Karen at court

[atrp2biz]

I don't know why I torture myself like this but I find it hard to believe that someone can misinterpret my point so badly.

What you are trying to drive at is that there are actually no losses simply RIDICULOUS....

Your interpretation of what I said is very different than what I actually said.

As discussed in the other Karen thread, I don't think we have enough information to say that she made or lost money for her investors one way or the other.

I agree that during the November 2014 to March 2016 period, the fund appears to have realized and unrealized losses of approximately $27 million (my math is in the other thread but it appears there were $57 million in unrealized losses offset by $30 million in realized gains). However, the fund has been in place since 2011, so the performance of the fund prior to November 2014 is very relevant to understanding whether or not Karen's fund/strategy made money for her investors. If the fund made $50 million prior to 2014, one could conclude that the fund made money for its investors. If the fund broke even during this period, the fund lost money for its investors. My point is we do not know the performance of the fund during this prior period so we cannot say one way or another.

Now to answer this question.

I agree. Just ask yourself, if there were no losses, why did she start the scheme trades? That only made sense if they had to make realized gains artificially to get the incentives. No other explanation exist.

One simple word--greed. She wanted to maximize fees so she realized her winners and kept open her losers. This is mutually exclusive to whether or not the fund made money since inception.

 

[dealmaker]

Investor.gov: The Confessional of Karen

https://www.sec.gov/news/sec-videos/investorgov-confessional-karen

 

[Pekelo]

To answer one topic quick, I guess prior to 2014 October nobody complained, thus that time frame wasn't part of the investigation. Also it was probably a kosher period. (well, maybe)

November 2014 is very relevant to understanding whether or not Karen's fund/strategy made money for her investors. If the fund made $50 million prior to 2014, one could conclude that the fund made money for its investors.

I disagree about the relevance. The market could have changed, her strategy could have changed, leverage could have increased. Lots of variables making it irrelevant to the examined period. Also investors come and go, thus if I signed up in mid-2014 and got a loss immediately, their track record from 3 years earlier doesn't make me happier. The only relevance could be the Ponzi-like nature of her funds, namely last man holds all the bags. The complaint also mentions that the scheme trades started earlier than 2014 October...

She does mention return % in the interviews and as I said, I summarized it years ago, but I am too lazy to find the post. The returns were in the high 20s or better, that is why she was able to raise money so quick...

 

[Pekelo]

I am quoting myself from 2012:
"Pekelo said:
Here is the 2nd video, they discuss absolute returns in the first 4 mins:

Summary: She has 2 different funds, 190 mill, and 105 mill of it is profit. I think the period is 3+years...

Fund A: From 42 mill to 95 mill
Fund B: From 1.3 mill to 27 mill then to 95 mill (included more fundings)

So contrary to indications, she never made 1000% returns, a big chunk of the money came from investors. Quote:

"At this point people throwing money at you right?"
"Yes."

At 13 mins they say she is up 30% this year on 95 million."

 

[atrp2biz]

I disagree about the relevance. The market could have changed, her strategy could have changed, leverage could have increased. Lots of variables making it irrelevant to the examined period. Also investors come and go, thus if I signed up in mid-2014 and got a loss immediately, their track record from 3 years earlier doesn't make me happier.

It sounds like we agree that there is insufficient information to determine the performance from either a dollar-weighted or time-weighted perspective.

The only relevance could be the Ponzi-like nature of her funds, namely last man holds all the bags. The complaint also mentions that the scheme trades started earlier than 2014 October...

Actually, I think it's the other way around. The NAV is the NAV, whether there are unrealized gains or losses. However, the fees are 'front-loaded' through the deferral of unrealized losses (since the fees are based on realized P/L).

 

[Butterball]

And that tastytrade clown never questioned her returns nor her nonsensical answers. Never pressed her. "Oh so you just roll down your short puts when the market moved against you?" "Yes." "Ok Karen, thank you that explains your performance. Thank you!"

 

[jetbird]

No surprise here. Underscores the fact that nobody can be trusted in this business.

 

[ajacobson]

I would expect a fair amount of litigation against TD and Tastytrade if she loses.

 

[Overnight]

I made it 9 mins into the video and had to bail. I have better things to do than sit there and listen to this cranky cherub go on about what she did or did not do with OPM.

If it was her own money? Fine.

If it works with 5,000,000 shares with OPM, then it should work with 5 shares of your own. Yes? Am I off on this line of thinking?

 

[Pekelo]

If it was her own money? Fine.

If it works with 5,000,000 shares with OPM, then it should work with 5 shares of your own. Yes? Am I off on this line of thinking?

I don't really understand your logic, but she did it with her own money too. That is why she got to be a HF manager. I even quoted "At this point they are throwing money at you? Yes"
You didn't even have to listen to the video...