In New York, in London markets swing wildly. But in Jon Sundt’s office at Altegris in La Jolla, the only crashing sounds this morning are the waves in the Cove, 10 stories below.
Sundt, 50, the blue-eyed descendant of a Viking king, likes it preternaturally calm. His natural high in life — after surfing — is managing risk, and Altegris now manages more than $3 billion in other people’s money.
It is not a hedge fund, that flexible pool of often vast sums of money whose managers can hedge their bets by going short — guessing if a stock or an index or a currency or a commodity will fall — as well as going long, that is, guessing these asset classes will rise in value. Altegris is a finder of hedge-fund managers. Then they put their clients’ money into them and monitor closely.
“You’ve got this wonderful world of amazing money managers, and no access,” since the SEC does not allow hedge funds to publicly advertise their services. “That was our business opportunity,” explains Sundt. “And when I say ‘wonderful world of amazing money managers’ maybe 5 percent of them are amazing, and maybe 95 percent of them aren’t worth a dollar.”
He fires up his desktop computer and begins to slice and dice a hypothetical million-dollar portfolio comparing different real managers against the S&P.
“The right type of long/short manager won’t necessarily get clobbered during down days, because he has a low correlation to long-only equities. That’s the key. They come into the market maybe long gold, short crude oil, long U.S. equities or short US equities — our software lets us follow them in real time.”
Nine months ago, Altegris came up with what I call “The People’s Hedge Fund,” a tradable mutual fund with a current value of $900 million, stock tickers MFTIX and MFTAX. Sold retail by brokerage houses like UBS, the fund allows access to the best global hedgies, at least as defined by Altegris’ fancy algorithms — a highly innovative product. (In the past three months of heightened volatility, July 7-Sept. 22, MFTAX Managed Futures was up 3 percent, while the S&P was down almost 17 percent. Sundt believes that success in our low-interest environment should be defined as annual returns of 8 percent to 12 percent.)
Since Altegris’ founding in 2001, Sundt’s clients have been investing in increments of $100,000 or $1,000,000. A hundred thousand, for instance, can be packaged into a $10 million fund then traded by the hedge fund SAC, which stands for Stephen A. Cohen, a trader personally worth $8 billion who works from a Connecticut warehouse where the temperature is kept cold, sweater weather, because Cohen thinks that people make better decisions chilled.
Cohen once purchased a piece of motivational art for some $8 million that might appeal to us San Diegans: a 14-foot tiger shark pickled in formaldehyde and encased in glass by British artist Damien Hirst.
“We don’t live in that world,” says Sundt, CEO of Altegris. “The great managers themselves might have some guys on their trading desks, you know, drinking a lot of coffee, living a different life than me. I can go surfing in the morning; they can’t.”
He points to the brass telescope in his office. It’s trained on Black’s Beach.
On the way to Black’s now for a look at the waves, we’re rattling and popping in Sundt’s beloved beach buggy, license plate “BLXVKNG,” a funky electric monster of an oversized golf cart.
He takes the key to the pipe gate from his board shorts and points to a keystone rock with a poem chiseled into it, dedicated to the memory of his father (a former Navy SEAL) and two brothers.
He explains, “My brother died of a cocaine overdose handcuffed in the back of a police car. My other brother committed suicide.”
He shuts the gate.
“When I buried Eric, my second brother, in 1994, I had to do something. I wanted to change the way kids thought about drugs. My brothers thought it was cool. It was not. You get to be our age and you look at people who do drugs: ‘What a loser.’ I want kids at 16 to go, ‘Loser!’ too.”
Sundt thinks big, but he thinks practical. He put together a video, then a DVD, had skateboarder Tony Hawk narrate it, sent pro-surfers like Laird Hamilton and successful runway models to junior high schools.
“A lot of kids get it. A lot of kids go through the program and they’ll identify with Alex Rodriguez, the best skateboarder in the world, who said, ‘Man, I saw those kids and they were just losers, and this is what I did.’ ”
Sundt put Natural High on the Vans’ Warped Tour. He asked how many middle schools there were in the U.S.
“85,000,” his assistant told him. “You can’t send the DVD to all of them, Jon.”
“Why not? What’s it going to cost?”
They held a party, wrote a check. About half the DVDs got tossed in the trash the first year. “That’s still good,” Sundt says. But in a couple of years, the Natural High program was adopted by the Los Angeles County school system, and now about 12,000 junior high teachers across the country talk the walk with 5 million students following the program in their classrooms.
On the way down the narrow road, we pick up a couple of surfers trudging with their boards. At the bottom, Sundt eyes the waves.
“You learn a lot about yourself when you surf, especially when you press the limits. I try to surf bigger and bigger waves. I make better decisions after I surf. I come into Altegris and nothing fazes me.”
Back at the office, another crazy-calm day from Wall Street to La Jolla, I pose the obvious question: “Do you get the same stoke from wild moneymaking days as you do from surfing? Is making money a natural high?”
