Ken Griffin Says Traders Who 'Go On Defense' Always Lose Money, Citadel Founder Warns Crowded Safe Trades 'Where The Losses Are'

Citadel LLC. founder Ken Griffin told the hedge fund's 300 incoming summer interns that investors who "go on defense" during market turmoil almost always lose money, and he advised them to park cash rather than crowd into so-called safe trades.

What Happened: "In finance, when you're playing defense, you're almost certainly losing," he said, according to a CNBC report, adding that every time a portfolio manager utters that phrase, “I'm waiting to watch the red because that tends to be what happens next.”

Griffin, whose flagship hedge fund manages about $66 billion, spoke as stocks whipsawed on President Donald Trump's shifting tariff policy and fresh fears that Israel's strikes on Iran could jolt oil supplies and inflation.

He argued that investors hiding in crowded risk-off positions often discover those trades are "where the losses are," whereas holding cash preserves optionality until markets reset.

See also: Bill Ackman Warns Iran An ‘Existential Threat’ To America, Says ‘It Is Time To Finish The Job’

The billionaire said Citadel has succeeded in coaching staff to become "risk-neutral," noting that "most humans are risk-averse." The closer a trader gets to neutral, he said, "the more optimal your decision-making is from a profitability perspective."

Why It Matters: Griffin's remarks echo his recent criticism that tariff uncertainty and ballooning federal deficits threaten long-term growth.

Citadel's internship program remains one of Wall Street's toughest tickets. More than 108,000 students applied for roughly 300 seats this year, an acceptance rate of about 0.4%, lower than Harvard or MIT. Griffin said the firm prizes "people who are willing to step up and occasionally have a bad day, because unless you're willing to have a bad day, you're not going to have a great day."

Oil prices and equity volatility could keep those bad days coming. According to Trading Economics data, Brent Crude oil futures price spiked to $73.4 after the Iran-Israel exchanges, stoking fears that the Federal Reserve may delay rate cuts. Even so, Griffin insists aggressive, well-timed risk-taking remains the surest path to long-term gains.

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