This interview comes from the podcast In Good Company by Nicolai Tangen, chief investment officer of Norges Bank Investment Management. Norges Bank Investment Management manages the world's largest sovereign wealth fund, the Norwegian Sovereign Wealth Fund. As of the beginning of this year, the fund has reached 16 trillion Norwegian kroner (10.78 trillion yuan). According to Prism statistics, its return rate in 2023 reached 16%, and the annual floating profit was 222.2 billion Norwegian kroner (1.5 trillion yuan), a record high. From a more intuitive perspective, it is equivalent to giving 5.534 million people in Norway 270,000 yuan per person.

It can be said that Norges Bank Investment Management is the largest buyer in the financial sector on the planet, which allows Nicolai Tangen, the chief investment officer, to interview almost any industry leader. Today, the protagonist is Ken Griffin, CEO of Citadel. It can be said that Citadel was the most dazzling star on Wall Street in the last round of dollar issuance cycle. In 2022, it even created $28 billion in revenue. After entering the interest rate hike cycle, Citadel still maintained a good performance.

As CEO, Ken is like a rock star. He is reported in the news of buying things almost every month. He bought the most expensive apartment in US history for $238 million, tried to acquire the NFL Miami Dolphins and its home stadium, Hard Rock Stadium, for $7.5 billion, and purchased a portion of the shares of the F1 Miami Grand Prix. In addition, Ken Griffin also has a lot of fate with the Crypto industry. His market maker business Citadel Securities has been involved in cryptocurrency trading for a long time and has become one of the mainstream liquidity providers.

At the end of 2021, Ken Griffin also won the auction of a copy of the U.S. Constitution for $43.2 million, snatching this precious relic from People Dao. Even many industry practitioners believe that Citadel is the mastermind behind the collapse of the algorithmic stablecoin project Luna/UST in 2022. Ken Griffin personally led the short-selling of UST in May 2022.

In this conversation, Ken Griffin talked about many hot topics today, the current state of the US economy, the impact of remote work on technology companies, and how he views the AI bubble. In addition, Ken also talked about Citadel's business philosophy, principles of recruiting talents, and how to face today's unpredictable market.

The following is the full interview:

The financial path of the giant crocodile

Nicolai Tangen: Welcome to today's podcast, we are honored to have Ken Griffin, one of the best investors of all time. Ken started his financial journey in a Harvard dorm room, founded Citadel, and had great ambitions to become the most successful investment firm in history, which is exactly the kind of ambition we like. Welcome Ken, it's great to have you join us, and thank you very much for taking the time to participate in this interview. So first of all, what got you into finance?

Ken Griffin: I have always been interested in the stock market for reasons I don’t quite understand. I wrote an essay in junior high school saying I wanted to understand how the stock market works. That makes me almost 40 years on this path (Ken is 55 years old), but I still feel like I am at the beginning of the learning curve. The global stock market is full of interesting and complex issues, the intersection of business models, earnings, and investor psychology. It is really an endless field. I am always learning, trying to understand how to value a business and how to be a successful investor in the stock market. It is simply the most complicated game in the world.

Nicolai Tangen: When you started in your Harvard dorm room, what was your vision? What did you think the industry might look like?

Ken Griffin: A funny thing is, I bought two put options on HNSI (Home Shopping Network, which was delisted in 2017) in my college dorm room when I was a freshman. In part, I have to thank good journalism for launching my career with an article by Gret Morgenson of Forbes. She made a point in the article that HNSI was the meme stock of the time. I liked her point of view and bought these two put options. Fortunately for me from a career development perspective, the stock subsequently plummeted and I made a few thousand dollars.

Ken Griffen at the 1989 college graduation ceremony. Image source: The Harvard Crimson

But you and I both know that when you’re a freshman, making $2,000 or $3,000 is incredible. When I sold those puts, the market makers quoted me less than their intrinsic value, which got me interested in the pricing of derivatives. I realized that I was lucky to buy those options after the stock crashed, but the market makers made a risk-free profit. I really, really wanted to understand the pricing of derivatives, so I started to understand the pricing of convertible bonds, which was also the beginning of my understanding of the hedge fund industry in my college dorm room.

