155: Anthony Saliba – The Trader’s Guide to Building Generational Wealth

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What is up, team? I hope you had a nice Christmas and Santa served you well. Welcome to the last episode of 2017. On this episode I have the great honor of speaking with an original market wizard and returning guest of Chatwith Traders, Anthony Saliba. Tony was first on episode one hundred and seven. On that episode, we mostly discussed Tony's life as a trader and related subjects, including how he made$9 million, give or take.

trading options on the floor of the CBOE before turning 30 years of age during the eighties. But one thing we didn't go into too much was Tony's life as a parallel entrepreneur and an investor. So I told Tony, this time around, it's something I'm keen to hear a lot more about, because Tony's success extends far beyond trading alone. For example, Liquid Point, an options execution and technology firm which Tony founded, was acquired in 2007 for a sum of mid-9 figures.

He's also invested in upwards of 100 companies and a whole range of sectors, owns a golf resort, shopping centres and other real estate, and that's not all. So the underlying theme throughout this episode is not how to become a better trader, but how to build generational wealth. I'm excited to share this episode with you because for me, Tony is a huge inspiration. Continue listening, please take something away from this, and most importantly, implement.

I won't say any more, here's the big boss, Anthony Saliba.

Aaron, how are you? I'm well. I'm well. How are you? Very good. It's been almost a year. Yeah, I was gonna say that. It's like almost exactly one year, like almost to the day that we uh did the first podcast. Absolutely. I was just telling my partners that. I've been well. I've been well. I mean, there's been a few changes since we last spoke. I'm actually now working at a prop firm in Sydney. Uh not as a trader. I'm a a trader manager here, but uh Yeah. So that's probably the

Fantastic. Yeah, that's probably the biggest uh change since we since we last spoke. Um I've only been here a little while. It's uh it's only been about a month actually. Uh uh what do they trade? Uh all futures, all futures, a lot of stuff on the ASX. But also, you know, some other markets around the globe too. So but yeah, most of the volume's done on the ASX. Uh-huh. Yeah. How about you? What's been happening? Oh my

Uh I've been so busy. Got a uh we we launched uh new company. We're actually waiting for FINRA approval, but uh we're partners with um ITG which is uh A large um publicly traded uh technology FinTech company that is Mostly in the equity space, but uh they had some um uh options technology and we Um took that on and added our own IP.

And now we've um got a really slick front end and, you know, mostly professional but also other buy side traders. So that's been taking time over the last um three or four months to get ready for a launch expected January second. And my other project, which I think we talked about a year ago, has been moving along really well. Development on the software has

um proceeded all year. We've got a kick ass simulator, we've got AI integrated into it, gamification, all about traders. So it's been a busy Busy uh eleven and a half months. Excellent, excellent. I'm pleased to hear. That's really cool. Uh is one of those projects you talked about, is that Matrix X?

Matrix X is the um joint venture with um ITG and um it's uh professional platform We could talk about that, but it's basically been um acquiring that business and adding our um some of our secret sauce, some algos for uh options and futures options.

Um, we're gonna be active in the crypto coin space. And it you know, we've got got some uh great technology. We've I've been adding a lot of staff. I went from two or three people to twenty three people in the last few weeks. Um just uh adding a lot of, you know, sales support, technologists. Here we are.

Well, funny enough, that's uh one of the things I wanted to ask you actually. I mean, let's address the elephant in the room because, you know, someone like yourself who's been in markets for uh it's been about forty years, right? Um Almost, yeah. What what's your stance on Bitcoin? Like where what's your take on this? Well, um You mean it's terms of the regulation or in terms of where I think it's going?

Well, I I think that it's real and I think that it's got a lot of value to absorb and I say that meaning generally for the genre. I'm not so sure It's all gonna go into Bitcoin. There's a a lot of coins that are um uh viable, and I think as it relates to an alternative to currency uh by governments, it has a long way to go before it even, you know, reaches um a meaningful percentage of the float of of currencies. So

Standing in its way is um are things like the deficiency in the coin itself. I mean of the hack. losses it hasn't been in the blockchain technology, it's been in the coin and the l wallets themselves. So that has to be addressed. But then you have regulation and uh just yesterday the uh SEC chairman Jake Clayton said that he's not so sure they shouldn't be um the ICOs shouldn't be done on uh national exchange. So that would uh either send the business offshore

make exchanges a lot more valuable. How about you? You know, it's it's funny, right? Because I've had a couple uh guys on the podcast who are actively trading or actively involved in Bitcoin markets. And I remember saying this was probably only six months ago, um, or thereabout. I was speaking to one of the guys and I was saying, you know, I just bought a bit of Bitcoin when it was around about three thousand dollars, right?

And I was like, you know, it's just a speculative bet. You know, I see if I lose a few thousand dollars on it, no big deal, it's not gonna change my life. But, you know, the upside is really unknown. And I was like, you know, the there's a possibility that in a few years' time it might be, you know, five thousand dollars a coin or or something like that. And it's just gone right past that and and kept going. So

Yeah, I mean, I I think it's very hard to say. Um, you know, a lot of people are trying to make predictions and say all sorts of things, but I think this is a a beast of its own. You know, I I I think at the end of the day no one really knows what's gonna happen because it's just there's nothing else like it. Right, right. There's obviously s you know, speculation that comes and goes. But as a store you know, house of value it kicks the shit out of uh gold.

