Updated: Sep 16, 2020
You can view the entire talk by clicking the photo above Dr. David Magerman is Co-Founder and Managing Partner at Differential Ventures, a venture capital firm that provides funding to enterprise software companies with unique advantages in data and machine learning. Previously, he spent two decades at Renaissance Technologies, considered by many as the most successful quantitative hedge fund of all time. On Tuesday, Magerman spent an hour speaking with high-school students participating in First Generation Investors, as well as the student volunteers from Harvard, Penn and Fordham who are introducing them to investing and providing them with real money to get started.
"Neither of my parents went to college. I am also a first generation investor."
Magerman told the students that he, too, is a "first generation investor'" whose father drove a taxi and mother was a secretary. They struggled with finances, but his parents focused on their son’s education and pushed him to learn and improve his life.
College and Early Employment
After attending The University of Pennsylvania as a first generation college student and continuing on to study computer science as a graduate student at a time when "the internet didn't exist," Magerman stumbled into a job with a hedge fund called Renaissance that built models to trade in bonds and currencies. Renaissance was unable to trade in large numbers of stocks at the same time, so the young entrepreneur built a system that could handle large numbers, leveraging the "law of large numbers" to generate profits by producing a high volume of small "bets" over time. Today, Magerman invests in early stage companies––mostly in computer science, machine learning and artificial intelligence––that are not public and helps founders improve their performance and increase their value. He also supports education, in particular, technologies related to distance learning, an area that has heated up recently due to COVID-19.
Answering Questions from the Students
Magerman stuck around to take questions from the students. Below are some highlights from the Q & A session.
On mentorship: Be someone who is "worthy of mentorship" –– earnest, and open to criticism and education –– and also eager to help others.
On trading: Don't trade on news; by the time you’ve heard it, others have probably already heard it and acted on it.
On careers: Don't go into the field that others steer you toward. Find your passion, and become great in that area. Yes, learn math and writing skills, but then focus on your areas of passion.
On "The Meaning of Life": Upon reaching a level of success that he had never dreamed of, Magerman found himself unhappy. After some soul searching, he realized that he was missing the point of life. Magerman turned to religion and began to focus on community, friends, and studying the Torah. He explained, “I find it helps me connect to things that I acknowledge I can't possibly understand.”