Maria’s Note: Maria Bonaventura here, Rogue Economics’ senior managing editor. Tonight is a big night for Rogue… At 8 p.m. ET, Nomi is going on camera with an urgent strategy summit. She calls it the Running on Empty Summit.
She’ll do a deep dive into the global energy crisis, and how it’s going to get much worse here as winter approaches.
And she’ll share the top five sectors that will go down… and the top five that will go up… as a result of rising energy prices.
So be sure to reserve your spot right here. And we’ll see you in a few hours…
In the meantime, for this special evening edition of Inside Wall Street, I’m sharing a fascinating conversation I had with Nomi.
We talked about her career on Wall Street… how she got there… and how her experiences over the past three decades have shaped the strategies she shares with Rogue Economics readers today. Read on…
Maria Bonaventura: Nomi, you became an analyst at Chase Manhattan Bank when you were just 19. How did you land such a coveted job on Wall Street at such a young age?
Nomi Prins: I was studying Mathematics at SUNY Purchase. In my final semester, I got a job at IBM. It was in White Plains, which was a 20-minute drive away.
One of the senior programmers I worked with at IBM was talking to a headhunter. This headhunter was trying to find him a job in New York City.
My mom would take me to New York when I was a kid. We’d go see shows and concerts there. So I’d always wanted to live there – in the city, in the middle of the action.
So I called up the headhunter. I said, “Hey, I’m getting my degree in mathematics with a straight-A transcript. And I’m working as a programmer. I want to work in New York City. I don’t care what I do.”
The next day, a Friday, I took a day off from IBM, and I took the train to New York City.
I interviewed with the head of the analytics group at Chase, who worked with their traders across foreign exchange. They were trying to convert their analytics and old code to C++, the new code at the time.
By Monday, I was working at Chase.
Maria: Did you have any interest in the markets before you got to Wall Street?
Nomi: Not really. And I’d had no desire to work on Wall Street up to that point. Before I got that job, I always thought I’d work at a technology company.
But I enjoyed working with math and analytics. I enjoyed working with sets of information and data, solving puzzles, and forecasting what could happen.
I got that from my dad. He was a world-renowned statistician.
And it just so happened that Wall Street offered that path in technology.
This was in the late 1980s and early 1990s. Technology was leading the way in the financial world.
During my five years at Chase, there was tremendous development in analytics on Wall Street. I was working at the cutting edge of things that hadn’t existed before. These things were new not just to me, but to Wall Street at the time.
And as I came to know, my analytical skills are very useful when it comes to markets and investment strategies.
Maria: We’ll get to more on that in a moment. First, you talk about your dad a lot. And for good reason. As you said, he was a world-renowned statistician. And you got your love for numbers from him. Can you tell us more about that?
Nomi: My dad really was a genius. He grew up in Holland during World War II. Twelve different families or orphanages hid him during the war. Some of the orphanages were built underground.
He wrote a book about it later in life. In it, he explained how he used his brain to escape possible death multiple times.
For example, he learned how to play chess at a very young age. Even as a child, he could often beat the adult at the table. And that endeared him to the people protecting him.
As a survival tactic, he got deep into the strategy and the math of chess. And then, very early on in my life, he taught me everything he knew.
In our family, chess is something you do to calm yourself. To this day, whenever I land somewhere on my travels, I play chess on my computer. It’s just a habit.
So that idea of looking past what’s right in front of me and learning to forecast was instilled in me during my childhood.
Dad worked at IBM when it was just starting to develop what we now know as semiconductors. And later on, he worked on forecasting models with many scientists around the world.
He always asked, “What will happen if this happens? And what will happen if that happens?”
We would often talk about his work at the dinner table. And when my dad was in his office at home, I would watch him work.
He taught me how to program code when I was nine.
And you’d often find 5,000-piece puzzles strewn across our dining room table. He taught me how to put the puzzles together in my mind before I started putting the actual pieces together.
So that sense of looking ahead and considering the bigger picture was a part of my formative years.
Maria: How did your ability to look ahead influence your work on Wall Street? You spent 15 years there. And you even ran teams of quants there, in the early days of that movement.
Nomi: I was always involved in developing new analytics. The teams I managed created new models under my direction. Then, I worked with major companies and central banks around the world, explaining those new models to them.
So I always had a sense of pushing that envelope.
For example, in the 1990s, I was a Senior Managing Director at Bear Stearns in London. I ran a 29-person expert analytics team. While I was there, we had the Asian Crisis in 1997 and the Long-Term Capital Management Crisis in 1998.
For both of those crises, I created models to evaluate the impacts of crisis in the financial markets. And I created investing instruments that my team and I then discussed with our big corporate clients and central banks.
The models I developed helped me analyze something I knew I needed to know. But it usually didn’t exist yet on Wall Street and in the international investment banking world.
Earlier, I did the same thing at Lehman Brothers, where I also developed a new model. That model made it possible for Lehman Brothers to sell central banks more U.S. Treasury bonds in an innovative way.
My job at the time was to look at how we could combine and blend different types of securities. And to explain it to central banks in a very simple way.
At Bear Stearns, during the spate of 1990s debt crises, I created models that enabled us to capture the risk of credit crises before they happened.
Before that, a lot of the securities were just about interest or exchange rates. “Are interest rates going up or down? Are foreign exchange rates going up or down from one currency to another?”
They didn’t factor in what happens if there’s a default in the country. Or what happens if there’s what we call a “credit event.”
So I modeled everything we did to include adverse credit scenarios.
At the time, it was unheard of to include credit events in modeling tools. I was the first to do it. It’s one of the achievements of which I’m most proud, analytically speaking, from my banking career.
Maria: Those experiences have served you well in the two decades since then. For readers who haven’t been with us for too long, how does that translate into what you do at Rogue today?
Nomi: Well, for me, it’s always been about taking what I know and figuring out a way to make it into a strategy. Or into something systematic. But not something so rigid that I can’t see what else might happen.
And that’s what I do for my readers. I ask myself, “Where are we in the markets? Where are we going? And how can I present a cohesive strategy that makes sense for that?”
Staying flexible is important to me. That way, if things change, I can recalibrate that strategy for my readers. So there is a framework, a strategy, but it isn’t set in stone.
I’m always watching for new information that could affect our investment decisions.
That’s very important, particularly in markets that are battered about – whether it’s by politics or a virus. Whatever it is, and whatever comes out of it, I can use that big-picture view to recalibrate my strategies for our subscribers.
Maria: And we know how valuable that is in choppy markets like these. Thanks for chatting with me, Nomi.
Nomi: Always a pleasure.
Maria’s Note: Nomi’s putting her analytical skills to great use in a new service she’s launching tonight…
At her Running on Empty Summit, she’ll do a deep dive into the energy crisis that’s brewing across the world right now… And she’ll uncover a strategy to help you turn that crisis into a profit opportunity.
Plus, she’ll reveal five sectors she believes will go down as we head into winter, and five that will go up.
So be sure to sign up here to reserve your spot. And join us tonight at 8 p.m. ET for all the details.