended up leaving, going to hockey teams. And we were talking about this the other day, which is why I was thinking about it. I think the last 12 Stanley Cups, five were either one. I think four. And then one was second place, whatever, runner up, whatever you call them, loser. But we're X peak 6 data people.
- [31:54]
Doug
Wow.
- [31:55]
Jenny
Well, they're data people for the hockey teams, but yeah, XP6 employees.
- [31:59]
Doug
You're like, what's that movie with the baseball guy?
- [32:02]
Jenny
Moneyball. Yeah.
- [32:02]
Doug
You're like the Moneyball of NHL.
- [32:05]
Jenny
Yeah.
- [32:05]
Doug
Oh, yeah.
- [32:06]
Jenny
I mean, Matt loves, loves, loves, loves. So should you have taken a little.
- [32:11]
Doug
Piece of those teams?
- [32:12]
Jenny
Yeah, exactly. Wouldn't that be nice? Yeah, the Panthers is one of them, but we ended up being part of the Minnesota Wild for a little while.
- [32:19]
Doug
Interesting.
- [32:21]
Jenny
That's crazy. Not anymore, but.
- [32:23]
Doug
So then is it true that the smartest people that you've hired for traders do not make the most money?
- [32:29]
Jenny
We train people have no knowledge coming in. So you don't have to know. You don't have to have a finance background, econ background. You could have a history background. Matt has an English major. So I was an English major. I was a business major. So we're looking for people at the end of the day who work really hard, who are curious, and obviously they have to be above average intelligence just to get into the math side of options trading, as measured by iq.
- [33:01]
Doug
Do you give people IQ tests?
- [33:02]
Jenny
We don't give them I tests, but there are lots of interesting, you know, mathematical ways to solve problems. Yeah. You know, Google, when they first started all those creative ways of testing people, we like to do that too.
- [33:14]
Doug
Do you have like a question you.
- [33:15]
Jenny
Ask them every time?
- [33:16]
Doug
If I want to come work for Ginny, do I gotta.
- [33:18]
Jenny
No, we don't. No. You know, because I obviously don't want to interview these, the young kids anymore. But, you know, we keep it fresh because there's so much sharing and stuff that happens now, but otherwise. Yeah, but there's a lot of culture that's involved in our hiring too. We're different than a bunch of the other trading firms on who we bring in and who we don't bring in. But it is. They love it when they come. Like that is one of the things we're most proud of, though. The other interesting thing is if they leave, we haven't had any XP6 people really create a firm like we created a firm. Interesting Though that is also true of many. You see that actually some of the other financial firms, you'll find some, but not so much. It doesn't happen that often. Right. There's not that many option trading firms, for example, so. But the, you know, Susquehanna, who was o', Connor, where we were at competitor forever, was still there.
- [34:25]
Doug
Yeah, I met a bunch of those guys at aei, I think I was.
- [34:27]
Jenny
Telling you last time.
- [34:31]
Doug
And I didn't, to be fair, I didn't really understand, you know, when I was at. When I was in finance, I was in private equity and asset management, but, you know, like index funds, commingled funds, that sort of thing. And I always thought about trading. Maybe I did that in the beginning, but it was really like arbitrage trading. It was like for, you know, State street just making a market. And then I met those guys and I was like. And I think I could say this about them and they would be fine with it. I was like, you guys are weird. Like, this is a different crew.
- [35:03]
Jenny
You know, it's a whole different animal. For sure.
- [35:06]
Doug
They're like physicists and rocket scientists that now trade online.
- [35:11]
Jenny
That's. Yeah.
- [35:12]
Doug
So half of what you're looking for are these people who basically, they just see the world slightly different. There's some like, sort of asymmetric little spin they have there is that everybody.