Nicolai Tangen: Do you think there are as many market opportunities now as when you first started?

Ken Griffin: I think the opportunities today are different than when I started. Obviously, how to price derivatives is well known, and there are a lot of Masters and PhD programs around the world, and degrees in financial engineering. So the overall level of knowledge in investing has really improved a lot. But conversely, today the market is much larger, it is global, and the product diversity is much richer. So there will always be niche opportunities for investors to gain insight and gain a competitive advantage in trading.

Nicolai Tangen: What mistakes did you make when you first started out in the industry, and what did you learn from them and improve on?

Ken Griffin: I've made almost every mistake I could make, and unfortunately, I've made some of them twice or even three times. But the key to finance is to try to learn from your successes and failures. I think a common mistake people make is not studying their own successful trades, they don't try to understand what they did right in that successful trade.

Let’s be clear, in finance, you make money when you have successful trades, and we all tend to put too much emphasis on learning from failures and not nearly enough on learning from successes.

Nicolai Tangen: So what is your trading strategy that has been a huge success for you? I mean, if you were to summarize your trading strategy, what would be the most successful thing?

Ken Griffin: Where we are most successful as investors is that we have a clear competitive advantage in absorbing information, processing information, and reacting to information. That's what we do best. So we structured the company on the principle of a "research business," and the core of this business is research, whether it's picking stocks or predicting the weather to trading commodities, first and foremost it's a research business, and trading is just how we monetize research, it's that simple.

The U.S. economy, online work, and the AI bubble

Nicolai Tangen: So based on all the data and research that you've collected, where is the U.S. economy today?

Ken Griffin: If you look back at all the data that we have, we are in very interesting uncharted territory. You and I have studied economics in some form our entire lives, and let me ask you this: Have you ever imagined a society in the United States with nearly full employment, inflation around 3%, and massive government spending going on?

Nicolai Tangen: No, I would not have anticipated that.

Ken Griffin: We are in uncharted territory, we are at that stage in the cycle right now where we are trying to pay down government debt, trying to get fiscal consolidation in place so that we have fiscal flexibility when the rainy days inevitably come, and yet, at this very moment, the U.S. economy is growing almost at or above capacity and the government is still spending massively.

The massive fiscal stimulus is leading to higher inflation in the economy than we expected to see, which puts the United States in a more dangerous long-term position and will give us less freedom to deal with the next crisis, or even, unfortunately, a depression.

Nicolai Tangen: You often emphasize the crisis of fiscal deficit. Why are you so worried about it?

Ken Griffin: You and I grew up in an era of fear of crowding out, where the size of government deficits around the world displaces private sector demand for capital. Of course, that fear still exists for those who think about the very long term. How do we make sure we don't crowd out the private sector to boost government spending?

But there's another important point, which is the issue of fairness. You know, there's a lot of focus on fairness around the world today. For example, are we getting too much income inequality? In a way, we're borrowing money from the future, from our children and grandchildren, right here and now, to maintain a standard of living that's not consistent with productivity or the work culture that's emerging in advanced economies. From an intergenerational fairness perspective, it's really unfair that we're spending so much money in the way that we're spending it.

Nicolai Tangen: If you were advising the president, or actually handling this issue, what would you say is the top priority for the country?

Ken Griffin: I think the first priority is that we need to increase productivity in the Western world. Nothing is more important than that. This is an important path to maintaining prosperity, both in Europe and in the United States.

Nicolai Tangen: How do we improve productivity now?

Ken Griffin: You and I both know that we need to improve our education system, especially in the United States, where K 12 education puts our children at a substantial competitive disadvantage compared to the rest of the world, and more importantly, at an absolute disadvantage in life, where they are not exposed to the ideas and concepts that will enable them to win fruitful careers.

The second point is remote work. The phenomenon of large-scale remote work is undoubtedly reducing mentoring, collaboration, leadership development and innovation. It is time to get our people together again to collaborate, mentor and develop leaders so that in 20 or 30 years we don't fall into the terrible situation of severe leadership shortage in the Western world because of the way we work today. I am worried about this.

