A (2:26)

How long did you do it?

B (2:27)

I did it for two years. Yeah. Okay. Yeah.

A (2:30)

And then quickly, the career path from there, what came in between Pit and One River?

B (2:35)

I Lost that mentor tragically. And so I had a bit of a soul searching period. I almost joined the military. I thought maybe finance isn't for me, I'd done well, but. And then I got through. Someone at Lehman Brothers is a very senior person there, talked to me and just said, you know what, I think you should come here. Not many people do what you've done. You should just, just give it a try. And I had told myself I was never going to Wall street. So I was like, two years in, I'm going to go to Wall street again. Got it, okay. And after a year I was convinced that I really didn't want to be on Wall Street. But my boss sent me to London and he just said, listen, I know this is not your scene, so why don't you. And what I mean by that is I think I've always just been a pretty independent builder type person and it was just bureaucracies are not really my thing. So he said, go out to London, it's very entrepreneurial out there. People are still smoking on the desk. At the time it was non developed by US standards kind of business. And he just said, just figure out how to make money and I'll support you. And I got there at an amazing time which was the erm, crisis. And so we figured out how to make a lot of money.

A (3:40)

This is the early 90s.

B (3:41)

Early 90s, yeah, this is. I got there in 91 and then I ended up staying at Lehman for a bunch of years. I was a prop trader, Credit Suisse. Took a year off, climb mountains, which was another whole new form of risk management and started a company during the dot com period of financial company, which was my first real operating experience of a significant company. Sold that in the 04 or something like that and then went back into trading first for myself, then a couple hedge funds as a macro PM and then started One river in 2013.

A (4:13)

Okay. In my mind part of what you do is macro with an emphasis on trend following and part is whatever we want to call it, digital crypto as we sit here today. How do those two worlds complement each other?

B (4:27)

I'd say what we do is what we really do at One river is risk mitigation and we're highly opportunistic and so trend following is part of that. But long volume's a much bigger part of our business and we kind of bring those two things together as risk mitigants for our clients. But we're always on the hunt for things and just as a macro investor, you don't know anything too deeply, which is both a strength and a weakness. And then. But you can cover a lot of ground. And so we got into crypto in 2020. We'd done very well for our clients through the pandemic. And then the question was, okay, what next? And one of our biggest clients and I were both very interested in what crypto could represent in terms of an expression of monetary debasement theme. And so we made a very large investment in November 2020 that tripled over the next year. And we got out, by the way, and returned all that, all that capital, hopefully the biggest redemption I'll ever have. But we built a business around that as well. And so I think digital, I saw digital as being probably a 10 year theme and I wanted to be part of it. And so we just built out a part of the business. So I think the biggest thing that we do for our clients is bring risk mitigation together with their existing portfolios to help them compound at a better rate than equities. But we're always on the hunt for what's next in terms of risk or opportunity. Got it.

A (5:48)

You mentioned fall strategies, hedging strategies. It's a relevant thought these days. And people are worried about valuation and worried about concentration. Hedging, though hedging is not easy, going home long volume every day is an expensive proposition. And so how do you think about that?

B (6:03)

I think probably because where I started my career, I'd rather go home long, a bit of volume than shortfall. And that's just part of who I am. And quite frankly, I've made a lot more money during really disruptive periods than not. But I think what most investors think when they think hedging is they think it is really hard because it is, but they don't quite think about it in the right way. Okay, and let's talk about the really big investors. The really big investors go, look, I have so much money that how can I hedge it? It's just not possible. And actually I have long duration money. In a lot of cases I'm pension plan endowment, sure. And so why don't I just ride out any downdraft? And so I think that they think about it a little bit the wrong way. The way I think about it is if you have good hedges in place and you combine it with your portfolio so that you don't really, you don't use some leverage so you don't have to take risk off the table, then when something happens, you actually have your hedge which produces a lot of Cash when mentally you're probably prone to make some pretty bad decisions. You're like, I've got this big pile of cash here, maybe I can use it for some of my redemptions or to pay the endowments budget or to buy some really cheap assets here. And I think, I think that's really the right way, holistically, that's the right way to think about hedging and what we do. And I think it's a, you can, you really can compound better than just being long risk assets if you have that dynamic in your portfolio.