And, you know, gold costs so much more to produce. Gold is unwieldy. Gold is you can't uh walk into a store and buy something uh in times of trouble with gold or any time. I mean, you can today with Bitcoin. More and more people are taking Bitcoin. I mean up till recently only pros could access it. Now as the common person is able to access it more and more, I think you're gonna see uh more value come into the space.

may go may go into Ethereum, may go into uh you know uh Artbyte is another one I saw today that Part of the funds go into supporting the arts, so to speak. So there's a lot of twists on that, right? But it all gets down to the distributed ledger technology. So And do you think there's a there's a chance we might see options? On Bitcoin. I sure hope so. Why not, right?

Yeah, yeah. I um I thought that's something you might be uh keen on. Yeah, well I mean, the reason why we have cur um futures is just because the CFTC is a lot easier than um you know, a lot easier than the SEC. And that's, you know, that's why you you see the futures today, but I guess you could have options on the futures that just aren't as heavily traded. So yeah, I think I think you're gonna have options soon. I mean on options on futures, which would be totally awesome.

All right, Tony. Well, last time we spoke, we ended up speaking for around about two hours. Um, I I need to ask you this time in advance, are you on any time constraints? I d I do I only have about To the top of the next hour I have a meeting at at uh two central, so I have about an hour and twenty minutes. Okay. Um Yeah, we'll um yeah, we should be wrapped up by then. Yeah, good. No trouble. No trouble. So Tony One of the big things I wanna talk to you about today

And we only just touched on it last time. So last time when we spoke, we spoke a lot about your career as a trader, right? But I and at right at the end we spoke a little bit about your life as more of a businessman.

And I'd love it if we could spend uh the time we have together now talking a lot more about that. Right? Right. So correct me if I'm wrong here, but I think it's in some ways it it's fair to say, and it may not have been intentional, but Being a trader was kind of like a stepping stone for you to To go on to even bigger and better things, right? Correct. It was. It it gave well, it gave me opportunities based on the money I made obviously, but also the skills I learned as an options trader.

uh in the mindset I delivered uh uh developed, sorry, as an options trader given many different directions you can go with an options position and my uh ability to think outside the box, so to speak. Um that you y you're given the attitude or you develop the attitude that anything is possible because in options there's always a a way out as long as you're you know you you're uh thinking properly going into the position. So my trading decades, if you will, um uh formulated

a mindset. It also gave me a lot more confidence. Uh because if you can trade options successfully, you can do, you know, just about anything in finance. um uh properly or successfully and than the capital that I earned obviously also. I was saying to my kids over the weekend, um So remember, you know, when I die on my tombstone, you need to make sure it says necessity was the mother of invention.

Because everything that I've done since my trading or even in in the middle of my trading years was uh I saw a problem and developed a solution. And that really you know sprung out of necessity. So the um options trading was a springboard. I'm still very close to it. We still have um traders that trade for us. We look at things in in terms of options. optionality, uh a lot of our deals involve options. So

It is in the fabric it so to speak, Aaron. Yeah, yeah, absolutely. And I remember that quote that's uh I even titled uh our episode Mother is uh Necessity is the mother of invention. Is that it? Yes. Yes, that's right. Yeah. So was there a point

Where you began to consider yourself more of a businessman rather than a sole trader? Or did it just kinda happen without sort of consciously intending it to happen. There was a a time early in my trading career where I fashioned myself as a businessman, like at the forefront of my mind, and I invested in things. like restaurants and I own part of a construction company and um

number of you know arm's length investments that didn't all go very well. And then I sort of you know, popped out of that mindset of being a businessman and actually rolled up my sleeves to do something and be involved in the business. And I was still I was still in my late twenties.

maybe I was thirty and I um I got involved in the clearing yeah I was twenty nine I got involved in the clearing business uh as a um clearing house owner And I I did that for about four years or five years until about four years until the market crashed and and uh you know, my role was in management but also in in marketing. And the um the partners I had were um supposed to do the risk management and things didn't go so well in the crash of eighty seven in that regard.

So I l I learned firsthand there was you have to really keep your eye on the register, keep your eye on the risk and be more involved um uh hands on. Uh Over the decades, I've invested in hundreds of companies, but most of the really successful ones. I was involved with either on the board or uh on, you know, hands-on uh management.

So that's kind of when I to answer your question, when I believe I thought of myself as a businessman, where I actually started to be responsible for the hiring and firing and managing of some people. I think that was probably in eighty eight when I started um the training company which uh we barnstormed around Europe and uh trained up thousands of uh mostly young men but also some women uh how to trade options. And those

young men and women are running trading desks around the world today. So it was a you know an interesting time. It was a way to learn how to um make a budget, meet a budget, uh And I I've you know, literally probably have learned more than I would have in any MBA program. Uh You know, at Wharton or

any other um business school. Right. Now you said some of those earlier investments. Uh I think you said you had a restaurant at one part or you were invested in a restaurant and a couple other things.

Uh and some of those didn't go quite so well. Uh do you know why they didn't go quite so well? Yes. Well, in the in the restaurant so I had a number of restaurants. I had at least uh three different restaurants that I can think of. Um um one was a chain and that didn't go well because Um one of our one of our store managers was stealing from us at one of our main stores. We had thirteen uh restaurants uh in various college towns in the Midwest.

