[Revised] Dan Waters is co-managing partner at Northern Trace, a commodity hedge fund. During his long career on Wall Street, Dan ascended to co-lead FrontPoint (along with Mike Kelly) in 2006. Shortly after, FrontPoint grew to be one of the world’s largest hedge funds, and was ultimately acquired by Morgan Stanley. Managing a portfolio is challenging. Investing at a large scale adds yet another complexity: managing talent. Like a portfolio, talent requires active management. Losers must be moved out, and winners must be scaled up. The difference is, of course, you’re making these decisions about people, not just securities, and that raises the emotional stakes. Dan insists that emotions are very important—you can't neglect them—but certain emotions can cloud judgement. Dan Waters is an exemplar of steady leadership (including during difficult periods), and he’s become adept at balancing his emotions so they don’t obscure his view of a situation. Dan’s thoughts on leadership are universally insightful, no matter your role or focus. He tells us the three simple questions he asks every prospective manager (24:18), and he discusses tactics for inviting people to improve (20:40). In this episode, Dan also provides us with a succinct thesis for leadership, “The best leadership comes from just doing what you're expecting of others yourself”(11:30).