Transcription
The man behind the first hedge fund in France and managing over $700 million in capital. You have to understand the trend and you have to understand where you are in the market cycle and then the technical will give you the timing trading map the risk-reward. You can have a very good idea but if you don't buy your IDs at the correct time probably your ideas can lose money.
Silven La Mer is one of the biggest names in the French trading space, never having a losing year as a hedge fund manager. The best marketing in finance is a performance. If you are good and people want to invest in your funds, what do you think hedge funds are doing these days cuz I'm seeing a lot of Black Rockck and and other firms get involved with Bitcoin. I think all those hedge funds are very very uh I think you have to put in place some sets of risk limits. After 8% draw down, I start to decrease all my position because it means that there is something change in the market and I didn't understand. If you have to understand why you didn't perform and how and when you need to come back more stronger in the market, you need confidence to make money.
When it comes to this topic of risk, which I wanted to come back to once I understood your technicals and fundamentals view, how did you navigate managing that pressure to have hundreds of millions of dollars under you? What does that feel like when you're placing a big trade and you know it's a large amount of money? What are those moments like? This is a very good point that's make the difference of a good trader and a bad trader.
Ladies and gents, welcome back to another episode. I'm joined by Sly or Silan as we as we can say in French. Uh we have a very cool career that I want to share with the audience where you've worked in real prop firm. You've been a hedge fund manager with hundreds of millions of dollars with your responsibility and then pivoting to now ventures that you're doing a very interesting career. So first of all, thank you for joining. I want to start off with just a summary on the things you've done because you've had a a nice and interesting career starting from your university and masters and just some bullet points to present date.
Yes. Globally. I think uh at the end of uh the '90s if you you wanted to penetrate a big dealing room uh big banks for example because at in 2000 hedge fund was not so common uh the trading was more uh inside the banks uh big banks. So in France you have so gen BNP credit agricultural and uh if you wanted to uh go for this bank to work for those banks you need to have a good diploma. So uh this the way to have it you have the three best business school. So uh we spoke about it it's I should say and the top engineer schools also and that's it globally. So you need to have those kind of diploma to uh have the chance to become a very competitive.
Yes. Uh and then uh you you start as an internship and then you you I do my military uh duties. Oh, you have that in France as well? Yeah. At the Yeah, back then. Okay. Yeah. Yeah. Uh I did it in at the BNP. So uh I did my internship in BNP, my military military duties in BNP also and then I started as a junior expert at BNP and I started uh asset management on equity side at BNP. This is the way uh I uh I was able to to go in in this uh industry in this activities and from BNP which was a prop firm I guess where did you transition after that?
After that um I went to Dexar Alf Dexar was the first hon in in France. Wow. Yes. Those guy was were totally amazing. The best traders I ever seen and uh I launched here the first long equity market neutral in Paris. Uh we met a very great success. We raised around more than 500 millions in two years. Wow. very huge performances because those guy understood the way the market is the way the market performed every day. So we had on my uh on my left the desk on the fixed income me I I did the long short equities uh on the right there there was the options guy. So all the information on all asset classes uh were there. So we we add an advantage on the market because we know everything at any time on the market and this is the way we do trading and this is the way I do trading again today. So I learned so much in this place. I stay maybe two or three years at Alio and then Dixia. It was so amazing. Totally.
There there's a lot to unpack here. I think I want to start almost at the beginning. So your degree and and it was a international finance. you said your masters. Um, a lot of people that I've had on the show are, you know, they've had their trading performance and they they've done their thing, but very few, I think maybe not any have had a formal background on the show. Um, so just for the people watching that maybe are choosing the path and thinking, okay, if I want to take this professional route or hedge fund route, how essential was this degree and and is the things you learned there still useful now in your training?
I think you you learn the basis of the economy because at the end of the day trading if you want to do trading you have to understand macroeconomy the the the world where you live. Uh this is what is very exciting for me in the trading you have to understand the world where you live on a daily basis and uh if you have a very good education a good degree you learn the way you live you learn the macroeconomy the microeconomy you learn trading you you learn everything. So uh this is only the basis and then you can start and make your proof in this uh in this industry and at the end of the day the the only way you you say I'm good or not good is a P&L you are able to generate and if you want to be able to generate P&L on a constant basis continuously you need to have a process a method you need to manage your emotions uh your stress because because I think uh your main enemy in in trading is you. If you are uh rigorous, discipline, a disciplined guy, I think you can do trading for 5, 10, 20 days because you manage your stress thanks to your methodology and your process.
I'm interested to know the your classmates at university who all went to a as you mentioned one of the best um universities in France and doing a tough degree at a master level did they all go on to be good traders or would this these things like emotions and psychology yes even at a degree level mast's level can still hold people back no I I think there's a lot of very uh high level guy like highQ guy you know uh they start they do very well but they stop because too much pressure or too stressful. Um this this this is real at the end. Uh if you are not able to manage the stress of your position, the stress of your P&L because uh nobody can make money on a daily basis, you have always up and down uh uh position. So if you are not able to manage that uh on the long run at the end you just stop because you are very you're not happy and you it's very bad for you when you entered the as you said the first hedge fund in France after when they launched after how long did you join? Uh no I join I joined uh this company to launch the so you were there from the beginning okay in that case because the company was exist existing for five six years I don't know but they they recruited me to launch the detention with a senior guy okay I see I see in which case then since you were the first movers into this space what were the challenges you faced was it a lot of capital coming your way cuz it's new exciting but also a lot stress, regulatory pressures. I'm sure there was a lot of chaos going on to launch this. What was that experience like?