- [35:21]
Jenny
Else does because it's really a commodity at the end of the day. But, you know, being in equities, this is what I always say, especially for females. Like, companies are about people's stories, Right. Just like here it's about your story. And following people is really interesting. Following the AI story is really about the people who are doing it. And so I think it's a great place in the equity world for women to get their feet dirty because they draw out that and they have real nuances about what they can understand or not understand. Again, because I see myself like, why was I able to. I was trained by someone who was really good at what they did and that's what we do for our people. So if you're interested in the markets at all, going on the equity side is a really interesting place to start.
- [36:17]
Doug
So is the framework for being able to take more risk and thus potentially have more reward. It sounds like. And tell me if this is wrong, something like, you have to do it more. This is your compounding experience, then you have to do it. I don't want to say the correct way, but with some sort of mentorship or guidance, just any sort of risk taking probably not great. Has to be some sort of structured risk taking.
- [36:40]
Jenny
I think it helps. It helps move the ball systematically forward. I don't think it has to be, but I do think that helps for sure.
- [36:49]
Doug
And then what's the next step? If it's take a lot of risks, structure the risks and then take bigger.
- [36:56]
Jenny
Risks, I think the next step is, again, there's this idea of risk management that I'm doing. How am I evaluating my doing? And you need time to go by. We don't know if a trader is going to be great at their job or not for a while. Just like you can go and be a beginner poker player and be a pro, you can, that happens. And so you need enough time to go by and then some assessment of that data to start to tell a story. It's like playing a hand versus playing an entire game of poker. That's where the hands add up to the game and hopefully the game that your table then you're moving. It's more like a tournament. Then I'm moving on to the next table and I'm moving on to the next table. Along the way is maybe it's the context switching happens. So much as you're taking risk, you open yourself like your aperture opens up so much that your regrouping becomes more important, not less important. As we take more risk in AI, I make sure we step back and say, okay, is that really what we meant to do? Because all of a sudden we're in, we're in so deep, it's the same thing. I'm on the turn, I'm on that fourth card that comes out on the table and I've got a lot of money in this thing. The one thing as a trader you do, you go home at night, you mark to market everything. If I had to start tomorrow, would I do exactly what I'm doing today? And if I didn't and if I shouldn't, and I should pivot, I gotta get out, I gotta get outta that hand in some way. And some things you can't get out of. Obviously, it's one thing to fold the poker hands, another thing to get out of a business or a business line or something along those lines. But the reassessment, the loop, right? You don't have to go all the way back to the beginning. Once you're on 10 times of doing this, you're going back to five and you're reassessing the five to 10 because you got better. You went to a different level, 1 to 5, then you went to 5 to 10, right. You're gonna come back and reassess, you know, I mean, there's no. I think there's no stopping learning. I think people think once you get to a certain, like, dollar amount or something, like, ooh, you know it. You know the answer. Oh, no, there's a lot more to come. Right. I remember, you know, Matt used to say, you know, so what's your number? Right? Yeah, totally. And we all would say it to each other in some. Well, it was 10 million bucks, right? Then it was 100 million bucks. So then what? Right. It's the same idea. How do you. Life moves, Right. And if you have figured out a way, but it's not a given. I mean, we've had some serious investments that have been really big, valuations that have gone to zero. We're talking 13 billion a zero. So those are real. You're watching some of these AI stocks move around. People are getting hurt, and a lot of people are making a lot of money. Right. If you're in crypto. So every step opens you up, I think differently. But I also think what I love and I love about some of the people who are following you is that I know where I want to go, and I don't need to go to that next. You know, I think I have a little bit of an entrepreneur's disease.
- [40:49]
Doug
You think so after, like, 15 turnarounds, I was looking at all the companies you've, like, taken and grown.
- [40:55]
Jenny
Yeah. It's not. I have to really consciously tell myself to know because it's interesting to me, and people who are entrepreneurs are interesting to me, and I want to see them. I want them to feel what I got to feel. You know, even. Even the bad moments. Right. They really have to be ready. I think that's the, you know, me in 1997 versus someone starting today. You're not sharing your fails. You know, you're living your fails. Like, I just keep my fails on my desk. You know, just the list.
- [41:33]
Doug
Do you really?
