Hedge Fund

Originally posted by NickLeeson

Do you want to do that? Then good luck;)
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This is a whole other subject in itself (startup costs that is) and I think there are other threads on elite almost entirely devoted to it.

Keep in mind that a lot of that stuf you mentioned- marketing the most glaring example- is only an issue for big players. If you plan to be small and nimble and don't need titanic size to cover your nut, then it only makes good sense that you have a network of willing (and capitalized) potential investors in the first place.

As for the legal fees, those estimates are way, way inflated IMHO idiots were cashing in on their street reps and opening funds left and right during the bull, which let the lawyers charge rates north of the moon, but it's not that way anymore. Legal fees for doing it bare bones, straight up and tight just are not that high, you can knock some zeroes off of that figure.

p.s. in the early eighties Paul Tudor Jones started his fund with $300,000. I don't think he was paying two or three times that just for paperwork....
 
Originally posted by darkhorse



This is a whole other subject in itself (startup costs that is) and I think there are other threads on elite almost entirely devoted to it.

Keep in mind that a lot of that stuf you mentioned- marketing the most glaring example- is only an issue for big players. If you plan to be small and nimble and don't need titanic size to cover your nut, then it only makes good sense that you have a network of willing (and capitalized) potential investors in the first place.

As for the legal fees, those estimates are way, way inflated IMHO idiots were cashing in on their street reps and opening funds left and right during the bull, which let the lawyers charge rates north of the moon, but it's not that way anymore. Legal fees for doing it bare bones, straight up and tight just are not that high, you can knock some zeroes off of that figure.

p.s. in the early eighties Paul Tudor Jones started his fund with $300,000. I don't think he was paying two or three times that just for paperwork....
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Tudor Jones, yup, that's true, but he also had great contacts that brought his assets up double quick - he'd broked for Soros amongst other stuff like trading for clients as a a broker etc.

But if you have your investors lined up already, then that's just great.

As for costs, one thing I've always found usefull is calculating in reserves at least double your estimates...

Sort of like building a house, you know? You think it's gonna be 10, then it's 12, 14 16, you know what I mean.

Just always better to be safe than sorry.

Best of luck, sounds like you're pretty much set to go.

You gonna keep us informed, that would make for some interesting reading.

Although, that'd probably just put pressure on you when you least need it.

Anway, best of luck and successagain with your venture.
 
Originally posted by NickLeeson


Tudor Jones, yup, that's true, but he also had great contacts that brought his assets up double quick - he'd broked for Soros amongst other stuff like trading for clients as a a broker etc.

But if you have your investors lined up already, then that's just great.
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Exactly.

I started out as a commodity broker as well (not to say I am in the league of Bacon or Jones, LOL). I got the ball rolling on the strength of the relationship I developed with a major investor, who backed my play when I decided to quit the firm. His capital alone provides me a nice cash flow, and I get a much higher payout than normal because I am going to give him a slice of the fund itself down the road in exchange for his faith in me- backing my play so early in the game. He's got some loaded relatives, and I also have a short list of heavy hitters who know what I'm about and want to hear from me when I can show them some twelve month black and white numbers.

He knows some guys, I know some guys, we get together and have a talk in twelve or eighteen months, yada yada yada.

If it works, great. If not, great. I just want to do what I love- trade- and get paid well enough that if I decide to sail around the world or focus on nothing but my kids ten years from now (don't have any yet knock on wood), I'll be able to do so.
 
I only have one thing to say about this whole thread:

Statrader, I think you are doing great with your income. Though I disagree with _NEEDING_ the education part to be a good trader, I would still enjoy having it - believe it or not, I enjoy "econophysics."

Trader99, thanks for providing insight into the wall street requirements.

Dark, I feel your passion, but I do not know what comes of it.

nitro
 
Originally posted by nitro


I feel your passion, but I do not know what comes of it.
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not sure i understand what that means-
but it has a cool shakespeare kind of vibe to it :D
 
Originally posted by darkhorse



Exactly.

I started out as a commodity broker as well (not to say I am in the league of Bacon or Jones, LOL). I got the ball rolling on the strength of the relationship I developed with a major investor, who backed my play when I decided to quit the firm. His capital alone provides me a nice cash flow, and I get a much higher payout than normal because I am going to give him a slice of the fund itself down the road in exchange for his faith in me- backing my play so early in the game. He's got some loaded relatives, and I also have a short list of heavy hitters who know what I'm about and want to hear from me when I can show them some twelve month black and white numbers.

He knows some guys, I know some guys, we get together and have a talk in twelve or eighteen months, yada yada yada.

If it works, great. If not, great. I just want to do what I love- trade- and get paid well enough that if I decide to sail around the world or focus on nothing but my kids ten years from now (don't have any yet knock on wood), I'll be able to do so.
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Again, sounds great. It'd be really something to have a true success story come out of these boards, and then be able to say, hey, we talked back then when he was just planning to start out.

And everybody we're talking about now started out small at some point, with little more than strong belief in him or herself - it doesn't have to be that you think you're GOD like ole George apparently still thinks, haha, that had me really cracking when I heard about that, but still, strong belief anyway, and endurance and all the rest.

Best of luck
 
Originally posted by NickLeeson


It'd be really something to have a true success story come out of these boards, and then be able to say, hey, we talked back then when he was just planning to start out.
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Except for one thing:

I don't plan to be well known. Ever.

The thought of fame is kind of nauseating.
 
