Good interview with Steve Cohen
- Thread starter ajacobson
- Start date
No...not everybody. He might be an insider trader, but he's still not in jail so that's an accomplishment in itself
That's not an accomplishment on his part. That's a failure on our part in electing government officials that appointed bureaucrats that are so inept and corrupt.
I don't think so. There are clear rules which define insider trading and he managed to ship around them by using dummies who went to jail instead of him. Moraly questionable? Yes, but no bureaucracy or corruption.
Second, you have to come up with a network of people who deliver the information.
While it's not too difficult to trade on market moving information, you have to get your hands on the information first.
I don't glorify this guy and I despise his way of treating people. He's the prototype of the Wallstreet A**hole, but what he achieved is nothing to be sneezed at. Building the expert network was a tremendous effort.
Those bureaucrats obviously got bought by that $1.8 billion donation. All those patsies were guilty on their own but the bucks stopped with him and he should've gone to jail and yet those bureaucrats decided to let him off easy with that $1.8 billion payment. The rich criminal would always want to pay but it's up to the prosecutors, the prosecutors that we place our trust in to stop them and accord their crime with proper punishment. The fact that Steven Cohen can just literally pay for his crime is not Steven Cohen's magic; it's those bureaucracy's incompetence and corruption.
It's not that difficult to get insider information apparently. You don't need a sophisticated network of people, it turns out you just need to pay. You can engage those what's called "networking experts" companies and they will hook you up with those "consultants" who are basically "insiders" in those companies, doctors, lab technicians, production managers who know what's going on in a company and you can do conference calls with them to get insider information. They pay like $5K per conference call and up to $5 million a year for these "consultants" and then they trade based on those information.
Trust me, what this guy does is not even worth a sneeze. If tomorrow I know Pfizer is coming out with a miracle drug that will completely cure Alzheimer's Disease with 99% success, I will buy 10K shares of Pfizer as well and I will make money. And all I have to do is do that 10 times over and there you go, I am a billionaire too.
You know, I've been thinking about this for a while: on the one hand the logic of the advantage that insider knowledge brings is undeniable. That said, one thing about Cohen, it's clear from his past that the guy is very competitive, needs-to-win A type personality: for example playing poker in high-school the night before his SAT test...
I think odds are that reality is a bit more nuanced than we'd like to think: he is probably a mix of a trader who has a great sense of when to fold his trades and when to press them. Throw in 'edge' and you've got a 'grey' reality (neither black nor white): he did have skill in making the most of the opportunities that came his way, and if these same opps were given to someone else, they likely would not have capitalized anywhere close to what Cohen did. So it's very hard to not give him partial credit for his success.
That said, I still think that today, with 'edge' gone the way of the dodo, it is significantly harder if not impossible to make the same kinds of returns even with the aforementioned skills... I think the odds of him generating eye-popping returns by pure trading skill are a longshot, but hey, maybe he will prove people wrong (who now mostly see him as a washed up insider trader). We'll see what 2018 returns are like. From what I've heard, not so hot...
I think odds are that reality is a bit more nuanced than we'd like to think: he is probably a mix of a trader who has a great sense of when to fold his trades and when to press them. Throw in 'edge' and you've got a 'grey' reality (neither black nor white): he did have skill in making the most of the opportunities that came his way, and if these same opps were given to someone else, they likely would not have capitalized anywhere close to what Cohen did. So it's very hard to not give him partial credit for his success.
That said, I still think that today, with 'edge' gone the way of the dodo, it is significantly harder if not impossible to make the same kinds of returns even with the aforementioned skills... I think the odds of him generating eye-popping returns by pure trading skill are a longshot, but hey, maybe he will prove people wrong (who now mostly see him as a washed up insider trader). We'll see what 2018 returns are like. From what I've heard, not so hot...
You guys should watch this video and then assess whether he should be considered "legendary" or not.
Anyway Cohen is relaunching a new hedge fund, this time with $20 billion invested cuz his 2 years of "family office only" "punishment" is over. Let's see how well he makes it without using insider information, IF he dares not to use it.
Anyway Cohen is relaunching a new hedge fund, this time with $20 billion invested cuz his 2 years of "family office only" "punishment" is over. Let's see how well he makes it without using insider information, IF he dares not to use it.
@JSOP: I think everyone knows this documentary and there's not much to say about it.
Thing is, I'm very caryful with talking somebody down before I didn't try put myself in the other guys position.
So I'm asking you: Would you be able to pull it off like Cohen? I mean, raising money, establishing the expert network, putting dummies in front of yourself to protect you and in the end pay the 1.8 Billion(!!) out of jail card?
I know I would not. I'm proud of what I achieved in the electronic trading realm, but I'm 100% not on par with guys like him.
And I don't think there will be a documentary about JSOP soon...amirite?
So yes, definitely a legend...one way or the other.
Thing is, I'm very caryful with talking somebody down before I didn't try put myself in the other guys position.
So I'm asking you: Would you be able to pull it off like Cohen? I mean, raising money, establishing the expert network, putting dummies in front of yourself to protect you and in the end pay the 1.8 Billion(!!) out of jail card?
I know I would not. I'm proud of what I achieved in the electronic trading realm, but I'm 100% not on par with guys like him.
And I don't think there will be a documentary about JSOP soon...amirite?
So yes, definitely a legend...one way or the other.
Yeah, so easy. The reality, of course, is more complicated.
First of all, the definition of insider information is not clean cut and changes at the whim of authorities. The whole expect network thing was cleared ad nauseam by outside legal counsels and was done over the table. Yet then the feds came in and said it's illegal. There are other examples, like dumpster diving etc. It's hard to manage a business vs a moving target like this, I am sure.
Second of all, even the "true" insider information is rarely clean-cut and clear (unless you get stock-moving news in advance like that preacher guy in PA). Usually it's just another piece in the mosaic that has to be taken into account. I recall reading a paper that only 30% or so of insider decisions result in profit (they used an interesting OTM options model).