- [41:33]
Jenny
Yeah.
- [41:33]
Doug
Like a piece of paper with all the things you lost money on.
- [41:37]
Jenny
Yeah.
- [41:38]
Doug
Wild. Is it one page, two page?
- [41:40]
Jenny
Oh, it's long. So it's not all the trading because there's so many trades. Right. But it's the company fails. Right.
- [41:48]
Doug
That's amazing. That reminds me of, like, Astro Teller from Google X. He used to put on his wall in his office his failure resume.
- [41:56]
Jenny
Yeah.
- [41:57]
Doug
You know, that's fascinating because my other friend who's a hedge fund manager, he does the same thing in his bathroom. He has A picture, like really big one. And on it are all the companies that failed that he invested in. And like some of the emails of people telling him like, you shouldn't do this. And then he did it anyway.
- [42:15]
Jenny
Yeah.
- [42:16]
Doug
What is that? Is that like an inoculation to remind yourself you're not superhuman?
- [42:22]
Jenny
You know, time heals things, you know, and that pain and suffering of some of those, I don't want to. I don't want to make that same mistake just because I can. Why should I lose $5 million or $50 million on something if I truly know better? When you have quantity, right? And I think I heard you say recently, why have three businesses that are okay, we can have one really good one. I totally agree with that. It's distracting. It's a heavy burden. But some people are just built for that. So the fun and the drive and the curiosity. Can I. Right. So we've created 2 billion dollar billion, 2 multi billion dollar businesses. Do I want to create a third? Absolutely. Wish I didn't. Wish I did. I really do, though. I want to prove it. Why? To who? Well, it's really to me, you know, and nobody knows. Nobody really knows anything because we're a private company. But it was one whisper, one moment in time because we were supposed to take one of our companies public and then we didn't. It was sort of in the spac craze. So that's one company gets leaked and that's how that whole story goes. But it turns out that story is great so that I can get more women playing poker. Right? So that's what drives me to be in public at all and talk. But it's an itch that you want to scratch and you have to be super conscientious. I don't care if you have a big business or a small business. But that desire, that's what the failure list.
- [44:13]
Doug
By the way, I have a live event. I only do one a year. It's huge. How big? Really big. In Austin, Texas, just for people who want to make more money, buy businesses, build businesses. It's called Main street over Wall Street. So if you liked this episode, you're probably going to want to be there. There's only a couple hundred spots left, so click below. I want to shake your hand in person in Austin, Texas, or go to msows.com msows we'll see you there. Hey, it's your friend Cody, by the way. Guys, I just realized that a bunch of you are not subscribed, which is.
- [44:45]
Jenny
Crazy because I feel like we Hang.
- [44:46]
Doug
Out every week and we talk about how to make your life better, how to make your bank account bigger, and I want to do more of that. So one, thank you for being here. Like, sometimes I'm like, pinch me moment, you know, and also share this with a friend. Subscribe. The only way we grow is when you share it, and we only show up on your feed when you subscribe. So I promise that if you do that, I will continue to make this podcast a way for you to steal all my rich and successful friends so that your life can be even better every single day. Do you think you can teach people to love the game like that? Like, to become obsessed with just playing, whether the game's business or poker life, and if so, how do you teach yourself to love hard things in business?
- [45:32]
Jenny
So I think there has to be some inherent desire that starts it. Can you put fuel on the fire? Absolutely. I think part of the way to do that is be surrounded by people who are amazing. Right? Amazing in whatever way. So, like, we really. We yearn for, you know, in the arts, right. When we, you know, fashion whatever it is. Like somebody, you know, Matt's some energy company in the middle of Utah, in the middle of nowhere the other day, just because we're so curious. And so I think that curiosity builds, you know, sort of the awe of being a human, what other humans are capable of doing. And we so enjoy watching that. People enjoy, you know, hearing financial stuff from us, especially in Austin, which has been really funny. They're like, we don't know you people.
- [46:27]
Doug
Yeah, very much so.
