Twenty Years Ago Today, I Started Working at Long-Term Capital Management

Not many individuals other than some of the partners from Long-Term Capital Management have spoken or written anything public about their experience. I happened to be up in Greenwich, Ct a couple of days ago to meet with one of the partners from LTCM and I realized that it’s almost 20 years since I started working there.

This isn’t a story of what happened at LTCM. This is a reflection on how I arrived at LTCM 20 years ago, some of what I did while I was there, and what I learned.

LTCM

The Liar’s Poker Influence

Upon graduating from NYU, there were only a few things most students from Stern did. We went to Wall Street, Madison Ave., or, at the time, the Big Six consulting firms. I chose Wall Street, primarily, because I read the book Liar’s Poker as a Sophomore in high school and was completely convinced I wanted to be a mortgage trader when I grew up.

Plans changed by the end of college. Kind of. While I was in college, I was lucky enough to get an unpaid internship at Merrill Lynch. I picked up writing Excel macros and working with Microsoft Access 1.0. That was my first real experience working with technology and I loved it. I decided to do a double major in Finance and Information Systems.

At the end of my junior year, a friend of mine, Anil, shared my resume with a recruiter at JP Morgan & Co. I got the paid internship. After the internship was over, my boss, Paul, asked me if I’d consider joining after graduating. I was ecstatic and agreed.

Job Hunting

Fast forward a few years and I decided it was time to move on from JP Morgan. I had interviewed at a few places before getting called into LTCM. Once the interview was over, I immediately decided that I wasn’t going to interview anywhere else. Working at LTCM would mean an opportunity to work with John Meriwether (someone I first read about in Liar’s Poker six or seven years prior) and some of the smartest people in finance. That’s where I wanted to be. If you’re in tech, it was the equivalent of getting a job at Google, Uber, 500 Startups, Facebook or Twitter when there were less than 50 employees.

Weeks went by and I hadn’t heard a thing. Weeks turned into over a month. I was sure that I didn’t get the job and it was probably time to start looking elsewhere. Before I started sending out my resume, I got a call. LTCM wanted to see me again. I was very surprised that when they told me I was being considered for an analyst position in the US fixed income risk management group. It was a Friday afternoon and I got a call giving with a verbal offer. A written offer would be faxed over to me shortly. I had to make a decision by the end of the day.

Here I was, twenty-two years old, excited but also scared about going to work for this company that no one had ever heard of. This up-start in finance. This startup. I laid out the pros and cons to my dad and he said to me, “I don’t know anything about your line of work. I’ve heard of and know what JP Morgan is but I can’t tell you what you should or shouldn’t do. You need to trust yourself and decide what you think is right.” I made a decision to take the job. After having been at JP Morgan for two years, Monday morning I handed in my resignation to my boss, Jack (who had been a lifer at JP Morgan).

Long-Term Capital Management

Two weeks later on June 10th, 1996 I started working at Long-Term Capital Management. I was now the youngest employee at the firm, much to Howard’s chagrin. Traveling for workUp until I came onboard, Howard had been the youngest employee at the firm. Being at LTCM was an incredible experience. It turned out to be a lot more than what I had expected. In good and bad ways. A few months after I had started working at LTCM, during the summer of 1996, I suggested to my boss, Lawrence, that we should consider evaluating technologies like the Netscape browser and a web server to build an Intranet. Back in 1996, not many knew what an Intranet or the Internet were. The few that did, mainly used it for email, Yahoo and a few other things. My boss was pretty excited at the prospect of bringing new consumer technologies into the firm. He spoke to two of the partners, Greg Hawkins and Eric Rosenfeld. Greg asked me some detailed questions about my suggestion. At the end of the conversation, he told me to get a prototype ready in a month. I was perplexed. I knew nothing about setting up and creating content for an Intranet. I just knew how to use Netscape (Thanks Marc)!

After work, I hit a few bookstores and tried to figure out whatever I could about  Intranets, HTML and CGI apps. Roughly a month later, with the help of our SysAdmin, Avi, we had the Netscape Suitespot web server in production, hosting all of our US fixed income risk reports. That set off a push over the next 18 months and the little proposal to create and Intranet turned into a team of people dubbed the “ATI” or “Advanced Technology Initiative” building a platform for all reporting and some applications being moved to the browser or Java.

