Yale SOM Graduate Gives Students Insight into Global Markets

Douglas Borthwick '96 says there was a time when a trader could get by just by reading the Wall Street Journal and maybe a couple of other sources. Now, he says, "You've got to read everything."

Borthwick, head of trading and managing director for Faros Trading, spoke to Yale SOM students on January 30 about his role advising clients and shaping markets. Hosted by the Career Development Office, Borthwick gave a presentation titled "The Euro and the U.S. Dollar," discussing whether perceptions about the directions of the two currencies are accurate, as well as the influence of Asian central banks on the euro.

Borthwick told the audience that in order to be successful in the world of foreign currency exchange and macro markets, one needs to be "obsessed" with international politics. He regularly speaks with high-placed sources around the world to get that key bit of information that will provide him with the insight needed to predict the direction of various markets. "I look at all the information coming in and sift through it to try to find patterns," he said. "Then I pull it all together into a coherent viewpoint."

Borthwick has been able to make a number of successful early calls over the years, from the downgrade of the U.S. credit rating by S&P last year to the first European Central Bank interest rate cut during the financial crisis. His job, though, requires more than making the right prediction. Over the years, Borthwick has become a regular in the financial press, sought out for his views by CNBC, Bloomberg, the Wall Street Journal, and Reuters. This has allowed him to exert influence in financial markets. "I'm able to come up with an idea, speak to the media about it, and see it taken up," he said.

Keeping an eye on currency markets across the globe has required Borthwick to truly be on call night and day. He sleeps in two-hour increments, he said, waking to check the news from all the markets around the world. His regimen has allowed him to form "hunches" that he feels free to run with, even if he's the only one out there advocating a particular position. "Just because no one else sees what I'm seeing doesn't mean I'm wrong," he said.