And um we also expanded a little bit too much when w we went out to uh Arizona to open a couple of restaurants out there which there was no management oversight. So with the combination of you know, hundreds of thousands of dollars being uh pilfered by one of our managers over a um relatively short period of time. that went un undetected. and the expansion, it was just too much

um for the the company to uh withstand. And it was in the early eighties, it was eighty two or eighty three, and interest rates were in the high teens and we were paying uh we're paying seventeen percent for um um loans to buy our equipment. So it was just a very uh top heavy business and it folded. And um uh

you know, went bankrupt after about four years of operation. It was just uh not you know, not well thought. Um my second restaurant that I was involved in was um Uh I was partners with with uh the coach, Mike Ditka. And uh uh he was uh just won the Super Bowl Chicago Bears coach. Everybody in America knows him because he's you know, pretty recognizable face. And I was the only partner out of twenty five that wasn't a lawyer. It was like the hottest deal in town. And I had uh um

And one percent of the the transaction. And coach had like ten or fifteen. And then um the lawyers had, you know, the rest. And after we opened, I was able to buy uh another couple of points. And Aaron, the moment from the moment the doors opened for the next five years, the place was either

one or two, definitely in the top three most uh active restaurants in the country. We had the most revenues in nineteen eighty seven of any coun any um uh restaurant in the company in the country rather, and we all got our money back within uh For the first year we tripled our money within the second year, it was just going gangbusters until um the coach decided he wanted bigger percentage. And he had had his heart attack.

and he, you know, wanted a bigger piece of the restaurant that bared his name, uh uh Ditka's. And he assembled us all one day and uh started yelling at us like we were a bunch of recruits that um you know his name was everything and he wanted uh a larger percentage and one of the lawyers reminded him that it was a room full of lawyers and we had a contract. And uh

It it went south from there. There was a clause that he could close it down and he closed it down and uh opened it outside of the zone that we controlled. And it's um the a very busy and popular restaurant in uh Maryville, Indiana, I believe, today, but we don't own any of it. So um It's uh you know, sometimes you can't control uh political issues and it was a good run for the four or five years that we were in it, man, I think it was five years.

Um and uh learned a lot, made a lot of money. It was a good thing. So you take all those lessons along the way and you try to build on them. You know, you You make sure you go into into contracts, um with uh your eyes wide open and you know, I would never have done that to anybody, but I could you know, I could kind of see his point where he Uh it was a big deal. He wasn't making that much, as much as he could, but uh I would never do that to anyone.

Yeah. Now, how did you get involved in the restaurant business? Now I know you're involved in lots of different sectors these days, but you know, in the earlier days This must have been a big thing because you were an options trader, you traded on the floor for many, many years. You know, you you didn't have any experience or background in the restaurant business. How did what gave you the confidence or how did you know what you were doing?

to be able to branch out into these areas and invest in places where you had no prior experience. Well, that's a good question. I um I really tried to look at everything in a risk reward uh manner and uh Just like I would with an options position, try to limit my downside and have the opportunity to um have some significant upside. I would say that in the early days and I I literally got started uh investing in outside businesses when I I was like

you know, twenty seven or twenty eight years old. And when I look back and I know a lot of, you know, twenty somethings today that probably wouldn't begin to know how to invest in other businesses. I I'm surprised that I did that. But but a big factor was the character of the individual that was running the business and and their um

work ethic and even if they didn't have a lot of history, uh, just their character that was a a a big factor. So, um My my rest or initial restaurant foray was possibly a um You know, an offer I couldn't refuse. I I entered in the restaurant as a um uh uh um a lender. I bought some of these um you know, kitchen packages where uh the funding of which would um finance

the build out of, you know, professional institutional kitchen. There are hundreds of thousands of dollars. And the interest rate, quite frankly, was, you know, quite attractive. It was over twenty percent. And I had the the uh kitchen equipment as collateral. Now anybody who's done that before knows that it's like a you it's like a car. Once you drive it off the lot, it drops in value by fifty percent immediately and then it goes down from there.

and kitchen equipment was even worse. So you had maybe twenty percent twenty cents on the dollar to backstop you. So if you got you know, three or four years out of it, you'd get to break even. And um I was lucky in both fronts where uh I did get the four years, maybe five, and the salvage value of the uh uh equipment was greater than we expect. It was closer to fifty percent. So even though the restaurants went BK, uh

the investment was above break even and you know, got lucky there. So you start to do the analysis like you're trading, or at least I did, it doesn't always fit. And sometimes you walk away from what might be a good deal because You didn't understand it well enough. And that's okay. It's better to uh not understand a deal and and not get involved than to get involved in one that you think is gonna go well but you didn't an analyze it properly. That's um you know, the correlation or the

um parallels at least to my trading. You know, and I had good good people working with me, good some good confidants that were friends and family, but uh

I always felt, you know, the risk reward was reasonable, I should diversify. And I I I can say that, you know, like I was involved in the construction business. I started a business in two thousand and two that had I managed it Uh I had a friend manage it and it went south after about a year, but it was smart home technology. If you think about the smart home technology, I don't know how it is in Australia, but there are this is one of the biggest growth areas over the last five or ten years.

And we were there early on. We had some early technology. And it we had a great name. It was uh called Smart Home Chicago. So like the song Sweet Home Chicago had a nice ring to it and we had a small team with some of our own technology, but We just I just didn't have the right uh manager and uh got sloppy and after about a year uh started going through the investment um to the point where I uh

I lost interest and let that go. But um smart home technology today, I look at some of the stuff that's out there, we uh we had a great great ideas, we just didn't I d I wasn't involved personally. I d we didn't stick to it enough and um and now you you know, you look back and you regret it. I think the vision is important too. I'll tell you one more story that I haven't really

told many people about except Uber drivers, Aaron. That's Aaron. So I invented Uber in two thousand and four and uh I uh you know Liquid Point was rolling along. We were growing, but I was looking for A different use for our software, and I was very frustrated about being able to get a uh a cab. In my neighborhood. uh at rush hour. The cab companies basically lied to you. They'd said you'd call up, they'd said the cab's on the way and no cab. Now this two thousand and four.