So there is no working from home at Citadel, we are all back in the office, and the better part is the impact on mental health. Remote working makes it difficult to separate life and work. It's great to see my colleagues working passionately and happily at work while maintaining the separation between personal and professional life.

Nicolai Tangen: What else do we need to do besides education and returning to the office?

Ken Griffin: Education, returning to office, but also prudent government regulation, encouraging entrepreneurship and entrepreneurship, promoting the growth of small and medium-sized enterprises, and promoting increased economic competition are all very important. The West must continue to develop trade policies that truly realize the benefits of free trade between North America and Europe. So some of the tendencies towards protectionism, we really need to think about pulling back and creating greater economic integration between the two continents.

Nicolai Tangen: Now when we look at all these things, is the stock market in a bubble? Or how do you see the stock market?

Ken Griffin: You know, it's always very difficult to determine whether you're in a bubble, because even if you're in a bubble, you're pricing assets very clearly. Can you and I go back to the dot-com bubble and what we were talking about at the time, and do you remember some of those conversations?

We were talking about how e-commerce was going to revolutionize the way we get stuff, and metrics like “time spent on page” became the dominant metric for pricing securities, but we created an entire terminology, vocabulary, and framework to justify and rationalize the bubble. Now what’s interesting is that jumping forward 20 years, many of the things we thought would happen in this revolution actually did happen, and many of the largest companies in the world today are actually businesses that are symbolically related to or similar to the internet phenomenon we envisioned.

So what's interesting is that we had the right thesis, we had the right idea, but people just lost their minds on valuations for a period of time.

Nicolai Tangen: Are we now caught in the AI valuation frenzy again?

Ken Griffin: The AI craze is really amazing, and it will be very interesting to see how quickly the success of AI is integrated into our daily lives and the way we do business. However, the second trend that is happening now is the importance of your chief information or chief technology officer in the executive and boardroom positions is rising again. People are starting to really focus on digitalization and using software and analytics to improve the business.

So what’s really interesting is when you talk to CEOs, they’ll tell you how their company is embracing AI and how it’s having a profound impact on their business. But if you dig deeper into those stories, you’ll find that there’s no AI involved at all, but rather the adoption of modern technology capabilities and digitization that can really improve and enhance businesses in the U.S. and Europe.

Therefore, I find that the really great thing about AI is that it allows entrepreneurs to re-emphasize the importance of technology and provide goods and value to consumers more efficiently. At Citadel, we use AI in many ways to improve the daily productivity of team members. We will use AI in the next two to three years to help draft emails, summarize research reports, understand or write memos and other documents required for daily business.

For example, we use AI to help label data, and then use it for some very important tasks, like how to help our software engineers be more productive. So in our company, we have all kinds of applications of AI. If we look back at machine learning, it's in some ways the most important part of the evolution of AI. At Citadel, we've been using machine learning for about eight or nine years, and machine learning plays a very important role in how we think about asset pricing, and occasionally in how we think about asset risk management, but in asset pricing, machine learning really plays an important role.

How to manage a portfolio?

Nicolai Tangen: Ken, I want to go back to your vision for Citadel, what was your vision for the company? When you started this company, what did you think it might look like?

Ken Griffin: Well, it’s a trip down memory lane. When I was 20 years old, I had the opportunity to manage a million dollars for a fund of funds company in Chicago.

They promised me that if I did well, they would help me set up my own fund and help me raise money. So Citadel started a little over a year after I graduated from college, and we raised about four and a half million dollars in November of 1990, and we started a strategy of trading equity-linked derivatives, convertible bonds, and warrants. That was the genesis of Citadel.

Now there are a few key things in this story that are important, the first being that I believe you can use math and software to help understand these pricing relationships, an area where most of the world is still using pen and paper and rules of thumb. I remember back in the day we hired a rocket scientist to help with these pricing models, and a friend of mine from a big bank literally laughed his head off when he heard how we were doing it, and he said, “You’re not trying to put a man on the moon, you’re trying to trade bonds.”

Ken Griffen at Citadel, source: WSJ

Now, more than 30 years later, the bank he worked for no longer exists, while Citadel and Citadel Securities have become two of the most important companies in the global financial market. To the extent that we have successfully ridden the wave of the rise of mathematics in finance, this wave has passed. We now take for granted the extensive use of mathematical concepts in the financial industry, which were actually first applied in our daily work in the 80s and 90s.

