Bill Lipschutz

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Bill Lipschutz is a forex trader who is the co-founder and Director of Portfolio Management at Hathersage Capital Management.

Contents 1 Early Life and Education 2 Early Career 3 Career 4 Awards & Recognition 5 Personal 6 See also 7 Notes 8 External links

[edit] Early Life and Education

Bill Lipschutz was born and raised in Farmingdale, New York. He earned outstanding grades all through junior high and high school. One of his favorite subjects was math. Lipschutz had an interest in tennis and became an avid tennis player.^[1]

Bill Lipschutz attended Cornell University and earned a Bachelor in Fine Arts from their rigorous Architectural Design program after five years. He simultaneously enrolled in business classes and earned an MBA in finance in 1982 from the Johnson School of Management, also at Cornell University.^[1]

[edit] Early Career

Lipschutz’ career as a forex trader may have started by accident. While at Cornell University, Lipschutz inherited $12,000 worth of stock after his grandmother’s death.^[2] In his inheritance, there were over 100 different stocks in numerous locations. It cost Lipschutz a substantial sum in fees in order to liquidate and consolidate all of the money in to one location. When he did get it all in to one place, what was left he refers to as his risk capital.

While attending school, he began investing the risk capital money from the stocks he had liquidated in his free time. In order to make the most profit from that risk capital money, he spent hours in the library, researching and reading everything possible regarding the market. He read several company’s annual reports and as many financial periodicals as were published to get the most up to date information. The more he learned, the more interested in financial trading he became. With hard work, eventually, he grew the risk capital into a portfolio worth close to $250,000. It was a great success, albeit short lived. The risk capital was virtually blown with one bad decision and a turn on the market. Instead of falling in to despair over the lost money, Lipschutz considered it a valuable learning experience to apply to any future investments. Through his college career, Lipschutz became more interested in the stock trading and continued to pursue it with success, while leaving his architectural degree behind.^[2]

During the time spent at Cornell, he met a woman who would later become his wife that happened to be a research assistant under Dr. Henry Kaufman. Dr. Kaufman was a world famous economist working at Cornell University. Lipschutz was working on getting a summer internship with Dr. Kaufman the year after his future wife was done, but his interest in trading and business classes also landed him with an interview for an internship for Salomon Brothers during the summer of 1981. Both interviews went well and Lipschutz was offered an internship with each. Since there was competition over getting Lipschutz to join both, he came up with a solution. Lipschutz decided to work for Dr. Kaufman during the early summer, and then moved on to work for Salomon during the late summer and fall. He would then go back to school in the spring to finish up his classes, write his thesis paper and finally to graduate in 1982. In May of 1982, he joined Salomon Brothers as a full time employee.^[2]

[edit] Career

After joining the Salomon Brothers in early 1982, Lipschutz attended the Salomon training program and began learning the ins and outs of the financial trading industry. In the midst of his training program, he was pulled aside and asked to be a part of the newly formed Foreign Exchange (or forex trading or FX for short) Department. He admits he didn’t know anything about foreign currency at the time, but no one else around him did either. So Salomon did what they do best – they defined foreign exchange trading. Salomon created a team of their brightest traders, came up with a workable plan for learning currency trading and hit the market running. Lipschutz was one of the original members of the Foreign Exchange Department, and he had success like few others did in forex trading then and now.^[2]

The foreign exchange markets took off about the same time Salomon Brothers were jumping in the market. Lipschutz quickly got a foothold in the market and became a powerhouse with the Philadelphia Stock Exchange, where the majority of forex trading took place. After learning the ropes for several months, Lipschutz got the hang of trading. He worked long days and often times around the clock to be up to the minute on what trading around the world was doing. At the peak of his career, Lipschutz had 50% of all the currency option volume on the Philadelphia Stock Exchange and 80% of all open interest option.^[1] Those numbers are staggering and have not been repeated since. With those numbers and his ability to gauge the foreign currencies, he became the forex trader. He was considered to be amongst the top five of all forex traders worldwide.

