Darius Dale of 42 Macro: 5 Things I Wish Someone Told Me Before I Became A Founder

An Interview With Doug Noll

Set Expectations Early and Often: A wise man once penned, “expectations are the root of all heartache”. Truer words have seldom been spoken. I love meeting with clients, but loathe internal meetings because I feel as though my time is always better spent just completing the task(s) we are meeting about. But successful organizations — be they Navy Seals or New England Patriots — operate with constant communication. Everyone knows precisely what they are supposed to be doing and how they are being evaluated at all times. So despite my disdain for internal meetings, have worked hard to create a culture of communication here at 42 Macro and the resulting camaraderie has paid dividends for our business.

As part of our interview series called “5 Things I Wish Someone Told Me Before I Became A Founder”, I had the pleasure of interviewing Darius Dale, 42 Macro Founder.

Darius Dale is the Founder & CEO of 42 Macro, an investment research firm that aims to disrupt the financial services industry by democratizing institutional-grade macro risk management frameworks and processes.

Darius attended Yale University and was a four-year starter at OT for the Bulldogs. Darius spent his entire childhood in and out of homeless shelters with a first-hand view of drug addiction. His humble beginnings have led him to develop a passion for social service that continues to this day. Darius serves as a junior board member of Domus Kids, and as co-chair of Yale Football’s 4 for 40 mentorship program.

Thank you so much for joining us in this interview series! Can you tell us a story about what brought you to this specific career path?

A simple newspaper ad — I’ll explain. It was 2008 and I was enjoying my senior year as an undergraduate at Yale without a strong inclination of what I wanted to do with my life. To that point, I was focused on preparing for the LSAT. I just assumed I would become a lawyer — not for any particular admiration for the field, but rather, because “lawyer” sounded like a good career. It seemed like a safe, reasonably straightforward path to making “a lot” of money, which, at the time, was whatever was enough to move my mom out of the low-income housing projects we grew up in — that is when we weren’t homeless.

Back to the ad… the CEO of a startup investment research boutique placed a full-page ad in the Yale Daily News with the headline: “We Are Hiring”. It struck me as odd given that it was the career section of the paper. “Duh”, I thought. I didn’t understand the significance of the ad until I brought it up as a joke to my friends on the football team, many of whom were interns that summer at the top banks on Wall Street. They explained to me that financial markets were in complete turmoil and that a number of them were not “offered” to return full-time the next fall, which I learned was essentially a formality for 90+ percent of Wall Street interns. It was the first time any of them ever heard about economic conditions being bad enough for Wall Street to eschew hiring a new “analyst class”. In fact, many of their former bosses had been laid off or were about to be in short order. It was complete chaos.

Of course I — with a few hundred dollars to my name that I had accumulated from working odd jobs around campus — knew nothing about the carnage in financial markets. I knew nothing about this “financial” world. Nothing about the stock market; my parents struggled with drug and alcohol abuse my entire childhood and never had any savings to invest. I knew nothing about “investment banks”; the only banks I was aware of were the ones where people cashed their checks — if they were fortunate enough to have a bank account. At any rate, I decided to apply to the firm that had placed the ad and the rest is history.

Can you tell us a story about the hard times that you faced when you first started your journey?

These days it’s cliché to embellish the hard times one has experienced en route to their success. Everything everyone does these days is “for the ‘gram” — that is to say with the intent of accumulating likes on their preferred social media application. I say that to say this: our hard times were very real and very persistent. I mentioned that my parents struggled with drug and alcohol abuse throughout my childhood. It was a good day if our household net worth was north of a couple hundred bucks because that meant the neighborhood dope dealer hadn’t commandeered it already.

There are a lot of poor people in this country and billions more who suffer through far worse conditions globally. My gripe is not as a former poor person, but rather, as a victim of physical and emotional abuse. Yes, it’s hard to grow up as a child living in homeless shelters without more than a couple outfits to wear to school. Yes, it’s hard to sleep with your family in van, in a Greyhound bus station, or in a roach-infested, two-bedroom “crack house” with 10+ people. Yes, it’s hard rarely celebrating birthdays or Christmases even as other kids in your low-income housing project managed to do so, however modest. Yes, it’s hard getting a video game console on income tax rebate day only to have it pawned for groceries a week later. Yes, it’s hard suffering through the embarrassment of getting served food at a food bank by your high school classmates who were there volunteering. But the hardest experience of them all was the abuse.

