Day in the Life: Michel Debiche, hedge fund founder
06:30 I am usually up with our baby, who is one. But even if the baby is asleep, we have to get the other two kids out the door. Sometimes I make breakfast for them, but usually it is my wife, Michal Melamede, who is about 500 times more efficient than I am.
The morning is crazy. We make their lunches and lunch for me. Michal, whose company (Metrics Solutions LLC) provides real-time software systems for Wall Street, may work from her home office, go to her office here in Princeton or on-site in New York City.
07:00 My commute takes me nine minutes, unless there is traffic when it can be up to twenty. This is very different from the years when I commuted an hour and a half each way from Princeton to New York. Now I have to choose a time to read a newspaper; then it was just part of my train time. I never saw the kids in the morning, and in the evening you are tired.
07:30 My working day falls into three parts - preparation, trading and tracking, and end of day wrap-up. The first step is checking that all the overnight data downloads have worked correctly and that all the updates to our databases have gone off. Second is portfolio reconciliation between our prime broker, Morgan Stanley, and our own system.
Actual trade breaks are extremely rare because we are trading with automated systems. I look for complications such as corporate actions, mergers, or special dividends that have to be handled somewhat manually.
08:00 Once the maintenance is done, we have to check that we have stock loan approvals, which we automate.
09:30 The market opens. Our trading model is extremely automated and runs on its own with a very light touch of human supervision. A great deal of price discovery occurs near the open; it is quite remarkable to watch our P&L, which we track in real time. It will often shift quite a bit in the first hour and a half of trading. I am really stuck to the screen for that time.
10:00 I sit at a desk with several screens, including a Bloomberg terminal. No stock makes up more than one per cent of our portfolio. If we have 1,500 stocks, we are constantly looking at the tips and fringes to make sure what is going on is normal enough. We look for bankruptcies or takeovers - anything that might no longer fit our model.
11:30 When we do a trade, it is typically 500 to 600 stocks in a single trade. We deal through two brokers who give us access to the New York Stock Exchange, Archipelago, Island, Instinet, Tradebook, and NASDAQ. We trade at frequent intervals during the day when the model determines it is worth trading. Each day we look into several stocks that pop out of various filters for performance relative to its peers over the last few days or couple of months.
12:00 I work with a headset and fingers on the keyboard. During trading I am pretty much tied to the office; if something unusual happens to the system it will send a text message to my mobile. There's no escaping.
13:00 The market tends to be quieter over lunch, so that's when I do phone calls, or have a marketing or development meeting. One of the sad things about a trading desk is you have to eat at or near your desk. I typically bring lunch from home. I can go down the hall to the microwave, as long as I carry my cell phone with me.
13:30 We have high volumes and low margins and make our profits on volume. We are serious consumers of telecommunication bandwidth - we have five T-1 lines. When we send 1500 trades, we want them to get there quickly.
14:00 Market changes create opportunities, like the Fed announcement in January 2001. On a day like that you want to crank the dials up and let the model trade like crazy. Right now I don't have as big a team as I used to, but I can do it all myself.
On a proprietary trading desk, you waste so much time in meetings. Here you do it yourself or get it from a provider who has to be good because they are selling a service; they are not just part of an internal bureaucracy who does it whether they are good or not.
15:00 Sometimes a data feed or a connection to a trading system will go down. It's a small fire, and you have to sit there and put it out.
16:00 After the close we do internal meetings, take calls, and do end of day wrap up. We prepare the files and upload them by computer to Morgan Stanley and take care of any open issues that came up during the day.
17:00 There is always more to be done, it is not as if we have only one idea to trade on; the trick is to fit that development into an otherwise busy day. New work usually ends up getting done on weekends and evenings.
18:00 I usually leave around 6:00 or 6:30pm, although I can leave earlier, as early as 5:30pm to cart the kids to soccer games. I used to be a soccer player until injuries caught up with me, and now I am a soccer Dad. There is so much you miss out on when you commute because you are disconnected from community life. Richard Levine, my partner in Quantia Capital, I met because he was the coach of my daughter's soccer team.
You learn a lot about people when you see them function as a coach, particularly in a volunteer organization where they have to deal with parents who leave their kids and their vicarious dreams of glory in the coach's hands. It is a real study in human nature, which is why Richard is the one who handles investor relations. He is more diplomatic than I am.
19:00 We have dinner at 7:00 or 8:00pm, depending on soccer practice
20:30 I help the kids with homework. Sometimes I work from home in the evening. When you are running your own business, there is always paperwork. Once in a while I go back to the office. You can't do that when the office is an hour and a half away, but here it is no big deal.
22:00 This is usually the cutoff, unless there has been a lot of homework, in which case I might have to work later.