Uh, what I I was very impressed by by the quality and the skills of those guys. Okay. So, I wanted to be as good as they were. So, I think I worked uh 24 hours for one years every day. Yeah. And um the the things you learned in university, you mentioned as well off camera, they taught you some technical analysis. Yeah. Is is the things you learned at university at a mast's level relevant or is it more what you learn from your your colleagues in this uh
No, no. What I learned uh during my degrees uh were really relevant. It allows me to start to start and to know what I uh want to do and to know the way you can trade you can take position you can uh manage your risk and stuff like that and then this is the theory and then in uh in the reality it's very different to say okay uh I have a very good chart it's a good strong buying signals it's different to think that to say that to advise that and to take the position and to leave the position and to manage it. This is two separate words and I think good traders are able to do this both side because you have to create a process a methodology that will work in the most market condition as possible.
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when you take your theory that was from university which is just maybe how to get started it's it's ge geopolitics fundamentals versus a working strategy taking theory into application as you were saying what was that building process like to take your theory into actual execution ideas but uh I had the chance to to to start uh trading activities with very good traders very very good traders so uh um I wanted to take a position for any reasons, I can discuss my uh business case or my uh investment case with senior guys and I learned like that because the guys say okay I think it's a good point here this one is not a good point because that and that and that and that and at the I started to say when you do trading you have to understand the world where you live. uh when you do trading on equities you have to understand what's uh is going on on the interest rate on the fixed income on commodities on the forex because it impacts a lot of equities uh if you want to go long on u UK name which make uh 50 or 60% of it revenue in the US you have you need to have a view on the euro of the cable on the euro pound for example on the US dollar pound for example if you don't have this view this view but at the end of the day you can trade only the currency to trade the the equities because if the pounds collapse so all the UK exporter have an advantage in term of competitiveness in term of price so you have to to always to see everything when you do trading so when it comes to the the strategy that you had it was not the final weight is not only on your shoulders you have a team around you and you can and you can bounce ideas. Now I can see this working in in in a great way because you have support and you have not only the emotional supports but then you you can get some feedback but it all can also maybe give conflicting views where in in the team someone has this idea that idea cuz it's it's not an exact science to understand the economy or the health of an economy and and down to an individual level let's say me I can trade by myself or I can trade with my friends and my friends might all get me excited to enter a trade that isn't usually my plan or or vice versa. this is my plan but they might convince me otherwise. How did you navigate individual opinions versus team mentality?
Th this is a very good point. Uh that's make the difference of a good trader and a bad trader. Uh you have to have your own conviction. Okay. Okay. You your your commission could be feed feeded by uh this guy this guy this guy but at the end this position is my position. So I am responsible of this this position. That's it. If you think okay uh my position is very good uh my investment case is perfect the market is wrong it's not the way it works the market has always right is al always right always so when you take a position is your position is your responsibility in in a hedge fund environment I imagine you had a risk team or a risk desk does does externalizing that responsibility so you're not going to ever revenge trade for more trade overlever these things are out of your hands Does this um like alleviate a lot of pressure or is this something that is just you have to do it?
You have to do P&L. Okay. So you have a sets of limits, a risk limits terms of le leverage of beta of everything of volatility and you have to navigate inside those sets of limits and if you are above if you are a bridge of uh those limits you have the compliance the risk department they come and say okay what what's happened and you have to cut and stuff like that. Okay. So, it's more like uh the police guys of the the rules. Basically, you have to follow certain rules. Okay. Um at your peak, you mentioned 700 million was was uh being managed. Yeah. Before we even get to that point, how did you get to raise that much? That's a huge number.
The best marketing in uh in finance in uh in trading is a performance. If you are good the the people want to invest in your fund and then you have a good marketing guys and good sales guys. They have to understand your process uh understand the quality of the portfolio manager and uh have the network to sell to sell the fund. But how long were you managing funds for in this in this uh yeah it could take too much time for a portfolio manager to raise fund. This is uh this is a a bit uh it could be painful because uh the the the job of a portfolio manager is to make money. Yes. Exactly. So you don't want to be mixing roles. Okay. You you will do more money for for the portfolio manager if you manage a lot of money. So if you make 10% on 1 million is not the same commission than 10% on 100 millions. Exactly. Yes.
What kind of performance did you guys see in this time? me I I had I never had a negative year. Oh yeah. Yeah. My worst year was 0.74%. Just about break even. Okay. And my best year was 17%. And from which years were you doing this? Uh between 2000 and 2008. Okay. So and and the the crash I guess the O8 crash was a time for you to exit or what happened there?
For for me when there is a a crash when a crash happened for me it's more an opportunity to make money because there is a lot of spread uh there is a cows in the market so you can uh you can take advantage of it but you you need to react very quickly because if you are not in the good way uh if you are long and there is a crash you have to know your risk uh and act very uh immediately very uh urgently to over your position to hedge everything. So you you you need to know your risk at any uh in a real time and uh as I said uh I think the the job of a senior trader is to know at any time what is priced by the market like that you can react very very quickly when the news happen.
This now in in 2025 are you managing people's money or your own capital? What is uh your life? has a lot of uh hedge fund bank traders and uh high net worth and individual trading or not yourself? No, because I am regulated by the DFSA and FSA. So I cannot do both. I see. Okay. Conflicts of interest. Yes. Okay. So I'm interested to just hear like when you're giving advisory now in in the current climates compared to when you were trading back in the early 2000s, has things changed the markets, the way to view things, the way?
No, I I think I don't think so. Globally because it's for me the market is something very cyclical what we are seeing now uh we saw this kind of uh behavior in the past uh the the way it could change and way it change actually is the uh the rapidity of the market adjustment because we are pro sometimes there are too much money and the market uh converge too quickly or more quickly and today no I think it's always the same situation we have US president wants to cut the interest rate po the Fed doesn't want because imported inflation is too high due to the tariffs uh but I think the the main goal of u uh the US governments is to decrease the value of the US dollar to uh decrease the impact of the inflation first and to make more competitive the US companies all around the world and uh when you see the freit from China because they own 30% of the treasuries of the total debt of the US government China does. Yeah. Okay. uh and everybody said okay but if they sell everything interest rate the long-term interest rate in the US the 10 the 10 years will go up very sharply uh but I don't think so because the for me the plan because I think those guys are definitely not stupid they have a plan for sure and the plan for me is to take what the Chinese own on terms of treasuries to take back inside the US to to make them more independent from uh from outside. So there's two ways to do it and Burk Shager Juan Buffett announced already that they bought a lot of treasuries and probably the Fed could do also he could force the Fed to buy in sort of new quantitative easing just to uh to to buy the the treasuries from the Chinese guys like that you have a lot of you have a pressure on the US dollar but not on the interest rate. I think this is the plan.
