EP 079: The biggest financial experiment the world has ever seen—global macro investor, Raoul Pal

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Raoul Pal has a history rooted in the hedge fund industry, and with him, he carries more than 25+ years of experience in financial markets.

For a number of years he worked at Goldman Sachs where he co-managed the hedge fund sales business in equities and equity derivatives. He later moved on to GLG, one of the largest hedge fund groups in the world, where he launched their global macro fund in London.

Today, Raoul no longer manages client money but continues to invest his own. He also writes a premium research newsletter, The Global Macro Investor, and is the co-founder of Real Vision TV.

In this episode we navigate through some uncharted waters which have not been explored previously on this podcast. So in addition to macro investing, technical analysis and hedge funds, we discuss theoretical economic models, business cycles, negative interest rates, and why the world is economically in a frightening position.

Lessons learned in this interview:

  • How Raoul got into a position where he was regularly communicating with Tudor Investment Corp, Soros Fund Management & Long Term Capital Management etc.
  • Raoul shares his experience from hedge fund sales at Goldman Sachs to launching a global macro fund at GLG which traded all asset classes in all markets.
  • What defines a global macro investor, examples of the themes one may attempt to capitalize on, and the types of data/information one may analyse to form ideas.
  • The benefit for short-term traders to have an idea of economics and fundamentals, and how Raoul blends these factors with technical analysis for long-term trades.
  • Raoul explains the lack of common sense in theoretical economic models and why they’re out of touch with reality, plus the need to understand business cycles.
  • What’s frightening about the current state of economies, why major problems could be looming on the horizon, and the affects of negative interest rates.

“The world is the most debted it’s been as a percentage of global GDP in all of economic history.”

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Links and resources mentioned:

  • Manias, Panics, and Crashes by Charles Kindleberger – Recommended reading by Raoul, about the mismanagement of money and credit throughout history.
  • Real Vision TV – A company of Raoul’s, best described as Netflix for investors. Watch on-demand, long-form video interviews with financial masterminds.
  • Global Macro Investor – A premium newsletter Raoul writes for some of the largest hedge funds and high-net worth individuals, sharing global macro ideas.
  • @RaoulGMI – Make sure you follow Raoul on Twitter. He’s very responsive, so tell him what you thought of this interview!

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