Hedge Fund

[NickLeeson]

Originally posted by darkhorse




LOL, actually Christ said it first. It's from somewhere in the new testament.

He was one of the ones who helped burn into my brain that there is no magic, no secrets. Just talent, tenacity and lots of hard work.

Ooops.



That old, huh?

Hmm. Not sure what that means. Maybe I'm just plain getting old and senile.

The second is oh so true, but I'd wager that even if everybody opening an account had to sign a by penalty if ignored document stating that they'd read and understood that they'd still go chasing after some holy grail anyway after the very first trade where they let a loss run because they thought the market would turn.

 

[darkhorse]

Originally posted by NickLeeson

they'd still go chasing after some holy grail anyway after the very first trade where they let a loss run because they thought the market would turn.

A good read on this topic is "Influence: The Psychology of Persuasion" by Robert Cialdini.

His basic premise is that a functioning society hardwires participants to act in a certain way that is beneficial to all, but that unscrupulous predators can prey on weaknesses created by those unwritten rules. It applies to trading in that we can't escape the negative consequences of deeply embedded habits. Someone who goes through life stroking their ego and being logically inconsistent day to day can't just turn it off when it's time to trade. If you run away from your problems in life, you will run away from your problems in the markets. That's just the way most folks are.

 

[trader99]

Originally posted by traderbambu
"This is a "Show me the money!" business - if you consistently make money with little drawdowns, nobody would ever want to know what kind of formal education you have. It is ridiculous to see all those freshly graduated guys wanting to manage money just because they have an MBA or whatever. (Would you let a new doctor perform brain surgery on you just because he has just finished medical school?)
Again: it is based on trust and the ability to consistently make money with small losses.
B]

True. That's what I've been saying all this time on this thread. haha. And BTW, new MBAs do NOT become portfolio managers right away. They are like assistant PM or associate or research analyst for a few years under the mentorship of a more experienced PM or even CIO(Chief Investment Officer).

A great track record beats everything hands down!!!

But I think one of my point earlier is this. How does one get a big track record managing millions? You sorta have to play by the rules - go get some kind of good education - undergrad,mbas,phd,etc. whatever(even though what you learn might NOT be applied in any way directly to the market. haha.)

You do that merely to get in the door and so you can get to the position where you can begin to get a track record - either using fundamentals, technicals, or quantitative strategies.

Or you can join a prop firm and get your track record there. Trading until you are good and maybe someone will notice.

So, there are many paths to the same goal. No one path is better than the other. But, i guess the education+institutional route is a "safer" bet in a sense that you get salary,benefits,etc. while you learn to trade/invest. That is you don't have the possiblity of going broke before you are good.

other than that, it's no big freakin' deal. happy friday!

trader99

 

[NickLeeson]

Originally posted by darkhorse




A good read on this topic is "Influence: The Psychology of Persuasion" by Robert Cialdini.

Thanks for pointing that out, Darkhorse, sounds like an interesting read, I'll look into getting that.

Also, trader99, i think we can all subscribe to your summary, many roads lead to Rome, some are safer than others, and results speak for themselves.

Happy Weekend!

 

[SethArb]

I have heard that many hedge funds are neg on the year

worse than the Index funds ...

what are some of the reasons for this ?

less liquidity ? more chop than trends ?

 

[praetorian2]

Hey Seth,

I think you nailed it right on. I think that a lot of funds got slaughtered last week in the massive move up. There's not enough plain vanila institutional action lately for them to pick off. It seems that the hedge scene is getting "crowded."

If everyone is just trying to fade and short stock scams, you keep getting screwed. Look at all these stocks which are frauds yet they keep going up b/c they are 60% shorted. That's too much smart working that goes couter to your own progress. Shame.