My stepfather, God bless his soul, was an angry man who, in hindsight, was probably angrier at how his life turned out than at anything my mother, my brother, or I ever did. Everyone that has spent as many years as a victim of physical and emotional abuse as we did, knows it’s the emotional abuse that takes its toll and sticks with you for the rest of your life. Even at 10 years old I could take a punch from that 30-something year-old former Marine. What I couldn’t take was my stepdad telling me, at 3am in the morning the night before I took my SATs, that I was “a f***ot that would never amount to anything”.

In hindsight, I think he saw that I was going to make it out of that awful environment and would likely return to rescue everyone else but him. Dealing with adversity like that your whole life is extremely challenging — for an adult. God bless my mother who is the strongest woman any of us knows; I for one don’t know anyone else that’s quit crack cocaine — cold turkey — or survived two near-deadly-abusive marriages. No woman or child should ever have to experience the frequency and intensity of abuse we experienced. God bless every woman and child that is suffering through something similar today. Hope is not lost. We are praying for each of you.

Where did you get the drive to continue even though things were so hard?

The audacity of hope. Even as a child, I knew that my mother, brother, and I did not deserve the bad hand we had been dealt. I didn’t know much about the world beyond our broken situation. We never had cable, there was no internet back then, and even when the internet came to be, we didn’t have access to it. Escaping for me was always done through books and my imagination.

I learned to love books in third grade when my brother and I were blessed to attend Delmar-Harvard, a college preparatory elementary school in the University City neighborhood of St. Louis. My mother, brother, and I lived in a nearby homeless shelter for much of that year and the way school zoning worked in St. Louis at the time allowed us to attend. The academic experience was life changing; when I returned to our former inner-city elementary school district the next year, I was learning at a rate equivalent to two grades ahead of everyone in my class. That would generally remain the case until I started taking AP classes in high school.

If you, the reader, learns one thing from reviewing this article, it’s the importance of contributing as much as you can to education programs that support kids struggling in poverty. They can’t help themselves; it’s the duty of YOU, ME, and everyone else who’s been blessed with an opportunity to contribute. Please don’t squander it; the world around us is full of little Darius Dales whose futures depend on our generosity.

So, how are things going today? How did grit and resilience lead to your eventual success?

Show me a successful person that has truly earned their success and I’ll show you a person with a ton of grit. We live in a capitalist society in which competition reins supreme. As such, anyone that experiences success in any field has undoubtedly overcome obstacles — some small, some big. I’m not unique in that regard.

In terms of how things are going today: never better. I thank God every day that I get to get out of bed every day to do something I love… that I’m actually good at. What percentage of the service people that we interact with regularly or the laborers that support our goods economy 24–7 dream of being able to say that? Everyone in our grossly overpaid financial services industry should count their blessings in that regard. I know from experience that things could be far worse. God is [always] good.

What do you think makes your company stand out? Can you share a story?

There are three things that make 42 Macro stand out in the comically saturated field of macro strategy research: 1) our team; 2) our customers; and 3) our process.

Every successful CEO says (or should say) this: we have the best team on earth. I genuinely believe it. Of the five full-time employees and three long-term consultants we have on staff, only my partner Steven Lamar and I have worked in the field of investments. The rest have backgrounds in software development, digital media, TV production, marketing, etc. Even Steve dabbled in the tech space for a while as co-creator of the Beats By Dre headphones that Apple purchased for $3bn in 2014. The diversity of backgrounds ensures that we have a wide range of experience (I’m the youngest employee) and expertise. That experience and expertise allows us to “fail fast” when we make mistakes and pivot to the highest-ROI opportunities as quickly as possible. So many startups waste tons of resources — time, money, emotional energy — chasing low-ROI opportunities due to the sunk cost fallacy. We’ve been very fortunate to avoid such big mistakes thus far.

Every successful CEO says (or should say) this: we have the best customers on earth. I genuinely believe it. For example, everyone knows how toxic social media can be — especially Twitter, which is currently the primary social media platform for serious investors. I have two Twitter accounts: 1) @42MacroWeather, which is my public account that I use to interact with the broader investor community; and 2) @42MacroAware, which is my private account that I use to interact with 42 Macro clients. In my public account, once or twice a week I am faced with the decision to either argue with an ill-informed, anonymous curmudgeon or block them instead. I always block and pray for them, for it is a sad existence when one finds pleasure in disparaging others over the internet. To date, I have yet to have a bad interaction with followers of my private account. Obviously, our customers are biased to be supportive, but at every moment, there is a small percentage of soon-to-be-former customers in the community that have made the decision to cancel and still have residual access to the service. Surely these folks are no longer incentivized to be kind, yet I have yet to observe even the faintest hint of disrespect towards me or other members of the community. Remember, this is Twitter we’re talking about where f-bombs and n-words outnumber trees in the Amazon rainforest. The culture of kindness and safe learning environment that 42 Macro clients and I have co-created is truly remarkable and I count it as one of the biggest blessings of my adult life.

