For Wall Street, a Year of Hunting Bargains While Taking Refuge

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Trading from kitchen tables. Chasing takeovers alone by mobile phone. Tracking down N-95 masks for the local hospital.

This was a singular year on Wall Street, an industry where flurries of buying and selling usually happen on tight clusters of desks — not in isolation from homes — and where deals are traditionally sealed with handshakes that now are taboo. For many, the challenges were unexpected and terrifying, but also a chance to prosper.

“I have a vivid memory of much less sleeping,” said Mark Spitznagel, whose main hedge fund strategy at Universa Investments surged more than 3,600% in March as he and colleagues reacted to round-the-clock market swings. He rode out the turmoil working from a wing of his house, and eventually found time to recharge at his Michigan goat farm.

Spitznagel is one of five finance executives interviewed by Bloomberg to piece together a tumultuous year punctuated by a pandemic and unprecedented economic stimulus, by protests and the most contentious presidential election in memory.


Sheila Patel, who oversees $1.8 trillion as chairman of Goldman Sachs Group Inc.’s asset management division, was on her way to New Zealand after attending the World Economic Forum in Davos, Switzerland, in January. Stocks were near a record high, with investors undaunted by news trickling out of China about the emergence of a new coronavirus. President Donald Trump said at the conference that it was under control.

“The virus was the unspoken, constant underlying theme of many discussions” at Davos, she said. “At that point, most people were just speculating about what it was.”

Patel, who’s retiring this week after more than 17 years at the bank, had just been through a personal health crisis, beating back cancer with a successful round of chemotherapy.

“It was actually quite scary, because you feel like you’ve just gotten through a significant illness, and you think, ‘Uh oh. Is this dangerous? And what does this mean for me?’” she said. “Sometimes hardship makes us learn things that the good times don’t.”

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Patel canceled a stop in Australia, one of the final legs on her trip after Davos.

“As everything got canceled, my husband was already in New Zealand and I came to meet him,” she said, “and we’ve been stuck ever since.”

It didn’t take long for investors and others to appreciate the severity of the virus. On March 11, the World Health Organization had declared the Covid-19 outbreak a pandemic, the first in more than a century. Less than two weeks later, the S&P 500 tumbled 34% from its February peak.

John Rogers, the founder, co-CEO and chief investment officer of Ariel Investments, thought the crisis would pass in a matter of months.

“I really missed the gravity of it,” said Rogers, whose firm is the oldest Black-owned money manager in the U.S. “I was one of the more optimistic people.”

Rogers adheres to Warren Buffett’s philosophy that times of crisis present opportunities, and that it pays to be greedy when others are afraid.

“So I was very well predisposed to search for bargains everywhere we could, having very important daily research meetings with our teams, to get everybody’s perspective,” he said. “Conversations all day long. We wanted to be ready to buy and move quickly. We felt that the bargains would not stay bargains for long.”

Spitznagel said he wasn’t wondering when the market would bottom out. His tail-risk hedge fund was already positioned for a black swan event, with clients investing in it as protection against a stock-market plunge.

His firm specializes in guarding against market shocks and has profited during other times of turmoil, including the dot-com crash and 2008 financial crisis. The firm’s risk-mitigation strategy has delivered annualized gains of 105% since its inception in 2008 through 2019, according to an EY audit document viewed by Bloomberg.

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What stood out the most to Spitznagel? The massive amounts of emergency stimulus that Congress and the Federal Reserve pumped into the economy in early spring as millions of Americans lost their jobs and tens of thousands of small businesses were forced to close.

It was “recognizing that it’s a kind of wartime,” he said. “The market is just so driven by intervention right now. This is what investing has come to: What is the government going to do next? Right now, that’s what the game is. That’s a very weird and dangerous thing.”

By late March, New York City’s hospitals and nursing homes were running low on face masks, so Chinh Chu and his team spent the early days of the pandemic helping where they could by procuring personal protective equipment for first responders.

“We took a week off work and went to all our contacts and bought as many N-95s and KN-95 masks that we could, from all the places we could,” said Chu, a former Blackstone Group Inc. dealmaker whose firm raised money for multiple special purpose acquisition companies in 2020.

He called everyone he knew in China, in private equity, and procured 400,000 masks in a week, distributing them to hospitals, nursing homes and friends and colleagues with elderly relatives.

“I turned my house into a warehouse,” he said.

Just as the initial shock of the pandemic had begun to wear off, a wave of racial unrest had begun to envelop the U.S. following the death of George Floyd under the knee of a Minneapolis police officer. It also was a time when banks and asset managers across the country were forced to face their own shortcomings regarding diversity and inequality.

“I thought it was a real teachable moment for my kids,” said Neuberger Berman Chief Executive Officer George Walker, who took part in ensuing Black Lives Matter protests along with his three eldest children, ages 11, 9 and 7. “This was a summer where we all took stock of who we are and what we believed in.”

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By then, many in the business world had begun to adapt to working from home, social distancing, forgoing travel and spending more time with family than ever before.

A Goldman Sachs team in London dreamed up a “no-call zone” concept — Patel said it was replicated companywide — allowing employees to choose blocks of time in the middle of the day that they could devote to their kids, their work or themselves.

“For the first two months, everybody just worked flat out from home — lots of video-conferencing, work getting done on kitchen tables, kids around,” Patel said. “If you got through several weeks of that, the strain of it was clear.”

There was little rest for Chu, who did Zoom calls with colleagues from dusk until dawn. His favorite moment was the $1.7 billion initial public offering of Dun & Bradstreet, which began trading July 1. Chu’s firm, CC Capital, quadrupled its initial investment within 18 months.

“Not only was that IPO interesting,” he said, “it was the fact that we raised two SPACs in the middle of a pandemic.”

As for Spitznagel, the spring and summer finally meant he could spend some time on the farm with his family, taking long hikes and communing with the goats.

Hiking is much better with goats,” he said. “You are alone and in good company at the same time.”

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