Valencia, Spain – Don Wilson’s day-to-day life in the world of proprietary derivatives trading bears close resemblance to his approach to sailing – it is all about the disciplines of managing risk and reward.
Risk and reward was also part of the calculation that drove the Chicago businessman to bid $102,600 on eBay for the chance to race as 18th man on USA 98 today. “I figured there was a reasonable chance that BMW ORACLE Racing would be the challenger for the America’s Cup and that would give some reasonable expected value to this experience,” he said. “Also, the money was going to a good cause.”
The auction was an initiative by BMW North America in support of one of the car maker’s long-standing charitable causes, Susan G. Komen for the Cure, a foundation for breast cancer research. Wilson’s generous bid was the highest amount paid in support of charity for an 18th man ride with BMW ORACLE Racing.
Wilson only heard about the auction from a friend as it neared its closing date, so entered his bid and won the trip of a lifetime to Valencia as the guest of the team. Part of the prize was also a superb Girard-Perregaux watch, which was presented to Wilson by Gino Macaluso, president of the exclusive Swiss watch company.
Wilson is a keen amateur sailor and owns a small fleet of race yachts including a J105, a Melges 24, a Tartan 10 and a couple of Tom 28 yachts.
Wilson first learned to sail as an 11-year-old when his family moved to Zurich, Switzerland. He returned to the USA to attend the University of Chicago and later went on to found his own business, DRW Trading Group, which has offices in Chicago, New York and London and deals in the arcane world of proprietary derivatives trading.
These highly specialized markets are characterized literally by an infinite variety of maturities, contract specifications and exotic modifications. Understanding the derivatives markets implies an ability to fathom quickly the nuances of the listed markets.
“Actually, sailing is very similar,” said Wilson. “It is as risky as you want to make it. If you make it riskier than you should, you pay the consequences. It is all about finding opportunities and deciding on the right amount of risk to take.
“When you are racing, you are constantly assessing the probabilities of windshifts and weather factors and then you make good risk-reward decisions based on those elements.”
If some people choose to find their recreation in areas completely different from their day-to-day working lives, Wilson is happy to adopt a businesslike approach to his sailing. “I am fine with that. It is a very different format and environment.”
Although he is keen on sailing, he has never been near an America’s Cup event before. “I am not a spectator sports type of person,” he said. “I prefer to be out there doing it myself.”
Of course, from his privileged vantage point at the back of the yacht, the 18th man is not allowed to participate, or even speak, during the racing, but Wilson was perfectly content to be a spectator on this occasion.
Afterwards, Wilson was upbeat about the experience. “It was definitely a lot of fun to be right there in the action,” he said. “The racing was very close. It was a great experience – definitely well worthwhile.”
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