Billionaire Ken Griffin, founder and CEO of Citadel, said defending is not the best strategy in an era of confusion and volatility and almost always backfires investors. “In finance, when you’re defending, you’re almost certainly losing,” Griffin told Citadel’s new class summer intern on Thursday evening. “There’s no other way to put it down. Every time a portfolio manager says, ‘I’m in defense,’ I’m waiting to see the red. Because it tends to happen next. As of June 1, Griffin, whose hedge funds oversee their $66 billion assets, believes it will be a better place to hide cash than it is often considered a “safe transaction” in a risk-off environment. “If you’re going to defend, you’re just going to cash. Otherwise you’re just in the ‘safe deal’ that everyone else has already done. And safe trades are often where there is loss,” he said. Investors have tackled a very intense market this year, as President Donald Trump’s trade, diplomatic and tax policies are still unpredictable. Global geopolitical risks have also intensified after Israeli airstrikes last week. The conflict between the two countries has grown on the fourth day. The volatility of crude oil prices has sparked new concerns about price pressure. The worry list continues to complicate the Federal Reserve’s directives on interest rates. “We’ve been really good over the years at mentoring people who become more risk-neutral in their actions. Most people are risk aversion,” Griffin said. “In finance, the more neutrals are risky, the better decisions are from a profitability perspective.” Citadel’s internship programs are highly selective and competitive. Over 108,000 students applied for over 300 positions this year. The company’s acceptance rate is lower than that at Harvard University and the Massachusetts Institute of Technology. Citadel has “is “incredibly successful” by creating a culture of real risk takers. It creates a culture of people who are willing to have a bad day, as long as you’re willing to have a bad day, you won’t have a great day,” Griffin said.
