Dmitry Balyasny - Building a Better Model - [Invest Like the Best, EP. 274]

My guest today is Dmitry Balyasny. Dmitry is the Managing Partner and CIO of Balyasny Asset Management, otherwise known as BAM. BAM runs a multi-strategy, multi-PM model that aims to produce consistent absolute returns. Since its founding in 2001, it has produced only one negative year and become one of the largest firms of its kind. Please enjoy my conversation with Dmitry Balyasny. 

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes. 

Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.

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Show Notes

[00:02:53] - [First question] - The origin story of his firm and the key stages of evolution

[00:06:43] - Describing the difference between good and great in platform hedge funds 

[00:10:25] - How a multi-strategy, multi-investor group works and managing capital allocation

[00:13:58] - What he’s trying to solve at the end of the day as their CIO

[00:16:21] - How close they are to their idealized end-state 

[00:18:26] - Typical amounts of leverage associated with these types of models

[00:20:22] - Lessons learned about incentivizing talented investors

[00:22:39] - Ways he tends to attract risk takers and their levels of variance

[00:28:15] - Other characteristics that are common amongst great PMs

[00:30:42] - The nature and source of edge and how it’s changed most over time

[00:33:19] - Some of the hardest portfolio and business decisions he’s had to make 

[00:37:59] - One of his most important business decisions on the firm side

[00:40:09] - How they’ve thought about shorting as a firm in general and more recently

[00:43:52] - How interest rates affect this style of investing

[00:45:29] - His view on the opportunity set in private markets and what does and doesn’t excite him about it

[00:49:42] - How reading Ayn Rand most shaped his thinking

[00:50:36] - Things Ayn most got right and most got wrong in his mind

[00:51:24] - What the war in Ukraine has felt like for him as a Ukrainian-American

[00:52:08] - Ways the future still has him excited as he continues to build his firm

[00:53:53] - Where his trading instincts draw him today and areas of interest

[00:55:11] - His most memorable trade of all time

[00:56:37] - In which order the major asset classes will be affected by digital innovation

[00:58:13] - The kindest thing anyone has ever done for him