In today’s episode of Framework, Jamie talks with Nancy Davis, Fixed Income Manager and Founder of Quadratic Capital Management.
Nancy began her career at Goldman Sachs where her work with derivative markets and investing across asset classes would ultimately become the foundation of Quadratics.
After ten years at Goldman, Nancy was offered a commute-free opportunity in Connecticut. As her career continued, Nancy eventually decided it was time to take a bigger leap and build her own firm. Why? She truly believed in her investing strategy and decided it was time to invest in herself.
Nancy talks with Jamie about constructing portfolios using long options, what it really means to be “risk-free”, and the secret sauce for professional success.
“Remember when you were learning math in school and you would look at an equation, and you had to do the order of operation? It wasn’t where the equation started, it was what do you do first? And I personally think a lot of more conventional investing strategies just have the wrong order of operation when constructing risk.” ~ Nancy Davis
- There are benefits to having fully-funded long optionality to understand what your losses will be long-term. It makes more sense to address risks preemptively rather than trying to course-correct once they’ve already made a negative impact.
- Investors own short durations because they feel less risky than long durations, but these “short” durations are still long.
- When it comes to starting a business, know what your strengths are and focus all of your energy on those strengths. Then find partners to fill the gaps.
- Success comes when you love what you’re doing and it rarely feels like work.
Links and Important Mentions
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