Mohamed El-Erian, chief economic advisor at Allianz, talks to best-selling author Larry McDonald about his journey into finance. By the time he turned 40, he had only ever worked in the public sector. El-Erian tells McDonald how he made his move from academia to the highest level of buy-side finance. This clip is excerpted from a video published on Real Vision on April 19, 2019 entitled “The Big Regime Shift.”

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From Academia to the Buy-Side (w/ Mohamed El-Erian)
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Transcript:
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LARRY MCDONALD: Yeah.
MOHAMED EL-ERIAN: To the buy side. But none of it was planned. It was all a series of good
fortune all along.
LARRY MCDONALD: So you make the move from academia to the buy side, which is the asset
management side. Now you're at the highest level of asset management. And the difference, in
terms of your daily routine, the inspiration, did you find it was a little bit tougher bar each day to
hang with that crowd, in terms of daily inspiration and, I guess, achieving alpha?
MOHAMED EL-ERIAN: A lot tougher, and for two reasons. One is at PIMCO, the people that
were in the room were the smartest people I had ever met, in fact, I've ever met. I haven't met a
group of smarter people and more driven people. And it puts you in a completely different
environment. And the second is that you've judged every single day by the markets.
And if it's not going your way, which, as you know, happens, you've got to figure out why-- is it a
question of time? Did I get something wrong? So you can't just rest. Every single day you're being
questioned. And even if it is going your way, you have to think, well, has gone as far as it will go?
So it was quite a shock to the system, but something that I really enjoyed. And I was very lucky to
be at PIMCO.
LARRY MCDONALD: When I was at Lehman, one of my most impressive investors that I've ever
met and worked with was Mike Gelband, who now runs Exodus Point. And Mike used to come by
the desk, and he used to say-- he'd look at your position. He's stare you in the face, and say, "Are
you long because you like it, or do you like it because you're long?" And how do you--
MOHAMED EL-ERIAN: And it's amazing how many people end up in the second bucket.
LARRY MCDONALD: Yes.
MOHAMED EL-ERIAN: And we always used to say if we didn't have to trade on it, we'd put it on
now. And we try to question that. I tell you, I've had lots of major events that have changed my
life. One was my first day at Salomon. So I come with a research driven, policy driven approach.
And my boss is a 24-year-old trader. And I wrote about this in the book. And he tells me, look, I
want you to understand there are days when I'll listen to you. And there are other days if you
come anywhere near me, I'll shoot you.
And the difference is that sometimes the market trades on fundamentals, sometimes it trades on
technicals. And I don't want to see your face when the market trades on technicals. And that, for
me, was sort of an early indication that I better figure out what those technicals are. Otherwise,
I'm going to be relevant for just part of the time.
So it was a really important way of understanding a broader point, which is, while we like to
specialize in one of four circles, either the academic side of it, or the policy side of it, or the
market side of it, or the political side of it, that's not where the world solves. The world solves at

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