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So the goal is to strategically bring down the value of the dollar for competitiveness. But the strategy that he's going about it, it can also invite counter tariffs as the situation right now with China is is this just noise you think or and it will eventually settle and is just kind of headlines and and politics or is this a real threat you think? No. Uh for me uh to renegotiate some contracts uh old than 50 years is not abnormal. This is the way he does it. This is a bit uh conflictual and uh nervous for the market. It brings a lot of volatility and noises on the market. But if he does it another way, probably he will obtain less than he will obtain doing that this way. the the the rude way. Okay. In terms of a leverage. Yeah. Okay. Because nobody has interest to fight uh to fight us but to fight all together because uh that you destroy a lot of value. Okay. Uh globally the US economy uh is below zero today. So he wants to force the chairman of the Fed, Jeron P, to cut the interest rate. This is the main goal. I I think he's creating the condition for huge bullish market.
Do you think the play of the interest rates or him trying to strategically pull it down is more associated to the US debt which is at all-time highs or is it more to create an environment of spending and and a booming economy? Exactly. You want to create a an envir environment to uh favor the investment and the spendings. Uh and the main point for me it will succeed if the treasuries if the 10 years rate uh won't go up because if the interest rate the 10 years go up uh the real estate market will go down and then the consumption will go down sharply. Okay. Yeah. So yes, there's a balancing act between him trying to bring interest rates down but also the the effect of inflation right now. And what is what is the view on that side on the inflation itself?
It's it's higher. This is this is another way another point very important. Uh in six months, five or six months uh the Senate has to vote for the tax uh reforms in the US. I think there is something like ah I don't remember the figures but billions dollar at taxfree for corporate and a lot of uh lot of overs uh department and like that you will create an a really strong economic environment inside the US. I guess the goal is also to bring u with the tariffs the goal is to bring production manufacturing in into the US to not only try and export but also not rely on uh external factors. Yes, it's it but I'm not sure. I'm not so sure of that because yes, he want to because at the end he he's right to say okay, China's uh prices are too low and uh commercial balance is too uh is too deteriorated for the the US. But in China, I don't know but uh I don't know they are doing uh a t-shirt at 0 20 cents when you produce it at $1 in in the US. So there is something not fair in but at the end uh the US uh guys can buy a t-shirt at 20 cents. So this balance is not so uh conceptually it's uh it's not so easy to uh to address it but if you bring back all the industry all the workers in the US uh you will create inflation. Yes, because whether it's tariff or whether it's USmade, it's going to be more expensive either way and and that has an inflationary bubble and and Yeah. And in fishy by the salary is uh the the history the economic history uh showed that it's not a good idea. But uh from the the commentaries that I'm seeing online, it seems that we're creating an environment where yes, it's going to cause a boom in the economy. That's what projections may be. But it's also going to create a huge wealth divide or increasing wealth divide because the middle class or the lower class, they're just going to experience more expensive things, everything, cost of living, inflation. Um, and it seems like for the wealthy, you know, they are the ones that going to benefit in the end and they'll have tax breaks. Which brings me to this point. I don't know if you saw the the day when he announced the 90-day pause of the tariffs, he made a tweet about it. And I was very curious why why is he tweeting this? And and and then I see a video a few hours later. He's in the White House with some of his buddies, Charles Schwab included. He's like, "He made this 900 million, he made this, he made this." Laughing about the whole situation. Brings me into this point of like, is he a, in your opinion, is he a president that is for the economy, for the people, or do you think he's just part of the elites and and his goal is to make wealth for himself and his buddies and then use the economy as a way to catalyze his own growth?
He's a businessman at the beginning. So, yeah, he's still a businessman. No, for me, it's very clear. is not I I I don't think uh one president is here for America is probably they are all here for for themselves first. I think especially when you have a 4year window to make change, everybody thinks short term. You think what can I achieve in four years and and you're going to make policies that are not you don't care about the long-term inflation or the long because you'll be gone as a president. He has a lot of ego also. So he want to be the president to make the America great again and stuff like blah blah blah. But uh uh yes uh if the interest rate short-term and long-term on the in the US are uh lower uh is going to be very good for every everybody in the world. So uh it's a I think he's creating conditions to to make in place a very strong bull market. Yes. And specifically in one year because in one year he will uh the the Fed chairman will change. He will probably put in place someone close to him and it's gonna be easier for him to Does the president have any control or influence on who can be in the No. Yeah. The president will elect the future chairman of the Fed. I see. I see. But this guy has to be independent. Yes. They're not they don't have influence from the government, which is another another topic, I guess. Um, but now that we've kind of arrived to this summary that the environment is shaping to be positive for the US. So then people can start to see okay the the stock market is on a 20% discount right now. Yeah. Uh but then there's also the recovery path might not be so smooth and we also don't know how to time it. So how do you take a environment where you think within the next year or year and a half things will be better than they are today. How do you position yourself into a trade either technicals or what do you connect?
uh for me from a point of view um I publish sorry it was in French but I published in my uh YouTube uh channel uh study on the S&P 500 and for me we touched probably the bottom uh midappril and you mean when they had the 90-day pause and then a bounce you think that's the final low yeah because technically speaking uh it's it's a case on the dot on S&P and the NASDAQ 100 uh we touch the support of the bullish trend since 2020 since the the bottom of the coide. Okay. So it's a real real important a key level uh from this point of view and then uh for me uh US uh government tested the market tested the investors and they saw that it was on totally uh not under control. They lost everything. So they step back and say okay now uh everybody uh we've written everybody so now just go and negotiate and um this is the way Trump did uh during this first mandate exactly the same way but it was only with Chinese guy now it's with everybody so this 90-day pause the way I'd understood it is like I said it's a short-term pause let's get some relief but then it's going to resume after 90 days and and it might continue going lower. So, is there an argument that this could just be a temporary bull trap or a temporary euphoria and then it continues lower?
Uh, I'm I'm I am an optimist guy. So, I don't know what will happen after 90 days. Uh, but for sure after one years every single country uh would have negotiate with the US. So, it's just a question of time. I see. I I because the market uh expressed something. The market said and states the fact that US economy against the world, it doesn't work for the US. Mhm. Because the underperformance of the of the S&P since the election of Donald Trump was more than 20% against the Euro stock 50. So the market said, "Okay, US against the world. it doesn't for work for the US. But probably now uh if the European countries doesn't negotiate uh with the US, they know in advance that they will lose everything. Mhm. Because uh Chinese will uh sell all the their product in the Europe. So the the European industry will collapse totally. So they need to negotiate. Everybody has to negotiate. So after this um let's say Trump tested the market the investors showed that US versus the world is not a positive route you should take. Do you think now Trump is coming into these negotiations with less power or less leverage because everybody saw the reaction?
I am not sure. I am not sure because uh for the moment uh it looks that he will win because uh Thailand, India, uh Vietnam, they all said okay 0% tax on US goods. Okay. Uh in Europe you have Italy and Spain uh they want to negotiate. France and Germany country doesn't want to negotiate. probably there will be a good deal for the UK and the US also. There's a very strange situation between Canada and US. We'll see. It's very very very very strange. I don't really understand but probably they are very close. They know they know them each other very well. Uh so I think they will find a way to work together and then the real target is the Chinese. So but Chinese they want to negotiate and uh US wants to negotiate. Look at the end and I think the first minister of Chinese is here not for ideology. He's here for his own healthy also. So they will find a way. It's like uh Putin and uh and and Trump at the end they all have the same interest.
Do you think it's true when people say that China doesn't need the US as much as the US needs China? We don't really know. Nobody don't really know because it's like the the tariff. Okay. When you you make a car in uh in the US, first you will buy some uh cow shoe from uh I don't know Mexico and then you will buy electronic system from China and then you will buy something else in Canada and then you bring everything in the US territory and you do something you assemble uh the component and then you go back to Europe because in Europe I don't know there is something special and then you go back again in the So you will put uh tariffs on each uh so they don't know actually they don't know how they can uh do something uh intelligent and it works. So probably they spoke about qualified product probably like iPhone but because I don't think an American guy wants to buy an iPhone at $3,000. Exactly. Or today they produce 20% of the iPhone in the India and tomorrow it's going to be 40%. But in the meantime it's going to be a nightmare for for Apple. So I think all those situation is really a lot of noises to have a better place to negotiate.
Do you think with with a lot of uncertainty no matter what the markets including forex including commodities that we are in a time of all-time high of uncertainty? No. No. No. Not at all. Because you know when you you if you measure the uncertainty by the volatility of the market like the VIX index or V2X on the European side index uh during the coide the VIX index uh was at 95% at the top at the at the top during the the tariff term it was at 50%. Okay. So it was it was not a position of crash or real uncertainty because and if you have a look on the sector's performance performances you you see that the defensive sector in European market uh went up so that mean okay there is a lot of investor are going to sell the cyclical part of the market and buy the defense inside so they don't put their money in cash so it's just a game. You're right. I see.
What do you think is driving maybe even like I say Bitcoin is is kind of flying at the moment. Most specifically gold cuz gold didn't even have a dip. It's been rocketing as a safe haven. I was using that as an index to say okay the the world is uncertain so they're going towards to gold. Is that a correct read or do you think there's something more going on? No, no, it's right. But what is very interesting it's like uh for me it's a bitcoin because okay there is a lot of uncertainty. So everybody wants to buy gold, right? I think it's a mistake because uh if the war in the Russia stopped ended the the gold will drop sharply. You think a big influence of gold prices right now is the uncertainty of that war? It's a part of it. Wow. Okay. Okay. uh and if the the war ended uh US and maybe the world economy will have access to commodities at the cheaper price because of Russian production because of Ukrainian production. Ah okay. And and that's significant. Yeah, very significant on the wheat and the the soft commodities. Ah I see. So uh it's going to be easier to import from Ukrainian and al also from uh from Russia for the oil and gas for example specifically for the European countries. So the inflation will maybe decline a bit thanks to this situation. I see. Um, so the the geopolitical situation for me is really clear. The the way they want to go is very clear. It doesn't seem like US is particularly trying to help influence the end of this war from from the things that I see which is limited. What is your view on that?