Every successful CEO says (or should say) this: we have the best process on earth. That I do not believe because many of the clients we service are among the world’s largest and most respected asset managers and corporations. We simply can’t compete with their resources. Where we can compete, however, is on process. So much of what transpires in finance is human being succumbing to their own cognitive biases en route to being on the losing side of a trade. Human beings are hardwired to connect the dots even though an uncomfortably high percentage of economic and financial market outcomes are truly random and, thus, unpredictable. This incessant desire to have everything always make sense is true for retail investors that often become overly confident in an investment thesis after perusing finance Twitter or consuming finance podcasts. This incessant desire to have their investment theses proven right is also true for professional investors that often spend more time managing to client expectations — expectations that themselves can be clouded with cognitive biases — than consistently optimizing for the best outcomes in a repeatable, Bayesian manner. At 42 Macro, we have a deep understanding of these cognitive biases and have built a suite of powerful, cutting-edge tools that help investors overcome their cognitive biases and consistently make better investment decisions. While our process is not perfect, our clients are generally very happy with the results.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

This is something I struggle with because I’m as type-A as they come. When we started 42 Macro in April 2021, I found myself working ~90 hours a week on average; that’s obviously unhealthy and eventually it would have become unproductive. Each year I’ve been blessed to reduce that figure, to ~80hrs per week in 2022 and roughly ~75hrs per week now. 65–75 feels right. Anything less and you’re undoubtedly leaving meat on the bone. Anything more and you’re undoubtedly harming your health. I would know after developing high blood pressure, in part from sitting in a chair for so many hours each day.

Back to the gift and curse that is type-A syndrome, I genuinely lack the ability to procrastinate well; most of the time I have an outstanding task, I find myself completing it in my head as I lie awake at night. That is especially true if the task is analytically oriented. In fact, 9 times out of 10 I’ll hop out of bed in the middle of the night to continue working on an econometric tool that I am building or iterating. My brain won’t let me go to sleep if I don’t; it prefers to be in problem-solving mode at all times.

In short, the best advice I can give to other entrepreneurs is to prioritize the tasks that are most likely to keep you awake at night and delegate (if you have the resources) or disregard (if you don’t) everything else.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

Everyone that has achieved the level of success that I have achieved — which pales in comparison to the people I admire — has benefitted from people that cared about them enough to make a difference in their lives. The people who’ve made the biggest difference in my life include (but are not limited to):

-My mother who, despite battling her own demons, always made sure my brother and I had a place to rest our heads and with food in our bellies. As I mentioned earlier, these weren’t always the best places nor were we consuming the freshest food, but things could have been worse. And as bad as our living conditions were, I am eternally grateful for how hard she tried to make sure they were not worse.

-My brother who, despite having the same academic prowess that I demonstrated after the year we spent at Delmar-Harvard Elementary, eventually dropped out of high school to pursue a career in drug dealing. I can count on a few hands how many times he sacrificed his admittedly-ill-gotten earnings to pay our rent or buy groceries — as a teenager. To that point, our family had been evicted 4–5 times; he put a stop to that brutal cycle of transitory homelessness. Best of all, I can proudly say that my brother will soon be a full-fledged elevator mechanic after years of schooling and apprenticeship. I receive far too many accolades for being the “American Dream”. No one I know has overcome more obstacles to achieve success than he has — including being temporarily pronounced dead after a then-fatal gunshot wound — and I’m extremely proud of him for that.

-My third grade teacher Ms. Peck instilled in me a passion for learning at a young age. Even after acquiring the hindsight of attending Yale where so many of the students spent their entire K-12 education in college preparatory academies like Delmar-Harvard Elementary, I can say that she did go above and beyond to ensure I felt included and was able to grasp the more-complex subject materials (relative to what was being taught at the inner-city elementary school that I transferred from).

-Marcus Stubblefield, who ran the community center in our low-income housing project called “Safe Futures”, which was literally a safe haven for nerds like me to escape from the gang violence and drug dealing taking place literally right across the street.

