Wealth Podcast Post

Beating the Market with Kamal Gupta

George Grombacher August 5, 2022

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Beating the Market with Kamal Gupta

LifeBlood: We talked about beating the market, transitioning from playing blackjack to Wall Street, what it takes to be a successful investor, and how to position yourself for success, with Kamal Gupta, professional gambler turned hedge fund manager who beat the market for 103 consecutive months

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You can learn more about Kamal at KamalGuptaWrites.com and LinkedIn.

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Our Guests

George Grombacher


Kamal Gupta

Episode Transcript

Unknown Speaker 0:00
Come on

Unknown Speaker 0:11
let’s put this Georgie the time is right welcome. Today’s guest is strong and powerful Kumar Gupta. Kamal, you’re ready to do this? Yes, I am. All right, let’s go. Kamal is a professional gambler turned hedge fund manager. He’s the author of play it right the remarkable story of a gambler who beat the odds on Wall Street. And he had an unprecedented one of a kind, 103 month streak of positive returns. Come all excited to have you on tell us a little bit about your personal life smart about your work and why you do what you do.

Unknown Speaker 0:48
Well, needless to say, I grew up in India. And I came to the US for graduate school to like, it’s a well worn path from from India to study engineering to come to the US, especially computer science, and I was one of them. But my path take a slight detour. Because, you know, unlike most people in my profession, I was just sick and tired of the computer world, I found incredibly boring and dull and soul crushing. And I couldn’t imagine the rest of my life sitting in a cubicle writing code and punching on a keyboard all day long.

Unknown Speaker 1:20
So, on a ski trip to Las Vegas, I came across blackjack. And I was fascinated by the simplicity of the game, like get it as close to 21 as possible without going on. And then when I found out that God county can turn the odds in your favor, I was absolutely hooked. And to the chagrin of everyone around me and

Unknown Speaker 1:42
everybody, I decided to become a professional gambler, which, you know, to most people, you know, and I was living in San Francisco at the time, it didn’t matter where you were from San Francisco or India, choosing to become a degenerate gambler was probably the worst path. I mean, you could follow and, and only that I did proudly. So this is what I’m gonna do. And it’s there was not I was not doing in the shadows, I was just doing it out in the open.

Unknown Speaker 2:07
And it for the next two, two and a half years. That’s all I did for all practical purposes. And eventually everybody came around because I have a line in the book where I say, experience has taught me that the world hates the gambler, but they love a winner. And this contradiction rarely gets tested because most cameras are losers, right? So in my case, the contradiction was really evident, right? So, you know, I thought, after two and a half years of this and winning on a sustained basis, I thought the rest of my life was going to be spent traveling the world playing blackjack. And that was almost three decades ago. That however, was not to be in a remarkable turn of events, which I described in the book. My gambling skills earned me a job at Lehman Brothers, you know, where I was grilled all day about, you know, my Miami expertise, mainly because all these bond traders on Wall Street, they fancied themselves as bad gamblers, right. But I mean, I knew more about blackjack than all of them combined. And then they had me submit to a public test of counting a deck of cards under 18 seconds, which I could do at the time. But that was in the solitude of my apartment, not on a trading floor, which is the first time I’ve ever been.

Unknown Speaker 3:20
But I happened to identify the cards correctly in 16 seconds, and they gave me a job and I, I came to Wall Street, not knowing the first thing about business or finance. And I just thought, you know, I’ll give it two years. And then I just go back to blank check in San Francisco, because

Unknown Speaker 3:38
I was not a fan of New York and I love San Francisco.

Unknown Speaker 3:42
But you know, and this is the story in the book, you know, despite suffering a great deal of you know, frankly, abuse

Unknown Speaker 3:51
and difficulties in this industry ended up staying for 27 years.

Unknown Speaker 3:57
And then eventually it culminates with my creating what I consider just it’s impossible to prove this because there are no public records available. what I consider to be the finest long term long term, I mean nine year track record produced by an individual in hedge funds trade. And also and this can be proven publicly, anyone can do it. I played a key role. This comes towards the end of the book in 2018. In what became the largest hedge fund launched in history, it’s called Access Point capital. So that’s the story in the book, starting from an immigrant from India, you know, ending up on Wall Street not knowing nothing and about how he Gamble’s how he risks he takes in life and you know how, in spite of a great deal of difficulties, eventually it all works out. Amazing.