A (7:34)

And as we sit here today, just given the setup, given volume surfaces, is there anything that looks particularly compelling to you?

B (7:41)

Volume's pretty cheap right now, just as a general matter. But I think you have to be dynamic because I mean, one of the mistakes that I think a lot of investors make is they're looking at their portfolios right now. They're going really high valuations. I don't know about next year. Who knows what's happening geopolitically, Volume's cheap. I'm going to put a big hedge on. And what most of them do is they lock in a strike price. And yeah, they got cheap volume, but they don't know when the crisis is going to happen. So what if the market rallies 10 or 15% and then falls 25? It's going to feel pretty awful on the way down. But you're str. You, you don't really have that much convexity, you don't have a great hedge in place.

A (8:19)

Right.

B (8:19)

So I think the key is being really, really dynamic and people are worried about valuations right now. As you should be.

A (8:25)

All right, I want to talk about trend and trend following investing. It's a big part of your approach. What's the framework right now? How do you approach that business today?

B (8:33)

So just stepping back on trend following. So I think all great investors are trend followers. They just are. Because what are you doing when you're trying to capitalize on a trend? You are foreseeing something, some dynamic that the market underappreciates today and you believe will somehow get priced in over some period of time. And if you're an investor, it's not over a week, probably not over a month, probably over at least a few quarters, maybe a few years, maybe a decade. Like I was talking about crypto, I think crypto, I saw that as probably a 10 year trade. We're halfway through it and you're still of that view.

A (9:06)

It's about 10 year trade.

B (9:07)

Yeah, I think that's about right. Like we were getting into Bitcoin at 15,000, it's 8,590. It's, it's got probably a long way to go and we're halfway there. So. But anyway, trend following, I think as great investor, all you're looking for are trends. And so the question is, how do you capitalize on those? And there are, at the highest level, there are two ways of doing it. One is systematic and one is discretionary. And I think the best performing investors through time will be the discretionary traders who are exceedingly good at identifying trends fairly early. They don't have to be day one, but in the first quarter of some type of new dynamic that's going to move something and then they concentrate their investments in a fairly narrow space. Could be a stock or a sector or a country or a commodity. And then eventually they get out. The other way to do it is systematically. And the advantage with doing it systematically is you take the emotion out of it. You spread your bets across. We probably trade 150 markets, let's say more. Yeah. So you spread your bets across all these different markets and you can essentially capitalize on trends that if you were trying to make discretionary decisions, inevitably you never make. Or you might make some emotional mistakes somewhere along the way. Right. And so you're not going to make as much in that strategy as the best discretionary trend identifier, maybe someone like Soros, who is great at that. But you do very well. And the advantage of that as well is you can capitalize on periods that are pretty, pretty big dislocations, things that you didn't really see coming. He just, just wasn't on your radar. It could have been like this gold move, or it could have been in 2022. By being in trend following, you capitalized on the down move in equities, but also the down move in bonds, which is a huge correlation breakdown. So as an investor, a typical investor, you had built your whole portfolio betting on that correlation remaining intact, and it went the other way. So trend had a terrific year that year at a time when most portfolios really didn't. When we combine long volatility and trend following and equities, when you combine them in a leveraged way. And if you look back starting at 2007, let's say the S&P's up 6 to 7x combination of S and P and properly built hedges is up like 2x that and S and P hedges and trend following is up like 40x. By the way, it's not intuitive. That's something that early in my career I didn't really appreciate, but now I do. And so the biggest investors in the U.S. that's the kind of thing that these guys are looking at.

A (11:57)

Okay, and then how do you know?

B (11:59)

This is the hard question, but how.

A (12:00)

Do you know at the end when it's time to ask for the check? How do you know before the big reversal comes and the end of the move comes, or do. Or you just say, you know what, I'm going to make as much money in the belly of that move as I can and I'll probably get hurt at the end.