- [46:29]
Jenny
So that's been fun since we moved to Austin. But.
- [46:33]
Doug
Now they will.
- [46:34]
Jenny
Yeah, now they will. But. Yeah, that. I think when we are looking. I know you talk about green and red flags. We are looking for someone who doesn't have all the answers. We are looking for someone who's curious and wants to figure them out. Because I think it's inherently drawing ideas. We do this a lot. Like, our very first piece of technology was because I went into at Wendy's, and. Which is funny. And whenever I say that, I'm like, why was I eating at Wendy's?
- [47:03]
Doug
But anyway, you look like you frequent the place.
- [47:05]
Jenny
Right, right, exactly. But literally, there was someone there taking the order. And then there was, you know, it used to be that big boulder of a screen was in the corner. And maybe you don't remember that, but I do. And someone was doing the fries. And, you know, we used to laugh. You're the fry guy, you know. But we. That was our that was our tech we built. And because how were we gonna, as a couple people in a room, gonna manage? Because you have to be broad enough in your trading. Right. It's not like we're Goldman Sachs and we have flow, right. Which is two people in a room. So we have to get a broad enough portfolio for this thing to make sense. But eventually it became. It was Walgreens, it was Walmart. Like we created an inventory management system for options trading and nobody had talked about that before. We literally had off the shelf models where everybody was like the smartest people were using, creating the best models themselves, whereas we just bought. So we just approach the problem differently. How do you do that? I think by being curious about the world, being curious about learning new things and abstract or angular to what you normally do.
- [48:18]
Doug
What companies have you invested in or built or turned around that you're really proud of, but you don't talk about a lot because you have a lot of them. Are there a couple that you're like, you know what? We did this thing and nobody even knows.
- [48:34]
Jenny
I think there's, I think there's a lot of pride in turning anything that's like hemorrhaging into not hemorrhaging. Like there's a lot of pride just in that there's a lot of pride in helping the people who are, who put their heart and soul into it to not feel like they caused a calamity and were really part of something that worked. It just needed some small tweaks. I think there probably isn't. I think there's probably more that I'm doing pretty tough. I'm not the one to pat on the back very often. I think there's a lot more that I think we could have done a lot more for. Ultimately, there are people who are behind these things. Right. That I wanted some other outcome. Right. There's more fails than there are successes. But even ideas we had that we thought could be interesting, we were either cocky or stupid or, you know, we just didn't really understand it so much. You know, we've entered the insurtech space, which is fascinating. You know, I didn't think anything was older than sort of like the way the financial world, the meat and the, you know, the pipes of the financial system work. Oh, no. Yeah. Just go into the insurance side of it and it's a whole nother. And that doesn't mean people want to change.
- [50:04]
Doug
Yeah.
- [50:05]
Jenny
And so those are the things where, I mean, I just. The weight of the world on, like, I know we can does anybody care? Right. And I'm trying to bring a team along to care with us and be different and approach solving the world differently. But you know, they're big industries. I think also why I get the entrepreneurial itch because there are these smaller businesses that you can continue to do that give amazing opportunity for a small team of people that you don't have to take on that, that massive world, unfortunately. And we're sort of in that space. So. But yeah, I think I'm.
- [50:50]
Doug
You're big now, so.
- [50:52]
Jenny
Yeah, you know, you can't get the.
- [50:53]
Doug
Same thing out of like a million dollar Laundromat.
- [50:56]
Jenny
No, No.
- [50:57]
Doug
I don't know.
- [50:57]
Jenny
Maybe you never know. You never know where it might show. It's funny though, because one of my, my partners, he talks a lot about those types of businesses and he and I would always talk about them. And so I'm fascinated by it. I think there's an incredible amount of opportunity in sort of cycles. I think we're in a really good one right now with AI to help you sort of leverage it faster. Like unique opportunities that come along. And what does that mean? Whether it's either just helping you on the marketing side or it's helping you on the research side or just helping you execute the bones of getting a company off the ground, which is always more burdensome than people think it is. But you have all those. The tools in your toolkit just got awesome.
