there is an interesting series of articles starting today on hedge funds in the wall street journal. i strongly recommend reading it.
best,
surfer
best,
surfer
hedge fund wannabees
- Thread starter marketsurfer
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That was a pretty good article. The bar is high and the skilled who have fallen are many.
Most of these guys made classic mistakes. Gotham had no business hiding behind VIC for the past few years and it caught up with them. Quitting a 1M a year job outright to start a fund isn't a great move either. Consistent profitability is the key, but you have to be mature and truly think the process through. Having a business plan with some downside protection and realistic expectations is important too.
From the article, it sounds like the B schools are still teaching this stuff, but some of these guys got caught up in the hype and forgot. The expensive education doesn't always end when you graduate!!!
Most of these guys made classic mistakes. Gotham had no business hiding behind VIC for the past few years and it caught up with them. Quitting a 1M a year job outright to start a fund isn't a great move either. Consistent profitability is the key, but you have to be mature and truly think the process through. Having a business plan with some downside protection and realistic expectations is important too.
From the article, it sounds like the B schools are still teaching this stuff, but some of these guys got caught up in the hype and forgot. The expensive education doesn't always end when you graduate!!!
great points, ktm. i am looking forward to the next in the series.
surfer
what business schools teach you about starting a hedge fund or about trading??
seems most get their knowledge from trial and error........ i know thats the way that I learned how to consistently make money.
seems most get their knowledge from trial and error........ i know thats the way that I learned how to consistently make money.
You got it wrong. There are 2 gothams. Gotham investments and gotham capital I think. The bad one is not associated with VIC. The VIC one has not done anything wrong as far as I know.
yeah, when the indexes are down 30% and your fund is down 25% you tell your clients you did extremely well because you beat the indexes, even though they would have been better off in a savings account !
I think I'm right. Gotham Capital Partners is the one in trouble and they are associated with VIC. I am a VIC member and a few guys who were Gotham insiders had posted the controversial short thesis statements on the site. A few days after the Times article broke, the statements were removed. That was the first time ANY statements had ever been removed from the site. A few weeks later, Gotham was returning money.
Joel Greenblatt from Columbia B School is a partner at Gotham and it was widely known that he runs VIC.
I don't think necessarily that VIC has done anything wrong, just that those guys should not have posted the statements in the way they did. There was talk they had sent them to the media as well, including Jim Cramer. This was promoted as a private site for those who had skills with fundamental equity evaluations, and should not be a conduit for manipulation.