B (12:13)

But that's life in a discretionary. And I always think about discretionary because we think about how to, how do you codify discretionary thought processes into our systematic strategies? But in a discretionary sense, I honestly do not think it's valuation. I think it's just being able to identify when people who have been betting against a trend are feeling maximum pain. And I think you can't teach that, unfortunately. I wish I could have learned that in textbook. You know, I've felt enough of those moves where I actually, where there are times where I actually, I feel a certain way. And I know that's wrong. Like, I know that I want to get out of something. And I know, okay, I'm sure this is wrong. It just is. I've seen, I've felt this before. But I also, you know, if you feel something in yourself that other people, you know, the market's filled with people like you, and that's what makes highs and, and lows on a, on a systematic or with a systematic strategy, it's a bit different. You need to have a set of rules. And I think what I just described is it's not possible to codify. Unfortunately, if we ever figured it out, we have the magic money machine, right? But I think that there are all sorts of ways just in looking at momentum rollovers, but also we're doing all sorts of research on more fundamental factors that can anticipate changes in trends. We've got some great AI machine learning types of things. I'm sure everyone is working on those things because there's so much data in the world and there are interesting ways of thinking about it, manipulating. I think what we bring to the market is just a very strong discretionary, fundamental approach that we then work to try to codify. But I think it's not easy is the answer. And you do the best you can and you hope that by spreading Your bets across 150 markets and running a pretty high volume that over time you generate meaningful returns? Sure.

A (14:07)

And is there anything today you find any trends you find particularly compelling or any that you feel like are probably in their last innings?

B (14:14)

If we talk about it at the highest level, I think the most important trend that is unfolding in the world from an economic perspective, let's set geopolitics aside, is this debt expansion. Just because this is probably not what you were looking for, but like, we can talk about specific markets, but I think that's the most important factor here, is that there seems to be little to no spending restraint anywhere in the world. There's some places that are trying to do a little bit better job with it than others. The US Certainly is not. And I think that if I reflect on my career, which started in 89, we've had these series of financial crises and policy responses, and the policy responses more or less have grown increasingly aggressive and the government has taken on more of the private sector liabilities, expanded debt, and tried to create this ongoing prosperity with very little interruption. And so now you're at a point where I think the size of government debt, unless we have a real productivity boom, which by the way, we might. But the size of that debt and, and the interest obligations are pushing the government to make all sorts of financial repression decisions and rate decisions, and it probably leads to a very large financial crisis here sometime over the next decade. I think that's the most important trend to pay attention to because in a lot of ways most things feed off of that. I think what's happening in equities, what's happening in policy, what's happening in gold, happening in oil, like feed off of that dynamic and the path along the.

A (15:51)

Way is higher rates, steeper curves, more term premium, or not necessarily.

B (15:57)

I think that what the government has already begun and is committed to is. And I think, by the way, it's sensible. So this might sound like a criticism. I think if you and I were running the government, we would do something, you know, more or less in the same zip code. I think we're trying to figure out how do we run the economy as hot as possible with an emphasis on making sure that we clear as many roadblocks for AI development as possible, which is electricity and permitting and all these things, and then do everything possible to make energy as cheap as we can, which I think is a very deliberate strategy and probably part of what's happening in Venezuela, and to try to keep inflation down to the greatest degree possible, and then do everything possible to manage interest rates lower so that the actual interest burden is as low as it possibly is. And if you can make those things happen, I think you have a pretty good outcome. By the way, I think we still end up with a crisis down the road because I don't think you're going to see the political establishment become more austere. So I think what that does, that combination of policies pushes that problem out. Three years, five years, maybe longer, probably not longer. And that'll feel really good, by the way, during that period of time, it'll feel great. Okay. But I think you'll still see these spending dynamics and you'll see whatever the crisis that comes in the backside of this AI boom is, and I think it will be significant. You'll see an overwhelming policy response. So I think you should see steep curves and you probably do, but I think there's going to be a lot of policy action to bring those curves flatter as well.

A (17:35)

Okay, let's talk about crypto for a minute. Let's talk about bitcoin. We're roughly 30% off the highs of October. What's been kind of going on the past couple of months?

