John Henry--The Next Blow Up ??
- Thread starter jay gould
- Start date
No, it is not necessary to have a large some of money to execute a profitable strategy and manage it, especially if you built scalability into your system.
Winton Capital Management (Trend follower)
Jan....... Feb .....Mar .... Apr ...May....YTD
-5.38% 6.58% 4.64% -4.21% 6.40% 7.55%
There are many trendfollowers, some are having decent years despite the choppy markets. Winton has 2 billion under management. Jay likes to find the worst performing ones currently and pick on them. Winton has been around since 1997 and has never had a losing year and average 20%/year. JWH takes big bets and has big swings but it consitent in the long term. A trader like VN cannot compare to these outstanding managers, I don't even understand this discussion, the returns speak for themselves. Jay seems to have some issues with trendfollowing in general, maybe he doesn't understand it or maybe he is jealous, I don't know. I think someone should start a thread discussing Jay's emotional issues with trendfollowers. Maybe his father beat him and his father was a trendfollower?
5yr
Ed Seykota earns 60%/year, never has blown up, and has time in his life to pursue other things to help people, like his trading tribe. VN doesn't do that he is in it for the money, fame and publicity. And has achieved losses and infamy, the thing he is most unwilling to feel is exactly what he ends up feeling.
Jan....... Feb .....Mar .... Apr ...May....YTD
-5.38% 6.58% 4.64% -4.21% 6.40% 7.55%
There are many trendfollowers, some are having decent years despite the choppy markets. Winton has 2 billion under management. Jay likes to find the worst performing ones currently and pick on them. Winton has been around since 1997 and has never had a losing year and average 20%/year. JWH takes big bets and has big swings but it consitent in the long term. A trader like VN cannot compare to these outstanding managers, I don't even understand this discussion, the returns speak for themselves. Jay seems to have some issues with trendfollowing in general, maybe he doesn't understand it or maybe he is jealous, I don't know. I think someone should start a thread discussing Jay's emotional issues with trendfollowers. Maybe his father beat him and his father was a trendfollower?
5yr
Ed Seykota earns 60%/year, never has blown up, and has time in his life to pursue other things to help people, like his trading tribe. VN doesn't do that he is in it for the money, fame and publicity. And has achieved losses and infamy, the thing he is most unwilling to feel is exactly what he ends up feeling.
From NYT 5/29/05'
"Returning to business hasn't been much easier for Victor Niederhoffer. His first hedge fund business was crippled in 1997 by leveraged and unhedged speculations in the Thai stock market, and then finished off by a wrong bet on American stocks.
Mr. Niederhoffer said he was severely depressed by the blow-up. To stay afloat, he had to sell his silver collection and take a mortgage on his 20,000-square-foot home in Weston, Conn. Friends ostracized him. "People stopped inviting me," he said. "I became persona non grata, and I think they were very disappointed in me. They thought of me as a winner and a prudent person. They had planned their retirement around their investments with me."
He did not get back in the game until 2002, when he founded the Matador Fund, an offshore hedge fund with $4 million. Today it has assets of $156 million, mostly, he said, from South Africa. "The economy is so bad there that our problems look minor in comparison," he said, alluding to his previous misfortunes.
The fund is up 147 percent since he founded it, including a 13 percent gain so far this year. The 2005 gain has come despite extraordinary volatility: for example, the fund lost 13 percent in just one month, April.
If such swings unnerve Mr. Niederhoffer, he doesn't show it. "There is always the possibility of failure on the front burner," he said. "You can't make money without risk. We believe we took appropriate risk."
Still, he knows that this may be his last chance. "People are willing to give you a second chance in America," he said. "I am still walking on very thin ice. And I am older. I am 61. I don't have the resilience to come back again."
Sounds like the dude still swinging big %s around, -13% in April and ytd +13% :eek:
i'll agree with this, neal. my contention is that "trend following" has a slim chance of working( when i say working--i mean resulting in worthwhile profits for the energy and capital extended) for the averaqe capitalized trader. But rather its a strategy for well capitalized traders who are able to diversify and withstand the inherent drawdowns. teaching this strategy as a primary method of trading to the average capitalized trader will result in a few winning traders, but the majority will be wiped out.
just my opinion, ofcourse.
best,
PS. kindly note, when i say "trend following" i am refering to commonly understood tactic of buying higher highs and higher lows and vice versa.
So the bottom line is that Vic blew away ~50-75m in 1997m, came back 5 years later with 4m when he started Matador in 2002, had assets size of 45m at end of 2004', and now is at 156m in assets from South African investors, according to NYT 5/29/05 article and up ~13% for the year, or probably 10-20m. April was -13% for his fund however.
These seem to be the facts, from what I have gathered.
These seem to be the facts, from what I have gathered.
Quote from jay gould:
i'll agree with this, neal. my contention is that "trend following" has a slim chance of working( when i say working--i mean resulting in worthwhile profits for the energy and capital extended) for the averaqe capitalized trader. But rather its a strategy for well capitalized traders who are able to diversify and withstand the inherent drawdowns. teaching this strategy as a primary method of trading to the average capitalized trader will result in a few winning traders, but the majority will be wiped out.
just my opinion, ofcourse.
best,
PS. kindly note, when i say "trend following" i am refering to commonly understood tactic of buying higher highs and higher lows and vice versa.
Jay
It's one thing to warn people about the difficulty of trend following methods. I believe that you are right on in saying that capitalization is key and many people overlook that.
It is another thing (a big leap) to 1) claim that the larger and well capitalized trend followers who have been successful are purely lucky and in delusion, and 2) constantly put down JHenry's performance this year while selectively ignoring his longer term track record.
What part of JH has not blown up yet do you not get? Of course, you are absolutely entitled to your opinion that the successful trend followers are lucky and not skilled. But next time you cite a down month for JH, how about citing something quite similar from the non trend followers, like a -13% April return for VN, to keep things balanced?