-My high school football Coaches, most notably Tom Burggraff who took it upon himself to send my tape to Ivy League coaches, despite me not ever hearing of universities like “Yale” or “Columbia” as late as my senior year of high school. Everyone knows “Harvard” — if only because they won’t shut up about it — and I knew of “Princeton” from watching Fresh Prince of Bel Air as a kid. At no point did I think someone with my lack of resources could ever attend an “Ivy League” institution — primarily because I did not know the Ivy League (and most of the institutions that comprised it) existed until I started getting recruited by them — all thanks to Coach Burggraff’s initiative.

-My West Seattle High School AP Marine Biology professor Craig McGowan, who I believe was the head of the University of Washington Marine Biology department at the time. After becoming frustrated with the frequency with which I was being pulled out of class to meet with visiting college coaches, he pulled me aside and asked me to decide asap. I told him my top-two choices were “U-Dub” — our hometown University of Washington Huskies — and, I quote, “some small school in Connecticut that doesn’t even offer scholarships, but I really like their coach: Yale”. He said to me verbatim, “I’m going to call Coach Gilbertson (the then head coach of U-Dub) and make sure you don’t play for us. Go to Yale, son. You’ll thank me later.” Nearly two decades later, I can’t thank you enough, Mr. McGowan!

-Coach Tony Reno, who recruited me to Yale as a then-upstart defensive backs coach. To that point, of all the coaches who visited West Seattle High School to recruit me, he was the only one who was willing to come to the High Point Housing Projects to have dinner with my family. That means he was there at night time. The care he showed then followed me throughout my time on campus and follows each of the players that have suited up for him as head coach of the Yale Bulldogs since January 2012. Coach Reno if you are reading this, please know that I sent a detailed email to Athletic Director Tom Beckett to advocate for your hiring when head coach Jack Sidlecki stepped down in 2009. I forwarded him that same email the day he fired Tom Williams in 2011. The high-quality character you exhibited in 2011 was the same as it was when I sent the original email in 2009 and when you were recruiting me in 2004. Thank you, Coach Reno, for teaching me integrity.

-My Yale offensive line coach Keith Clark, who instilled in me an unwavering commitment to and appreciation for the daily grind. There was no hiding from Coach Clark’s harsh, eastern PA coaching style. It was often miserable to experience at the time, but I’m a far better man because of it. Outside of the military, nothing prepares you for handling the ebb and flow of adversity in life quite like atoning for a mistake in practice on a rainy, 35-degree, New England evening in late-November. Thank you, Coach Clark, for teaching me discipline.

-Last, but certainly not least is my wife, Ali. Words cannot describe the positive impact she has had on every aspect of my life since we’ve met. Proverbs 18:22 reads, “He who finds a wife finds what is good and receives favor from the Lord.” Truer words have seldom been written. Starting a company in an industry as competitive as finance in a country as cutthroat in the United States requires a lot of sacrifice and perseverance. Her support though the natural highs, lows, and perpetual insecurities that come with running a business is the primary reason I feel so confident today. My friends would describe me to be an NYC/Montauk/Miami socialite in my 20’s and early 30’s. I’ve done a lot of really cool things in a lot of really cool places with a lot of really cool people. And none of that beats the amazing times I have each night or on Sunday’s hanging with Ali on our couch. Moreover, I finally feel like I’m ready to balance being a CEO and a dad and it’s all because of how wonderful Ali is as a person and how wonderful she has been to me. Thank you, Ali, for teaching me patience.

I’ve had countless people bless me throughout my adult life including friends, colleagues, business partners, clients, etc., so please accept my sincerest apologies to anyone that feels left off this list; it was not intentional. This article would never end if I listed everyone that has ever paid an act of kindness forward that I was the recipient of. Paying it forward > paying it back, always.

How have you used your success to bring goodness to the world?

Selfishly, I can proudly say that my family are no longer living in the squalor of low-income housing. Everyone reading this that is first-generation “not poor” understands the constant tradeoff between saving for retirement and improving the lives of your family. To date, I’ve largely chosen to support my family; I wouldn’t be here without them.

Unselfishly, being able to volunteer with or contribute financially to organizations such as Domus Kids, Bridgeport Caribe Youth Leaders, MENTOR New York, DREAM, Feeding America, Shriners Hospitals, Vox Collegiate, Project Come Up, etc. is one of the things I am most grateful for in life. I have depended heavily on the kindness of strangers throughout each phase of my life, and it is a blessing to be able to pay that forward. Environment is the #1 reason children fail or succeed, so it is up to us to do what WE can to improve as many environments as we can for the young people in our communities and across the globe. OUR future depends on it.

