Novogratz was raised in Virginia. His father was a West Point football lineman and 1958 Knute Rockne Award (best lineman) winner Robert, Sr. He attended Fort Hunt High School.
Michael Novogratz excelled in athletics. He qualified for the National Collegiate Athletic Association (NCAA) wrestling championships in both 1986 and 1987 (both at 150-pounds (68.0 kg).
Novogratz earned his A.B. in economics. He then served in the New Jersey National Guard as a helicopter pilot.
Michael Novogratz began his career with Goldman Sachs in 1989 as a short-term bond (money market) salesman.
Novogratz lived in Asia from 1992 to 1999. He ran a trading desk for the firm in Hong Kong. In 1998 Goldman made him a partner.
Among the positions that he held at Goldman were president of Goldman Sachs Latin America and the head of fixed income, currencies and commodities risk in Asia. In March 2002, Novogratz joined Fortress Investments.
He was ranked a billionaire by Forbes in 2007 and 2008. But it is Novogratz’s recent title, The King of Cryptocurrency that has put him on top of the investor radar.
In October 2015, Novogratz retired from Fortress Investments.
Novogratz made an epic call a few years ago when he said, “Put a little money in Bitcoin…Come back in a few years and it’s going to be worth a lot.” Novogratz was of course bang on the money.
Bitcoin was trading around $200 at the time and as recently as August 2017 was worth $5000…
Over the course of the year (2016-2017) Novogratz scooped up (while he was holidaying) $250 million in profit from trading in cryptocurrency. It was the biggest haul of any single trade in his career.
He supports Democratic political interests.
He revealed in 2017 20% of his net worth was in Bitcoin and Ethereum.
Over the course of the year Novogratz scooped up (while he was holidaying) $250 million in profit from trading in cryptocurrency
INVESTMENT STYLE
Michael Novogratz is not a conservative investor, he has an open mind to new ideas. But that can also produce a mix back of results. Novogratz has had his share of losses. His fund lost $150 million taking the wrong side of a bet on the Swiss franc.
Then he compounded those losses by stacking up on positions that assumed Brazilian interest rates would fall. When the bet went the other way and faced with the prospect of client redemptions, Novogratz cut his losses and vacated his position.
But he has since made a comeback in cryptocurrencies. He trades cryptos using technical analysis to gauge investor sentiment.
“In a lot of ways, this is a market like any other market,” Michael Novogratz said. “You see the psychology of fear and greed in the charts the same way you’d see it in charts of the Indonesian rupiah or dollar-yen or Treasuries. They’re exaggerated because of less liquidity and because you can’t get short.”
“I sold at $5,000 or $4,980,” he said.
“Then three weeks later I’m trying to buy it in the low $3,000s. If you’re good at that and you’re a trading junkie, it’s a lot of fun.”
“Remember, bubbles happen around things that fundamentally change the way we live,” he said.
“The railroad bubble. Rail-roads really fundamentally changed the way we lived. The internet bubble changed the way we live. When I look forward five, 10 years, the possibilities really get your animal spirits going”.
But animal spirits have left some of the smartest people in the room sucked dry. Isaac Newton (English, physicist, astronomer, mathematician genius) invested in railroads, he doubled his money then got out, meanwhile railroad stocks continued to rally. Seeing all his friends around him becoming rich (peer envy) Newton decided to jump in again, this time investing a lot more money at the peak. The market crashed and Newton lost it all.
Irritated Newton famously said, “I can calculate the motion of heavenly bodies, but not the madness of people”.
Remember, bubbles happen around things that fundamentally change the way we live – Michael Novogratz
LEARNING RESOURCES
Michael Novogratz very recently, in September 2017, did an interview with Bloomberg.
Today, he hosts a weekly “crypto meet-up” for as many as 90 people over drinks at his office in Manhattan’s SoHo district and waxes effusive about his adopted industry.
Put a little money in Bitcoin…Come back in a few years and it’s going to be worth a lot – Michael Novogratz
CONNECT WITH INVESTOR
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Michael Novogratz