In dealing with this wave, I think the biggest challenge is that you have to cultivate your own talents. In the early days, you have to hire people with very different backgrounds, which are usually rare on Wall Street at the time, such as physicists, nuclear engineers, and mathematicians. You have to hire people with very different backgrounds from the typical Wall Street traders, and you have to teach them financial knowledge and let them participate in solving problems such as the value of derivatives and the value of complex securities. There is a knowledge gap between them, which requires us to help balance the different views between those responsible for investment and those responsible for analysis, and try to bridge their differences.

Nicolai Tangen: Your ability to innovate and expand in the financial sector is quite unique, so why do you think you are so successful here?

Ken Griffin: I think some of the things we do are very different from most companies. Everyone thinks that investing is an art, but we think that investing is also a science. As we run this company day in and day out, we really focus on the combination of the art and science of investing and how to make our investment decision-making process work well.

The second point is that I believe our hard work in analysis and learning has brought us rigorous investment discipline, from which we have created differentiated insights and given us confidence in capital deployment.

The third point is experience, which is the wisdom gained from our past losses and pain. My leadership team and I have been through many difficult times in the market together. We have learned some very painful lessons, but this has made us better investors during turbulence and crisis.

Nicolai Tangen: Another thing that happened during this time is that passive capital and short-term capital became more prevalent. What impact do you think this has had on more long-term fundamental investors like us?

Ken Griffin: This is very interesting, the rise of passive investing suggests that markets are either efficient or semi-efficient, and that investors can get exposure to broad indices of the entire world or specific industries at a lower cost without having to pay for active management. This embrace of passive investing has been revolutionary for the industry, but passive investing only works when there is a group of people doing fundamental research involved and helping to price the securities.

Therefore, passive investing requires capable, successful, and competitive traditional asset managers to make the theory of passive investing work. The increase in short-term investors will help ensure that markets remain efficient in responding to rapidly evolving news information, but we should really do everything we can to ensure that traditional asset managers prosper and that they maintain their research and investment capabilities, as they are critical to the price discovery process that passive investing relies on.

Nicolai Tangen: So given all of this, if you are an average retail investor, what should you do?

Ken Griffin: If you are a lawyer, dentist or teacher with a full-time job, I think the best way to make money depends on your position in the financial market. You should choose to invest in a broad stock index product or a widely managed actively managed pool of funds. For example, you manage the Norwegian sovereign wealth fund. I know that you are very focused on investing a considerable portion of the funds in stock indices. The strategies you have developed around the world over the years have enabled you to obtain comprehensive growth and profitability of countries around the world at a very low cost.

It's a very deliberate way to deploy a large amount of capital that you have, and you're also investing in assets other than equities, and then using a variety of strategies based on what you think are the relative competitive advantages of your internal team and external managers. This is the way I would recommend any large-scale capital management to do it internally in a cost-effective way and find what you think are the best managers around the world to get a diversified portfolio.

How to build a good investment team?

Nicolai Tangen: I totally agree with you. Now, 34 years after the company was founded, we have the report card, you are very successful, how do you stay ahead of the curve? How do you make sure you still stay hungry?

Ken Griffin: There are a lot of different aspects to this question, so let's break it down. How does Citadel continue to thrive? We have an incredible leadership team, and I have world-class leaders at Citadel who are managing our various businesses, and I'm very grateful for them to be a part of this team. I also continually work with my leadership team to improve and strengthen our investment strategy. I maintain constant communication and engagement with my senior leadership team on the core issues of recruiting great talent, developing great risk takers, and ensuring that capital is deployed in the hands of our best risk takers when the best opportunities arise.

Our first focus is on human resource development and the allocation of optimal human capital, and then there is a second thread in everything we do, which is how to build competitive advantage, how to better collect information, and how to make better decisions.

Nicolai Tangen: One of the things that you do is have multiple managers and these whole concepts, how are the teams organized and how do you think about that?