- [51:50]
Doug
That's amazing because I think a lot of people are really scared about AI right now. They're not as optimistic. Maybe the builders, people who really understand tech are, oh my God, every day I almost can't keep up with the new things. But what would you say to somebody who right now is like, I'm super scared of AI I actually think it's going to take over and make me irrelevant.
- [52:09]
Jenny
Yeah. Wildly important that you get your hands dirty. Right. So, you know, for poker power, we're building tools all the time for our app for marketing reasons, et cetera. I'm like, I'm going to get in there and build the tool myself. Right.
- [52:25]
Doug
What are you using? What are we coding with?
- [52:27]
Jenny
Well, Claude code. Have you ever used Replit too? I have not, but I've heard of it. But I think it's really important. Who cares that it doesn't go anywhere? It helps in so many different ways from how to think about solving the problem to how to get a thought into the world in some form or fashion. At a minimum, having communication with somebody else or technologist who knows So I think getting your hands dirty and you.
- [53:01]
Doug
Can'T mess it up.
- [53:02]
Jenny
You can't mess it up, which is super cool. Yeah. And by the way, everybody else is getting their hands dirty now too. They're not experts. Yes. There's some technologists. We're not trying to compete with those people. Right. There's 98% of the world who's just like you.
- [53:19]
Doug
So we talked a little bit about poker, but if business is a poker game, what are the deadliest tells in entrepreneurship? What do we have to watch out for that we are signaling to other people as entrepreneurs?
- [53:32]
Jenny
I think entrepreneurs, that their biggest tell is their overexcitement about the possibility. And so they have a great hand. I'm just not playing because I don't believe. Or it might play strongly against them, meaning I might exit. And we see that a lot because we do see a lot of newbies that do come in. We're happy to think and listen and hopefully mentor a little bit, but nothing can go wrong. And it's like, I don't know, that flush might come out and all you have is two pairs, and they're just not cognizant. Yeah. Just a little naivete.
- [54:18]
Doug
How do you flip that around? So if you are really excited, what is. What do you need to do to temper that? Is it having plans A, B and C? Is it being honest about the risks? How would we get Jenny on board? You know, if I'm like, I'm an entrepreneur, I want to do something with Jenny. I want to show her how great I am, but also show her what a smart thinker I am.
- [54:36]
Jenny
Yeah. There's a bunch of things we always say. There's like, sort of not a formula. It's more like a picture. I think that they have to be aggressive on the offensive opportunity. They do. But if they can't address anything defensively and. Or they cannot. They have not shown where they have failed in the past or acknowledgment of failure in some form or fashion, whether it's in this product or somewhere else. I think those become definite red flags for us. I want to know, like, you're going to conquer the world, but I also want to know how you're going to methodically get from A to B to.
- [55:15]
Doug
C. So I think a lot of times it's really important as an entrepreneur to understand what's happening in the room around you. Like, context is super important, not only in, you know, running a business, but let's just say there's somebody listening and they want to get promoted or they want to do better in their job, or they want somebody to take them more seriously. What can. What can poker tell us about reading the realm in life? What cues?
- [55:42]
Jenny
Yeah, this one I love only because it's so relevant. The context, right? We talk about levels of thinking. So if you're just thinking about your cards, you might get lucky. You have to be thinking about the other cards at the table, then you have to think about what they're thinking about your cards, right? So if I'm sitting across from someone and. And I want something to happen, I want more money, I want a different position, I want a different challenge, I want something. I have to think about what they're thinking, and I have to think about what they're thinking about. It's my boss, the rest of my team. I have to think about what they're thinking about what they owe to their boss. I have to literally set the table in full color as opposed to black and white. And that's where we get messed up. It's like, I would love to give you more money, but did you hear that? Were you meeting over there? It's probably not a good time. You know, it's just there's some things that are wildly simple and people are just so adamant. They're like, they've been so frustrated and they come in and they just want A, B and C and it. And because they're not addressing the context. That's why when you sit at a poker table and you start to learn, right? And now you're like, oh, I'm going to play with my family. Oh, I'm going to play with my friends. I'm going to play with strangers. Like, all of a sudden you go, oh, that's why this is like the office. That's why it's like that meeting. That's why it's like that conversation. Because I don't know everything about the people I work with. And one fascinating thing we've done with our management teams is have them play poker together. It's amazing what our managers learn about their teams by playing poker with them and vice versa. But obviously, I hear more from the senior managers.
