John W. Henry to Stop Managing Client Money

Quote from Random.Capital:

Take out constant inflows from "retail", and the concept of sustainable alpha becomes pretty tenuous.
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This.

The whole idea of large alpha in 2012 = "tenuous".

There has been a major Cultural Shift...
People get that retail trading = casino.

100% of my profits come from capturing $0.03-$0.04 spreads...
Whereas in the 90s there was lots of alpha.

Probably 90% of IB's profits come from market making operations...
And on down the list.

(But don't let reality stop you... flail for that "alpha").

Though get a large spike in volatility...
And the amount of alpha spikes concurrently...
So if you are not built to exploit Vol Spikes = you are toast.
 
Quote from oldtime:

am I the only guy that's doubled his money since 2009? and that was just sitting long in an index fund
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what i don't get with a guy like Henry, is... what was he doing while hundreds of stocks were advancing 400-500% and more since '09 ???
 
Quote from imabadboy:

what i don't get with a guy like Henry, is... what was he doing while hundreds of stocks were advancing 400-500% and more since '09 ???
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Trading futures
 
Hundreds of poor , uneducated students on Zulutrade outperform Henry by a looong shot during the last 2 years.

Why? They have to make money. Henry? Does not have to- his focus was recently on baseball.


Those who have big money often don't have the slightest idea how to invest them. Huge mistake after a huge mistake. Bernie Madoff a prime example of how the financial elite "invests".
 
Quote from DT-waw:

Hundreds of poor , uneducated students on Zulutrade outperform Henry by a looong shot during the last 2 years.

Why? They have to make money. Henry? Does not have to- his focus was recently on baseball.


Those who have big money often don't have the slightest idea how to invest them. Huge mistake after a huge mistake. Bernie Madoff a prime example of how the financial elite "invests".
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Comparing guys trading $2,000 accounts versus funds that have to move billions is absurd.
 
Quote from denner:

Comparing guys trading $2,000 accounts versus funds that have to move billions is absurd.
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The most ignorant argument i always hear.
Do you have the slightest idea how much size you can execute on FX on interbank platforms? In one single little click?
$2B can be managed on FX without any liquidity /slippage issues.


But most of these CTAs trade futures,most of futures have VERY poor liquidity.

Well, who do i talk to anyway? Bunch of freaking newbies or people without any basic trading knowledge.

Retail traders are all trading FX using MT4 and thats where the easy money is. Futures is for big boys, the game is too efficient there.

Henry did not wanted to adapt, so here is the result. I predict that most 15+ yrs old trend following futures managers will close shops soon.
 
Any updates on what Henry has been up to these days?
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People fail to understand why the big fish go and invest with HFs, returns are only part of it and often less significant than correlation with the equities market. While you can have a lot of your money stuffed in the indexes, you also want investments with zero or negative correlation to equities.
Not saying this to excuse his crappy returns recently though.
 
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