Unknown Speaker 4:52
Is it

Unknown Speaker 4:54
so you’re a kid you talk to United States is it

Unknown Speaker 5:00
Audacity? Is it confidence that in the face of I’m sure your parents hated every second of this probably for the years that you still said, No, this is what I’m doing. Actually, not for years, much more than a few years because I get married two years into my Wallstreet career. And at my wedding in India with a wedding in in America and in India. The guests wanted to know how I went from computer science to Wall Street. Sure, and couldn’t tell them the story. Because even after having gone legit, and working on Wall Street, my parents could not face up to the fact that I was a gambler. Take them another five years to come around. And then I could tell my relatives that I well, I spend my time gambling. So yeah, it was, I mean, I don’t know if it’s Audacity or confidence.

Unknown Speaker 5:52
The biggest problem I had with the casinos, and this is why I played blackjack and no other game.

Unknown Speaker 5:59
Because let’s say poker, poker is also a game of skill. But the difference in poker and blackjack is when you win at poker, you win from other players like yourself, you the house, because it takes a cut from every part always wins in poker, in blackjack, you’re playing against the house. So when you beat the game, you’re beating the house and taking the house as money. And that’s what I wanted, I did not want to win money from other people like myself. My problem was the house was fundamentally evil. Because these casinos, which you know, bright lights, and fancy, whatever, you know, drinks and everything else.

Unknown Speaker 6:38
The biggest strain that I had a problem with was the concept of unfairness. Because the fact that you go into a casino, you play the game, according to the rules they set for you save themselves. And if they find out, you’re counting cards, and you’re good enough to beat them, they throw you out of faith that I spotted myself on several occasions. So when I read the book, the million dollar blackjack by Ken uston, initially in my career, I was just outraged by the fact that the casinos took our countries out. And I initially became a card counter, just to teach the casinos a lesson. It was like a David versus Goliath, which is a theme that has followed me throughout my life. But to me, the gambling aspect was David taking on the life and trying to obviously do this, David is not going to take that Goliath down. But if I can make a small dent in their bankroll, that will be worth it. And then obviously, I can make a living off it and I finally figure it out.

Unknown Speaker 7:32
But initially, my objective was just to beat the house. Because

Unknown Speaker 7:37
I think that’s amazing. And thank you for that.

Unknown Speaker 7:42
So it’s it’s create a system, yes, have the discipline to follow that system at all costs. It’s have a big enough bankroll to be able to suffer through thin times. And you’ve you’ve, from my understanding, you’ve never deviated from your system. I think that the consistency of that is, is amazing. As somebody who considers myself a relatively consistent person, I certainly cannot claim that. So kudos to you on that. Well, that came. I mean, in hindsight on some, on some level, it seems difficult that for 20 years, I could just follow the same system over and over again, even though there were times which were traumatic, you know, in trading. But it all comes back from my the time I spent playing blackjack because I believe I mean, Blackjack can be mathematically proven, that gives you an edge. So I believed in the system. And I will have to admit that there were times I didn’t always follow it because especially in the early time, so when I, you know just sort of lost faith in the compass, my favorite How could I lose five rounds in a row and stuff like that? And I knew how badly things went for me every time I deviated from system.

Unknown Speaker 8:58
So by time, you know, I came to Wall Street and unlike most Wall Streeters who show up when they’re fresh graduates in their early 20s. I came to Watson in my very late 20s. So I was a much more fun human being who had spent, you know, two or three years in the crucible of these Las Vegas casinos. So I was certainly a lot more hardened from that standpoint. And also I knew the value of discipline. And so staying disciplined once I hacked upon a method, it was very easy because I’ve seen what happens when you’re undisciplined and rageous not just to myself, but to a whole lot of people around. You know, and some of the stories are in the book. So really bad things happen. Yeah.

Unknown Speaker 9:43
Man, it’s so

Unknown Speaker 9:46
fascinating. So how did you how did you find yourself at Lehman Brothers in the first place? How does that even happen? It happened you know?

Unknown Speaker 9:58
I really thought less than

Unknown Speaker 10:00
My life was playing blackjack and traveling the world. And in traveling the world, I happen to be on the East Coast. And where I was staying with some friends on the Upper West Side of Manhattan, in they had friends and all these people worked on Wall Street and you know, at a nightclub, which is now defunct, but it had a very cool name. It was called a bar bat, you know? And they’re like, people turned to me, and I was a stranger, I didn’t know who I was, they asked me, what do you do? And I said, I’m a professional gambler. And it was two years into my gambling career. And I sort of felt like I earned the privilege, you know, it stopped everyone in their tracks, and they wanted me. So over the next two hours, I stripped out of the story of my last two years. At the end of that someone said to me, you should work on Wall Street.