- [57:32]
Doug
Would an example be, like, Mary always folds really early or doesn't put a lot of chips on tails? Absolutely. Doesn't take a lot of risk?
- [57:42]
Jenny
Yeah, absolutely. No question. And then now it's a conversation, you know, it's a conversation with Mary. Like, I notice this. Like, you want to do it in a way so that Mary still keeps coming back to the table. Right. Because you want her there but you want her to recognize, you know, so what do you see? How do you approach Mary? And you know, what did you do on that hand? Why? What if one thing you can probably work on, right? And all of a sudden she starts doing it? Because that is way uncomfortable for Mary to do three times the big blind when she goes in, she just wants to tippy toe in. So what message are you sending? And they start to learn, they start to. This is where the self assessment starts to come in and go, oh, wow, I didn't respond.
- [58:28]
Doug
So to wrap up, if, if there is, let's say there's a woman listening out there right now and she knows, like you said, her gut. She knows that she's not taking the right level of risk that she wants to in her life. She is a little scared. She's not sure what to do next. And you know, she might not have even understood all the things that we talked about today. Like what would you tell her? Hey, if you want to level up your life next and if you want to change your mindset about risk and your capability, what advice would you give.
- [58:58]
Jenny
Her for me right now? Because now I've seen the impact with so many women, hundreds of thousands, the emails I get, the LinkedIn stuff, we do the DMs learn poker. And I also say like, if I could have learned poker when I was younger, I think I would have saved 10 years out of mistakes in my career.
- [59:25]
Doug
You would have had your third billion dollar company.
- [59:26]
Jenny
That's right. I'm behind.
- [59:30]
Doug
Real slacker. Jenny, this was such a pleasure. I love your mission. We're going to put in the show notes the link to your website, which I think is. I loved the risk question at the bottom of the website too. It made me think about what my risk was for today too. And then also about Peak 6 and then also most importantly, poker power, where they can go and learn more about how to play poker. Now I think you were working on an app last time I talked to you. Is that out now?
- [59:55]
Jenny
Yeah, the app is out. Poker Power Play, that exists. So we teach people in person, we teach them virtually and you know, we're doing it every day. We have 20 some odd teachers across the US who are traveling or being online to help move the ball forward for anybody who's interested.
- [60:15]
Doug
That's wild. Do you think you're just creating a bunch of competitors now because you're gonna get all these women now?
- [60:20]
Jenny
That's so funny. You said it. So my co founder, Matt, he said. He said exactly that, literally, like, one hour ago. And he's like, that would be a pure joy for us to be able to do that.
- [60:36]
Doug
I love that. I think most people don't understand that. At your level of the game, I imagine. Yeah, you wanna keep winning, you wanna keep building, but it's also something bigger. It's like, what are you gonna do? Take all the jets to the grave, you know? No. Gotta leave some behind. Jenny, thank you so much for being here.
- [60:58]
Jenny
And, Doug, here we have the Limu Emu in its natural habitat, helping people customize their car insurance and save hundreds with Liberty Mutual. Fascinating. It's accompanied by his natural ally, Doug.
- [61:13]
Doug
Uh, limu is that guy with the binoculars watching us.
- [61:16]
Jenny
Cut the camera. They see us. Only pay for what you need@libertymutual.com Liberty. Liberty. Liberty. Liberty Savings Ferry unwritten by Liberty Mutual Insurance Company and affiliates Excludes Massachusetts.