Believe it or not, there are edges that we, as retail, simply can not access regardless of the rhetoric on this site- these are real edges that only can be accessed via funds. surf
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
A Fund vs. Your Own Money
- Thread starter Opulence
- Start date
Neither of those two reasons apply to me.Quote from Specterx:
It's hard to imagine why anyone who can consistently make 20% a year or more would want to start a fund. Two reasons that come to mind are as a pure ego play ("Look at me, I'm a hedge fund manager!") or as a temporary move for a few years to escape severe capital constraints. The second is reasonable, but for the first there are IMO much better ways to offset boredom.
Like I said earlier, I started a fund for two reasons:
1) to make more money (without increasing downside risk),
2) because I like building businesses.
Quote from rtiger29:
20% not enough to make a living?? But isn't that the point. If you can consistently do 20%, then you will eventually get to the point where you wont need anyone's else money, meaning you will have lots of money. I guess it depends how impatient/patient someone is. If they are willing to just keep being consistent, year after year, then they will prob never need anyone's money.
The problem is, you can't. Markets change, edges change, they are not static regardless of what you read or folks claims. surf
I think that's really the thing
Are you a people person?
I know I'm not, the best day of my life was when I stopped being a broker and started trading my own account
I still manage some OPM for friends and family, but they don't know what the hell is going on, and there is very little trading involved, it is all just asset management (I don't even charge them a fee anymore.)
they will never have to answer for the kind of risk I take everyday
Are you a people person?
I know I'm not, the best day of my life was when I stopped being a broker and started trading my own account
I still manage some OPM for friends and family, but they don't know what the hell is going on, and there is very little trading involved, it is all just asset management (I don't even charge them a fee anymore.)
they will never have to answer for the kind of risk I take everyday
Quote from oldtime:
I think that's really the thing
Are you a people person?
I know I'm not, the best day of my life was when I stopped being a broker and started trading my own account
I still manage some OPM for friends and family, but they don't know what the hell is going on, and there is very little trading involved, it is all just asset management (I don't even charge them a fee anymore.)
they will never have to answer for the kind of risk I take everyday
Surely you mean, YOU will never have to answer, not THEY--as in your clients--right?
I answer for it everyday, but I don't have to explain it to anybodyQuote from marketsurfer:
Surely you mean, YOU will never have to answer, not THEY--as in your clients--right?
It seemed like a good idea at the time
you get joy out of setting up operations and getting people on board
that's the difference between you and me
if I need any kind of human contact, I can just post bullshit on ET
that is why I am happy in just a small town, and you need to be in the big city
different strokes for different folks
to each his own
you know what makes you happy
and I like being a hermit
you could probably live without me, but I can't live without you
nothing happens until somebody can sell it
Quote from oldtime:
I answer for it everyday, but I don't have to explain it to anybody
It seemed like a good idea at the time
you get joy out of setting up operations and getting people on board
that's the difference between you and me
if I need any kind of human contact, I can just post bullshit on ET
that is why I am happy in just a small town, and you need to be in the big city
different strokes for different folks
to each his own
you know what makes you happy
and I like being a hermit
you could probably live without me, but I can't live without you
nothing happens until somebody can sell it
well said, oldtime. i couldnt make it if there wasn't edge and new ideas to present like those from folks like you----- surf
Quote from oldtime:
I should just give my money to you. At the moment my edge is getting a little dull.
Sure, if you have the wherewithal to invest in hedge funds, I would be pleased to share what I have in my stable. Right now, a start up medical fund and a quant arb program operated by several top notch credentialed science types are seeking allocation. surf
Hi Opulence,
Just for a different perspective I am kind of in the middle between these two but historically am more slanted to the professional side verses retail side.
I have worked at a big bank FX market making, on the CME floor options market making for a proprietary floor trading firm, a hedge fund in London and finally as an internal proprietary trader for a large asset allocator offshore in the Middle East.
So more hired gun than hedge fund owner/manager but always running a capital allocator verses just my own money.
Institutional money means you can leverage your talent via a nice fat free call option.
Well this is kind of strange because I canât think of a universal reason that anyone wouldnât want to leverage their talent and choose a pretty close to sure shot and relatively quick way to becoming a millionaire with minimal personal financial exposure.
There might be some specific reasons to a particular individual but since I started trading in 1982 to present day I have never personally met an individual that turned down the free call.
In fact in all market stories/myths/legends I have only heard of (not met) one guy that choose to turn down institutional money and continue to only trade his own money.
The siren call of the free call option on your trading performance is simply too strong.
Iâve never met this guy either who decided to take institutional money for a few years just to quickly become independently wealthy so they could then shut down the fund to just trade their own money.
It is amazing how poor a millionaire feels when his peer group is all multimillionaires so most stay at it for as long as their performance holds out.
I think ego is just part of a pretty long laundry list and not that close to the top.
For most I think it is the pretty high odds of success in achieving financial independence in a pretty sweet time frame that is the driving force for most. I am from a working class background and the money was a big part of it for me.
The intellectual challenge of figuring out a big complex puzzle is a pretty powerful drug when it hooks you.
But the big reason is trading attracts people that are very competitive by nature and they really want to experience the satisfaction of trading at the highest level.
Trading serious size at an institution is like playing on the GPA tour or NBA etc and for most very competitive people doesnât compare to hustling at the local golf course or neighborhood basketball court.