In six short years, Lipschutz built the Foreign Exchange Department to be the most successful ever. By 1985, he was pulling in $300 million per year for Salomon Brothers. Which, when figured out daily, was the cool sum of $250,000 profit.^[3]

Lipschutz was the principal trader for Salomon Brothers’ proprietary foreign exchange account from 1984 until he left in June 1990. In 1988, he was appointed a Director of Salomon Brothers, heading the Global Foreign Exchange Options Group and the New York Foreign Exchange Trading Desk. In 1989, he was named the Managing Director and Global Head of Foreign Exchange.^[4]

Despite his enormous successes, Lipschutz left Salomon Brothers. He felt they were becoming too large and were losing their appeal as a cultural institution. After a particularly large and successful campaign, he opted for an early retirement. He left the workforce, dabbled in some small trades, and ultimately looked for more business. His retirement did not last long. Currency trading was becoming bigger and more profitable than bonds or stocks, and Lipschutz knew where his natural ability lie, so he went back to work.^[5]

Lipschutz went to work as the President and CEO for the North Tower Group briefly in 1990. They are a subsidiary of the Merrill Lynch Corporation and manage funds. Then he left North Tower Group and went on to found Rowayton Capital Management in 1991. They were as asset and management firm where he was the President and CEO until 1995.^[4]

In 1995, he took a direction far different from the road he had been traveling on. He met up with a bunch of his former Cornell classmates and they formed Hathersage, which is a currency hedge fund manager company. His current title is Principal and Director of Portfolio Management. Hathersage is a small, hands on company without the large number of investors or employees that he was used to working with. The company is also run out of his home, and the homes of several of his employees. Together with his friends, and his wife, there are seven employees total. Each has a very specific role in the company and its day to day operations to make it successful. Hathersage is a $200 million dollar company that manages only 14 investors.^[6] What is different in this company from his past endeavors is that these are managed accounts. There are many safeguards in place to handle loss reduction provisions. The accounts aren’t always at the whim of the currencies and cannot be lost with a single bad transaction. These safeguards have helped Hathersage to show an 18.8% average on returns each and every year since their conception. This statistical success is outstanding and hard to achieve in the financial world.^[5]

[edit] Awards & Recognition

Bill Lipschutz was inducted into the Trader Monthly Hall of Fame in October of 2006.^[5]

Bill Lipschutz has been featured in two print books about exceptional market traders. The first was The New Market Wizards: Conversations with America’s Top Traders by Jack D. Schwager. It was written in 1992 and features several of the top market traders from the 1980’s and 1990’s.^[4]

The second book to feature Lipschutz was written by Alpesh B. Patel in 1998. It also goes in depth with how Lipschutz thinks about the markets every day and how he rose to great success.^[4] Both books are still widely available online and in bookstores and at the local library.

Lipschutz and his wife, Lynelle Jones were recognized in a book by Maggie Jackson, What’s Happening to the Home: Balancing Work, Life and Refuge in the Information Age.^[7]This book was published in 2002 and features many prominent people who work successfully from their homes. Lipshutz and Jones are featured for the design of their home, which is also their very high tech workspace. Lipschutz has no less than 12 television monitors in his apartment, which scroll the up to the minute information o foreign currencies. He is able to view the numbers in the bathroom, in the bedroom and everywhere in between with ease during the day or night.^[7] Maggie Jackson wrote the book as a cultural study of how the home and workplace have combined in to one place, and very successfully at times.^[7]

[edit] Personal

Lipschutz is very guarded about his personal life, just as he is with his professional life merits. He is married to Lynnelle Jones, who is also a director for Hathersage. She has a background in economics and spent years in the bond and financial industry for Salomon, Rowayton and Goldman Sachs before forming Hathersage with her husband. They met while attending Cornell University.^[8]

[edit] See also

List of personalities associated with Wall Street

[edit] Notes

[edit] External links

• Official Site Biography