Capital Available for Traders

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Quote from mickson:

Guys I have been offline for a while.

I think there is so much speculation going on here about the kind of guys we are going to find. I have a simple philosophy lets see what the leaderboard attracts - that simple.

I would allocate money to Kevin Saunders who is at the top of the leaderboard right now based on what I have seen so far. Not sure if you have checked him out but he is far from a piker he is a full time money manager and he isn't complaining about the size of the allocation. For us RAPA has already achieved its immediate objective, at least in terms of its first allocation on 7 December.

My partners are serious players who have seeded hundreds of small time traders with their own money with some moving on to the really big league managing billions. We are not rookies I can assure you seeding managers is in our blood.

I picked up some discussion on the thread relating to the rules regarding our DD policy, I am not sure if that was discussion about some other product. All I have said so far, according to the mandate we enter with the trader he will have to continue trading according to the style that achieved his ranking. We have no intention of making a manager trade with a drawdown limit that will guarantee failure. Performance fees are subject to a high water-mark with no hurdle rate.

If a trader who tops the rankings has a max DD of 25% what is the point of allocating money to him with a DD limit of 10%. We understand that trading entails the probability of losing money, but we would like to think that our screening process and our money management skills will prevail. Time will tell......
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So I see Kevin sells naked options in crude oil. That explains the high sharpe and low drawdown. I'm not knocking him, he seems like a smart guy. But do you really think you can get him an institutional type allocation for selling naked options? Half of ET sells naked options. LOL. It's a serious question though, because I question the real alpha that is coming from that. Crude oil while being volatile has been rather range bound for the last few years. In 2008 he would have taken every institution that invested with him to the bottom of the south pacific.
 
Quote from Pekelo:

Since Patak is offtopic for this thread, we should probably move that part of the discussion to the appropriate thread. But anyway...



Success? When I see their numbers, I will account for their success.
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He's taking about the guys who are funded and unlike you trading real money in live markets
Passing the Combine itself is not a success, unless you like a paper trading diploma on your wall....
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You don't even have that.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=113413&perpage=30&pagenumber=2
 
Quote from rwk:

This is a good example of two very different views of the same problem. For folks with the money, there is a shortage of talent. For folks with the talent, it's too hard to attract money.
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If you have just s few million dollars, you can get inundated with pitch books from hundreds of funds with 15+ year trackrecords, pedigree, and platforms with proper controls and investor protections.

There is NO shortage of talent for an high net worth individual to choose from. The hardest part is distinguishing between all of them.

Many of the flagship top tier funds are closed to new investors but the guys who made those funds are starting new funds every day.
 
Quote from Maverick74:

So I see Kevin sells naked options in crude oil. That explains the high sharpe and low drawdown. I'm not knocking him, he seems like a smart guy. But do you really think you can get him an institutional type allocation for selling naked options? Half of ET sells naked options. LOL. It's a serious question though, because I question the real alpha that is coming from that. Crude oil while being volatile has been rather range bound for the last few years. In 2008 he would have taken every institution that invested with him to the bottom of the south pacific.
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Well stated Maverick. Despite these guys pedigree, there appears to be a disconnect between market reality and the product. I have seen his before with really smart inventor types who are so sold on their creation, no amount of reality can dissuade their ideas.

surf
 
Quote from Maverick74:

So I see Kevin sells naked options in crude oil. That explains the high sharpe and low drawdown. I'm not knocking him, he seems like a smart guy. But do you really think you can get him an institutional type allocation for selling naked options? Half of ET sells naked options. LOL. It's a serious question though, because I question the real alpha that is coming from that. Crude oil while being volatile has been rather range bound for the last few years. In 2008 he would have taken every institution that invested with him to the bottom of the south pacific.
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Who said anything about an institutional allocation, I am happy to allocate our money to start with. You don't know us maybe we are as big as an institution.

Secondly Kevin made 11.90% in 2008 and has made excellent returns every year for 6 years with an audited track record.

You seem to be quite the expert, in fact maybe even an authority, why don't you introduce yourself? I have no idea who is giving me all this advice it would certainly help to know, what you do for a living and perhaps you are prepared to share with us your track record.
 
Quote from mickson:

Secondly Kevin made 11.90% in 2008 and has made excellent returns every year for 6 years with an audited track record.
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5-10 years is VARIED market environment...
Would be a reasonable sample to judge a money manager...
Even then you have to drill down...
And understand the strategies employed IN DETAIL.

Simply allocating capital based on short-term leaderboards...
Is a highly suspect statistical shortcut...
A common error that would be laughed out of any post-grad level stats discussion...
Maybe rename the site FBR Capital (Fooled By Randomness).

Basically, you have to be an Elite Money Manager...
To be able to identify other Elite Money Managers...
It's not about crunching a bunch of numbers.
 
Quote from mickson:



Secondly Kevin made 11.90% in 2008 and has made excellent returns every year for 6 years with an audited track record.
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This thread isn't a referendum on Kevin but what was drawdown in September/October '08, just curious if you have the stats? Option seller drawdowns in high volatility are important, returns are secondary.
 
Quote from DeeDeeTwo:

5-10 years is VARIED market environment...
Would be a reasonable sample to judge a money manager...
Even then you have to drill down...
And understand the strategies employed IN DETAIL.

Simply allocating capital based on short-term leaderboards...
Is a highly suspect statistical shortcut...
A common error that would be laughed out of any post-grad level stats discussion...
Maybe rename the site FBR Capital (Fooled By Randomness).

Basically, you have to be an Elite Money Manager...
To be able to identify other Elite Money Managers...
It's not about crunching a bunch of numbers.
More...

Clearly you haven't read the full extent of how we allocate points on our leaderboard.
On the issue of post grad stats I think you will find our qualifications in this field at post doc level suitable.

Finally we are not asking anyone on ET for money we are quite comfortable having covered this base. All we are asking for are talented traders to show us their numbers and we will allocate money. I get that we are new and therefore we will need to earn our credibility but to come up such ludicrous theories of 5-10 yrs of track record, please do me a favor.

You can ridicule our approach all you like, it's our money we don't need your approval. If you guys have constructive input for us so we can make our product better we are happy to listen.
 
Quote from kroponer:

This thread isn't a referendum on Kevin but what was drawdown in September/October '08, just curious if you have the stats? Option seller drawdowns in high volatility are important, returns are secondary.
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It was small btw but we are focusing on our Leaderboard and the track record therein. The 6 yr track record was part of our "research" in understanding who our leader currently is and merely to respond to Mavericks authoritative doom call for 2008. Perhaps not all naked option writers are the same. :D
 
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