B (17:44)

God, the price action's been terrible.

A (17:46)

Yeah.

B (17:46)

Which goes back to you. Like, how do you know when trends are over? You know, there was a. There was a lot of excitement at the highs. I think, number one, I'll say, I don't know, but I think this is my framework for it. I think that you had a rush of essentially Wall street guys that came in and just built all these digital treasury companies. And obviously MicroStrategy was the pioneer in that space. But there have been so many others that have come after that. And I don't think they provide massive value for the economy. And I think they front loaded a lot of demand and they created a hype cycle unto themselves. And they kind of raced forward and brought a lot of. A lot of future bitcoin demand forward. And then you just hit a point of saturation for the time being. And then there's a lot of leverage in the system that was betting that was going to propel us to a higher level. It could have, but it didn't. You know, you kind of ran short of buyers. And then the dynamic on a market like this is once that happens, it starts going lower. And I think that's happened at a time when the AI theme has been so explosive. Gold has been. And bitcoin is very much a momentum trade. If you look at over a few month period, even over a Year, period. So when a lot of the people who had been deploying capital there started losing money and looking at these other things are making money, I think you started seeing rotation. And now what you, I would say now where you are in the cycle is you see people actually getting really bearish on it. They're like, well, there are quantum computing risks to bitcoin and there are, you know, which I don't think are going to manifest, by the way, but those are the things that I've seen through a few cycles now. You get toward the bottom, people start looking for reasons why it's going to a much lower price and then some dynamic will shift. Maybe it's the silver to. People will say, oh, the silver to bitcoin ratio, which means nothing, but it's so wide. Or it's the catch up trade, it'll start moving and those others will stall. And so I think we have significantly higher prices given policy activity. But I think that's what's been happening. And it's, you know, it's painful when it happens and everyone's like, why is it happening?

A (19:53)

And then big picture, do you have a fundamental framework for the asset class? So part of me thinks bitcoin's a bit like gold in that it's whatever one wants it to be. There's no fair value, there's no yield, there's no intrinsic value. And so in the end, it's really subject to narrative and flow of funds. But am I missing something? Am I missing a fundamental anchor point in your view?

B (20:16)

Bitcoin is so many things. We could spend a lot of time talking about bitcoin and we probably shouldn't. There's plenty to read about it. But I think that one of the things that bitcoin can become is it could become a blockchain or digitally native form of collateral that governments really can't interfere with. And gold is such a thing. Gold is worth a lot more. If bitcoin were worth as much as gold, It'd be like 1.3 or $4 million. Bitcoin, 30 trillion assets. And it's not. Right. So gold can be used like that. Right. We've gone through this period, really throughout both of our careers where probably the greatest form of collateral has been U.S. treasury bills or bonds or dollars. And you could, you know, they're fungible, you can post them as collateral and margin. But in a world that's fracturing, which I think we are, we're probably creating a few spheres of influence around the world and US is probably Western hemisphere and Europe and Russia have to figure it out and China will have the East. And I think there's a growing interest by lots of governments in the world to not be on the dollar system if they can avoid it. I think bitcoin serves as a potentially a great form of collateral that can be moved instantly, effectively at zero cost or at close to zero cost. And so I got excited about blockchain because I saw the promise of that type of world, not necessarily where bitcoin is that source of collateral, but that technology. But bitcoin could become that in this world. So in a low trust world, where you can't just trust that if you put your money into treasuries, you're going to get it back, which Russia just discovered. It can't put their money into European banks or US Banks or anything because it can get confiscated. You could use gold, but you actually have to store gold somewhere. You have to dig it out of the ground, then you have to put it back in the ground and then you have to associate it with a token and then you have to secure it and you have to make sure that no one's going to take possession of that wherever it is in the world. Whereas bitcoin actually is the first big scale asset that could provide that source of collateral that no government in the world can touch. So I think if I were to look out over the next 15 years at what could be its biggest value, I think that could be its biggest value. Now. It's still too volatile really to, to fill that role at scale, but we're, it's getting there, it has that chance. So if I were to think about what's the potential big win for bitcoin, that's probably what it is over the next 15 years, could become bigger and better things over a longer period of time, but that's kind of it. And in the meantime, it's still a highly speculative asset and bigger players are getting involved and some of the early players are getting out, moving on. And so it's interesting.

