Jim Chanos on Taking Risks Early

I took the biggest risk of my life at age 33 and I was terrified.

With a wife and two kids, a mortgage and almost nothing in the bank, I left my management position at a broker-dealer and dropped my Series 7. I essentially bolted from the business I had been in for a decade, giving up my license and my livelihood on a bet that I could be doing better for my clients as their advisor and make a lot more money once I was happy and the pit in my stomach dissolved.

And thank god it worked. I’m not sure what I would have done if it hadn’t.

In hindsight, I wouldn’t change much about my timing and all of what I had gone through to get things things right in the end – it was the real-world education of a lifetime. However, if I could change one thing, maybe it would be not waiting so long and staying with a profession that I truly hated. It probably would have been a lot less stressful had I pulled the ripcord in my twenties, before the babies and the bills.

Oh well.

Jim Chanos, one of the most successful investors of all time, began his career on The Street as a banker and then a brokerage firm analyst. The conflicts inherent in those roles drove him to seek out something more and that’s when he became a hedge fund manager. You see, Chanos was interested in the pursuit of truth and, what’s more, a way to make money from the discovery of truth before others could find it. The name of his firm, Kynikos Associates comes from the Greek word for cynic (and it can also mean ‘dog-like’, another apt metaphor for a fund that relentlessly hunts down meaning in the public information that others cannot see).

Here the legendary manager offers some advice to young professionals about timing their risk-taking:

“If you ever have an idea and you think you need to take career risk to accomplish it, do it early in your career…

Life intrudes — as when you get older you end up with more responsibilities and your ability to take risk diminishes.  If you are 25 and have a great idea and you fail, no one is going to hold it against you, and future employers and investors might actually look favorably upon it. So it you really want to pursue something, do it while you’re young — you’ll have more energy and you’ll be able to take more financial and career risk. If it doesn’t work, you still have your whole life ahead of you.”

I would counsel the same thing. I have some close friends in their late-20’s and early-30’s on The Street who are in the process of doing exactly this. They’re going for it now before they lose the chance or life intrudes.

For more words of wisdom from Jim Chanos, I highly recommend Mamta Badkar’s round-up at the link below:

22 Brilliant Quotes From Legendary Short-Seller Jim Chanos (BusinessInsider)