We had um some mobile technology, which was basically a browser based system uh over uh a MiFi, so uh telephone technology, but it was More than three years before the iPhone was even thought uh launched. You know, nobody uh had even heard about this. So we took our trading software and I came up with this idea that um If I could make a market in taxicab routes, okay, that had a fair value, and posted on our software that was on a laptop in every taxi driver's car.

then they could see that I was willing to pay up to get a ride at that time and come to me. So I I took the idea, we built it out, and uh we took the idea to the cab companies, and my commercial model was Cab companies, this'll help organize you. It'll um give you a higher degree of um Credibility with your riders because you could lock in where the cab driver would see that my bid

surpass the fair value and he would hit my bid and lock in and he would note get my address and I would expect my car. And I went around and they all threw me out, Aaron, because they thought I was cutting into their business. All I was asking for was

ride that was booked to pay for the software and you know with millions of rides a month and sure it would have been a great business. But after each of the cab companies told me where to go because they were either run by, you know uh fam in Middle Eastern or Russian families that weren't gonna let us uh weasel our way into their business. uh I I gave up and uh hired a a private driver. So I had a I had a chauffeur, if you will, from um

December of two thousand and four until um December of twenty fourteen when I got on Uber full time uh when the system here was working really well in Chicago. So Yeah, I was a little early for the technology. I had the right solution because once again a problem was presenting itself to me every day.

And uh we were reminiscing yesterday with one of my um technologists. He brought it up. He said, Remember when we came up with Uber back in uh late oh three, early oh four? I'm like, Yeah, believe me, every day I remember. Um But I mean, uh it it doesn't mean that it would have, you know, been a successful business. There's a lot of hurdles. Maybe the city would have tried to block me like they try to block Uber for a while.

You know, you you have to have a visionary, you have to have a good manager, you have to have a good backdoor guy to make sure that you um stick to your budget. And that's, you know, w we've learned a lot over the years and and I would say all the businesses that we're involved in today, we have a hand in the management.

Yeah, and I mean I think the the uh taxi companies still feel the same way. I think there's still uh an equal equal amount of pushback from them with regard to bad. How about it, right? Yeah, yeah. It's kinda it's kinda funny.

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I'd like to ask you, Tony, do you think for a trader to make really big money like life changing generational wealth, right? Mm-hmm. At some point, they need to do more than just be an individual trader. You know, like let's say they're a prop trader. Okay. So, you know, they might be trading a fairly sizable account, but For them to really make a lot of money, they need to at some point take the next step. You know, so from being a prop trader or an individual trader of some sort to actually

Doing it as a business, right? So either hiring other traders or starting a firm of their own or getting involved in other businesses, you know, you've done all those things, but is it possible to make these large sums of money like we're talking about through trading alone. Well, okay, so It's funny you say that. So we've been spending uh as I mentioned last year, this other project that I'm working on and been working on with uh some great partners.

for I've been involved for almost three years. They've been on it for a little more than a year longer than me. And uh It's a an effort to create uh CPTs, consistently profitable traders, because um You know, the the data isn't all in one place, but um by looking around and um accumulating the fragmented data that does um that is available Um over ninety percent of active traders fail. Um closer to five percent prob uh probably are consistently profitable. CPTs, consistently profitable trade.

Now Traders that work for a company that have mentors that have um a technique and a strategy that uh or a set of strategies that work, money management skills, proper tools. They have a higher um hit ratio or higher success ratio, um, arguably uh over seventy-five percent. So

Your question is founded on which type of of trader uh is it? Are you working for somebody and you're more consistently profitable? Or are you amongst the ranks that are inconsistent and as you said cannot amass um uh enough wealth to change the situation from generation to generation and uh within your um family. Um the ability to become consistently profitable and then do it with an ever increasing amount of capital

From friends and family, for instance. We call them the the great 10,000, 10,000ers. And what they do is they happen to be be successful that year. They're sitting around the table at Christmas. They say how much they made and The next thing you know, people are throwing ten thousand dollars at'em, do it for me next year. Okay? And some of these

Men and women actually do that and start to grow their own um money management business and they're successful. And those start to break out and they're running a business. As you mentioned. So it it isn't impossible and clearly depending upon your threshold for risk, um You know, there's there's certain services today, you know, active trader services that play on being short premium all the time and they're close to consistently profitable, but you

You know, may you have a problem sleeping at night and maybe you're not so lucky all the time and maybe you're giving it back to too great a degree. But becoming consistently profitable. and being able to turn that into a business is um required, in my opinion, to be that game changing, life changing, interger intergenerational wealth. And it's also not that hard to do. Okay. I mean I mean it isn't extremely easy, but it isn't impossible to do. And um there are those who

are becoming their own managers, even in their own uh realm. Uh there's a lot of family offices that have sprung up around this and uh And I think it's an admirable goal. Now, the other thing is supplementing an existing income or or just having a comfortable living that you know you can count on it, you're not spending uh six or eight hours a day in front of the PC. That's that's also possible too.

Okay, so let's say a trader has been doing well. Let's say I don't really like to put a number on it, but let's just say they've made their first million dollars, okay? Mm-hmm. For someone in that position

Where can they go from there? Like, does this open doors to greater opportunities? Um, how could they begin to turn what they're doing into a business, something that has greater scale than what they've been doing previously, to to build these uh, you know, this generational wealth what we're talking about. to that point. Absolutely. And even less than that, I mean it's not a far cry to have a small trading account that you uh double.

in the course of a year that would help you attract, you know, family money or f um uh money from friends, but um that success, the bigger that success, then I think that opens a lot of doors. Now clearly the the aspect is well, you know If you're doing so well, why would you want to um share that with me? But that that gets to the aspect of um being able to um have a you know have a decent um management agreement with um

you know, with your investors. So yeah, that that is the first step. Um there are um you know, s systems and services that are available to um um join and be able to um have the infrastructure available to you to do that and um I think that you know, I think that's a good thing more and more the the the fastest growing area is is self directed trading over the last few years. passive investing, you know, continues to lose um

uh the luster more shops, more big hedges close down, they can't scale. Um like China, for instance, it's been a lot of um stories written lately that the passive investing Um business uh may not take a a toehold in China because the uh investors want to do it themselves and there's enough tools available for them at least to try. Not saying they'll all be successful, but it

becomes a you know, a a greater opportunity for them. I mean the returns haven't been that great. It's just as easy to buy and hold uh in this kind of market. So um doing it yourself has been the uh uh biggest growth area for a lot of the retail brokers here in the States and it's a matter of uh hanging on to those customers that can be a little bit mobile.

