YouSaid · the spoken record

Peter Borish

lines on the record: 90
first: 2023-06-23
most recent: 2023-06-23
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“And by the way, sometimes in the short run, right, that limit becomes a little bit of a magnet because if the limit in soybeans is 35 cents and you're down 33, do you really want to take a long position home overnight?”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a three and a half, I think, a seven, and a 15 And the point is there's a timeout because we just mentioned a moment ago about emotion in markets.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“You name it, and that's a credit to Paul, as I said, the ability to not only want to do it, but also to spend the capital to invest in data and computing at that time. And the real conclusion of that is where we are today, that all these markets are linked. You know, New York wanted to blame Chicago. There was the options markets, and they all were sort of disconnected. And that's where the Joint Task Force with the Treasury, the CFTC, and the SEC. And that was also where we put in the circuit breakers. Sort of price limits. There was no price limits in 87.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“So, first of all, it was an honor, and of course, I was the youngest person there, and I'm still friends with the number of the people that were staffers. But I can just tell you in summary that we, we tutor, were so far ahead of every other firm on Wall Street. We didn't even know. But all the data in the report, right, there's a chapter on the market break. All that data came from us. None of the other firms had it, whether it was JP, Goldman, MS, Bear Stearns,”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“And right. And then he went in and the markets took off after that. You know, there's a lot of... Good supportive, you know, material fundamentally, technically around that time, because you were still recovering from the 87 and people tend to remember the last thing that happened to them. So they're always afraid because they think that the market's going to go down. Just as now they're afraid they're going to miss out because the market was up. And I'm not so sure that they should be afraid of missing out.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“It's probably not coming to an end, or at least not today. And so now you have to look for your opportunities because remember you're managing other people's money. You got to get rid of your own opinion, shake your head out of that sort of intellectual fog that you're in and say, here's what the markets are telling me. I need to listen to the markets. And that was 1988. And when it really took off, and if you think about cycles and period and going into 91 with what happened in Iraq under Bush 1, and again, the same thing. Oh my God. And that was also a very interesting lesson because that was the first time in history we had a pre-announced date to start a war. So now, what do you do with risk management You've got models. Do you trade through it? Do you not think it's going to happen? Do you not have risk on going into that?”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, there was one of the best divergences technical buys in 1988. I think maybe the S&P made new lows or the Dow or the Dow Transports, and it was unconfirmed. And sentiment was so negative. And this is where you have to be flexible as a trader because you're like, okay, the world is coming to an end. And then I think we realized early on that”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Do you go in and you intellectually think okay, yeah, maybe we're going to crash and we're going to do something, but emotionally, you're like, wow, at some point, that's it. We're not going to benefit. We don't want to participate. We are not going to be short anything more after that next day. We're going to wait. We're going to see. And we want to be supportive of the markets and the economic system. And to me, again, we're relatively young. Paul's five years older than I am. But that's a lot of wisdom. And that's something I learned from that.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it was a life-changing day, really, for And, you know, there are good people and there are great people. And Paul is one of the great people in my mind, not just as a trader, but as an individual. Am I so committed to New York City and philanthropy? So there's always a little bit of sadness in the sense that when you are short something and it goes down and there are a lot of other people that may be getting hurt. So that's one reason as well.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. The Fed stepped in. They provided liquidity. The economy wasn't as dependent on the equity markets as necessarily as it is today as we saw post. And who knows what's going to happen now?”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Fixed income positions. We started buying a lot of fixed income futures all across the curve and particularly at that point one of the most liquid markets. And we felt that the Fed was going to provide liquidity, which they needed to do. And they did do. And the irony of that whole situation is it was after that crash that we started the Robin Hood Foundation, thinking that those who were less fortunate in New York were really going to be affected by the downturn in the markets. But the Fed stepped in.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“And back then, it was well over six. I think it was closer to seven. And that historically, you know, by the way, has thrown into market today. I think the risk reward is we're going more likely to there than back down to where we were.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. And that's changed a little bit now because of 24 hour trading. And so sometimes the extreme you do close on the low and extreme, and there isn't that much follow through the next day. But then there was definitely follow through. So we waited and we were patient and we were one of the buyers on that Tuesday, the 20th. So we performed a function, I think, that exactly what you want in the marketplace, right? Shorts were covering. We're being buyers. I like to think that knock on wood that maybe, you know, some of our buying help put in the low. But what we really did that wasn't just stock index futures. We felt and that the Fed and under Greenspan was going to be massively cutting interest rates. Remember, the 10-year today is what? 370, 375 times.