The edge in the institutional experience to me was like being taught to play baseball in little league, then high school, collage, minors and finally making the jump to the big leagues with the coaching, experience etc one gains along the way.
I just think the above route is a lot easier than being self taught and then trying to make it as a pro while trading out of your house.
I have a healthy ego but donât think I ever could have made it without the institutional training, experience, mentors etc.
I really donât know anyone that has ever done this and the closest I can think of is someone like Linda Bradford Raschke who today (but not in the past) trading (mostly I think) her own cash out of her house.
But Linda Bradford Raschke isnât even a very good example since she had several years experience with mentors, getting staked etc on the San Francisco and Philadelphia exchange floors.
When I was doing FX options for CRT in Phili for a short period of time in the 1980s she was on the Phili floor at the same time but doing equity. Without that experience and the backing, training etc it would be a pretty big jump to being a multimillionaire trading out of your house in Florida and on the weekend riding your very expensive horses to chill out.
Just my two dirhams worth.
You really like to tempt the trading gods donât you!
What happens it you lose all their cash? Then they will have to answer in their financial lives for the risk you did take but unfortunately didnât work out.
For the last twenty years or so on a fairly regular basis I get asked to manage a few bucks for family, friends and the guys at my Dadâs barbecue etc. I am polite but firm; no freaking way!
I am glad I made it with institutional money because I donât need the kind of pressure you must be under trading Momâs retirement fund.
Best of luck!
Cheers, Smoker
Quote from Opulence:
I'm sure that we have people on here that are successful at trading their own money and people that own successful hedge funds. But I want to hear from both sides.
Just for a different perspective I am kind of in the middle between these two but historically am more slanted to the professional side verses retail side.
I have worked at a big bank FX market making, on the CME floor options market making for a proprietary floor trading firm, a hedge fund in London and finally as an internal proprietary trader for a large asset allocator offshore in the Middle East.
So more hired gun than hedge fund owner/manager but always running a capital allocator verses just my own money.
Quote from Opulence:
I want to hear why you think owning a fund is advantageous or why you choose to trade using your own money.
Institutional money means you can leverage your talent via a nice fat free call option.
Quote from Specterx:
It's hard to imagine why anyone who can consistently make 20% a year or more would want to start a fund.
Well this is kind of strange because I canât think of a universal reason that anyone wouldnât want to leverage their talent and choose a pretty close to sure shot and relatively quick way to becoming a millionaire with minimal personal financial exposure.
There might be some specific reasons to a particular individual but since I started trading in 1982 to present day I have never personally met an individual that turned down the free call.
In fact in all market stories/myths/legends I have only heard of (not met) one guy that choose to turn down institutional money and continue to only trade his own money.
The siren call of the free call option on your trading performance is simply too strong.
Quote from Specterx:
or as a temporary move for a few years to escape severe capital constraints.
Iâve never met this guy either who decided to take institutional money for a few years just to quickly become independently wealthy so they could then shut down the fund to just trade their own money.
It is amazing how poor a millionaire feels when his peer group is all multimillionaires so most stay at it for as long as their performance holds out.
Quote from Specterx:
Two reasons that come to mind are as a pure ego play ("Look at me, I'm a hedge fund manager!")
I think ego is just part of a pretty long laundry list and not that close to the top.
For most I think it is the pretty high odds of success in achieving financial independence in a pretty sweet time frame that is the driving force for most. I am from a working class background and the money was a big part of it for me.
The intellectual challenge of figuring out a big complex puzzle is a pretty powerful drug when it hooks you.
But the big reason is trading attracts people that are very competitive by nature and they really want to experience the satisfaction of trading at the highest level.
Trading serious size at an institution is like playing on the GPA tour or NBA etc and for most very competitive people doesnât compare to hustling at the local golf course or neighborhood basketball court.
Quote from marketsurfer:
Believe it or not, there are edges that we, as retail, simply can not access regardless of the rhetoric on this site- these are real edges that only can be accessed via funds. surf
The edge in the institutional experience to me was like being taught to play baseball in little league, then high school, collage, minors and finally making the jump to the big leagues with the coaching, experience etc one gains along the way.
I just think the above route is a lot easier than being self taught and then trying to make it as a pro while trading out of your house.
I have a healthy ego but donât think I ever could have made it without the institutional training, experience, mentors etc.
I really donât know anyone that has ever done this and the closest I can think of is someone like Linda Bradford Raschke who today (but not in the past) trading (mostly I think) her own cash out of her house.
But Linda Bradford Raschke isnât even a very good example since she had several years experience with mentors, getting staked etc on the San Francisco and Philadelphia exchange floors.
When I was doing FX options for CRT in Phili for a short period of time in the 1980s she was on the Phili floor at the same time but doing equity. Without that experience and the backing, training etc it would be a pretty big jump to being a multimillionaire trading out of your house in Florida and on the weekend riding your very expensive horses to chill out.
Just my two dirhams worth.
Quote from oldtime:
they will never have to answer for the kind of risk I take everyday
You really like to tempt the trading gods donât you!
What happens it you lose all their cash? Then they will have to answer in their financial lives for the risk you did take but unfortunately didnât work out.
For the last twenty years or so on a fairly regular basis I get asked to manage a few bucks for family, friends and the guys at my Dadâs barbecue etc. I am polite but firm; no freaking way!
I am glad I made it with institutional money because I donât need the kind of pressure you must be under trading Momâs retirement fund.
Best of luck!
Cheers, Smoker