Do you think it's a good idea to take on money from family and friends? Like I'm sure that can also be problematic in some ways, right? Oh yes. Well that's it it's very problematic. I mean I think you're damned if you do, damned if you don't. If you're sitting around the dinner table at Christmas time saying, Hey, I you know took my fifty grand and in part time doubled it this year. You know, one of your brothers is gonna be angry if you don't help him out. And

if you're not successful, he's gonna be even madder at you. So it's a it's a it's a tough one that requires a lot of, you know, caveats going into it. But I think that you know, if handled properly and you kinda easily by saying, All right, I'll take half of what you want to give me that way. If um I'm not successful you won't be as mad It's just a uh uh a way of maybe mitigating your your uh

your problems there. But um it is tough. It's it's uh yeah you know as someone who had family in my successful deals and got brothers that weren't in Mad At, I can tell you firsthand that uh they feel like they were slighted. And that that has lingered for years and it's crazy because if uh If it was a loser. then, you know, you have to hear about it also. So Yeah. It's a tough Yeah. Like you said, damned if you do, damned if you don't. I think uh that's a great way to sum it up.

As you said earlier, Tony, over the years you've invested in over a hundred, maybe hundreds of businesses. Mm-hmm. How do you decide what's a good opportunity and what's a distraction? Hm. Wow, that's a great one because I will the the few that I just distractions. I mean the the Ditkas was a great distraction because, you know, I was a lot younger and single and we were making lots of money. It was a great place to go, but it was tot it was definitely a distraction nonetheless.

the the two or three problem businesses of the early days, uh the restaurants, smart home, they became um big sinks and distractions. But then the training company I got into because my investment in technology for my own use um became much more expensive than the developers uh had forecasted that uh it was gonna be. So I decided to get my money back. I built a business around it and found there was a big demand.

So the distraction for me was that I started another business that I ran and um that how I ended up lo uh leaving the floor. Okay. Um uh if you remember or you you're too young to remember, but you've heard of the uh little mini crash of eighty nine when the United Airlines uh merger or acquisition fell through and the market um collapsed

uh precipitously, you know, suddenly and precipitously. Uh I was in جرمانی the wall was coming down, you know, and I was uh we were training um German bankers and I had a big position in the S P X on and I thought I was only gonna be gone a week and uh all the political stuff my team stayed and So it was a distraction. I just said I you know, I can't um

split this up and so for for another fourteen months or so it took me almost that long to get out of my positions. Um uh I was um uh straddling uh being a floor trader and running this international business.

But there's been other distractions that just didn't have a silver lining. At least with with a training company I built a big big uh institution and had a big following and you know, it's done well and then even today with with our simulator, it's, you know, one of the best, you know, state of the art simulators in the um in the world.

But preventing a side business or an investment from becoming a distraction is uh so key, Aaron, because um It's called a passive investment for a reason. And The best way to prevent that is a very good thing. to keep your investment low enough so that if the worst happens it's not going to um raise your um attention. Uh I'm in a I I got in early, twenty years ago almost into stand up MRI.

And you know, uh it's a um magnet magnetic resonance uh um system where it would um uh the individual who has a uh claustrophobia uh or or problems laying down to get in the CAT scan you would you would um sit upright and and uh it was gonna be a great business. Well, for the first five or six years it was just a tremendous distraction because it was being mismanaged and then um things righted themselves.

a new operator came in and for the last uh ten or so years um it you know we get annual reports get a dividend or distribution and it's not a distraction. But during those early tumultuous tumultuous years, I was like, why why is this even in our lives? It's um um well you know, we invested a little bit more than we probably should have, and you get involved because it's just not small enough to walk away. Um so if it's a passive investment That I think is a key uh issue.

But if you're involved as I am with a number of the the businesses today, uh as a a director or a manager then you just need to be able to have good uh delegates that'll help uh handle your um your calendar and be involved with um uh the minimum that is uh uh required of your essence, meaning that as I say to my people, do only that. which only you can do. So don't stop to vacuum the office when you know somebody's coming in to vacuum the office in an hour. It's a waste of your time.

Uh I'm not saying don't be helpful to your um fellow um staffers, but try to focus on your expertise and what would be missed. if you don't do that which only you can do. Yeah. Well I'm glad you brought that up actually because this is something I want to ask you. Like, you've achieved a lot, right? And you know, forty years or however long it's been, um, since you've been, you know, working, trading, uh been a parallel entrepreneur, et cetera.