What are your “5 things I wish someone told me before I started leading my company” and why. Please share a story or example for each.

1 . Be Authentic: Everyone that has experienced environments such as the ones I grew up in understands the importance of keeping it real. What they may not understand is the value of keeping it real in the real world (read: corporate America) too. Clients and colleagues see right through phony BS. On the client side, nothing builds trust like admitting mistakes — and us prognosticators of financial markets make plenty of them. On the colleague side, nothing builds trust like leading by example. Our team works extremely hard because they can trust that the guy in charge is right there in the trenches, alongside them, seven days a week.

2 . Fail Fast: One of the hardest things to do as a leader of an organization is to get teammates to abandon what they’ve dedicated time and energy on to pivot to something else. It’s also one of the most important things leaders must do. At 42 Macro, we have established a culture of failing fast in both our corporate strategy (e.g., pivoting away from fruitless marketing schemes) and in the research we publish to clients (e.g., booking small losses on trades before they become bigger ones).

3 . Less Is More: I cannot fathom how much money I would have wasted to date if I had been blessed with the same blank check to pursue “entrepreneurship” as many of my former classmates at Yale from well-to-do families. When you have ample resources, every idea is a good idea. In the real world where resources are as scarce as competition is plentiful, most ideas are not good ideas. Only a select few are worth organizing and motivating a team to pursue, like the development of our new Appearances and Insights pages — the both of which help us better service our community of loyal followers.

4 . Set Expectations Early and Often: A wise man once penned, “expectations are the root of all heartache”. Truer words have seldom been spoken. I love meeting with clients, but loathe internal meetings because I feel as though my time is always better spent just completing the task(s) we are meeting about. But successful organizations — be they Navy Seals or New England Patriots — operate with constant communication. Everyone knows precisely what they are supposed to be doing and how they are being evaluated at all times. So despite my disdain for internal meetings, have worked hard to create a culture of communication here at 42 Macro and the resulting camaraderie has paid dividends for our business.

5 . Success Is Nonlinear: By now you have likely seen some version of the “what success really looks like” graphic. But until you have started a business with high expectations, only to have your pollyannish expectations for instant success consistently disappointed, you do not know what the process of achieving success feels like. To deal with the disappointment, I’ve learned to incorporate the “Rule of 0.5” into every projection our team comes up with. Revenue projections? Multiply those by 0.5. Deadlines for important initiatives? Divide those by 0.5. Not every project you undertake will fail to achieve expectations, but many of them will. And the only way to overcome the optimism bias and planning fallacy that both speak to our intrinsic desire for success is to systematically haircut your microeconomic forecasts like we do at 42 Macro.

How can our readers further follow your work online?

Readers can connect with me directly via my public Twitter profile @42MacroWeather and my LinkedIn profile Darius Dale. Readers who wish to access the complementary research and risk management insights we publish on a daily basis should also follow 42 Macro on Twitter, LinkedIn, and Facebook. And, of course, readers that are committed to improving their investment results and investing acumen should consider becoming a client of 42 Macro. Thanks in advance for checking us out and have a blessed day!

This was very inspiring. Thank you so much for joining us!

About the Interviewer: Douglas E. Noll, JD, MA was born nearly blind, crippled with club feet, partially deaf, and left-handed. He overcame all of these obstacles to become a successful civil trial lawyer. In 2000, he abandoned his law practice to become a peacemaker. His calling is to serve humanity, and he executes his calling at many levels. He is an award-winning author, teacher, and trainer. He is a highly experienced mediator. Doug’s work carries him from international work to helping people resolve deep interpersonal and ideological conflicts. Doug teaches his innovative de-escalation skill that calms any angry person in 90 seconds or less. With Laurel Kaufer, Doug founded Prison of Peace in 2009. The Prison of Peace project trains life and long terms incarcerated people to be powerful peacemakers and mediators. He has been deeply moved by inmates who have learned and applied deep, empathic listening skills, leadership skills, and problem-solving skills to reduce violence in their prison communities. Their dedication to learning, improving, and serving their communities motivates him to expand the principles of Prison of Peace so that every human wanting to learn the skills of peace may do so. Doug’s awards include California Lawyer Magazine Lawyer of the Year, Best Lawyers in America Lawyer of the Year, Purpose Prize Fellow, International Academy of Mediators Syd Leezak Award of Excellence, National Academy of Distinguished Neutrals Neutral of the Year. His four books have won a number of awards and commendations. Doug’s podcast, Listen With Leaders, is now accepting guests. Click on this link to learn more and apply.