MIB: Bose Weinstein, Saba Capital

This week, we speak with Boaz Weinstein, founder and chief investment officer of Saba Capital Management. Prior to that, he was the co-head of Global Credit Trading at Deutsche Bank, where he founded Saba Principal Strategies in 1998 as a Deutsche Bank-owned trading group.

He discusses how he internsed at Goldman Sachs, where he was distracted by the “killer rows of great people in the future hedge fund.” The work involves settling bets for traders who have debated all sorts of trivial matters. Pre-Google, settling bets on when interest rates were negative (WW2) and other odds involved deep dives into local libraries.

We discuss how Saba Capital has become the 5th largest owner of SPAC, investing very differently from the general public. He further explains how he is engaged in tail risk hedging, looking for an edge in asymmetric betting. He also recalled working with the New York Fed over the weekend to analyze what it would take to free up all of Lehman Brothers’ derivatives trades. LEH had 1,000 transactions out of 100, one of which Deutsche determined to release a dozen of them that weekend. LEH’s Derivatives took about a year to complete.

Weinstein recalls how he first came to the public eye as a fund manager who joined JPMorgan Chase & Co. Who warned about the London whale, a JPM trader who has acquired a huge position in derivatives for the firm. At a JPM conference, Weinstein explained that there was a high probability that the London whale took the risk and why it could go against it. When the trade finally sped up in 2012, JPM Chase incurred losses of at least $ 6.2 billion – derivatives from Weinstein Bank were on the other side of the trade, and the trade made the firm a profit of মিল 100 million.

Here is a list of his favorite books; A transcript of our conversation is available here Monday.

You can stream and download our entire conversation, including podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg and Acast. All our previous podcasts on your favorite pod host can be found here.

Be sure to check out our Masters in Business next week with Gerard O’Reilly, Chief Investment Officer and Co-CEO of Dimensional Fund Advisors, which manages 659 billion client assets. He is also a Dimensional Director. O’Reilly outlines the firm’s vision and strategy through daily oversight of the company’s people and processes.