Unknown Speaker 10:49
Why I don’t know anything. And then they gave me a copy of liars poker,

Unknown Speaker 10:55
which had come out a couple years earlier a few years earlier. And then on a flight back to Las Vegas, on page 125, it talks about a black set where they’re getting hired on Wall Street. Let’s see what maybe I can do that. Now. That guy also had an MBA from Harvard, which obviously, I was not going to.

Unknown Speaker 11:10
But I said, You know what? I’ll take a chance. And

Unknown Speaker 11:15
the rest, as they say, as I say, is this they actually have

Unknown Speaker 11:19
a lot of it. But I don’t know anything about that. Oh, it’s okay. Nobody does. Nobody.

Unknown Speaker 11:26
You’re gonna fit in? Great. All right. So

Unknown Speaker 11:31
the, this 103 month of positive returns? Can you look back and say, Were there a lot of times where you almost had negative or just a couple of times? That’s a great question, because

Unknown Speaker 11:45
I tried to figure it out. How many of those months did I get lucky?

Unknown Speaker 11:50
You know, you need luck. I mean, it’s impossible. Like, I mean, yeah, it was a good black man. But luck taught me my job, you know, at Lehman Brothers,

Unknown Speaker 12:01
that was 100, in three months,

Unknown Speaker 12:04
I can tell you with almost with certainty that there were no more than five or a somewhere between five and eight. So under 10 months that were locked, so maybe six or seven roughly. So if I’d gotten completely unlucky, I would still have had 97 Six, which is a very enviable, you know, tropical. And so I would admit, there are a handful of months where I got very, very lucky. I mean, on the 29th of the month, I’m like staring into the abyss of a loss. And something happens on the last two days of the month, where market just go completely, you know, in the opposite direction, and my loss turns into a profit. So there were like, maybe six odd months like that. But the vast majority were not luck. Right?

Unknown Speaker 12:55
Chance favors the prepared mind. Luck is the residue of design stuff. Well, I actually wrote an article about this exact topic for

Unknown Speaker 13:05
I think CEOWORLD dot biz. It’s called luck favors those who takes risks. And I really believe you make your own luck, because, like, I’ve had a lot of luck in libraries. But the luck has come from the fact that I’ve placed myself in situations, which allowed me to get lucky. Like, I mean, yeah, I mean, to get hired as a gamble on Wall Street is a really lucky phenomenon. But it wasn’t luck that made me give up into theaters. It wasn’t luck, that made me devote the extraordinary effort, and I did to become a good blackjack player. It wasn’t luck, that gave me the idea. You know, maybe I’ll set it as brothers. So I mean, yes, there is luck. But also you have to take steps, and that allow you to get lucky and also recognize when you are good,

Unknown Speaker 13:51
you know, and then take advantage of it. And sometimes people might get lucky and might be too timid, and risk averse to take advantage of the lack of opportunity that’s in front of them. Like I had friends in San Francisco when I was moving to New York, to work for Lehman. They thought it was, I mean, just as much as I tried to gambling was a silly venture. On my part. They thought this Wall Street was like a crazy idea. Like what the hell do you know about finance and business while you’re doing this? You’re so much happy to New York. I mean, it’s like, it’s not like they’re paying you anything to move over there. So I mean, I see you don’t understand it’s the opportunity. Like you just don’t know what could happen, you know, and, and that is that cliched line. It’s New York, if you can make it here, you know, so

Unknown Speaker 14:40
it’s like, I love it, but seems like something you would do, certainly so.

Unknown Speaker 14:46
And speaking of things you would do, obviously, you’ve you’ve you’ve become an author, but how else are you spending your time? Are you still trading? Are you still are you still playing cards? You know, it’s funny.

Unknown Speaker 14:58
In the book I sort of described

Unknown Speaker 15:00
I tried to go back to the accounting because I’m really unhappy with my life and on Wall Street after years. And I realized that I’ve just lost interest in, in accounting and bloodshed, because like, I’m a different person, you know, often two years on Wall Street, so I couldn’t go back to accounting. So I left the financial industry in 2019, you know, because 2018 was the launch. Just excellent point. Yeah. And that’s when I started, got the idea of writing this book. And I started working on it. And I think, a year into that, I realized, you know, what, I think I have something here. And I think I want to devote all my time to it. So I left the financial industry in 19. And I’ve had opportunities to go back. But now when I look back, I realize that it’s like blackjack for me two years into Wall Street. I think I’m done with finance, you know, I mean, and I think my brain right now is only uniquely suited to telling stories. You know, and thankfully, I have a lot of stories to tell. So I think that’s what I’m planning to do in the future, is to just try a way of telling stories.

