Daniel Calugar

Daniel Calugar is a data-driven investor with an academic and professional background in computer science, business, and law. He developed a passion for investing as a result of frequent interaction with investment professionals who serviced the investment needs of his legal clients. As a tax partner the Atlanta law firm of Hansell & Post and the global law firm of Jones Day he incorporated his partnership interest allowing him to set up and serve as trustee for his own tax-qualified profit-sharing plan. Calugar utilized his technical skillset to design computer programs that would assist him in making more effective investment decisions. He then moved on to hedge fund investments before eventually focusing on more mortgage-backed securities, futures, and options after the stock market crash in 2008.

Dan Calugar has had the privilege to travel the world with his life companion in part due to the flexible nature of his work. He is into fitness and enjoys working out. He is a pilot with over 2000 hours of single-pilot experience flying business jets. He has been active with Angel Flight and has flown over 200 missions for Angel Flight West and Angel Flight Southeast over the past 15 years.

Where did the idea for your career come from?

My background is in law as a tax lawyer. As a young lawyer, I saw that several of the more prominent partners in the firm left the practice of law to pursue investment-related careers. It seemed to me that managing money could be both more lucrative and provide a better quality of life than being a tax partner. My area of practice was tax-exempt retirement plans. As a pension lawyer, I was exposed to a lot of investment management people, and I developed a fascination for investing. This was the late 1970s — personal computers and spreadsheet software for the first time made it possible for an individual investor to analyze mountains of data. I had a background in computer programming from my time as a cadet in the Air Force Academy, and using Lotus 123 programming, I found ways to profitably time market trends. Soon I was making a lot more investing my own assets than I could possibly make as an attorney, and I make the leap to leave the practice of law and set up my own investment management company. I’ve always limited my investing to trading my own capital, which has given me a level of independence and freedom of choice that most investment managers don’t enjoy.

What does your typical day look like and how do you make it productive?

Because I am my own, and only, investment client, I normally have the luxury of setting my schedule to suit my interests. I spend a lot of my time writing programs that analyze investment ideas. I have a virtual assistant that spends her full time looking for investment ideas and researching investment topics that I feel might be productive. There are very few truly original ideas, so there is no shame in building on someone else’s ideas. I normally spend 2 hours a day working out, and I think staying fit makes me more productive.

What is one habit of yours that makes you more productive as an entrepreneur?

I try to focus on one idea at a time. Really good ideas are difficult to come by, so if you divide your attention among several competing ideas, you probably (a) don’t fully develop any single idea as well as you should, and (b) dilute your return potential by funding less than optimal strategies. It’s often said that diversification is the only free lunch. I disagree. If you have developed an edge in one area of investing, then diversification can be one of the most expensive items on the menu because it normally draws your returns to the mean. Of course, if you don’t have an investment idea with a true edge, then diversification may be your only option.

What advice would you give your younger self?

Always wear sunscreen.

Tell us something that’s true that almost nobody agrees with you on.

If you have a strong investment edge, go all-in on a single idea.

What is one strategy that has helped you grow your business?

Always follow your algorithms and stay the course. No investment idea works all the time. If you have thoroughly developed a trading algorithm, follow it. You are not smarter on any given day than the insight you have gained from hundreds of hours of research, so don’t assume you can beat your algorithms with ad hoc modifications.

What is one piece of software or a web service that helps you be productive?

I do most of my analytical programming using Lotus 123. Lotus 123 dates back to 1982, and its owner, IBM, no longer supports the program, but I’ve spent more than 30,000 hours using the Lotus macro programming language, and it works for me. It’s certainly not the fastest running software, but I have a bank of 7 servers that I connect to, and I’m often running ideas on multiple servers for days at a time. What I love about the Lotus 123 programming language is that I have used it for so long that it really has become an extension of the way I think about ideas.

What is the one book that you recommend our community should read and why?

The Bible. I start each day by reading a chapter from the New Testament. I think the basic premise of the Bible is to love your neighbor as you love yourself, and if we all did that, I believe it would make the world a much better place.

What is your favorite quote?

There are several quotes that I really like:

A theory is more impressive the greater the simplicity of its premises. Albert Einstein

Everything should be kept as simple as possible, but no simpler. Albert Einstein

Diversification is protection against ignorance. Wide diversification is only required when investors do not understand what they are doing. Warren Buffett

It isn’t what you don’t know that gets you into trouble. It is what you know for sure that just isn’t so. Mark Twain