Ken Griffin: We look at the business as various verticals, like the global commodities business, the long and short equity business, and the various credit businesses. In each of those verticals, we ask our business leaders to be entrepreneurial and really say to themselves: I have, in a sense, almost unlimited capital from this perspective. In that context, what is the most appropriate team, the most appropriate strategy, and the most competitive advantage to build and leverage in today's world and environment? That's how we run the business, very much with a blank slate, what should we do today to be one of the most effective deployers of capital in the world's financial markets.

Nicolai Tangen: Does each team decide their investment strategy?

Ken Griffin: The investment strategy is determined by the portfolio managers, the business heads and me, so the three of us will come together depending on the nature of the problem and work together to make sure that we have thought through how to create the most successful investment strategy.

Nicolai Tangen: So now you give me 100 million dollars and I work for you, so how would you view my mistakes?

Ken Griffin: First, we want to give you more capital to manage. Part of that is because, you know, we have really great people here, and we want them to have access to enough capital to support the teams around them to achieve revenue and profitability, to support the super teams around them. We really view investing as a task for world-class teams, because within the teams, you have a much healthier debate and dialogue, which helps to uncover the truth, to reveal the true nature of the debate, which is so important to our business.

So when we hire you as a portfolio manager, we spend a lot of time trying to understand a few things, first of all, what kind of team we're going to build and how to attract the best talent to join your team. Secondly, we want to work closely with you to make sure that you have a replicable investment process that you can learn from, both from your successes and failures, and that you're able to teach your team members to create their own operating levers, so these are some of the things that we think about when you join the firm as a new portfolio manager.

Nicolai Tangen: When will Citadel fire me?

Ken Griffin: First of all, we don't want to fire you, we want to see you have a very successful career.

Why do people have problems in their careers, why do they get stuck? There are a few reasons. First, some people are just not very good risk takers. You can put the facts in front of them, you have a very highly concentrated portfolio, you have large positions, and you can't clearly and unambiguously demonstrate that you have a clear advantage in having these positions. If these things are wrong, we have no basis for cooperation. Then there are some people who, even if they have all the information, cannot help themselves and improve their portfolio construction.

Nicolai Tangen: You mentioned information a lot, and you’re one of the really great users of alternative data. Let’s talk about some of the alternative data sources that you use.

Ken Griffin: The specific type of alternative data we use depends on the sector we invest in. If you invest in airlines, you are very interested in current airfares. If you are trying to predict inflation, you will break down each factor that the Bureau of Labor Statistics (BLS) looks at and produce their inflation forecasts. If you are involved in the commodity market, you may run a world-class meteorology program trying to predict short-term weather patterns or the dispersion of weather patterns. So, you focus on using alternative data based on the nature of the problem at hand. We always try to peel back the data and understand what information is critical to driving revenue for a company or demand for a commodity, and then take that information in the appropriate way, process it quickly, and make the right decisions.

How does Citadel recruit people?

Nicolai Tangen: You were attracted to market makers in college, and now you have founded Cedar Securities, one of the most sophisticated market makers in the world. First, for those in the audience who don't understand the role of market makers in finance, can you explain it?

Ken Griffin: A market maker is a company that provides liquidity to buyers and sellers that are not executed at the same time. This means that when you want to sell $50 million worth of stock, if there is no buyer in the market at the same moment, you will not overly drive the stock price. The market maker will use their capital to facilitate your transaction and then hope to find the final buyer of your stock at some time in the future.

We do this on a massive scale globally, in both fixed income and equity products. You know, in the U.S., for example, we trade almost 25% of all equity on a daily basis. Those are huge numbers, right? Citadel Securities trades $400 billion a day across all asset classes.

Nicolai Tangen: What do you think Citadel Securities will look like in the next 5 to 10 years?

Ken Griffin: I think it will be very similar to what it is today, but we will be expanding into more products, diversifying our business, and expanding our reach to more transaction partners, and we also provide a range of other services that investors really value, such as corporate financing and new issues. It will expand in size and scope over the next few years as we continue to solve challenges and problems that our clients face.

Nicolai Tangen: What do you think about the current geopolitical situation?

