Story
Goldman paid Novogratz 1% of the $200M his team made
Mike Novogratz explains how Goldman's culture justified paying traders far below market: he got $2M in 1997 after his team made the firm ~$200M (a 1% payout vs. the 15-20% a hedge fund would pay), with the carrot being eventual partnership.
“Now, me and my team had made the firm like $200 million. And so that was a 1% payout, right? If you work at Citadel or any big hedge fund today, you're broadly getting paid 15% to 20% of what you make. Goldman paid us 1%, but you're going to be a partner one day”
Number
Fortress IPO made 5 founders billionaires in a single day
When Fortress went public (the first hedge fund / PE firm to do so), five of its principals each crossed the billion-dollar mark on the same day, which Novogratz claims is still unmatched.
$5
Founders who became billionaires in one day · people
“Well, when we went public, we were the only company ever, and I think to this day this holds, where 5 guys became billionaires in a day.”
Number
Novogratz's Fortress stake hit $2.3 billion at IPO
After ringing the bell at the Fortress IPO, Bloomberg flashed each founder's net worth: Wes Edens at ~$2.4B, and Pete Brigger and Mike Novogratz each at $2.3B.
$2300M
Novogratz net worth at Fortress IPO · USD
“Wes owned a tiny bit more, so Wes would have been $2.4 billion. And then Pete and I own the same, $2.3 and $2.3 billion.”
Take
Most macro traders don't actually hold the trade they believe in
Novogratz says the short-dollar trade was near-universal conviction among macro investors, yet he'd bet only ~40% held a big position. Trading, he argues, is less about the call and more about anxiety management and overcoming the fear of being wrong.
“I would bet if you took all their portfolios, only 40% of them have a really big position. Well, it should be tautological that if you're bearish, you're short, and if you're bullish, that you're long. But it's not because of fear. What if I'm wrong? And so, so much of trading is anxiety management.”
Story
'You're not so smart, but you're lucky' — Barak unlocked Novogratz's edge
Former Israeli PM Ehud Barak, hired as a $200K/yr consultant, told Novogratz he wasn't the smartest but had a general's intuition and pattern recognition. That reframing explained why Novogratz was right more than wrong and boosted his confidence.
“He said, you know, you're not so smart, but you're lucky. And I was like, that's the compliment?”
Framework
Figure out what you're good at and where it comes from
Novogratz argues your performance jumps once you can articulate why you win, not just that you win. After a mentor named his edge (pattern-recognition intuition), his confidence rose and his fund grew from $300M to $2B with performance climbing.
“And so the lesson for you or for listeners is spend time figuring out what you're good at and where that comes from. And not everyone has the same skills.”
Steal thisName the specific skill behind your wins, not just the wins; conviction in your own process is what investors and customers actually buy.
Framework
Figure out what you're good at and where it comes from
Novogratz argues your performance jumps once you can articulate why you win, not just that you win. After a mentor named his edge (pattern-recognition intuition), his confidence rose and his fund grew from $300M to $2B with performance climbing.
“And so the lesson for you or for listeners is spend time figuring out what you're good at and where that comes from. And not everyone has the same skills.”
Steal thisName the specific skill behind your wins, not just the wins; conviction in your own process is what investors and customers actually buy.
Story
How Novogratz first bought Bitcoin at ~$96
Around 2012-2013 with Bitcoin near $96, Novogratz formed a thesis as the Chinese started buying and had his family-office colleague buy his first Bitcoin. He then looped in friends Pete Brigger and Dan Moore, who each put in similar 7-figure amounts.
“The Chinese had just started buying it and I made a thesis. I said, we gotta buy it. And we started buying some of it. My friend Jeff Lowe, who's become a great investor, was working in my family office and he bought my first Bitcoin for me.”
Framework
Starting rich makes it easier to hold a winner
Novogratz argues being wealthy made his crypto bet easier to hold: a young person who turns $10K into $100K faces every pressure to sell, but for a rich investor a position is just one more chip on the table, so they can hold through volatility.
“If you're a young guy and you put $10,000 into something and all of a sudden it's worth $100,000, your friend's like, dude, you got to take some. You can buy a house. You can— your girlfriend wants you to buy, you know, like there's so many reasons you're going to sell that thing and almost nobody can hold. But if you already have a lot of money, it's just another investment.”
Steal thisIf you can afford to, size a conviction bet small enough relative to net worth that you're never forced to sell it on the way up.
Framework
Starting rich makes it easier to hold a winner
Novogratz argues being wealthy made his crypto bet easier to hold: a young person who turns $10K into $100K faces every pressure to sell, but for a rich investor a position is just one more chip on the table, so they can hold through volatility.
“If you're a young guy and you put $10,000 into something and all of a sudden it's worth $100,000, your friend's like, dude, you got to take some. You can buy a house. You can— your girlfriend wants you to buy, you know, like there's so many reasons you're going to sell that thing and almost nobody can hold. But if you already have a lot of money, it's just another investment.”
Steal thisIf you can afford to, size a conviction bet small enough relative to net worth that you're never forced to sell it on the way up.
Framework
Learning to come back from losing matters more than winning
Drawing on wrestling, Novogratz says no one wins every match (even Nadal lost 48% of points), so the skill that compounds is recovering from losses, separating a loss from a verdict on your competence or character.
“Learning how to come back from losing is one of the most important things because losing doesn't mean you're a bad guy. It doesn't mean you're a shithead. It doesn't mean you're not competent. It just means you lost that game.”
Steal thisTreat each failure as a single lost match, not a referendum on you, then do the work to understand what happened before getting back in.
Number
Knicks playoff front-row seats: $50K-$80K a game
Novogratz, a season-ticket holder, says celebrity front-row Knicks playoff seats can cost $50,000 to $80,000, with the second row going for around $15,000.
$80K
Front-row Knicks playoff seat price · USD per game
“And if you want to buy front row in the playoffs, you know, they could cost as much as $50,000, $80,000.”
Framework
Parenting rich kids is modeling, not money rules
Novogratz's approach to raising wealthy children: you can't fake not being rich, so all you can do is model behavior. If you talk only about money, kids talk about money; if you discuss interesting things at dinner, they will too. His one rule for his kids was 'be kind.'
“All you can do is model good behavior. If you want your kids to work hard, work hard. If you want your kids to be kind to the people in your house and the cab driver, be kind to them. If all you do is talk about money, your kids are only going to talk about money. If you talk about interesting things around the dinner table, your kids are going to talk about interesting things.”
Steal thisStop lecturing kids about values and just model them; what you do at the dinner table becomes their default.
Take
Past a point, 'kids must beat you' becomes idiotic
Novogratz reframes the American-dream pressure that children must out-earn their parents: beyond a level of wealth it's impossible and pointless (a Bill Gates kid can't top $100B), so the goal shifts to scaffolding kids to be self-actualized rather than richer.
“Like at one point, if you're Bill Gates's kid and he's worth $100 billion, it's impossible. Like, well, I don't have $500 billion. Like, it becomes idiotic.”