For most people, losing $60 million would send them into a frenzied panic. For Rafa Martinez, it’s just part of the job.
“I fortunately don’t stress about anything. I’m the coolest dude in the room — it doesn’t matter if I’m way up or way down,” Martinez told Noah Kagan during an episode of Noah Kagan Presents, a podcast for entrepreneurs.
Martinez trades natural commodities for a living and is well on his way to becoming a billionaire. But it’s perhaps his childhood — growing up during the civil war in El Salvador — that shaped who he is today (and gives him a high tolerance for risk).
In March 2020, Martinez was in Spain watching Real Madrid play Barcelona when the world started shutting down because of COVID-19. “I’m watching crude collapse,” he says. “We saw my book just lose millions of dollars overnight because people started panicking.”
In fact, he lost about $60 million in a matter of three weeks.
But instead of panicking, Martinez bought himself out of his position and doubled down the opposite way. “Everything that I lost, I multiplied it by completely reversing my view, all in a matter of a month.” He ended up making back about $180 million, as he told Kagan.
In pursuit of the American Dream
His family emigrated to the U.S. from El Salvador when Martinez was just 12 years old. He was born into a 12-year-long civil war (from 1980 to 1992) between the government and the Farabundo Martí National Liberation Front, which was punctuated by violence and human rights violations.
“I remember as a kid when I lived in El Salvador hearing the bombs and the gunshots and people running on the roof and us hiding underneath our beds,” says Martinez.
“As a kid I didn’t really appreciate what my parents in their early 20s were going through,” he adds, his voice cracking with emotion. After the war, they lived a modest life: they had a house, they had food on the table, but they didn’t have any luxury items — they couldn’t even afford Christmas presents.
His family left for Houston in 1997 in pursuit of the American Dream, working minimum wage jobs and renting a one-bedroom apartment that cost $450 a month. Martinez knew he was going to make something of himself so he could support his parents one day, “because I wasn’t going to stop until I did.”
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From immigrant to multi-millionaire
Martinez made his first million when he was 29 years old, trading natural gas. He’s still a trader, though he’s also a serial entrepreneur, investing in a number of start-ups, from fitness and racing to construction and tech. He attributes his success, in part, to the fact he likely has a “higher tolerance of stress and risk than most people.”
While trading natural commodities can be a great way to generate wealth, he says it’s also a “great way to be stressed out and lose your mind over the stresses of the market.” In other words, it’s not for everyone — especially since commodities are considered one of the riskiest ways to invest.
But the secret to his success? He trusts his gut — even if he happens to be down $60 million.
“I understand markets are going to fluctuate, and so if I can withstand the fluctuations and still stick to my guns, then I can see positions play out while other people sometimes have to get out.”
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