The Prophet said: “In every craft seek the expertise of its experts.”
In the thoughtful environs of the Stray Reflections community, Steven Cohen, CEO of Point 72 Asset Management, joined us to offer an exclusive glimpse at how he approaches his craft.
Here’s a pared-down version of our salon. You can watch the full interview here.
On trading becoming easier
“The game has become more and more competitive over time. The brain power in the industry is probably as strong as it’s ever been. As someone who’s been around for a long time, I’ve got to work harder to keep up. I’m not sure it ever becomes easier.”
But Steve’s got wisdom. The sum of his experience makes trading mentally easier.
After all, time in the markets should provide perspective. “If you don't have perspective after doing this for 45 years, when are you gonna get it? I’ve got perspective.”
This perspective sees him handle volatility better than most people. When conversation turned to trading during the worst part of the pandemic, Steve lit up with excitement. Those periods of high volatility? He loves them.
“When things get serious, that’s when you take your game up a notch. I get very thoughtful, more involved. I really enjoy it. My focus goes up. I get calm in my decision-making; I don’t panic.
“When I’m losing money, I’m okay. It doesn’t throw me. That’s part of the gig. I lean into it, embrace it, and enjoy it. It gets my juices going. It’s about making decisions that make sense.”
On his morning routine
Steve is like a professional athlete. He has structured his life in a way that allows him to operate at peak performance.
His preparation for the day starts the night before by reviewing reports his portfolio managers send him. His portfolio is structured so that he can prioritize sleep and does not have to check the markets in the middle of the night.
“I get up around 7 and hang with my wife. I don’t rush out. We’ll just start the day watching the news. I’ll check markets on my phone and hit the desk around 7:30.
“I’m in touch with my portfolio managers getting updates on all their sectors. I’m up to speed on what they’re doing, how they’re thinking. We do a risk meeting at eight o’clock every morning.”
Steve wears two hats at his firm, operating both as a portfolio manager and CEO. The mornings are dedicated to trading. He’s running less capital than he used to, so he’s not the focal point anymore. There are 150 portfolio managers across the various strategies.
“It is liberating that the firm is much bigger than me. I built it