LTCM office in Japan
LTCM office in Japan

In early 1998 I moved out of the fixed income research group and ATI into the “systems” group. Here, I took on more of an infrastructure role. My job would morph again to focus almost exclusively on data over the coming months. I had just been given a project that would essentially rip out the whole market data infrastructure of LTCM and replace it with a new PC product from Reuters called Kobra. Essentially, everything affecting trading, research, risk and operations that required prices for various securities would need to be replaced. Every Applix Spreadsheet macro, every Perl script and module, every C library, every MarketVision screen would need to be re-written by December 31st 1998 – the last date the existing MarketVision infrastructure would operate. Then August 1998 rolled around and Russia defaulted and all hell broke loose in every corner of global capital markets.

The Collapse

By September, an offer from Warren Buffet to buy the assets of LTCM had come and gone. The hemorrhaging continued unabated. I kept working on replacing the market data infrastructure, unsure if there would be a need for the infrastructure at the end of it all. The partners took steps to ensure that all of the employees would not need to worry about our salaries. All we needed to worry about was sticking together and getting thru this. Within a few weeks, fourteen of the largest banks on the Street bailed out LTCM. Tough decisions were made by the “Oversight Committee” which was comprised of representatives from each of the fourteen banks. LTCM was scaled back considerably but by December 31st, thanks to everyone pulling together, we had a new market data infrastructure running on Reuters Triarch and Kobra.

LTCM Tokyo Trading Floor
LTCM Tokyo Trading Floor

The Aftermath

All of us were in maintenance mode at LTCM for about a year. We were kept around by the OC to keep the place running and fix problems if they occurred.

My friend Ritesh and I caught the startup bug and began working on plans for world domination. I don’t remember what the idea was but we made a trip to Boston to meet with Perot Systems. It didn’t work out but I had my first taste of a tech startup. Looking back, it was convenient that in October 1999, I got laid off from Long-Term Capital Management. It bothered me. A lot. Fortunately, though before the end of the year, I was back to working with Hans, Tom, Ira, Jim, Ritesh, Peter, Nandini, Marek, Rob, Claudette, Kin, Graham and many others on GlobeOp Financial Services.

I frequently tell people that I’ve been very lucky and fortunate in my life. My time and experience at Long-Term Capital Management has a lot to do with it. I was privileged to work with some of the best and brightest in the industry and lucky to learn some very important values very early on in my career at LTCM – humility, integrity and most importantly loyalty.

As I continue working on 500 Kulfi, I hope to build something that embodies these values as well as our core values at 500 Startups with Dave, Christine, Bedy, Khailee, Soaib, Shalini and everyone else in the #500STRONG family.

Related Posts:

Startup Weekend is Coming to India

Startup Weekend is a 54 hour event where developers, designers, and entrepreneurs get together and build great new Internet and mobile products. Startup Weekend is coming to India

Get your tickets to Startup Weekend Delhi or Startup Weekend Bangalore before the early-bird pricing ends.

Related Posts:

Car, Computers, Gadgets, Phones and Appliances for Sale in Delhi

UPDATE: All Items are sold and no longer available. Thanks for your interest.

We are moving so we’re selling the following items before we leave Delhi. All of the items will be available at the end of March or by April 5th at the latest, though a few items could be made available sooner if there’s enough interest. Most items have been priced at less than half price of what we bought them for.

Please email me at 4sale (a t) linosx (d o t) com in the next few days if you are interested in any of the items listed below. If you know of anyone that may be interested in some of the items below, please feel free to forward this post to them as well. In the email, please include what item(s) you’re interested in, what date you would like them by and possible bid you’d like to make.

Serious buyers only, please.
Update: Prices on some items have been reduced.
Thanks very much!
Pankaj

Car

SX4 2008 top of the line ZXi model.
Approx 30,000 kms driven
Fitted with Maruti seat covers and gear lock, regularly serviced
Insurance paid thru end of January 2011
Please post a message if you’re interested.


