Quote from smallStops:
Regarding academic studies - because academics have a strict code of practice and some deontology ( in simple terms morals & ethics) - they'd have to report any data where traders names are included. At least as long as their studies is done within a recognised academic institution. I think - but I am not sure - should they not comply with privacy laws, they could go through disciplinary actions.
It is the same for the off shore asset allocators and as with academic studies neither the names of the trader or possible allocator are passed until both sides indicate serious interest.
As I said before I have never heard of a trader turning down initially a meeting and then if they pass due diligence never heard of a trader turning down a multi million dollar allocation. For most the possibility to leverage talent with an allocation and become seriously rich relatively quickly is just too big a âticket to paradiseâ to pass on.
Quote from smallStops:
Even if one is not Norwegian, one can still get all the info - as long as it does not breach obvious practices - for some reasons this fund ( true of ~ 750billion$ today, and forecasted to get over trillion ) is very transparent. I still wonder why.
I donât know what points I made you are addressing with the above quote?
This is what I said about the GPFN:
Quote from Smoker:
Hi Smallstops,
A Norwegian citizen can get extensive information very easily on the Government Pension Fund of Norway as due to an investor in and future beneficiary but the fact is the GPFN is very discreet as are all sovereign wealth funds. Getting such detailed information as a non Norwegian citizen is most likely possible but not even close to as easy as it is for a Norwegian citizen.
Like my client the GPFN have a no unsolicited approaches for allocation policy which is more or less a âdonât call us, we will call youâ policy which is similar to my clients policy on hedge funds/CTAs.
In other words you canât just send them an email, make a quick phone call or walk in off the street and score a meeting to pitch for an allocation but instead you need to be invited into the club.
I can just add that the GPFN just about as discreet about their allocation policies and due diligence procedures as my client. The GPFN are not recruiting traders to allocate to using the websites you mentioned or any similar of their own design. This does not happen.
Quote from smallStops:
hahahaha. I always wonder why the mercenary guys are so transparent. Even having a website, and even willing to give info for people to check them out fully. Wow and funnily enough they do not pass or sell traders details. lol.
I have told you several times that no one passes or sells traderâs details. This is a mathematical process and no personal details would be passed until both sides indicate serious interest.
There is nothing sinister about this process; it is just business and has nothing to do with your references to human trafficking or drug dealing etc in earlier posts.
Quote from Ghost of Cutten:
How do you explain Madoff? Pure con artist, raised billions on smoke and mirrors.
Quote from Ghost of Cutten:
Incorrect, Madoff took down a few professional funds of funds advisers as well.
Would you be happier with generally correct?
His customer list was mostly professional athletes, actors, retired high net worth individuals, family endowments, some stupid and greedy money management advisors etc.
The reason you know for sure that none of the professional asset allocators allocated money to Madoff is you know that Madoff could never pass even a rudimentary due diligence.
Even if some GPFN (or other pro asset allocator) employee was bribed by Madoff for an allocation when the GPFN send in its team to do due diligence Madoff would fail and that would instantly end any chance of a GPFN allocation.
Quote from Ghost of Cutten:
John Meriwether - no edge, blew up twice, raised billions.
I can tell you a little bit about this one and in fact a kind of funny story.
I sat in the initial meeting where LTCM pitched for an asset allocation from my client. Even though I am was a proprietary trader and not asset allocator I really wanted to be at the meeting since being Canadian I really wanted to meet Myron Scholes who was a finance hero of mine.
LTCM had the right pedigree and great track record with +42.8%, 40.8% and +17.1% from 1995 to 1997 before the start of the blow up in August of 1998.
The due diligence team saw them during LTCM's initial start up and every year afterward until the blow up. Every one thought they were great on paper but LTCM wouldnât allow the team to do due diligence for âit is all proprietaryâ reasons.
Thus the team had to turn down LTCM with the âno glove, no loveâ deal breaker i.e. âno due diligence, no allocationâ.
Now a funny story turns hilarious. From 1995 onwards there was tremendous heat from TPTB to allocate to LTCM since their Wall Street Investment banking contacts were on the phone every day screaming at them to invest and those morons on the due diligence team be dammed etc.
The three main due diligence guys held their ground for three years and in fact threatened to quit if TPTB tried to force an allocation with no due diligence.
And then everything went BOOM with the Russian default and amazingly enough TPTB never mentioned their desire to allocate to LTCM ever again. It was like it never happened and everyoneâs hard drive in their head was reformatted and all those files were lost.
However TPTB never again tried to interfere in an asset allocation and so far have left everything up to the due diligence team.
Quote from Ghost of Cutten:
The evidence is clear - Buffett was right, fund management is mostly marketing and BS, performance is only a minority influence.
Actually Buffett is kind of guilty of this him self; remember when Buffett said hedge fund fees were outrageous.
His fees under the Buffett Partnership were +6% hurdle per annum and a cool 25% of profits per annum (and I believe no high water market) during a period when stock market beta return was around +8 to 9% per year.
Give a guy with Buffettâs talent and a huge freaking bull market and fees like that and that is where the Buffett billions and billions came from.
Honestly I have to wonder what Buffett would be worth if he just could have kept his mouth shut and kept everything proprietary instead of cloning himself hundreds and hundreds of times over.
Quote from Ghost of Cutten:
It's ok I saw his other post about pro vs retail money. So let's amend it to "It's easy to raise money from retail investors if you are a good at selling; for pro investors you need good results & method."
Now the question is, if you are good, what is the benefit of pro money over retail money?
Pro money usually comes in against the flow of the retail performance chasers. Pro money has a real premium on from the point of view of the fund manager since it is stable and in drawdowns when retail runs the pros keep you in business and usually use drawdowns to add to the allocation.
Thus the pros pay way under the typical 2/20 retail fees which one of the ways the guys out here crush the indexes year after year.
Quote from Ghost of Cutten:
Is it that simple though? I am sure in 1930 many value investors bought for the same reason they bought in 2008, it's just that the first time, 1931 and early 1932 came along and wiped those value investors (Graham included) out, whereas this time the system held together better and so the value players like Buffett were rewarded instead of crushed.
The fact is that you can never be sure that bad quotes won't become even worse, and then the fundamentals sink to justify them. Every market can not only go to zero it can stay there, in real outlier scenarios. All people using "Graham Risk" to justify going all-in are just writing very deep OTM puts and gambling with their financial survival.
I donât really understand what you are saying here about âGraham Riskâ being used to justify going all in and writing OTM puts and gambling etc?
Graham Risk to me means respect your stops and risk is the permanent loss of capital i.e. drawdown from which recovery is impossible rather than the Markowitz standard deviation as risk of Modern Portfolio Theory.
Graham Risk means keep some dry power to fight another day thus get out i.e. stop out to keep a drawdown from becoming impossible to come back from etc.
BTW a lot of Ben Grahamâs methodology was not fully formed like the âmargin of safetyâ stuff before the 1929 crash and subsequent bear market disaster.
I believe (donât know for sure) that the lecture notes of 1927 are not the same as the lecture notes of the 1930s. I am sure the 1929 crash put the value into value investing course notes especially regarding the âmargin of safetyâ part of Graham value investing.
Just my opinion of course.
Cheers Smoker
