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Emerging Markets: The Great Unravelling?

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Emerging Markets: The Great Unravelling? by Jawad S. Mian, CFA, CMT, Mauldin Economics

The Calling

Like the eclectic hedge fund star Hugh Hendry, I like to think my path into the world of investing was a matter of predestination. My initial plan was to become a doctor, then a lawyer, but God chose to put me in a bank instead. I started my career as a bank teller shortly after I graduated from university in 2004.

No one aspires to be a bank teller after completing four years of university, but it really was the best thing that could have happened to me at the time. I struggled with being shy most of my life, and the role, which forced me to interact with total strangers on a daily basis, helped me break out of my shell. I was still only 20 years old and it also opened up an entire new world to me. The Toronto bank where I worked employed more than 40,000 people, and had its arms stretched in many different activities. Everything seemed possible.

I worked hard and kept myself motivated. The neighborhood branch was not very busy, so I used any down time to browse through the corporate website and figure out the various lines of business, and to imagine what I might enjoy doing long-term. I had access to the employee directory, so I would make random calls to senior people in different roles to gain an understanding of what their job was like. It only took me a moment to get my bearings.

I found myself attracted to markets and quickly lost my heart in the process. This will come as no surprise to anyone who has read George Goodman’s 1968 classic The Money Game. “The market,” he wrote, “is like a beautiful woman-endlessly fascinating, endlessly complex, always changing, always mystifying. Then, if you have observed her a long time, you begin to see little tricks, little nervous movements of the hands when she is being false.”

Pretty soon, I was having sleepless nights. I was in, deep.

I wanted to get to know everything about her. I immersed myself in the study of macro markets and my slow-burning passion for playing the game kept growing with time.

In three months, I was promoted to personal banker. In nine months, I was able to convince my branch manager to let me advance to a fund accounting role within the securities services division—just to get a little bit closer to the flame of the markets, even if only as a bystander.

And it was there, as I stood in the corner on the 5th floor of the iconic building at 320 Bay Street, that I knew I was in love. For the very first time in my life, I met face-to-face with a Bloomberg terminal.

My heart began to flutter, my breathing slowed, and I was unable to snap out of my entranced state of mind. It was like a spell had been cast. I could not take my eyes off the flickering lights—sometimes green, sometimes red, every bit sexy.

I felt like Alice in Wonderland, falling down the rabbit hole into the frantic world of global macro. There was no rescuing me now. Every night, after work, I’d spend hours with my baby, my Bloomberg.

Together, we wandered the whole wide world. She piqued my interest with peculiar insights, and allowed me to glance deep inside her soul. There was always something to explore: US stocks, European rates, sovereign CDS.

This quickly developed into an obsession for me, although my friends liked to think I was possessed.

Over the course of many years, every investor develops his or her strong suit: a unique mix of personality traits, analytical ability, psychological make-up, and intellectual curiosity that defines his or her approach to markets and tolerance for risk.

I was simply on a journey of self-discovery. Who was I?

The diabolical nature of markets and the ever-increasing competition meant there was nothing more important than knowing myself. I did not want to deviate from who I am as a person and as a trader: one feeds the other.

Because my path was so wayward, there was no one I could really learn from directly. The only choice I had was to lose myself in the stories of others. I became a student, and made everyone my teacher. My love for markets blossomed as I studied the craft of successful money managers whom I related to most. This was made possible only by the timeless work of two remarkable individuals for whom I have the utmost respect.

The first was Jack Schwager, renowned author of Market Wizards and New Market Wizards, who conducted interviews with top traders during the ’80s. His interviews with Bruce Kovner, Paul Tudor Jones, and Stanley Druckenmiller emboldened me to become a professional investor.

Jones set-up his own fund when he was only 26 and, Druckenmiller his own when he was 28. I knew that that’s what I wanted to do as well. Since then, I never doubted that I would get to do that. It was only a question of when.

The second investor I most admired was Steven Drobny, the pioneering founder of Drobny Capital, who is one of the most respected advisors to global hedge funds. He opened my eyes to the different dimensions of global macro investing. Drobny interviewed world-class market practitioners during the best of times (pre-2008) for his first book, Inside the House of Money, and the worst of times (post-2008) for his excellent follow-up, The Invisible Hands. My favorite interview subjects were Jim Leitner, Scott Bessent, and Hugh Hendry.

Schwager and Drobny were both God-sent. Their books became my life. I got my education in their university. They were my real mentors.

Emerging Markets

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Mauldin Economics

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