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“That's correct. Because when I mentioned earlier about 1986 and July in September, we were short actually. And then we covered on that Monday and the market continued to go down until midday Tuesday. It also did that in September, I think it was September 13th. It's a long time. But generally speaking,”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, so in this case they didn't know what to do. But then panic sets in and they were selling. So we learned from our experience.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“We were on the right side. So there are a lot of people there that are in that quandary position. Because the market had been so strong, and without discipline, the irony of markets is buyers are higher, sellers are lower. Everybody loved Bitcoin at 60,000. They all hated at 20. That's just.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, yes. And so then the question is, and as I like to say, here's my definition of a quandary. You stay out of a market and watch everyone else make money or get in and thereby cause it to immediately crash.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Know it's a very, very interesting perspective because when you think about it, and it's also one of the advantages of why I say that it's so important to have all these different markets, when you're short something and it goes down, you're a natural buyer. So, people think shorts are bad. No, they're good.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“I think people have to give perspective. Remember, we at that time were not a particularly large firm. So for us, we were large short. And then over the weekend with the news that was taking place and also the fact of the sentiment, there were still people that were very sort of bullish and people that felt that they could be protected. And this is where most of these models assume consistency 24-hour trading, you're going to be okay. And you could even go to 98 with long term capital where that was also part of their problem. But on weekends, that's not the case. So you had a gap situation Monday morning.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“The analog really was ringing a red, red bell sort of on that Wednesday, right? There was a decline. You got to technical levels. You had a bounce, and then you failed. Right.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“That had just come in. So here's a rookie. Now, you had Volker Prior, and as I like to say, you know, young guys have all the moves. But old guys win championships. And so he was, in the sense, challenged what to do with regard to that. And that was something that we thought post-crash that he was going to be very aggressive in reducing interest rates, which he did.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“The market started to pull back in August and into September expiration. Remember back then there was only quarterly expiration. Right. So there was a lot more activity around that. And when we saw, and part of research is being able to replicate things, so you had always you had holidays and you see that. So you had Labor Day, you had three-day weekend. So you could line these things up in terms of price activity, volume, and the likelihood. And if you go back to the 29 scenario, you also saw what happened post-Labor Day, right? The top was September 3rd. Then you had the correction, then you had the rally. So when you sort of had the technical lining up with the fundamentals because of the issues that were taking place globally at that time and at the same time, believe it or not, we had a new chairperson in Greenspan at the Fed.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Always liquidity that you could stay longer stocks and that you could sell futures against it. And there is this assumption of continuity of liquidity. So at the same time, we understand that there's potential technical flaws underneath the markets, and we're building this model, which is really tracking what happened from the low of 21, which we corresponded sort of to the low of 82, and what was going to happen. And when I first built this model, I really thought that the top was going to occur in early 88 rather than August and the secondary top in October of 87. But then the technicals came together with the fundamentals and Paul being the great Tradery was really had the opportunity to take advantage.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you couldn't download it and you had to check it. And of course, when people are putting in a lot of numbers, there's typo. So you had to have charts just to see all those different things. And we started modeling and thinking given where we were with the new financial futures markets. And if you think about financial futures in general or new markets, we always sort of think about it as if you have a kid and they're five years, six years old, you think you could talk to them, you can think they're rational, but they're not. And they do throw tantrums. And that's happened a lot in derivatives. By the time you got to 87, right, the futures were five years old. People thought there was going to be portfolio insurance, that there's going to be this massive...”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“An incredibly strong rally. I think by the time we got to the high in August, right, it was up over 30%. On the year. And again, going back to what I just said earlier, Paul gave me the opportunity to take my sort of creative research imagination and spend it on some data. And we started being very early on collecting real-time data. And also modeling. And I mentioned that we hired people. So we took people. And back then there was a book, right? The DAO from 1897 to present. And we had to type that data in the spreadsheet. It was very common.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“They think about, yes, the low was in August of 82, but there was a serious correction in 84. And then even in 1986, there were some really harrowing corrections, particularly after July 4, 86 and the September expiration of 86. So it was really January of 87 when it started to take off in that first part of the year.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, but even then, and I asked people, I said, well, you know, you think I look any older today than I did yesterday. And they go, no, I go, well, you think I'm going to look any older tomorrow than I did today? And they go, no, I go, great. Two points a line. I'm never going to get old, which is fantastic.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, you have to be very mindful of inflection points. And I go through this all the time. People are like, oh, you know, the market goes up over time and it's a straight line.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Contrarian's sake, and that's the difference in all these different approaches. So the trend following, which is go with the trend, there's the wave strategy which says we're going to try to find an inflection point here. They're all good strategies, but if you don't have a disciplined risk management on top of it, you're not going to make money.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“It's over. The move is there. So think about it this way. You got 100 people in a subway car who are all along something. If I get out and go into the other car where I'm on the short side, I'm the one person in there. If I'm disciplined and I get stopped out, you can always squeeze one more back in the subway car. But when it turns, if I'm the only one there and they all come running out, that's why markets go down faster than they go up. It has to be in a logical sense the ability to take the other side of the trade. Now that doesn't mean you should be contrarian.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“With pleasure. So, first of all, we always said discipline before vision. And by that, it means we can talk and I can think and we can gossip and the market's going here. You know, it's kind of like gossiping about sports. That's not really trading. It's a disciplined rigorous approach. And so when I say it's an unnatural feeling is because we all most of us, I'm used to it by now, want to be liked. And so you want to be there going, oh, you're long apple, I'm long apple. Oh, we're all so smart. But you have to have that discipline to say, wait a second.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“And the futures world that you don't do, you can't lose your discipline because the market. Will discipline you regardless.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes. And the thing about futures is you must maintain your discipline. One of the problems I think with rookie options traders is that because if you're buying them, All you could do is lose your premium. So if you have a belief in the market and you buy your premium and then it starts to go against you, you go, well, I still believe in it and I still have premium left. So a lot of times when you're doing that, you put the trade on and you're mentally accepting the fact that you're going to lose all your premium.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“So the strength of Paul at that time and even today still is that because he had always traded on the floor and understood that most market moves come in extreme fairly quickly. Market spent a lot of time doing nothing. And then they reprice. So you have to have that discipline. You have to have that patience. And if you think it's going to be an acceleration point, then you try to get larger, but you have to have a really tight stop. It's such a contradictory approach because people want to be right all the time. And the way that you probe and trade is understanding that that's not the case. And he would always say, okay, they got me today, but I'm going to get them back with 100% interest.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“No, not at all. And so with the advent and the development and the starting of new financial futures markets, he was taking his technique, his approach, his discipline, and applying that to the new futures markets. And his commitment, and this I think people have to realize, because what one can do today, right? I have the Fred app on my phone. I can download massive amounts of data in hundreds of a second. Couldn't do that there. And he had a huge commitment through me for data. We would hire summer interns to put data into spreadsheets, build models, work. He was willing to and literally on the weekends we would be on our hands and knees, take it out, floppy drives, putting in hard drives, updating computers. And we were applying all that to the new markets with the discipline and approach that he had towards trading.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“So one of the geniuses of Paul in really understanding futures markets in general is that most of the innovative risk management approaches came out of the futures markets because of the embedded leverage using margin.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's 1985. I've been there three years. It's about the time you start looking for a job. And I had some job offers from, you know, sort of white shoe Wall Street firms and then through an acquaintance, I met this guy that was coming off the cotton exchange by the name of Paul Tudor Jones. He asked me to help him out because he was chairman of the financial exchange of the subsidiary of the New York Cotton Exchange. And they wanted to start trading some futures contracts. And I'm like, look, I'm young. I'm single. What a dynamic personality. Great person. I'm going to give it a shot. And that's how I started out at Tudor.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“And they were talking about, well, if Mexico increases a supply of oil, they'll get a lot more revenue. I being stupid, raised my hand and said, yeah, but if they increase the supply, isn't that got to put downward pressure on prices? And they're kind of like, you know, you should be sort of thinking about research, macroeconomic models. And that's really where it went. And at that point, foreign exchange and futures and derivatives were just starting 1982 was the year that S&P Futures started. So I went down into that group and did some research and being a little gear-heady, I worked on the sort of internal Black Schoals model for the Fed. And that's how I got fortunate and started my career. As I say, Wall Street is littered with former Fed people.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“And I finished graduate school in 82. In what was really the real recession under President Reagan. And I was very fortunate to get a job. At the Federal Reserve Bank of New York doing what? So, I was doing at that point, if you recall, it was the LDC, right? The Mexican crisis.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I guess it's sort of fortuitous. So when I finished graduate school, I always begin at Michigan because I'm a Michigan man. I went there for undergraduate and graduate school.”
2023-06-23 · Masters in Business · Peter Borish on Lessons From the 1987 Market Crash · IDENTIFIED FROM THE TRANSCRIPT · source