Eric Plateis is a co-founder of 5 and currently serves as the Chief Risk Officer. Eric’s 30 years of experience as a trader helps clients to manage their risk and choose energy products that are best for their business. The following interview with Eric Plateis was conducted by the 5 By 5 Editor-in-Chief, Steve Kass.
SK: How did you get started in trading? Is that something you always wanted to do?
EP: Sadly, this was not an intentional career decision that I made. I started out as a Biomedical Engineering major at Boston University, but I had a strong interest in markets and understanding what made markets work. Ultimately, I switched majors and began to study Accounting. I also started reading the Wall Street Journal every day and over time, I taught myself how to trade options while I was still in college.
SK: Why did you trade options and instead of stocks?
EP: I didn’t have enough money in college to trade stocks – options were less expensive!
SK: How did you find your way to the trading pits on the floor of the NYMEX?
EP: I started out working with a family member as an accountant for a clearinghouse on the commodities exchange where I did the accounting and allocation of profits and losses for each trader’s account in that clearinghouse. In 1983, gold options began to trade and since I knew something about trading options, I suddenly found myself as a trader in the gold options pits.
SK: Did you like that experience of being in the pits and is it anything like what is depicted in the movie “Trading Places”?
EP: That scene in Trading Places was actually shot in the gold pit when I was working there. It happened to have been filmed on a Saturday when I wasn’t around but some of the guys I worked with were extras in the film. And while there are some exaggerations in the movie, it is pretty close to what a busy day on the floor of the exchange is actually like.
SK: What is the most important thing you learned from your experiences as a trader?
EP: The most important thing I learned is that money isn’t everything and quality of life is everything. I had a very successful career as a trader, but I was miserable. I wasn’t happy because I didn’t believe what I did was adding any value. I learned that there is nothing more important than the way you value your work and what you give to the world through that work. The other lesson I learned is that nothing worthwhile ever comes easy…and everything comes down to what has been learned from failure. I carried a quote from Tony Robbins in my wallet for about 30 years. It read: “The only difference between successful and unsuccessful people is that successful people have failed more.” I read that when I was 24 years old and never forgot it.
SK: You have an interesting way of comparing markets to physics, can you say some more about that?
EP: Since I started my college career as a Biomedical Engineering student, I was very familiar with Calculus and Physics and the physical laws around both of those subjects. As I started working with charts of different stocks and commodities, I noticed the math involved with market studies, such as moving averages and market momentum, followed the principles of physics. I realized that, just like physical objects, money that is in motion tends to remain in motion unless it is acted on by an external force. This is the same as Newton’s first law of motion and inertia. The fundamental principles and laws that apply to the motion of physical objects also apply to the movement of markets.
SK: Why did you want to start 5?
EP: I am very independently minded and have been an entrepreneur all of my life. I knew I wasn’t going to be happy working for someone else at a large company. Helping clients think about the best ways to manage risk and choose the electricity and gas contracts that are right for their business were among the things that I enjoyed most over the course of my career in the energy industry. My partners and I also believed that customers deserved better energy advice than what was available in the market. For me, this was an opportunity to bring together all those things I loved around helping clients and the risk management experiences I had at different energy supply companies. Starting 5 was a way to both add value and fill a need in the marketplace.
SK: What do you think is the next big thing in energy?
EP: With time, I think we are going to see more micro grids and distributed generating assets that are operated independent of the utility. I think you will see this trend in both regulated and deregulated markets. I just don’t think that utilities are going to keep up with energy innovations. Instead, I think we are going to see privatized carve outs in the form of business campuses or towns that have some interconnection to the grid and operated through wholesale price signals.
SK: You have a very interesting clock on the wall of your office. Is there any significance behind it?
EP: The clock on my wall has hands that are stationary, while the clock moves around the hands – it tells time differently. For me, it is both a reminder and a challenge to look at the world from a different perspective. It reminds me of a scene from the movie “Dead Poets Society.” There is this scene where Robin Williams stands on his desk in the middle of class. He tells his students, “I stand on my desk to remind myself that we must constantly look at things in a different way.” I have this clock on my wall for the same reason.
SK: You are stranded on a desert island. What books, movies and music do you bring with you?
EP: In terms of books, I would bring “The Black Swan” by Nassim Taleb and for entertainment, it would have to be the Alex Cross series by James Patterson or the “Matarese Circle” by Robert Ludlum. My musical tastes are pretty diverse…it would be hard for me to choose. But in terms of movies, I would have to go with “Dead Poets Society.”
Connect with Eric on LinkedIn.