No, I I think the most powerful guy in the world is Putin though more so than Trump. Yeah, probably. Yeah. Wow. And uh but uh no it's very uh no because first of all we have to take back few years ago uh you had the end of the the war in the Middle East when only when the Russia came into the the game. True. And finish everything and then few years after you have the Ukrainian and the Russia uh fight it together. Right. But I don't think Zilinski woke up a morning and said, "Okay, I want to to join Otan." He uh probably he was forced or pushed by the US. I think the US wanted to have more precision about Russia army. I think it was also expanding NATO to the doorstep of of Russia. Yeah, definitely. And now I said okay we saw Russia is not so strong and Russia now the in the army you have so North Korean guy you have a Chinese guy they fight together so he said okay Russia is not so strong uh I think this is the first element but Putin it's for him it's everything is okay it's under control so they have to find uh both uh a way comfortable to end the the war and uh the discussion will be between Trump and Putin. So the current uh situation that we saw in the White House with Zalinsky and Trump and and that attitude it very clearly showed me that it's not a partnership, it's not anything. It's a very like inferior superior kind of dynamic down to how they would even address each other. I think that's also a reflection of of that war alto together with the things we're talking about now of just uh elections and and wars and all these kind of topics. It's implying to me you're more of a swing trader in in the in the hedge fund days and also at this moment when it comes to swing trading in general. Do you believe that having a strong fundamental fundamental bias is the most important thing and technicals comes after
for me it's 50%. Okay. You have to understand the trend and you have to understand uh if you where you are in the market cycle. So it's more a macroeconomic view on analysis and then the technical will give you the timing uh the trading map the riskreward and the what you want to buy or sell because if you if you are bullish on the market either you really bullish on the market you just want to buy an index or is better to buy some stocks or some forex some currency to to play your view actually and uh like that and for this part I use the technical
When you mention timing the market, are we talking just about let's say a market structure, demand area or is it more relate? What else could it relate to? Uh probably um you can have a very good idea, very good uh investment case and you're right, but if you don't buy your ideas at the correct time, probably your ideas will can lose money. Mhm. So market timing is everything in trading. So uh if you want to go short on the market during the coide uh at the beginning of the coide and you say okay I just wait one or two days you just uh you miss 20% of the move. Mhm. So the market timing is everything and and in this case let's say when you have a V kind of reaction as you're saying now it's the price is tapped in. It's already it's already up 10% from from where it was. I'm talking about the S&P 500. Yeah. Do you think then it's still sensible to wait for a retracement and then get in or dollar cost average or do you think the best opportunity is always in that in that initial timing?
Yes, the best opportunities is on the key level. Okay. So, and if if you want to find a key level, you have to make uh an analysis on the long-term charts. Uh because short-term charts doesn't work when you have too much volatility. The long-term charts you mean like the weekly and daily time frame or okay and and the flip side of me is thinking how do you avoid catching a falling knife like it's just going down and down and you don't want to you arrive to a key level but at times you can blow through the key level too. Do you wait for any sense of confirmation or rejection on those levels?
Good question. First of all the intermediate support you can just forget them. Okay. meaning 1 hour 15 minutes. No, meaning uh intermediate intermediate u trend you know you have the main trend since 2020 is very clear. Yes. Uh I can show you actually I have my computer somewhere. Sure we can throw some things on the screen as well. Yes. Um it's very clear. So when you touch this level you know that if you are above this level the bullish trend still remain in place. And if you are under this level, so uh probably you you start a bearish trend on the medium-term point of view. So you can buy uh straight this long-term support this key level with a straight tight stop loss for example. It's the first way to do it. But when you have since 2020 this kind of move, all right, your support is here. But here you can find an intermediate support. Yes. in between those support when you have a lot of volatility you can just uh ignore them because it doesn't work and on the flip side or let's say the devil's advocates of this is you have a very clear obvious level that you can see I can see and the rest of the world can see so if everybody is waiting for that level maybe the market doesn't even arrive there and you get you get a a premature reaction or something changes like a Trump tweet exactly in these cases I know I'm talking about a very specific scenario which is happening right now but in general in the markets uh you might have an idea and it doesn't meet that idea. How do you then react accordingly if it's not come to your key level?
I think it's very very very good question. Uh when you are on a key level most of the time the market reversed without any news just the time for investor to come back in the market. I see. uh when you are above this level you didn't touch it yet but the market reverse most of the time is because there is a news and is that important or is that more noise it's a it's a no it could be it could be important also it could be important also because to uh feed a bearish market you have you need to have every day uh bad news fear and bad news and bad news again worst and worst and worst uh after 20 30% losses if the market has to continue to go down he has to you need to have more bad news not pressed yet. Mhm. Uh so it's not so it's not so easy. It's like on 2008 and 2009 at the end when uh the market said Goldman Sachs has only two days uh uh liquidity in their balance sheet and after that it's bankrupt likely month. Okay. This is the end. Yes. Yes.
when it comes to uh involvement in managing large funds is because I I'm I'm completely uninformed. Are you managing the books in the sense of put some P put a dollar cost average in the S&P, put some in gold, put some in the bonds and kind of hedge around in the markets or are you deploying large capital for specific trade ideas? Normally uh in hedge funds or trading in banks even if trading in banks uh disappeared uh globally uh you cannot do everything you are focused on your process. So your process is long short equities is uh volatility is options it futures whatever but uh it's very rare to be able to trade every asset classes. Is that simply because you have a responsibility to your clients of No, because larger returns than the market. No, because you sell a process and in your process it's specify specifically uh writen that you can uh your universe of investment is this one. And the regulator enforces that as well. Of course. I see. Yeah. Of course, you have what we call the shitty ratio globally. With 10% of your assets, you can do whatever you want, trust more. Yeah. With that 10%, what do you think hedge funds are doing these days? Because I'm seeing a lot of Black Rockck and and other firms getting involved with Bitcoin. Yeah. I think all those hedge funds are very very uh you know, specific. Each trader has to to invest on a very uh limited assets. Okay. But there are there are maybe 1,000 of them.
In general, just out of curiosity, what is your view from the professional background that you have and the professional education that you've had on the cryptocurrency markets? To be honest, I don't really understand the cryptocurrency market. Okay. Me, I have uh on my in my uh bank account, I have US dollar, I have dam, I have euros, I have Swiss Frank, I have pounds. If I want to buy a Tesla, I just use my US dollar account. Why I will I have to lo to to use a bitcoin? I don't really understand. What about just as a aside from utility, just an investment vehicle? Because we can see it does outpace on a on a monthto-month, it's a lot of noise, but on a annualized basis, it beats the S&P. Yeah, it depends. Yeah. Yeah. Yeah. I I have to check. uh you don't have a formal position on it or view on it necessarily. Fair enough. Uh when it comes to this topic of risk which we we mentioned earlier on I wanted to come back to it once I understood your technicals and fundamentals view uh you c
Of made a claim that it's, it's one of the most important things that held people back, uh, that you noticed in your peers or, or a very significant portion. How did you navigate managing that pressure that you, you mentioned certain of your classmates couldn't, uh, to have hundreds of millions of dollars that are responsible under you? What does that feel like? Uh, when you're placing a big trade and you know it's, this is a large amount of money. What, what are those moments like? Because you, you have to think about, uh, relative performance and not in terms of, uh, absolute dollar. Is that something you can do? Like, of course thinking in percentages will help, but you know, in the back of your mind, okay, this percent means this in dollars, I guess it's hard to escape.