Unknown Speaker 16:05
I’m working on a film and TV deal for the book.

Unknown Speaker 16:09
So if that comes to pass, and we’re quite close, if that comes to pass, then the next two or three years of my life are spoken for.

Unknown Speaker 16:18
And beyond that, I don’t look beyond even six months. I mean, forget years. So. So right now my focus is on telling stories in any format. And hopefully, if this thing works out, then I don’t work on the script and all that stuff. Yeah, it seems like a perfect movie. It’s, you know, it’s, it’s like an aspirational story from somebody coming from India. And, you know, it’s like, an unusual immigrant story and an unusual realization of the American dream. And, you know, it has gambling on Wall Street, you know, I mean, what’s exciting topics, those are exciting things. And potentially lewer other young people to pursue your path and make other people’s parents also dislike your choice.

Unknown Speaker 17:07
Parents are gonna hate me

Unknown Speaker 17:13
like staring my my kid down the wrong path, you will not watch that movie you will.

Unknown Speaker 17:21
Gambling, I mean, obviously, gambling is big everywhere. And especially in India, I mean, people, like, you know, the biggest Indian festival is Diwali and the fall where at night, everyone is required to gamble. Because that’s how you welcome the Goddess of wealth, you know, into your house. So after you eat and everything else, everyone started gambling. So that’s how you are in the new year in India? Got it? Well, it’s a perfect segue into that. I love it.

Unknown Speaker 17:52
Oh, come on, the people are ready for that difference making tip? What do you have for them?

Unknown Speaker 17:57
You know, I actually, it took me a while to figure this out.

Unknown Speaker 18:03
But I have a tip about what the key to happiness is in lights. And I sort of explored this a little bit in the book, I really believe as someone who’s played a variety of games, and

Unknown Speaker 18:15
the key to happiness in life lies in playing the game while during the day, and sleeping well at night. Now, both of these things seem like simple statements. But if you drill down into it, you know, they’re fairly like involved, like playing the game, right doesn’t mean just method standpoint, or playing blackjack. You know, or managing money on Wall Street. From a mathematical standpoint, you have an edge, there’s also a consumer of right versus wrong. That’s what the book is called. Right? Right. There’s a moral component to playing the game as well. So it’s not just that you’re beating the house, to me, beating the casinos was a moral imperative. And I felt the same way about Wall Street, you know, because Wall Street is the house when it comes to this, this casino. And then sleeping well at night, also has taught has many components. But two big ones that I’ll highlight. One is, again, a moral imperative that which is that, you know, anyone who’s committed a lot of evil during the day will have a hard time sleeping at night. I don’t care how much you know,

Unknown Speaker 19:14
how great you are, I mean, I don’t think you can sleep at night, knowing that you are, you know, and more importantly, in Wall Street terms, sleeping well at night, is a very difficult thing to achieve. And it’s a concept of risk management. You’ve managed your risk, and you position in a way that doesn’t keep you up at night and force you to check oh my god, where markets in Tokyo time on London time or get up at one in the morning. Get up at four in the morning, just to see where markets are. So you trade in a fashion which so I mean, in a nutshell, play whatever game you’ve chosen for yourself, figure out a way of playing it well during the day and make sure you sleep at night.

Unknown Speaker 19:54
And I think that will make you happy money is a distant third in this equation.

Unknown Speaker 20:00
Shouldn’t and money is simply the side effect of a game played well.

Unknown Speaker 20:05
I think that that is great stuff that definitely gets caught.

Unknown Speaker 20:09
Thank you so much for coming on. Where can people learn more about you? Where can they get a copy of play it right the remarkable story of a gambler who beat the odds on Wall Street. So the book has been is now available in the entire English speaking world. You can buy it on Amazon, you can go into bookstores, Barnes and Nobles. It’s also available in Indian subcontinent published by Bloomsbury and in North America. It’s published by ECW, press and independent press in Toronto. So the book is available everywhere. And if they want to get in touch with me or learn more about me, I copied Michael Lewis’s website, his website was Michael Lewis writes.com. So I made my income out of the rights.com because if I call my website Michael, looser, calm, I think you would have objected to that.

Unknown Speaker 20:53
So come out of the reits.com smart, smart, love it. If you enjoy as much as I did, she’ll come all your appreciation and share today’s show with a friend who also appreciates good ideas and loves a good story. Pick up a copy of play it right wherever you buy your books, and go to a common Gupta writes.com. That’s KMALG pt a rights.com. Thanks again. Cool. Thank you very much. And until next time, keep fighting the good fight. We’re all in this together.

Transcribed by https://otter.ai

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