Um, how do you manage your time? Like how do you What what are your secrets to to being so productive and getting a lot done? Oh man, depends who you talk to. I don't think my wife's gonna be listening to this, but if you ask her, um, not as productive as I could be, but um I um and I also have a partner who disagrees with what I'm about to say on my answer. I

I don't sleep as much as uh most people, so I have a little bit more time in my day. And um my my partner would say that I'm not um operating optimally and that, you know, I would be more efficient if I got more sleep and I would take less times on uh less time on tasks. that I do um uh uh endeavor to accomplish, but uh I you know, I'm a a technology person to the nth degree. I I I can do most everything necessary today on uh my phone. Um I I used to spend lots of hours

on, you know, spreadsheets developing the uh forecasting and the planning for the businesses that we're doing. But try to boil everything down to um You know, lowest common denominator. Just like I had an options position, giant options position, I would take out all the low risk. um components, low risk spreads that had uh definable risk, put them off to the side and focus on the risk as pieces. So um with my calendar I run everything through certain point persons or I

Nobody can get on my calendar uh without her um gatekeeping. Uh I try to keep my meetings to a half an hour or less, although um certain occasions, um yours for instance, um other interviews that I might have, or um this you know um opus of a project that we're working on we usually have two hour calls Um so to keep them tight. and then have a really good team around you that uh you can orchestrate.

With Liquid Point, I had a great team. I mean we had we sold the company uh for over two hundred million and we only had forty-three uh staff members. Um the uh up you know, optimization, efficiency of the team was really because um everybody was trained to do multiple roles. So even though you did that which only you could do, you could also step in if your colleague needed uh a helping hand while you had some downtime, and we used homegrown systems to do that.

So it's a combination of um delegation using technology to stay organized. And um also trying to do that which only you can do. So I will go into a meeting and and hear out the the team and not try to micromanage uh what they're doing.

Um I guess slightly shifting gears. I feel as though some people probably have the uh the idea that to make a lot of money you need to take big risks. Now, I'd be interested to hear if you feel as though that's uh true somewhat. And also what are some of the greatest risks that you have taken to get to where you are now? Hm. Well, it's not true that you have to risk a lot of money to make a lot of money. if ti if you're willing to take time. I but if you're um

looking to make a lot of money uh trading in a short period of time, yes, you're gonna have to increase the size of your uh positions. Um I mean there just hasn't been enough volatility in the market to do it otherwise unless

you have bet properly, if you will, on um a few names that have, you know, moved up exponentially over the last few years. So that, you know, is something that um w when volatility comes back into the market and there's an ability to um um leverage differently and place better bets where you can make money in both directions of the market, I think that um um that'll be the case.

some of the biggest risks that I've taken. Um Did you say that paid off or just in general or that I regret? Just in general. I mean, maybe they've paid off, maybe they they hurt you. Um Yeah, but some of the things some some of the greater risks that you have taken where you were kinda quite vulnerable at some point. Right. Well those Those uh investments where I didn't play uh a role in um in managing. Uh I had um You know, I I had some traders that were very um low risk and disciplined

And then I had a couple traders that uh over the years that um colored outside the lines, uh if so to speak, you know. And in one case And we're still good friends and I you know, I felt bad that He took some additional risks and um basically doubled down on um on a trade that was whipsawing him, this is maybe about ten years ago, and he ended up losing, you know, millions uh for us or for me. And uh

You know, I probably should have clamped down on that. It was happening, you know, in real time over the course of uh a few months. And that, you know, was a trading risk. I would say in the passive investments, uh I put a a fair amount of money in Fisker automotive. And

Uh Fisker had a better car than Tesla. Um All systems look to be uh go And if it was not for the Department of Energy canceling uh a loan that the company needed desperately to build out, it was like a$300 million loan to build out a battery plant. in Delaware, uh, we would have the best electric uh and hybrid cars on the roads today. But um That didn't happen.

Uh a Chinese investor bought the business for five cents on the dollar a few years ago and now he's um rolling out the first and actually to add insult to injury, the cars are quite similar. and I believe the Karma, which was our first car, uh, is the name that he's using on his first car. And we own nothing. So, um I haven't really risked the the bet the ranch on anything

Uh now I might be reminded m by one of my family members that I've forgotten something, but I I think that trader about uh eight or ten years ago uh was the worst. And like I said, I feel bad. I'm still friends with him but you really screwed the pooch.

Okay. But I mean, how how could you have avoided that? Like is that something you can only look back on in hindsight and say, you know, I should have picked up on that or, you know, were there some red flags leading up to that? No, you're you you're right. It could have been um avoided. I um happen and this is a good point to people, your listeners who go into a partnership. Um you could both be great professionals.

know your skills, you know, uh immensely and uh be very proficient at um executing. But if you don't have clearly defined roles between the two of you And I hate to say this is kinda what happened. It fell through the crack. We both got busy, the two partners. I was actually running li you know, Liquid Point at the time. And the other partner who was managing other investments just thought I was minding the store, so to speak. And um before you know it it uh it started to get out of hand.

And instead of sitting down with the trader and deciding we should exit the uh the position, uh that's when he you know, doubled down. So You avoid it. by making sure that somebody is, you know, mining the store, whether it's a restaurant or a construction company or um a trading company, clearly define roles and You you know, you cannot diminish the value of getting on the phone or having a face-to-face with other operators, whether it be your partner or your staff on a regular basis.

uh very much old school in that regard to have, you know, regular touch points. I'm not saying that you have to consume your week with meetings, but I'm also not a guy that goes to the golf course. and says, Okay, uh the team at home's gonna take care of it, uh, day in and day out, week in and week out. Some something's gonna go wrong unless Everything is off your plate and somebody else has been um made responsible for that and then um you know actually executes his or her role.

And so that's if you have a partner you need to have clearly defined um functions.

And I guess in some ways this kind of goes back to a point you made earlier where you said, you know, you you almost need to decide whether this is a passive investment or whether this is something that you're actually gonna be hands on with, right? Exactly. Yes. Yes. If it's a passive investment, the size of your investment is going to be the place where you dictate. First and foremost.

