Masters in Business

Math Puzzles That Still Need Solving

Even though Jeffrey Sherman never got the right answer, he landed the job at Trust Company of the West anyway.

The challenge was to solve a mathematical puzzle posed by legendary money manager Jeffrey Gundlach and, as rumor had it, get rewarded with a job in Gundlach's fixed-income department at Trust Company of the West. Jeffrey Sherman, this week's guest on Masters in Business, never did manage to solve any of the puzzles, but he eventually started working with Gundlach.

He now is deputy chief investment officer at Gundlach's Doubleline Capital LP. Sherman, a former statistics and mathematics instructor at University of the Pacific and Florida State University, also hosts the company’s podcast, “The Sherman Show.”

Sherman tells the story of how he managed to turn Yale professor Robert Shiller’s cyclically adjusted price-to-earnings ratio, or CAPE, into a hedged value portfolio he runs for Doubleline; it has outperformed its benchmark and the Standard & Poor's 500 Index during the past year.

You can stream/download the full conversation, including the podcast extras, on Bloomberg, iTunes, Overcast, and Soundcloud. Our earlier podcasts can all be found on iTunes, Soundcloud, Overcast and Bloomberg. Next week, we speak with Ric Edelman of Edelman Financial Services LLC.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Barry Ritholtz at britholtz3@bloomberg.net

    To contact the editor responsible for this story:
    James Greiff at jgreiff@bloomberg.net

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