Ken Griffin: You know, you and I are both very lucky, we really grew up in a peaceful era until the last two or three years. It's been heartbreaking to watch the war in Ukraine unfold before our eyes. It's unbelievable, did you ever think that in your lifetime there would be war in Europe again? No. But now that we are witnessing it, it's really heartbreaking to see the terrible losses and devastating effects that the Ukrainian people and economy have suffered from the war entangled with Russia.

Of course, just a few days ago, we saw Iran launch an attack on Israel. Israel has been in great trouble, and the situation in the Middle East is probably not as surprising as the war in Ukraine. The Middle East has always been a region that is more prone to geopolitical challenges, but regardless, the events of last October, the war in Gaza, were very heartbreaking moments.

Nicolai Tangen: So, Ken Griffin, if someone asked you to take over the finances of the United States, would you do it?

Ken Griffin: Look, if the United States was facing fiscal challenges and I was able to help the country, of course I would do it.

Nicolai Tangen: Let's talk about corporate culture. You've mentioned the importance of talent. How much time do you spend on recruiting?

Ken Griffin: I've been talking to candidates, and there's nothing more important than the talent that we bring in. They've been developed here and are leading this company in terms of the capital they're investing and the business they're building.

Nicolai Tangen: You had a lot of applicants, right? I think you had 1,500 positions in New York, but you received 100,000 applications, right?

Ken Griffin : Yes, we received about 100,000 applications from all over the world. Let me tell you, what makes me most happy is that people all over the world know that we work five days a week, which shows that there are a large number of young people around the world who want to enter an environment where they will be well mentored and led and developed, and they will have an excellent career. This makes me optimistic about the future, and I hope that those of us who run businesses around the world can reach a consensus with these students and give them the experience that will enable them to have an excellent career.

Nicolai Tangen: Let's say I'm one of those 100,000 people and I've managed to get an interview with you. Of course, I'm a little nervous because you're a very famous person. What questions would you ask me?

Ken Griffin: I'll be the fourth person you meet, so I have a great set of questions for you. I look for ambitious people. I want to find people at Citadel who really want to change the world of finance, who want to live an impactful life, who want to make an impact in the world. What I look for is strong communication skills. I think it's very important to be able to communicate ideas, and no matter what business goals you pursue in life, you have to be able to express your ideas.

We are always debating the merits of our ideas within the company to find the truth. So I look for ambition, communication skills and the ability to reason and rationalize across a wide range of areas. I look for those who are truly great thinkers because problem solving is so fundamental to what we do every day and great problem solvers are the ones who succeed at Citadel.

Nicolai Tangen: Can you tell these qualities from a resume or do you need to meet the person?

Ken Griffin: You need to meet people. Today people know how to write a resume to cater to the needs of employers.

Nicolai Tangen: How do you tell if I'm a good problem solver?

Ken Griffin: “What problem did you solve?” Every student has a problem-solving story, whether it’s the laundry service they started, a previous summer job they had, or a paper they wrote, there are many opportunities for students to demonstrate their truly excellent problem-solving skills.

Nicolai Tangen: What is the most difficult problem you have solved?

Ken Griffin: Well, the hardest problems right now are unsolved, but you know, there's a lot of work going on, and one of the challenging problems is multi-period optimization. Multi-period optimization is taking different views of how stocks are going to perform in the next day, week, month, or year, and then how to create the best portfolio based on those different views at this moment in time. This involves the capital allocation decisions that we have to make. This is an interesting and challenging problem that we haven't fully solved at Citadel.

Nicolai Tangen: I read somewhere that you said that if you are naturally a good competitor, you will love working here. What does that mean?

Ken Griffin: We make no secret of the fact that we want to hire people who really enjoy competing and winning. The financial markets provide competitors with a report card every day about how they are doing against the competition. We find that people who enjoy competing and winning enjoy working here because they enjoy seeing the results of their work at one of the world's leading financial institutions and seeing the results of their research reflected in the portfolios they build and manage.

Nicolai Tangen: What is your view on leadership? What is good leadership for you?

Ken Griffin: Good leadership is about dealing with the reality of the situation at hand. Good leaders are objective about the problems, challenges, and opportunities they face, and they make rational decisions about them. They don’t fall for the paid-costs fallacy, nor do they lose hope when things don’t go well, but they always make good rational decisions.