And if it's too big for you and it becomes an issue, uh, you better have um some good assistance or will distract you. Uh I hate to say, you know, having legal counsel or um having, you know, advisors. I've been pretty lucky that my family, you know, our family office, we we meet every Monday morning, we talk about you know, key investments and uh summer status quo. I'm I'm involved. I'm invested in a um uh a line of uh facial and hair care products, okay? And uh

I I was reminded yesterday that I had uh three times what I thought I had in in the investment. And um I was like, Oh, well maybe I should think about it a little bit more. But uh I you know, I I ping the uh CEO or we're we'll have a meeting at the end of the at the end of the month. But um

You review them and you know, there's plenty of software to do it um electronically, but not all investments have real time data like we do in trading. Yeah. So you do need to meet with the operators and and talk to them.

Yeah. Now this particular company, is this uh is this an early stage company and is is that something you like to do is get in at the early stages or do you like to wait till a company has a bit of a track record, if you will? That's another that's a great that's a really great cr question actually, Aaron, because Um I guess I take it for granted that I should get in on er at early stages, if you will, actually have met with lots of founders.

Um, case in point, one of our companies is a water company, coconut water, sparkling coconut water. and uh a young man came to me a couple years ago with an idea. Um he had been uh working for some neurosurgeons as a researcher.

b about the um effects of the fat in um coconut oil and how that um the essence of that or the enzymes in that I'm not sure exactly of the um scientific and medical um phraseology, but these um neurosurgeons and the researchers had determined that uh coconut fat prevented um issues with memory and you know, Alzheimer's dementia, whatever, and they were creating a uh pill and they have a very successful um medic you know, it's uh over-the-counter uh supplement uh to help

um prevent uh Alzheimer's. Well, this young man said, well, and what if I put it in a drink? And they said, Yeah, whatever, you know, go for it. Was traveling back and forth to Vietnam, where he had lived in um Southeast Asia for a while, made a number of contacts. and found a manufacturer that would um develop the product to his specifications and he wanted me to be his partner and he said, Hey, you know

Just take the company and um hire me and I'll work for you. And he's a really hard worker. It was his idea. But I don't know how to run a business. He didn't know anything about spreadsheets. He didn't know anything about, you know, making a payroll, marketing, paying the government, all the things that go on with a business. And I just didn't have the time. So, you know, I s made some suggestions to him.

and um uh put a small amount of money in so that I didn't delude him very much and set him on his way. Well, uh Two years later, we I put in money about a year ago, but two years since that initial contact and conversation. This company today is in Costco. Uh Marianos. Um Albert. um um safe way. They um Kro uh Kroger has contracted with them to white label their coconut water for their own brand. They have over two million cans in back ordered um for the first quarter. So this is out of his

Garage. Okay. And um, what do I know about water? You know, I don't know anything about distribution, but I helped him with his numbers to begin with. I I gave him a little bit of advice. My wife helped him uh design the the can. Uh it's a beautiful looking can. And then he found another investor who uh did know the space, uh the water space, and now they're off to the races. Um one of the uh local bottling companies wants to buy them for over ten million dollars. Just

in one year. And I'm like, it's too early. It's too early. Uh you guys are gonna, you know, you know grow it a little bit more from here and probably be able to do, you know, four or five times that, or maybe even ten. So I guess, you know A a lot of it matters on you you're asking about early stage. It was just an idea.

And I helped him put a spreadsheet together. I you know, I'm not taking credit for his success at all. You uh uh it it's his was his idea, his hard work, his partner um hard work, but you know, we Kept tapping them. back into you know, into direction to go down the right path to make a budget and um You know, worry about the numbers. I'm not sure they're out of the woods, but it looks like they are.

So early stages where I've gravitated. Now, you know, we've got real estate, we've got um some um mature businesses that we went into, but yeah, it's been mostly startups and um Uh Probably should have um Started an incubator a while ago.

How do these opportunities come How do you come across these opportunities? Because, you know, they're from all over the place. Like before you were talking about a stand up MRI machine. Here you're talking about a water company. There's a um hair product company you're involved with. Like how do you come across all these opportunities in different sectors? Well, um a lot of people approach me on LinkedIn. I've got um

My second level group uh first level group's about twenty thousand, my second level group's about four million people. Um, I get pitched a number of things. I I've been trying now that I have Matrix, I'm staying away from um doing too much uh of that reading. But with uh the new project I'm you know, right now we're it's a startup also that's that's sucking up uh some of my time, my management time to get that launched. But uh

It also spawns relationships in related businesses and try to put pieces of the puzzle together. We're in the process of buying one of the national exchanges right now. It's been in the uh you know, papers a lot. In fact, there's a story about it today in the uh Wall Street Journal. And um uh has spawned a nexus with crowdfunding um uh companies because we we're gonna do something special with the um

companies that are the products of regulation C F that um are are funded that way. So they kind of find me, Aaron, but my uh partner and my nephew Mike Saliba, he probably You know, reviews. I don't know, twenty twenty deals a week where sometimes he doesn't get past the cover page, but sometimes he spends a great deal of time analysing whether it it's a fit to one of our other businesses. And um yeah, they they find me. Um I definitely think that their synergies that can be

found between companies when you least expect them. Now I don't have any I don't have a synergy between the hair care product and the water product except that I did go to a friend of mine who is um pretty high up at Procter and Gamble to see if they were interested either or both and I think they're regretting not being interested in the um water company.

