EP 085: Know your edge, exploit your edge—survive the game w/ Blair Hull

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Blair Hull has been labeled by Forbes as, “One of the most successful traders of the last 40 years,” and he was also profiled in Jack Schwager’s, The New Market Wizards.

Prior to trading, Blair was a serious Blackjack player for 5-years during the 70’s. From there he took his winnings to the the Pacific Exchange to trade mispriced options, and in 1985, he founded one of the world’s premier market-making firms, Hull Trading.

At its peak, Hull Trading was active on 28 exchanges in nine countries. Then in 1999, the firm was acquired by Goldman Sachs for $531 million dollars.

Today, Blair is the founder of Hull Investments—the parent company of an actively managed ETF, Hull Trading Asset Allocation, and proprietary firm, Ketchum Trading.

Listening to this interview, you’re going to hear more about Blair’s career and his observations as a trader, why he believes great things happen in teams, and why everything revolves around having an edge.

Lessons learned in this interview:

  • Blair talks about life before trading when he played Blackjack for 50-days each year, how he got an advantage, and how he was initiated into a Blackjack team.
  • After being barred from casinos, Blair shares how he developed models to trade mispriced options on the exchange floor and won big during the ’87 crash.
  • Insight to why Blair believes that great things happen with teams, objectives for founding Hull Trading, and why the firm had an innovative drive for automation.
  • About the types of strategies that were deployed at Hull Trading, the reasons for hiring non-traditional trader types, and why Goldman Sachs acquired the firm.
  • Blair speaks on the subject of market timing, what it means, and how it’s a large factor of his actively managed ETF, Hull Tactical Funds (Symbol: $HUTS).
  • What is an edge? Blair defines what it means to have an advantage, how being systematic reduces randomness, and wisdom for younger developing traders.
blair hull interview

Photograph source: Forbes

Links and resources mentioned:

  • Beat the Dealer, by Edward Thorpe – A book by the father of card counting which influenced how Blair was able to get an advantage when playing Blackjack.
  • A Practitioner’s Defense of Return Predictability, by Blair Hull & Xiao Qiao – On the Social Science Research Network, you can read the paper Blair references.
  • HullInvest.com – Follow this link to learn more about Blair himself, as well as Hull Tactical Funds (ETF), Ketchum Trading and the Hull Family Foundation.
  • @BlairHull – Follow Blair on Twitter, and tweet him about this episode.

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