Computers

  • 24
    Like New 24″ iMac with

    2.4GHz Intel Core 2 Duo processor at 2.4GHz
    320GB Hard Drive
    Built-in speakers,
    iSight Camera
    Dual Layer DVD Burner
    RAM upgraded to 4GB.
    Warranty till end of February 2011
    1kV APC Back-UPS RS-1000 Commercial grade surge suppressor and UPS for use with iMac.
    Factory installed Mac OS X Operating System and Software
    iMac + APC UPS – Rs. 75,000

    Update: I’m accepting the best offer over Rs. 65,000 or if you prefer to pay in US Dollars, $1,200 for both the UPS and 24″ iMac


  • HP dx2280 for Sale in New Delhi
    Like New HP Desktop Model DX2280 and 19″ Flat Screen Monitors (2 1 available)

    Intel Core 2 Duo running at 2.20Ghz
    2MB L2 Cache
    1 GB RAM
    Intel 945G Graphics
    Gigabit LAN Card
    160GB Hard Drive
    Sound card for sound output and sound input
    Warranty expires in January 2011
    HP w19 19inch Flatscreen LCD Monitor with DVI and VGA Connectors
    No keyboard or mouse included

    There is no CD or DVD drive so these are perfect for office computers. They come installed with Linux Fedora 12 and MS Office compatible version of OpenOffice

    Rs.20,000 Update: Accepting the best offer over Rs. 15,000 or USD 300 total for each system and 19″ monitor.


  • White Apple Macbook for Sale in New Delhi Rs. 20,000
    White Apple Macbook for Sale in New Delhi Rs. 20,000
    MacBook for Sale in New Delhi
    MacBook for Sale in New Delhi


    White Macbook

    2.0GHz Intel Core Duo
    60GB Hard Drive
    RAM upgraded to max of 2GB
    Built-in speakers and Mic
    iSight Camera
    DVD Burner

    New original MacBook Keyboard, Apple Battery and new original Apple 85W charger (charger alone is Rs. 4,500 and new battery is over Rs. 7,000) Will come with factory installed Mac OS X Operating System and Software. A Mickey Mouse sticker was stuck to the top of the MacBook which we removed (partially, as visible in the picture above)
    Rs. 20,000

    Update: The MacBook is sold!


Computer equipment

  • Netgear wireless-g routers Rs. 1,000
  • Lightly used HP OfficeJet 5600 series Photocopier, Fax, and Scanner – Rs. 6,000 or USD $125
  • Laptop PCMCIA WiFi cards (3 available) – Rs. 1,000 for all 3


Mobile phones

  • Sony Ericsson T610 – Rs. 2,000
  • Nokia E61 – Rs. 8,000 Rs. 6,000 or USD $125


Appliances and Furniture

  • Osterizer Blender – Rs. 1,500
  • Morphy Richards Toaster for Sale in New Delhi
    Morphy Richards Toaster for Sale in New Delhi Rs. 2,000
  • AquaGuard Integra7 RO Water Filter for Sale in New Delhi
    AquaGuard Integra7 RO Water Filter for Sale in New Delhi - Rs. 10,000
  • Hydraulic multi-adjustment Office Chair  - Rs. 5,000
    Hydraulic multi-adjustment Office Chair - Rs. 5,000

Related Posts:

Perl Module for use with Yourls Released

CamelI wanted to put an image of the Perl Camel up on this post but it would have required getting permission from O’Reilly to do so. Hence, I decided to use this beautiful picture by angeloux.

I just got around to finishing the alpha version of WWW::Shorten::Yourls which is a simple Perl module to shorten URLs using the open source Yourls.org project.

You can take a look at the code at GitHub or install the code using CPAN.


#! /usr/local/bin/perl
#
# LICENSE: This code is licensed under the same license as Perl itself
#
##############################################
use WWW::Shorten::Yourls;

my $url = "http://www.teknatus.com";
my $uid = "userid_for_yourls_install";
my $passwd = "password_for_yourls_install";
my $base = "base_url_for_yoursl_install";

my $yourls = WWW::Shorten::Yourls->new(URL => $url,
USER => $uid,
PASSWORD => $passwd,
BASE => $base);

print $yourls;

my $yourl = makeashorterlink($url,$uid,$passwd,$base);
print $yourl;

1;

Do let me know what you think.

Related Posts:

Startup Saturday Volunteer Meetup

For anyone interested in volunteering for Startup Saturday Delhi, we’re meeting today, November 22nd, 2008 at 3pm at the Teknatus office in NSIC. If you’re interested in joining us, please drop me a note.

Related Posts: