While you were sleeping (the China ISM number came out)
By Katya Wachtel
For Omega Advisors’ Steve Einhorn, the window of sleep-able hours is narrowing.
“One needs to know whats going on around the world. I turn in around midnight so I can monitor what’s going on in China and Japan,” Einhorn, vice chairman at Leon Cooperman’s $7billion fund, said at the Reuters Global Investment Summit last week. ”A decade ago, did I and most others focus on what’s going on in China? No. Now we wait for the November manufacturing index for China to come out. The day is longer because of that. I am up around 6 in the morning; I review what has gone on overnight in Asia and in Europe. I spend an hour in front of the machine at home, going through data and news releases” before he’s out the door.
This was undoubtedly the most common refrain when we asked some of Wall Street’s savviest money managers and investors how they begin their day, and with what must-read literature, during the week-long summit.
Jeff Kronthal, who was the head of Global Credit, Real Estate and Structured Products at Merrill Lynch and now runs investment firm KLS Diversified, is in the office no later than 7 am for that very reason. ”The world is working,” he said, and even though he manages 40 people now instead of 3,500, “there is so much going on overseas, that you need to know what’s going on in Europe, what the China numbers were” before it is possible to begin the day. “When I started at Solomon Brothers, it didn’t really matter what went on overseas,” Kronthal, who worked at Solomon for a decade until July 1988, said on Tuesday.
“You can tell by the bags under my eyes I agree with that sentiment,” said Teresa Heitsenrether, who runs JP Morgan’s Prime Brokerage. “It’s a 24/7 type of proposition.”
Of course some money managers who call the West Coast home, have it much worse. Because of the hours of the U.S trading day, dictated by Wall Street’s home on the East Coast, many California-based investors rise as early as 3.30 or 4 am.
Even though D.E Shaw managing director Max Stone is based in New York, he does not seem to be suffering from the same sleep deprivation as some of his compatriots. ”If you have a 2-day trading horizon and you need to react 10 seconds after the Bank of Japan does X… You can’t be sleeping,” he said. Luckily for Stone, his investment strategy involves a 3 to 12 month month time horizon. ”It’s an investment approach that works for us, and happens to allow sleep.”
Tod Seides, co-founder and co-CIO at fund of hedge funds Protege Partners, is up at the crack of dawn, but not because he’s waiting for macro-economic data out of Asia. Rather, he’s squeezing in interval training at the gym. He uses his commute from Connecticut to get up to speed on the latest news, favoring the New York Times sport section, The Wall Street Journal, a bunch of strategy pieces and as many hedge manager letters as he can devour in one sitting.
For Margaret Patel of Wells Capital Management, there is one aim: read everything. ”Some people filter their news and I’ve never done that because what’s not important today might be tomorrow,” she said. Patel consumes a plethora of Wall Street research but when asked for a favorite, she tapped the work of former Chief Economist of Bear Stearns, David Malpass: “He’s a very creative thinker,” she said.
MORE RECOMMENDED READING FROM OUR SUMMIT GUESTS
DE Shaw’s Max Stone: Favors the Economist, but also allocates a fair amount of reading time to books as opposed to weekly commentary. “I tend to get the best investment ideas when walking as opposed to staring at a screen,” he said.
Jason Ader of Ader Investment Management: Now gets most of his news on the iPad, on which he peruses the WSJ, New York Times and New York Post every day.
DoubleLine portfolio manager Bonnie Baha: Reads the print version of the FT, but has strayed from the WSJ. “Online, I will go to Drudge as well as HuffPo to get the different sites. Economist is a mainstay.” She added that “Jim Grant is a favorite around our office.” James Grant founded the eponymous Grant’s Interest Rate Observer in 1983, after penning Barron’s ”Current Yield” column. Baha tapped Deutsche Bank’s Head of Global Fundamental Credit Strategy, Jim Reid, as “probably the most consistent macro corporate strategist” there is, with his Early Morning Reid invaluable.
JP Morgan’s Teresa Heitsenrether: Has a fairly long commute to work – “that’s where I do all my reading.” In addition to the newspapers, Heitsenrether doesn’t miss JP Morgan’s Head of Economic Research Bruce Kasman’s Global Economic Outlook.
Damon Silver, top policy maker at the AFL-CIO: Said his morning reading list is ”embarrassingly conventional.” He reads the New York Times “cover to cover and glances at the Washington Post.”
Rick Sharga of Carrington Mortgage Holdings: “I read very little printed material anymore,” he said, though he does read the local Orange County Register on Sundays. Sharga gets most of his morning news on the radio. On the analyst front, he favors Fannie Mae’s chief economist Doug Duncan; Chris Thornberg at Beacon Economics; and Ivy Zelman on the housing beat.
John Brynjolfsson of Armored Wolf: Has a long list of go-to analysts: Bob Savage at TRACK; Mark Grant at Southwest Securities; Bill King at Arbor Research; David Kotok, chief investment officer at Cumberland Advisors; Ed Hyman at ISI; Jim Bianco; and Meridian Macro, which ”sends charts on everything.” He also read’s Ezra Klein’s Wonkbook column at the Washington Post “religiously” so he knows “what the left is thinking.” And he gets a late-night dose of commentary from Jay Leno and The Daily Show.