No, because in terms, when you work, uh, for an goal, of course, is to raise the more fund as possible. So to manage the more fund as possible, but what wants your investors, they want to have a good return. So you always have to think about returns, not about US dollar or absolute, you know.
Okay. And, uh, but when you manage a lot of money, you, you need to pay attention of the liquidity of the market. You have a lot of different things you have to, to look at. Uh, if you manage 1 million euro, it's very easy to buy and sell and buy and sell. And when you manage 700 million or 1 billion, it's very hard to buy and sell at a good time. You have slippage. Okay. So this, this is more important this way because, uh, sometimes liquidity on the market is very low.
At what amount of assets under management do you start to face these liquidity issues? Uh, I was, uh, PM in H fund in, uh, 200, 267, 567, uh, liquidity was lower, uh, and above 500 millions, it starts started to be difficult to trade my way. Of course, I see if, if you are award and you take a huge position on futures, it doesn't make any differences, but, uh, my way, me, I, I like to take a big position with a strong view and to trade this position, uh, not every day, but, uh, on the specific levels.
In the 80 years that you were involved in the hedge fund, how often did your thesis or strategy or ways of trading change or evolve, let's say? Yeah, I think, uh, the main change was after the financial crisis. Okay. With the policy, with interest rate at zero, it was all the metrics we used, the, the value metrics we use disappear totally, was totally inefficient. Let me explain you why. Because when you manage a big mutual fund with billions and billions under assets under management and your mandate is to buy, uh, corporate bonds or just fixed income with interest rate at zero, uh, you make less money than the management fees. So all those guys has to find a proxy to the bonds. What they did, they just go to the equity market and to buy and they bought equities with, uh, specific axis like high dividend, quality of results, uh, quality of management, uh, sustainable growth over the time. This is why, uh, we paid, uh, L'Oreal, for example, the French company. L'Oreal is very nice company with, maybe 8% organic growth every year since 20 or 30 years, uh, with, I think 11% operating margin, and we, the price earning ratio was historically around 15 to 20, but, uh, in two, let me, let's say, yeah, to 2014 until 20209 or until the COVID, actually, I think the, the PE was above 40. So it was totally crazy, make no sense, right? And the only way to explain that is just to understand the structure of the market, who make the price, and the mutual fund met the price at this time. And if you don't have this view, you cannot understand why you pay L'Oreal at this price.
What was your best year of performance? It was, uh, in 2001. I achieved 17%. 2005, I achieved 15%. 40% mean, but with very low volatility of the performance. And, and what was the difference between these years where, where is your best performance and the year you had a 75%? Yeah, at 75%, uh, I was eaten by.
Even though you didn't lose money though, it was still. Yeah. No, no, no. It was, I think the first three months of the year was really good for me. Okay. And globally, the first three months of the year are always good for me because this is the moment where the big investors start to build their position for the year. Okay. So you can see the flow, you can, you can see in the chart the trends moving, right? So you can take benefit of that very easily. And then you have corrections, and those correction are sometimes very difficult to address. And after that, you have the summer. And in summer, if you are not in the good way, normally there is very less liquidity. So all the movement of the stocks market are wider. And I was not in the, I was not in the good way. So, and I was on holidays in Namibia, I think I remember. Okay. And I was eaten by two or three profit warnings. It was on 2011, I think, something. No, no, no. Uh, 2004. Yeah. 2004 was my worst year. And, uh, I, I, I took the profit warning badly on Nokia and three or four big names like that. So when I came back from holidays, I was, I was up before the holidays, four, 5%, and when I came back, I was down 3%. But it was a very good lesson because when you on holidays, just cut your position. Oh, okay. Even though you had infrastructure and team and so forth. Yeah. Your position is your position. I see. You cannot, uh, ask to your junior guy to cut your position if you are not here. You could, but, uh, the best way, just cut it. Okay.
And what was your reaction like after that, in terms of you've taken a, after a vacation, you've taken a sizable loss on your portfolio? What was the route to recovery or what was your mentality like afterwards? I took lot of position, but with a smaller size to recover step by step. Step by step. As a trader, it's very simple. You have to find an edge, and then you have to have a mind so you can follow that edge. But how do you know if you're performing correctly or not? You have to know your data. And Tradzeller is going to show you everything that you need beyond the surface level win rates and performance and equity curve. It's going to show you detailed reports. It's going to be your back testing tool, strategy testing tool, playbooks, notes, and it's going to be a full journal. It makes your journaling easier, faster, and more meaningful. Whereas, if you were just documenting on an Excel spreadsheet or taking screenshots on your iPhone, you wouldn't be able to pull out the data that you need. The correlations that the AI within Trade Zelda is pulling out for you. There's so much variety and utility within the software that I think it's essential for any trader. So the link somewhere below is going to take you directly to the Tradzella website. I'm not getting paid. This is for you. If you want it, if you like it, go ahead and explore it, and probably you'll be using it for years to come.
What is your philosophy on this? Because I've also heard the flip side, uh, where it's like if you're 50% down, it's 100% to return. Meaning like, and, and if you reduce your risk, then it's going to take even longer. And then the mentality of being in draw down or being in the negative for even longer because you reduce risk. There's that side, but there's also, okay, your emotions are sky high, so reducing risk is a more sensible. How do you play with both sides?
But no, I think you have to put in place some sets of risk limits. And on your total portfolio, you cannot accept to lose more than 20%. It's not for me, it's not, it's not possible. After 8% draw down globally, I start to decrease all my position. Okay. Because it means that there is something changed in the market, and I don't, I didn't understand it. So I just need to decrease my risk.