Nicolai Tangen: Are you a good leader?

Ken Griffin: Most of the time, yes. Speed is a key factor in decision making, and on the axes, one is accuracy and the other is speed. It's important to understand what the tradeoffs are between the two axes at any given time. Sometimes, being close to right and fast is more important than being absolutely right but slow.

The cost of changing your mind is a key factor in determining how fast you need to be. If you are going to invest in a real estate development that will take 40 years to complete, you don’t need to be fast, you need to think thoroughly because once you start the journey, it will be a very long journey. Whereas if you buy $500 million of Apple stock and the next day you realize you missed an important fact, you can act quickly to exit the deal.

Nicolai Tangen: How do you balance analysis and intuition?

Ken Griffin: The best intuitions are actually almost like subconscious analysis. When people tell me, "Just intuitively, I believe X," I wonder if that's their subconscious mind at work, and they've had this experience so many times that they know roughly what the answer is, but they haven't written it down, but their intuition is actually more a reflection of their inherent ability to analyze a problem and tell you what to do.

Some people’s intuition seems to be just: what coffee did I drink this morning, so I should go long or short the S&P 500 because I had good coffee that day. But that doesn’t apply here. At Citadel, intuition is actually a reflection of the analysis going on in the analyst’s brain, which may not be fully formed or fully manifested yet.

Leisure life

Nicolai Tangen: What happens if you leave the Citadel?

Ken Griffin: That's a great question, and the good news is I have a lot of people here who can run this business successfully without me. I don't want to leave, I love my job, I love the people I work with, and it's really a passion for me. So I don't want to think about that day, but if it does, I have great partners who will continue to run this company.

Nicolai Tangen: If you could go back to university again, what would you study?

Ken Griffin: Wow, so when I was 20, or when I was my current age?

Nicolai Tangen: You are the age you are now.

Ken Griffin: I would probably go back to college and learn a little bit about philosophy and government, which have always been issues that interest me. Good governance is important, and having a solid philosophical foundation I think would help in better policy making. I would probably also spend some time studying math and computer science to get a better understanding of today's state-of-the-art technology. It's been a long time since I took math or computer science in a classroom, and it would be interesting to see where the world of these fields is today.

Nicolai Tangen: What are you most curious about?

Ken Griffin: I would say my curiosity ranges from innovations in biotechnology to computer science, so STEM (Science, Technology, Engineering, Mathematics) is the area I am interested in. I am very interested in the development of STEM fields around the world, from nuclear fission and nuclear fusion to microprocessors and genetic engineering, and I have an insatiable desire to learn more about the problems and developments in these broad fields.

Nicolai Tangen: When you’re not spending time on this, how do you relax?

Ken Griffin: I love biking, and there are great bike paths here in Miami, and I'm very fortunate to have three young kids who are almost teenagers, so most of the time, I basically spend all my free time with them.

Nicolai Tangen: Speaking of young people, we have thousands of young listeners. What advice do you have for young people?

Ken Griffin: Now, you know, my advice hasn't changed much in thirty years, pursue what you're passionate about, to be great at something, you have to be passionate about it. If you don't have passion, you're not going to be great at it, you're not going to be satisfied with your career, you need to pursue something that actually makes you want to get up in the morning and do it. It could be becoming a doctor, it could be becoming a lawyer, it could be picking stocks, but you have to find what you want to do to get up in the morning, what is the thing that is intrinsically motivating to you.

If you are driven by extrinsic motivations, you will feel that life is superficial, and you need to find your inner calling in life. I remember there was a young woman here, about thirty years ago, who was very talented on the investment team, and had been with us for about a year and a half, two years, and she walked in with her manager and said she was thinking about going to medical school, and I need you to convince her to stay at Citadel. I said, well, the thing is, as soon as she walked into my office, I offered to write her a letter of recommendation, and the world desperately needed another great doctor, and if that was what she wanted to be, I wanted to help her achieve her dream.

Nicolai Tangen: So just to end on such a great note, it seems like you have achieved your dream and you are working hard to make Citadel the most successful investment firm of all time, so I have to sincerely congratulate you and thank you for being on the show today, thank you very much.

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