A (23:06)

Yes, wildly.

B (23:07)

Yeah.

A (23:08)

One more question, one more formal question. You occupy a bunch of different places in the asset management business. You have the trend following piece, you have the digital piece of the volatility piece. If you were to hazard a guess what your business or just kind of writ large, the asset management business looks like in five or 10 years, do you have a strong instinct a lot's.

B (23:26)

Going to happen in that period of time? Or one of the big things, one of the big dynamics that we see happening And I see from my seat at Coinbase is this wealth transfer from baby boomers to younger people is it's game on.

A (23:39)

Yeah.

B (23:40)

So the way that people invest in trade is going to shift from certainly you're younger than I, but certainly from my generation older to I think more of, you know, more of a speculative kind of investment mindset. I think a lot of the, A lot of what's happening in blockchain and DeFi actually over the next couple years is going to find its way into traditional markets. There are going to be people posting all sorts of new collateral to get leverage to take other risks. And so I think we're going to end up in a quite a speculative market, which means the highs will be higher, the lows will be lower. I do think over the next decade we're going to have this debt sustainability crisis. It could be soon. So if the AI theme really craters, I think we see a huge recession in the U.S. and then we see massive stimulus and you have debt sustainability concerns. And that's a crisis that starts looking a lot more like 08, but even bigger because the government's not going to be able to bail out the market the way it has in the past because it's the source of the problem in many respects. So I think that will change the nature of markets. But so I think you're going to have younger, more speculative, skewed markets. Young people have a lot of money to speculate with. I think you'll see great move into Robo Advisors. So a lot of young people, I mean, we're working on some of this stuff right now, are going to turn to AI to help them make investment decisions. I think that'll probably change the nature of some of these markets. And I think in the background you're going to have, yeah, you're going to have this big debt issue which ultimately leads to some kind of inflation. And I think that will change the nature of the asset management industry. I don't think that AI is going to make all investors obsolete. And at the end of the day, people with a lot of money, maybe someday they just give it to a machine. I don't think that's the case. I think they'll. So I think firms like ours will, as long as we stay curious and nimble, I think we'll do really well, grow a lot.

A (25:44)

Let's finish with the proverbial lightning round. What's your greatest strength as an investor?

B (25:49)

I think I triangulate really well, which just means probably, like you, I talk to a Lot of people I've cultivated a group of really smart and insightful investors and traders that I talk to and I read a lot, probably spend a third of my time reading, third of my time talking to people, third of my time internal, the firm or firms. And I think for me, I don't care if an idea was my idea or not. I really just want to figure out how to make money for our investors and build a great firm and supply great ideas and services. And so I just think if you have a great group of people that you've talked to over a long period of time, so you can kind of know when they get too bearish, you can sense it, when they get too bullish, you. You kind of know it. And you can feel that in yourself, like we were talking about with market terms. So I think if you do that, if you invest a lot into that and then are good listener, which I am, then you can triangulate information well. And I think my writing has helped me enormously. I'm sure it's helped you. When you put upon yourself the pressure to publish every week, it's a blessing and a curse if you do that. It rewires your brain. It makes you have to organize your thoughts clearly and be able to articulate them. And that process within yourself, I think is a. It helps your life, your trading, your business, investing.

A (27:09)

What's the best piece of advice you've ever received?

B (27:12)

This isn't a throwaway from my wife, but it is. I think I was. I've always been a good team player, but for a lot of my life I really kept to myself and she pushed me to really be open. And my writing's a reflection of that. You know, I didn't used. Now I have a big distribution. I talk about personal things and ideas and themes and things like opening yourself up to a lot of people has been incredibly gratifying personally. It's been very helpful professionally. But I think it's also when you do that you force yourself to be more introspective. And there's nothing more important, I think in life, definitely investing. But even in life, there's nothing more important than being introspective because otherwise you don't keep learning. And so that really came like when I reflect back on my life, that came from that advice.