You decrease your risk to try and solve what's going on or wait for the market to go back to another cycle? Both. Okay. Actually, both. You have to understand why you didn't perform. You don't perform actually, and, uh, how and when you need to come back more stronger in the market. You need confidence to make money.
How much of an influence does the election cycle have on overall performance? Election, election cycle, like election year, and then midterms, and then pre-election, and all of these things that change policies and narratives because some, sometimes, um, some presidents, some situation are very well known and nothing will change. The big changes we, we met, we saw it was the Brexit, probably it was not unexpected. Uh, the first election of Donald Trump was totally unexpected also, and it changed a lot. Brexit changed a lot of different, a lot of things. How so? The, the pound dropped so dramatically, everybody go short on the Footsie, on the UK market. But when with the, the pound dropped so sharply, every smart investors bought, uh, UK name, exporter UK name, actually, and it works perfectly. And you have to understand that with the pound at a very low level, the UK market, which is turned with the outside country, it's an export country, uh, you have a lot of opportunities to make money.
A bit of a different question, but I, I thought it's a good opportunity to ask. So I was watching some video maybe like two weeks ago, and it was talking about how every member of parliament has to disclose their positions. Yeah. Publicly. I think there's a bit of a delay between them taking the trade and maybe a few weeks or one month later, it becomes public knowledge. But it's very fascinating to see how members of parliament in the US, specifically, they were talking about Nancy Pelosi, and how she has historically in her career beat even the best of hedge funds every single year for an extended period of time. I think pointing towards insider trading and these kind of things. Is this something interesting to you that, you know, we can see the, the positions of people in, in power and kind of piggyback their ideas? This, this video even said that there's an app that has kind of made index or an ETF out of members of parliament's positions, and you kind of follow along, and historically speaking, you will beat the market just by following members of Congress. Do you think there's anything interesting in there?
Yeah, totally. I think, uh, they know a lot of things that we don't know. First of all, for sure, that's how the world works here. Secondly, I think you see only a small part of their portfolio because probably someone else take position for them.
Do you think they're heavily monitored to stop that, or it's kind of they turn a blind eye? Totally possible. I don't know. But, uh, globally, uh, if, uh, I was on a politician, guys with a lot of information, I want to take benefit of them. I won't take position on my own name.
At the highest of levels, we're talking hedge funds that have tens of billions or even more in in capital. How clean dirty is that game where it's just, you're naive to maybe think that it's, it's going to be all just great traders. It might also just be a lot of inside information and who you know and, and how close you are to Trump and these kind of, you know,
Um, I think they are good. First of all, they are, most of them are very good trader. Uh, secondly, there are big films, so there are a lot of information, a lot of analysis, analysts inside the films, a lot of, uh, IT guys, uh, able to code a lot of different models, so they have a lot of information. So they normally have to beat the market on a yearly basis, every year, because every, everything is made for them. So, and in top of that, they are very good. And secondly, uh, the inside information is not so easy. Uh, you, in my career, I had a lot of inside information, but maybe 1% of them works. Oh, interesting. Okay. Okay. So it's not just like an easy blueprint if you. Definitely not, except if you are the CEO of the company and you know that you're going to sell your company. But, uh, if you just hear the rumors of the market, you have to interpret them. And, okay, but of course, um, it's a bit touchy, but if someone told me, okay, I heard that, uh, this company will be taken over by this one, and I know the company, and I can have a look on it, and if I see an increase of the volume of transaction, and I see a lot of different indicators moving in the same way, okay, probably it's real. But I do the work. Thanks because I heard something, but I cannot challenge this information. I don't know if it's true or not.
We mentioned that in 2000 compared to now, 2025, how you don't think too many things have changed. The market is cyclical and follows that same behavior, but at the same time, we can also see that the world has changed. AI, tech, quantum computers, just the level of education of the, the, the industry. Where do you think the future of the, the industry is? And do you think it's going to have more dependence on AI and bots and these kind of things, or do you think how it has been will always stay how it is?
But you know, if, if everybody do, uh, the same things, there is no opportunity to make money. So, uh, AI, okay, we do data crunching for 20, 40, 50 years already. So it's the beginning of the AI. AI, you put the generative AI, you put all datas you have, you put in the algos, and you have some input. Uh, we, when we create models, we select what we want to put in the models, that the data. This is the difference. But it's the same prospect, actually. It's the same process. Um, and I think, uh, today, uh, the biggest hedge fund like Citadel, Millennium, Exodus, all those guys, they have a lot of very, uh, performer trader. But this one do only the industrial sectors. This one do only fixed income. And I think, I think the futures of the trading is, was exactly the beginning of the trading is, is to have a view on every asset classes. Okay. It's a global macro view.
I think this is the future of the trading. As technology advances and you have involvement in bot algorithmic trading and developing them, do you think the future is going to be more algorithmic and, and therefore less emotions, or do you think there's always a space for manual discretionary trading?
Yeah, but you know me, I don't like, uh, the systematic trading because when you put a system in place, you have to follow it. Is that a good thing? Yes, but, you know that, uh, there is no trading system works every day. So when you have a big draw down, you have to continue to do what the model says, right? And this is the way I don't like. It's not me. But you, you have to be comfortable of what you are doing on a daily basis. So for some, some, some IT guy or for some engineers, they like this kind of way to work. Me, I, I just use the alos and the system to have more informations, but I like to say every morning, okay, I think the market will go up because of that, that, that. Okay. And, uh, and if I'm wrong, because if you follow just models, if you start to build a draw down, uh, and the draw start to become very big, uh, it's very comfortable to say, "Oh, it's not me, it's a model." Yes. When on the discretionary trading, okay, it's only you. It's not the model. Trading. Yes.
How much of an influence do you think intellect IQ has on the performance of a trader? Yeah. Um, of course, uh, the biggest IQ you have, I think the, the best trader you, you could be. But, I think tra, you can, uh, learn trading and you can learn the basis of the trading and make money with very simple things.
