When you were trading leveraged products such as commodities and currencies, how did you determine what your allocation was? Until we ran out of money, we were always leveraged to the hilt. When we bought something and ran out of
money, we would look at the portfolio and push out whatever appeared to be the least attractive item at that point.
For example, if you wanted to buy corn and ran out of money, you either had to stop buying corn or sell something
else. It was an amoebic process. You know how amoebas grow—they grow out this way, then they run into pressure
so they grow out the other way. It was a very amoebic portfolio.
You never evaluated the risk of your positions on an individual basis? So, if you lost money in one market and had to reduce your portfolio, you might just as easily cut back in another market? Right. We would always cut back on what we thought were the least attractive positions in the portfolio.
Even today, that sounds like a very unconventional fund. Back then, I imagine it was probably unique in terms of its investment strategy. It certainly was unique. I still don't know anybody who trades all the markets. By all the markets, I mean all
the currencies, commodities, bonds, and stocks—long and short—alloverthe world. I am retired now, and I still do all
these markets. People say to me, "You're retired? We have a full staff and can't even keep up with all these markets.
What do you mean you are retired? You are short stocks all over the world!"
I must admit, I find it amusing when you say you are retired. Now in my retirement, I'm more active than anybody, and people say, "How do you follow all these things?"
I have the same question. I don't see how you can invest in American steel without understanding what is going on in Malaysian palm
oil. As I explained before, it is all part of a big, three-dimensional puzzle that is always changing.