But uh w with regard to the securities industry, we have connected the dots on a number of things now that are in our portfolio that have symbiotic um

relationships. So I'm not afraid to keep looking at some of these new ideas. Yeah. And I guess that's just what happens, right? When you've been doing this for as long as you have, people start to hear about you, know what you can offer, know what you're all about, and um, you know, things start uh showing up on your doorstep. You know, um A book that I was in

thirty years ago, uh, Market Wizards, which is, you know, one of a handful of books that I've been involved in. But that book particularly I said something in the book, so it lives on like your podcast will now, but this the these this was in a day before podcasts. I said something in that book that haunts me still to today. And that is at the time I was still building a trading company. I was partnered with a French bank and we were populating traders over there in Paris.

and in Germany based on expertise that we instilled uh in them here in Chicago. And that company became very, very uh successful. The bank uh took it and ran with it. Um Transoptions was the name of it and it it trade I think For about fifteen years they had a very good run in uh European markets. But that was then. Today, people, young people who

Find market wizards, because it's an interesting book. There's uh uh thirteen other gentlemen in uh uh highlighted in the book, Paul Tudor Jones, um you know, famous, much more successful traders. uh than I was. So it's worth reading But they read my story here and then they say, Oh, are you still looking for traders? Like, no, that was thirty years ago and those guys might might might be looking for traders, but it really is um

uh funny how they find you. And uh I'm sure your audience, you know, has ideas. Um Uh happy to ping me, but um uh I'll be blunt and and short with them if the ideas are um uh not something I'm interested in. I'll I'll let them know. Uh pretty much answer everything. Uh Late at night while you're sleeping, I'm probably on LinkedIn or something. Uh uh visit.

Now I know we've got to wrap this up in just a moment. I thought we would have wrapped it up ages ago when he said earlier I've only got, you know, just over an hour but Um, you know, once again we've um we've we've pushed it to the limit. So There's just one last question I'd I'd like to ask you, Tony, and all the wealth that you've accumulated in the time that you've been going as an entrepreneur, as a trader, as a businessman.

Has most of this come in the form of lump sum gains or has this come more in the form of constant income streams?

You're one of the best there, and that's another great question because uh I I don't think a lot of people think of that c would think of that question. I definitely wouldn't, but now that you mention it, lump sum, I'm I'm afraid to say. I mean, I was told by one of my uh staffers young millennial recently said, you know The only way you can really get wealthy in in today's um world is to own equity. And uh I don't know if that's a hundred percent true only way, but it is a way.

And I've been approached by so many people that wanna be on board with, you know, some of the projects. Uh they wanna they want a piece of equity. So I would say lump sums in that um you you build, you build, you build and then you've attained value and somebody agrees with that value and wants part Uh I've had streams, of course, um, that have been decent sized. But

Typically, like I have some partners in real estate. We own a golf course down in uh southern part of the state. We have some shopping centers, things like that. And They're old school and they've created streams for me uh passively. I'm passively on my So uh the bigger numbers though have been uh lumps, except when I was on the floor. I mean I would consider that, you know, I was working hard for that and creating a daily, monthly, you know, annual stream.

But since then it's been in lumps and that's that's a real that's a really good question. I think uh I'd like to hear that from others too, you know? So that mostly comes in the form of exits or when someone buys a stake in one of your businesses? Yes. Yes. That's been that's been the case and uh It's also a great question because this is startup that we have now today in Matrix, we've kind of talked about

probably not exiting, you know, we regr regret some of the exits that we've had, um because over time you could have done better with that company, made you know, continue to to build it and the multiple you got then has not um you know justified you know hindsight seller's remorse, however you wanna uh characterize it, but we've literally said this time maybe we'll just try to make this into a stream and continuous stream. And I've got young kids.

They can step into the breach. You can move to Chicago. Uh well, once again, absolute pleasure speaking with you. I I I really appreciate you taking the time. Like you said earlier, you try to keep most of your meetings for half an hour. So I I feel truly honored that um we've uh almost gone for another, what, hour and a half here. So yeah, thank you very much for doing this, Tony.

Aaron, my pleasure. My pleasure. Anytime. And I I've gotten a lot of compliments from uh friends of mine that jumped into here and they become listeners of yours. Um so That's awesome. That's awesome. I love getting your pop up. on my machine too and and picking off a few of those when I get a chance also. Oh, very good. Very good. So if someone does want to kind of follow along with you and see what you're up to, the best place to do that is LinkedIn.

Well they can hit me on LinkedIn or um if they wanna send an email to info at Matrix X, that's M-A-T-R-I-X-E-X. dot com. So that's um I read them all. Um, you know, we've been hiring, so there's been a lot of uh inbound, uh mostly um uh engineers. But uh yeah, you know, if if they've if they're a listener of yours and they have a question they ask

even a trading question, I'll find uh a way to answer it or one of my guys can answer it. But yeah, info at matrix X like executions uh dot com. So um appreciate it and uh Let's not make it another year, even though it's great to talk to you around the Christmas time and uh Yeah, we might have to make it an annual thing. Yeah. Well I'm glad you're in Sydney. I really miss Sydney a lot. I was in Sydney at Christmas time. It was It was kinda strange'cause it was summer, but

It was really beautiful and I loved it. Yeah, yeah. No, it it's certainly it's right in the middle of summer here at Christmas time. But um, you know, I'm hoping to make it over to Chicago s at some point too, so it'd be awesome to to catch up. Uh well give me plenty of warning. you're invited and we could uh you know introduce you to other traders and other people in the industry. Um wouldn't be uh a waste of your time, that's for sure. Yeah, that'd be awesome. That'd be really cool.

Well, uh, Tony, I know you've got a call in a couple of minutes, but um yeah, thank you very much for doing this. It was uh it was really great. Um and I hope um we'll have a part three sometime soon. Sounds great, Aaron. My pleasure. You've reached the end of this episode of Chat with Traders, but rest assured there are more.