“Building a world-class business is a natural high. It’s never been just about the money. Taking a phone and a desk, which is where I started, to this, is a natural high. It feels good.”
Sundt, 50, the blue-eyed descendant of a Viking king, likes it preternaturally calm. His natural high in life — after surfing — is managing risk, and Altegris now manages more than $3 billion in other people’s money.
It is not a hedge fund, that flexible pool of often vast sums of money whose managers can hedge their bets by going short — guessing if a stock or an index or a currency or a commodity will fall — as well as going long, that is, guessing these asset classes will rise in value. Altegris is a finder of hedge-fund managers. Then they put their clients’ money into them and monitor closely.
“You’ve got this wonderful world of amazing money managers, and no access,” since the SEC does not allow hedge funds to publicly advertise their services. “That was our business opportunity,” explains Sundt. “And when I say ‘wonderful world of amazing money managers’ maybe 5 percent of them are amazing, and maybe 95 percent of them aren’t worth a dollar.”
He fires up his desktop computer and begins to slice and dice a hypothetical million-dollar portfolio comparing different real managers against the S&P.
“The right type of long/short manager won’t necessarily get clobbered during down days, because he has a low correlation to long-only equities. That’s the key. They come into the market maybe long gold, short crude oil, long U.S. equities or short US equities — our software lets us follow them in real time.”
Nine months ago, Altegris came up with what I call “The People’s Hedge Fund,” a tradable mutual fund with a current value of $900 million, stock tickers MFTIX and MFTAX. Sold retail by brokerage houses like UBS, the fund allows access to the best global hedgies, at least as defined by Altegris’ fancy algorithms — a highly innovative product. (In the past three months of heightened volatility, July 7-Sept. 22, MFTAX Managed Futures was up 3 percent, while the S&P was down almost 17 percent. Sundt believes that success in our low-interest environment should be defined as annual returns of 8 percent to 12 percent.)
Since Altegris’ founding in 2001, Sundt’s clients have been investing in increments of $100,000 or $1,000,000. A hundred thousand, for instance, can be packaged into a $10 million fund then traded by the hedge fund SAC, which stands for Stephen A. Cohen, a trader personally worth $8 billion who works from a Connecticut warehouse where the temperature is kept cold, sweater weather, because Cohen thinks that people make better decisions chilled.
Cohen once purchased a piece of motivational art for some $8 million that might appeal to us San Diegans: a 14-foot tiger shark pickled in formaldehyde and encased in glass by British artist Damien Hirst.
“We don’t live in that world,” says Sundt, CEO of Altegris. “The great managers themselves might have some guys on their trading desks, you know, drinking a lot of coffee, living a different life than me. I can go surfing in the morning; they can’t.”
He points to the brass telescope in his office. It’s trained on Black’s Beach.
On the way to Black’s now for a look at the waves, we’re rattling and popping in Sundt’s beloved beach buggy, license plate “BLXVKNG,” a funky electric monster of an oversized golf cart.
He takes the key to the pipe gate from his board shorts and points to a keystone rock with a poem chiseled into it, dedicated to the memory of his father (a former Navy SEAL) and two brothers.
He explains, “My brother died of a cocaine overdose handcuffed in the back of a police car. My other brother committed suicide.”
He shuts the gate.
“When I buried Eric, my second brother, in 1994, I had to do something. I wanted to change the way kids thought about drugs. My brothers thought it was cool. It was not. You get to be our age and you look at people who do drugs: ‘What a loser.’ I want kids at 16 to go, ‘Loser!’ too.”
Sundt thinks big, but he thinks practical. He put together a video, then a DVD, had skateboarder Tony Hawk narrate it, sent pro-surfers like Laird Hamilton and successful runway models to junior high schools.
“A lot of kids get it. A lot of kids go through the program and they’ll identify with Alex Rodriguez, the best skateboarder in the world, who said, ‘Man, I saw those kids and they were just losers, and this is what I did.’ ”
Sundt put Natural High on the Vans’ Warped Tour. He asked how many middle schools there were in the U.S.
“85,000,” his assistant told him. “You can’t send the DVD to all of them, Jon.”
“Why not? What’s it going to cost?”
They held a party, wrote a check. About half the DVDs got tossed in the trash the first year. “That’s still good,” Sundt says. But in a couple of years, the Natural High program was adopted by the Los Angeles County school system, and now about 12,000 junior high teachers across the country talk the walk with 5 million students following the program in their classrooms.
On the way down the narrow road, we pick up a couple of surfers trudging with their boards. At the bottom, Sundt eyes the waves.
“You learn a lot about yourself when you surf, especially when you press the limits. I try to surf bigger and bigger waves. I make better decisions after I surf. I come into Altegris and nothing fazes me.”
Back at the office, another crazy-calm day from Wall Street to La Jolla, I pose the obvious question: “Do you get the same stoke from wild moneymaking days as you do from surfing? Is making money a natural high?”
“Building a world-class business is a natural high. It’s never been just about the money. Taking a phone and a desk, which is where I started, to this, is a natural high. It feels good.”
