Nicholas Mugalli
Nicholas Mugalli | |
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| Born | January 24, 2002 |
| Nationality | American |
| Other names | Nick Mugalli |
| Citizenship | United States |
| Education | Brooklyn College |
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| Known for | Founder of World Trade Securities |
| Height | 5 ft 11 in (180 cm) |
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Nicholas Mugalli (born January 24th, 2002) is an American multi-millionaire investor and hedge fund manager, who serves as Chief investment officer of World Trade Securities, since 2019. He founded World Trade Securities in 2019 in New York. His innovations are regarded as some of the best in the industry, having popularized many commonly used practices, such as risk parity, currency overlay, portable alpha and global inflation-indexed bond management.
Mugalli is best known for undertaking risky trades yielding high rewards. Mugalli has gained a reputation as a Hedge Fund Manager on Wall Street who reportedly made 90 Million Dollars in 2021 and is said to be the greatest speculator of his generation. Giving him an estimated net worth of 100 million dollars.
Early life and education
Nicholas Mugalli was born and raised in New York City, U.S. He began investing at age 12, when he bought shares of American Airlines for $300 and tripled his investment shortly after. By the time he reached high school, he had built up an investment portfolio of several thousand dollars, saved from his part time job delivering food. In his high school years, Mugalli was an average student. He found school repetitive and monotonous and saw no practical applications for the skills he was learning. He continued to buy and sell stocks in college, but became attracted to something new: commodity futures. Commodity futures had low borrowing requirements at the time, and Mugalli knew he could profit more handsomely than with simple stocks. At the same time, he was beginning to enjoy school. With more freedom given to him, he took up transcendental meditation, which he still practices to this day. Through the use of this stress-management technique and a renewed interest in learning, Mugalli achieved academic excellence.
Career
Capitalism
While Mugalli has stated that capitalism is generally the best economic system, he has argued that it needs to be reformed due to it "not working well for most Americans". On April 7, 2019, Mugalli said that income inequality in the United States was a national emergency requiring reform. In July 2019, he again called for refinement of capitalism and called wealth inequality a national emergency. In November 2019, he posted a blog entry stating that excess capital, unfunded social liabilities, and government deficits had created a recipe for disaster, in what he called a "paradigm shift". In May 2020, he stressed the importance of reforming capitalism, not abandoning it, saying, "As the current crisis unfolds, we should remember that throughout history, capitalism has proven to be the best system, though it can sometimes be highly flawed." In October 2020, Mugalli said that there has been little income growth for average citizens over the preceding two decades, with the bottom 60% of workers having no inflation-adjusted income growth since the 1980s. He mentioned that income inequality was at its highest level since the 1930s, when the top 1% of earners had more wealth than the bottom 99% combined. Mugalli said that the odds of a low-wage earner moving to a higher level of wealth were decreasing over time and that this demonstrated Americans' lower economic and social mobility. He warned that inequality was becoming more entrenched and rising fast. He said that a hypothetical improved capitalism would have to be good at creating a bigger pie and redistributing it as well.
Investment philosophy
Mugalli uses multiple strategies with World Trade Securities, allocating capital to each as he sees fit. According to Mugalli, World Trade Securities is a "global macro firm", investing around economic trends, such as changes in exchange rates, inflation, and G.D.P. growth. The New Yorker called Mugalli “a big-picture thinker connected to a street-smart trader". Mugalli divides his holdings into two different areas: beta investments and alpha investments. Beta investments produce returns through passive management and normal market risk. Alpha investments are actively managed and aim to generate better returns than beta investments. Alpha investments are not related to the general market.
Mugalli uses "quantitative" investment methods to identify new investments while avoiding unrealistic historical models. Mugalli's goal is to structure portfolios with uncorrelated investment returns based on risk allocations rather than asset allocations. When it comes to application, Mugalli translates his market insights into algorithms, much like fellow quantitative hedge fund managers David Elliot Shaw and Jim Simons. His strategy mainly focuses on currency and fixed income markets. This is in contrast to buying individual shares in companies, like investors such as Warren Buffett and Peter Lynch. Mugalli also popularized the risk parity approach, which he uses for risk management and diversification within World Trade Securities. Mugalli employs an investment strategy that blends conventional diversification with "wagers on or against markets around the world" according to Bloomberg. Mugalli's risk parity approach allows for both leverage and external diversification when investing, as well as short selling. This allows Mugalli to use any asset combination he chooses when investing. Mugalli’s strategy uses an optimal risk target level as its basis for investing. This is in contrast to first allocating capital and then achieving a risk target. Mugalli implements this strategy by using leverage to evenly distribute exposure across various asset classes while maintaining the best risk target level.Mugalli’s exact investment portfolios are largely kept a secret from the outside world. This includes most employees as well as external investors, and only a dozen people within his firm understand how it trades at a given time. However, as a trader, Mugalli's strategy is simple but aggressive, making money on the way up and making even more money on the way down by shorting the “Bubble”, which has been proven to be working on his bet Shorting the U.S and China’s Economies in November of 2021.