A (28:05)

Okay, which investor do you admire the most?

B (28:08)

I don't want to offend anyone by not including them on the list, but if I look through my career, Arc Soros was. I learned about market reflexivity through Soros. So My early years in London, I was reading everything. I get that he put together. And I think his framework for thinking about markets and trading and investing and cycles and booms and busts has always helped me. And I love the fact the guy started with nothing and he had a big chip stack, and he, for so long, just kept pushing out there. You know, I saw that early movie about Paul Jones in 87, and I've always loved that guy ever since. And I think what I admire most about him is his longevity, because I've seen a number of people who are close to me really suffered through this business mentally. And I think he's shown the path of, like, you can be a great trader and you can build out a team around you. And I think with that team, it's allowed him. I don't know if he would say this, but from my perspective, it's allowed him to sustain and be as outstanding as he has been for so long. And then I got to know Ray a bit later in my life through my writing, and, yeah, I just admired his approach, which in some ways is kind of mine, which is probably why, in other words, he started his career through communication and trying to help big institutional clients. And I've really tried to do a lot of that myself. It's astounded me that no one's ever really tried to copy what Race done because it's so successful. And so he's built an amazing business. I admire that. And I think his. He's obviously been a great investor, and I think he's always tried to help his clients, and I think he's trying to help younger people with advice and his wisdom. And so I admire all those things. But there's. I don't think there could just be one investor there. There are others as well, but those are some of the big names of people that I've really admired.

A (29:54)

Okay, last question. Where do you spend your time outside the office?

B (29:58)

I told you, it took a year. And, you know, in the mountains when I was about 30 and I just. Was. I monked out. I just climbed and skied and paraglided red. And so I've always had this draw to the mountains. Jackson Hole is where our family spends a bunch of time now. And I just. Yeah, I love just being outdoors. Altitude, nature, animals. Not really a tennis player, a golfer or anything like that. There's nothing wrong with that. I just. I hope at the end of the day, like, I go down with a grizzly bear or a shark or, you know, something like that, as opposed to something really, really boring.

A (30:32)

Yeah.

B (30:32)

Makes for. But we'll see.

A (30:33)

Makes for a good tombstone.

B (30:34)

We don't get to we don't get to choose.

A (30:36)

That's right. That's right. All right, Eric, that's the run of it. Thank you so much for doing this.

B (30:39)

Great. Thank you. This is awesome.

A (30:41)

Thank you all for listening to this episode of Goldman Sachs Exchanges Great Investors, which is recorded on December 17, 2025. I am Tony Pescarella.

C (30:55)

The opinions and views expressed herein are, as of the date of publication, subject to change without notice, and may not necessarily reflect the institutional views of Goldman Sachs or its affiliates. The material provided is intended for informational purposes only and does not constitute investment advice, a recommendation from any Goldman Sachs entity to take any particular action, or an offer or solicitation to purchase or sell any securities or financial products. This material may contain forward looking statements. Past performance is not indicative of future results. Neither Goldman Sachs nor any of its affiliates make any representations or warranties, expressed or implied, as to the accuracy or completeness of the statements or information contained herein and disclaim any liability whatsoever for reliance on such information for any purpose. Each name of a third party organization mentioned is the property of the company to which it relates, is used here strictly for informational and identification purposes only, and is not used to imply any ownership or license rights between any such company and Goldman Sachs. A transcript is provided for convenience and may differ from the original video or audio content. Goldman Sachs is not responsible for any errors in the transcript. This material should not be caught, copied, distributed, published or reproduced in whole or in part or disclosed by any recipient to any other person without the express written consent of Goldman Sachs. Disclosures applicable to research with respect to issuers, if any mentioned herein are available through your Goldman Sachs representative or@www.GS.com research hedge.HTML. goldman Sachs does not endorse any candidate or any political party. Copyright 2025 Goldman Sachs All Rights Rescue.