Originally posted by nitro
I only have one thing to say about this whole thread:

Statrader, I think you are doing great with your income. Though I disagree with _NEEDING_ the education part to be a good trader, I would still enjoy having it - believe it or not, I enjoy "econophysics."

Trader99, thanks for providing insite into the wall street requirements.

Dark, I feel your passion, but I do not know what comes of it.

nitro
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Actually I think there wasn't really all that much disagreement, apart from some strong personalities feeling the inevitable need to clash a bit, haha, I think everyone can and actually has agreed that

a good education, what for you Americans would be Ivy league or what have you, and for us Germans just plain ole uni, is great for the initial first step of getting your foot in the institutional door if that is the route you choose to reach your ultimate objective, but then it's up to you, and nobody can teach you how to really perform.
 
Originally posted by darkhorse



Except for one thing:

I don't plan to be well known. Ever.

The thought of fame is kind of nauseating.
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I can fully sympathise with that point of view.
 
Originally posted by Maverick74


Trader99, I will give you the benefit of the doubt for now. But i'm keeping my eye on you. So does that clear up this thread? Anyone else out there think there is a correlation between education and trading? StatTrader? I think you pretty much proved my point. Since you're only making about 125k in real income and you espouse to be the product of a great education, we can clearly see that since there are many many guys out there raking in millions and tens of millions. Your pretty much on the bottom of the totem pole. I mean if the result of an ivy league education is only 125k in real income I think I'll pass. I want to make millions and tens of millions. So I better stay away from those fancy schools. Nothing wrong with that though. I'm not making millions either so I can't look down on anybody. I think a way back when you were trying to prove some kind of a point about your salary and whatever, the point that a lot of people missed is that we don't even know that you're a trader. You could be working at some IB designing computer programs. I've never once on here seen you post anything trading related. Such as what you trade, the kinds of styles you adhere to and so forth. As far as I'm concerned you might be working in compliance. Anyway, where should we take this thread now? How about the correlation between trading and the kind of car you drive? Anybody? Anyone?
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Maverick74:

Dude! I don't need you to give me the benefit of the doubt shit. I wasn't here parading my resume/credentials/income/whatever. It just that these topics came about when everyone on this thread for some reasons started this debate about institutional vs daytrading,etc.

SCREW THAT!

But here's the TRUTH. I think ANYONE can become a "decent" trader given enough time and training and market experience. Maybe it takes 6months, maybe it takes 1-2yrs who knows. But the thing is the typical prop trading job the person isn't offered any salary. So, he/she can go broke/or barely living by before he/she can master the art of trading. And perhaps, this is why the statistics of failure rates are so high in daytrading(???)
Yet, oddly enough the average prop trader probably has more "personal/real-life" exposure to the market than the typical person at an investment bank.

Because on the other hand, a steady 6figure salary is really nothing at an IB. They pay new MBAs grads, phds, and even really solid undergar college students that much just coming out of school. And the thing is most of them dont' really do "market" related activity. IBanking is a huge arena. Some people do sales, others research, others trading, others compliance, others technology,etc. So, the group of people who actually take risk in the market and get compensated appropriately are relatively small.

And that's one of the reason I went to the buyside after being on the Street. In the buyside, everyday is the market.

You wrote(i'm not sure if you are addressing to me or stattrader):

"You could be working at some IB designing computer programs. I've never once on here seen you post anything trading related. Such as what you trade, the kinds of styles you adhere to and so forth. As far as I'm concerned you might be working in compliance."

To answer that question, yes, I'm TRADING everyday now. Remember, I switch to prop trading?! But even before prop trading when I was at my quant funds, it was all market work. But let me give you a new perspective here. In institutional fund management world and especially at quant funds(i've been at both traditional mutual fund and pure quant fund), trading is NOT(I repeat NOT) a glamourous activity.

Think about that for a minute. I repeat, in the institutional fund world trading is NOT a glamorous activity. Do you know why???
Portfolio managers or quant fund managers ultimately make the buy/sell/short decisions. Traders are mere people at the keyboard executing trades for us. I mean think for a minute. Can you imagine a portfolio manager at Fidelity or Janus(not that they are necessarily good funds it's just an easy example) sitting in front of his PC and CLICKING away at the Level 2 box to get a few hundred millions dollars worth of stocks???

So, on the buyside fund managers get paid MORE than traders. On the sell side, traders rule. So, get that fact clear.

For example, at the last quant fund I was with, we built some rather nontrivial models and backtested it. But when it comes to execution, we just have 2 traders and we were managing $2B. Technology has enabled us to not even really need traders. In fact, if we really wanted to we could have the buy/sell list generated from the model to spit directly to our prime brokers for execution without even any traders.

So, to repeat your question: "You could be working at some IB designing computer programs. I've never once on here seen you post anything trading related. Such as what you trade, the kinds of styles you adhere to and so forth. As far as I'm concerned you might be working in compliance."

Given what I said, the actual physically typing in trades is not something I did in my previous jobs or even Stattrader I would assume. Because that kind of trading is considered "CLERICAL" even. I mean fund managers determine what traders get paid at the end of the year. Not the other way around. We see how good they beat the VWAP(volume weighted average price) and if they got the prices we wanted.

but if you are on teh sell-side(that's the typical IB) then traders rule. But I'm not really keen on that type of "trading" because I don't think that's pure speculation. It's just earning the bid/ask spread as market maker.

Rest my case.

trader99
 
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