We talk to Stephen Duchesne, CEO Endowment Bond Exchange, about what inspires him, success stories and his passion for numbers and statistics.
How did you land in finance and investments?
I studied Pure Maths at Uni and while doing an internship at Johnson & Johnson I noticed that all my friends who went into the Money Markets seemed to have far more exciting time than me. So I applied as a trainee Bullion Dealer and spent the next couple years trading gold before I moved into the quantitative side of financial markets where I built arbitrage and options trading models. It was the mid 1980’s and there were plenty of arbitrageable inefficiencies in the FX, Bond, and futures markets so it was a fun time. I spent most of my career in the wholesale financial markets with global investment banks and have quite broad exposure to the investment side and well as the trading & structuring side of the business.
How has this industry challenged or surprised you throughout your career?
The industry has continually challenged me because while the most exciting places are at the forefront of new products and transactions, it never stays new for long and you can’t stand still or the rest of the market will catch up. It means continuous self-education and trying to solve new (and old) problems in a new way. The markets has surprised me in the degree of imaginative product and market innovation, as well as the way new innovations have improved the efficiency of the financial system & economy. I have also been surprised over the years at the number of crashes, scandals, investment frauds, and “rogue traders”; every time it happens it’s usually for yet another different reason but it inevitable has the same outcome.
What are the big issues playing on your mind?
The biggest issue playing on my mind is what kind of world we will pass on to the next generation. A big global problem is energy, and we need to stop burning fossil fuels and find a new, cheap, clean, & reliable source, such as Thorium power. With population growth being what it is and the increase in demand from China & India, it’s very important to solve this. The increasing global geo-political instability is a big worry too for me, particularly with the development of terrorism & fundamentalism. I also worry about the cost of housing for the next generation and the cost of education for their children.
You’re obviously committed to your work. Where does Steve Duchesne the investment person and the person begin and end (i.e. work/life balance)?
Saturday !…. That’s my day for kids sport, outdoor chores, and family. On Sunday it’s a run, an hour or so at the beach, then back to work in the afternoon.
So what do you do in down time that doesn’t involve finance?
Spend as much time with the family as I can. I have four kids so it’s a full time job, but I like to read, go to the theatre and opera, eat out, and talk politics. I love the beach, but truth be told I am very interested in certain technical subjects in finance such as equity valuation and behavioral finance which I apply in my own portfolios. Most of what we know about probability theory came from, mostly French, mathematicians losing money in casinos, and looking at how we understand risk and uncertainty and deal with it as flawed humans really interests me. In my youth I made the mistake of admitting to an interest in statistics, which I won’t do again… This isn’t being recorded is it?