And how about if you are very, very disciplined guy? Yes, that's actually going to be my question. You might have a very intelligent person, but I, I would imagine the people that have more intelligence are also more overanalytical and overthinking. Whereas the guy that is a normal guy, he might also have the courage to actually do things and not be in analysis paralysis. So there, there might be the element of system and planning over there. How about just the ability to regulate emotion, excuse me, where you have people, even if you're in working in a professional environment, you have a risk team, you have a system, but you have drama in your own life, personal problems, financial problems in your own life. Is that a skill that you can eventually just master?
Yeah. Yeah. Yeah. Your envir, your own environment is very important in trading. And also, uh, you miss something because if you have a very intelligent guy, successful guy, makes money every year, this guy probably has a very big ego also and overconfidence. And the overconfidence in the market, uh, is not a good friend at all.
What is your views on, uh, the new age of prop firms like an FTMO and so forth? It's a good way to learn. Learn. Okay. Not earn. No. Learn. It's a good way to learn.
Why do you think it's a good way to learn compared to, let's say, deposit $1,000 into a normal brokerage account? First of all, um, the, the, the profession without money, and then you are in a real condition of the market of a trader. So you are, you are in the market. So you can analyze, analyze everything, every part of the trading, like the fees, uh, the latency, when I think something, I send another, when is executed, why the slippage, everything. You have to learn all of those points because if, uh, a bad execution in trading is deadly. Yep. So you, you have to, uh, manage every, everything. It's not difficult. It's really easy. But you have to be focused. Understand the fees. Understand the turnover of, of your portfolio. If you make one person by each trade because you do only scalping, but you pay too much fees, it doesn't work. So you have to understand all this part. And prop film, for me, is a good way to start. And when you are confident, go to broker. I think the, this is the, are the best. And you start really, but you have to understand all those, uh, small details to, uh, to, uh, to launch and to engage a lot of capital.
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If you are a futures trader, if you were a trader that didn't have the education and then you couldn't take the corporate routes, let's say, how would you have, uh, become a trader? Let's say you start with profits, you make a few payouts. You got 10, $20,000 in payouts. Where do you go from there? If you don't have an institutional route, you have to, uh, to train yourself. So, uh, you have to be coached by someone who is good. So, uh, we, a lot of people offers coaching. Me, I, I did, I do actually, uh, you, you can buy very good, uh, education, uh, and, uh, and start slowly. You, you, if you have an internet connection, you, you can go to Yahoo Finance and you start slowly like that, and you, you just train yourself. And if you go faster and more professionally, you take a coach.
How important was mentorships and guidance like this in your own career? How important was that? Uh, I think my experience at, uh, my first experience in hedge fund was, uh, critical. Without that, I think, uh, uh, I would not have been the trader I am today. Meaning guidance, coaching, all these things are me too. I'm a big advocate. Everything I've achieved in my life is either me searching on the internet or me asking and being coached by someone. I think learning from your own mistakes can also be, as you said earlier, deadly. You can fall on your face too many times and never get out. It's very easy to, to lose everything in trading. Yeah. Uh, trading is, uh, is, is based on experience. So you have to make mistakes, you, and to learn from them, and, and if you have a good coach with you, you will do your mistakes, but he will explain to you, and your mistakes won't cost you too much.
We spoke about earlier how you allow, allow yourself to have a bit of flexibility in your system, not just completely mechanical and, and, you know, you have your own, let's say, intuition involved. Intuition is something that I think can be powerful when you have the right experience. But, uh, at what point do you allow, should you allow intuition to come into your decision-making and, and, and not let it just be emotional noise?
Okay. For, for me, um, in this job, you have to take pleasure to do it. If you have intuition, just play it, just go. But as I, uh, explained to my, uh, students, if you want to survive in the market, you have to put in place a trading plan. And the trading plans is all the rules of your trading activity. It's like the, the size of your position, your stop loss, your take profit, the, how you will manage your position when it's open, everything. Okay. Okay. You think because, uh, you are just happy it is a sunny day and everything is okay. Okay, I want to buy the market. Okay, why not just buy the market, but you put your stop loss and you respect it. Yeah, that kind of, at the end, you have 50% chance that the market go up or down. So why not? I would say it's not a question. Of course, the trading is a very intellectual activity. Uh, and when I, I see a lot of video on internet online, say, okay, I do copy trading and stuff like that. Okay, I said, okay, it's, don't believe that it's. Okay, the trading, you have to have, you need to have an intellectual, uh, reason. Okay. You have to think what you do. You have to understand what you are doing. Uh, you have to, uh, masterize everything that is trading. So if you copy someone, you are not responsible of what you are doing. And on, in trading, you are, you have to be responsible of everything because your position is your position. It's not the position of someone else. Mh. At the end, if you make money or if you lose money, it's due to you, not to, uh, this guy or this guy or whatever. So this is the main point. But you have to follow your intuition. You follow your logical, you follow your work, your analysis, and just go. But you have to control your, your risk. This is the main point. Don't never see the P&L you can achieve or reach. Just see the max losses you allow to have on each single position you're going to take. This is, I think, the, the main rules in the, the main advice I can, I can give is this one.
That was actually going to be my final question. In your, I guess, 25 years in the markets and, and, and many cycles and all the experiences that you have, what would be the lasting advice you want to give to a trader who is on year one? After 20 years in the financial market, I didn't improve my French accent, first of all. Secondly, no, the, the be responsible of what you are doing. And just understand that you have to put in place a trading plan. The trading plan will force you to be disciplined, and that force, that allow you to manage your stress on a daily basis because just follow it. When you put in place your trading plan, it's based on, uh, objective criterias because you don't have any position at this time. When you have the position and things goes wrong badly, uh, you can be very too much emotional, you can wait, you can, whatever you can have the, the worst behavior as possible for a trader. If you follow your trading plan, you will survive. Mhm.
Silvin, very, very, uh, honored to have you on the show. I think your credentials speak for themselves and, and in the end, a wonderful episode also. Thank you for joining us. Thank you very much. Brilliant. There we go. Thank you.