Focus on the big things in life and if they are going well the rest will fall into place.
A Massachusetts Institute of Technology (MIT) graduate, Saagar Gupta has over a decade of experience in the financial realm under his belt. However, it is important to note that his passion for finance was initially sparked after he graduated high school, while serving as an intern for the hedge fund Ascena Capital. Although Saagar had already committed to attending MIT in the fall, the idea of remaining in his home state of California and securing a full-time position with the company certainly seemed tempting. However, he remained on course and moved across the country shortly after his internship came to an end.
While he studied Electrical Engineering and Computer Science in college, Saagar Gupta swiftly realized his true calling was in finance. Therefore, upon graduating and receiving his degree, Saagar began his career at Susquehanna International Group, a Philadelphia-based firm where he learned the ins and outs not only of effectively managing capital, but of the financial industry as a whole.
Several years later, in 2010, Saagar Gupta moved from Philadelphia to New York City in order to become a quantitative trader for HAP Capital. After a fulfilling four years, Saagar decided it was time to take a brief hiatus from work and decide on the next steps he wished to take in his career. This goal was ultimately achieved by spending several months traveling Europe with his young but growing family.
While exploring a small town in Italy, the idea to start his own firm struck him. It was the most feasible option for him — after all, he wished to work for himself all while being afforded the time necessary to spend with his beautiful wife and children. Upon returning to the United States, Saagar Gupta founded SG3 Capital, a small private investment fund based in sunny Dorado, Puerto Rico, and has never looked back.
Where did the idea for SG3 Capital come from?
After I left my previous job, I decided to take my family (wife and two daughters at the time, ages 3 and 6 months) to Europe for 2 months. Driving through Switzerland, Italy, France and Belgium, I was trading from my phone and iPad and it was going so well I started to think about launching my own trading company. I never really thought I could do it without the infrastructure of a larger company, but it turned out that I had all I needed in my head. When I got back to the States, I started looking for investors, and within a couple months I had the framework for SG3 Capital in place. It ended up being a lot easier than I thought it would be.
What does your typical day look like and how do you make it productive?
My typical morning involves reading the news, checking over my positions, and thinking about potential trades for that particular day. By 9am EST I am getting ready for the market open and fully focused on potential trading opportunities for that day. Usually in the first few trading hours of the day I am quite busy trading and managing positions, but by the afternoon once the busy work has slowed down, I will start research new trading ideas. Also in the afternoon I typically schedule any meetings or calls that I need to have. At the end of the day, I try to take some time to think about my decision making that day – were they decisions I would make again given the same circumstances, or do I need to improve my game for the next time a similar situation comes up?
How do you bring ideas to life?
Very carefully! It depends on the idea. If its a trading idea, it’s pretty easy, I can just think about how I want to express the idea in the market and the odds I am getting, and then go execute it. And by how I want to express the idea, I mean do I buy stock, do I buy a call (a derivative that gives you the right to buy the stock), or do I find some other way to get the exposure I am looking for. For longer term ideas, I will typically take a lot more time and thought to decide what to invest in, and I find those decisions much more difficult. Right now I have been thinking a lot about the Puerto Rico Real Estate market because I think there is a ton of opportunity there for investors to look at, but it’s hard to find the time to make the proper commitment to this idea.
What’s one trend that really excites you?
Decentralization. I don’t talk about politics much, but I think most centralized governments have been failing their populations. Even the United States which has created a lot of prosperity doesn’t seem to have policies that are setting ourselves up for long term success. For example the national debt keeps getting bigger and bigger, but income inequality also is becoming worse and worse (the rich are getting richer, the poor are getting poorer). I think decentralization will help solve this problem, and many more similar problems. It will take a long time to see real effects, but this trend which is in its infancy now will give more power to regular people instead of concentrating power in the hands of a small group of politicians.
What is one habit of yours that makes you more productive as an entrepreneur?
I work a lot, so it is important to carve out time with my family. What I try to do is make sure I leave my office at a reasonable hour so I can get some quality time in with my wife and kids. Then, once the kids are asleep (which is relatively early since they are young), I often go back to work. This gives me a few extra hours to tie up loose ends, do extra reading, or just think about bigger picture ideas. Knocking out smaller tasks in off hours really helps me personally be much more productive during the day.
What advice would you give your younger self?
I don’t have a lot of regrets in life, but I think the best advice I would give my younger self is to not let little things bother me. Focus on the big things in life and if they are going well the rest will fall into place. Humorously, a senior in my fraternity when I was a freshman gave me some similar advice, but I didn’t pay enough attention at the time!
Tell us something that’s true that almost nobody agrees with you on?
Having a lot of paranoia isn’t a bad thing. Most of my friends and even my wife get annoyed at my super-high paranoia level. The odds of a particular trade going against us or underestimating competition in the marketplace can be a death knell for me and my business, so I have found this degree of paranoia to be beneficial to my business success. I like to think about every possible scenario no matter how remote the chances, just to be sure I know what my downside is with each particular situation. The movie The Big Short touched on this too, as it highlighted a number of traders who were able to predict the 2008 Financial Crisis based on their outside-the-box thinking.
As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?
Pay attention to the details. I am very detail-oriented, almost to a fault. This has been great for me in building my business, but it can also be a double-edged sword. Sometimes focusing too much on the details will force you to miss the bigger picture. But for me, being detail-oriented ensures that I don’t miss good trades and also helps me avoid bad trades as well.
What is one strategy that has helped you grow your business?
To be honest, scaling and growing my business has not been a strong suit of mine. If anything I have been too conservative in growing my business. But the nice thing about that is that when times have been tough, I have managed to survive because I haven’t invested in projects that require a lot of overhead.
What is one failure you had as an entrepreneur, and how did you overcome it?
The biggest failure I have had since I left the comfort of a big, stable company was during my 2nd year trading on my own (this was before starting SG3 Capital). Because the first year had gone so well, I started to take on more and more risk and scale up my trading. This worked great until it didn’t. In the summer of 2011, my increased risk-taking came to a head with a major loss as the US debt was downgraded by the major ratings agencies. The ensuing turmoil left me in a big hole for the year. I ended up completely shutting down my trading for a month and then re-focusing on only my best trades. I slowly built my business back up by making back the money I lost and then continuing to focus on risk-management much more carefully. I probably gave up some upside in the short run, but I sleep much more comfortably at night now!
What is one business idea that you’re willing to give away to our readers?
Create a business to buy and rent real estate in Puerto Rico. Properties are going for super cheap prices and there is a ton of good stuff for sale. This island will eventually recover stronger than ever and now is the time to capitalize on that. If you are not boots on the ground here it is difficult to do this, but feel free to get in touch and I would be happy to help point you in the right direction (certain areas are going to be much stronger/safer than others).
What is the best $100 you recently spent? What and why?
I recently bought a couple kids tennis rackets and signed up for a private lesson for my three kids. Only my oldest (6 years old) was really able to follow the instructions (I took the younger two, ages 4 and 2, on the side to just play with the rackets and balls), but it has now turned into a lot more quality time with my kids playing a game I love. I played tennis growing up, and while I am not that great, I love getting out there with my kids, especially since the courts are essentially in my backyard. The best part is my oldest has really gotten into tennis and is really enjoying it.
What is one piece of software or a web service that helps you be productive? How do you use it?
I love the Flipboard App on my iPhone. It makes it super easy and convenient to read news that is filtered by your preferences. I find it super useful to help me curate a diverse array of news stories that I can read wherever I am. I select the topics I am most interested in, and it presents stories on those topics that are relevant and engaging. I think it uses AI to learn which stories I read and present more material that I will want in the future.
What is the one book that you recommend our community should read and why?
This is more of a series of books, but the original Market Wizards by Jack Schwager written in 1989 is what really got me into trading. In these books the author interviews a number of high profile traders, many of whom are household names and it really gets into the ways that these titans think about the world. It helped me realize that finance, and specifically, trading, were exactly what I was cut out to do. Since the original, Schwager has followed up the series with three more books on more contemporary “market wizards.”
What is your favorite quote?
I recently read this list of quotes where a first grade school teacher had her students complete the ends of some famous quotes, and I found it both hilarious and mostly true. So rather than pick something serious, I will keep it light-hearted and send you to this link which has the 26 fill in the blanks. See for yourself how funny they are.
Saagar Gupta on Linkedin: