Managing Funds for a Living

[paysense]

FYI...per the chart above, an ~50% return was achieved in about a 5 month period - with a rather conservative strategy and minimal use of margin.

Again I say...this is a moot point if come xmas all is lost back (because all strategy parameters weren't worked out i.e. downtrends).

Also, for those potential believers - I've coined a phase "...Simply add Zeros", when extrapolating into larger funds (= larger return $$$)

Paysense

 

[paysense]

(MarketWatch) - The rally in U.S. stocks that propelled the S&P 500 Index and Dow Jones Industrial Average to new highs in the last few days will extend into the coming week as corporate merger activity and expectations of less inflation keep pushing the market higher, strategists said.

Breakout the credit cards lol.

Just curious. Is there any verifiable audits of a contrarian that started a hedge fund based on reverse-trading all systems at C2??

It seems, if this can be indexed - some very serious gains indeed can be derived.

PS

 

[Cache Landing]

Quote from atticus:

Reading the Merck Manual doesn't make one qualified to perform cardiothoracic surgery. Opening an account shouldn't qualify one to run OPM.

Cache -- would you feel comfortable handing cash to a guy who's pushing a strategy in which he can't derive the synthetic?

It's been fun, but I have a plane to catch.

Completely agree. The people that I mentor for free ask me a lot of advice about how to find a good MM. I tell them to ask every "advisor" three questions right up front.

1) What's the difference between a covered call and a naked put?

2) How does a vertical spread differ from a collar?

3) Are options inherently more risky than the underlying?

If they have to look up the answer to any of these, I wouldn't give them a dime. Those of us who really do this recognize that these are the most basic questions.

 

[Cache Landing]

Quote from paysense:

I don't need to tell you that this is a very respectable 4-month return. But why not state your 4-year return? I am the only dummy here?



Capital has already and will align itself. I do have SOME pride in what I do and feel I have succeeded in hitting most of my targets - not the least important is preserving gains during the inevitable market downtrend (=$$$).

There are few and far between that can say they do this with any degree of success and thus there go almost ALL funds!!

Now I have to go bye for now - and the best to all ventures.

Paysense

First off. If the record isn't audited or at least consisting of posted real-time trades, the suggested returns don't mean anything here.

Secondly, the people who know me here, know that I can trade. I have in the past demonstrated via real-time trades. Returns averaging 5-10% monthly. Currently I only target 4-5% monthly with OPM as I was desirous to significantly reduce max DD.

Third, anyone can get 50% annual on a 20K account. Even Warren Buffet, the king of the slow method, claims to be able to return at least 50% annually on an account less than 1MM. Ask Atticus how much harder it is with >10MM.

Lastly, I hope you have a backup strategy for you covered calls when this euphoric market heads south. There is a reason that most hedge funds aren't around long. One of two scenarios:

1) The manager, who really doesn't know much about trading, gathers a bunch of slippery money during a few good years. During these good years the strategy employed fits the market characteristics well. When the market changes- and it always does - the omniscient manager doesn't adjust his strategy. Slippery money was only attracted during the >50% return years. One year with only <10% and that money is gone.

2) The manager is actually one of the very few who does know what he's doing. He consistently meets targets and the money he manages is very sticky. His fund is capped as he recognizes the limits of his strategies (notice the plural). In a relatively short period of time he is making so much money that the motivation is gone and it simply isn't worth the effort to run OPM anymore.

My statement earlier was aimed at the fact that you are promoting a strategy that does very well during a bull market, and even better during a slowly climbing or flat market. Everybody I know has made >30% annual for the last few years. Your CC strategy will get blown out of the water if this market heads south with a vengeance.

 

[Cache Landing]

I realize that you claim to have preserved capital during the last bear market, but I have to throw the BS flag on that if you were using your current strategy. Covered calls were some of the biggest losers from 2000-2002. The only way you could've preserved capital is to hold cash. If you do this with a 20MM account, it will drop to a 1MM account before you can blink.

Check out your 3-year chart you posted 98-01'. Great gains during one of the biggest bull markets ever. This is where you would attract slippery money. Then look at your returns during 01'. They flat-lined! Why? Because a CC strategy doesn't perform well during a bear market or when vols are rising. All that money that you would've attracted during 99' and 00' would be gone at the first possible chance in 01'.

Managing OPM in significant amounts is a different game.

 

[El OchoCinco]

Real fund managers dont whore themselves out at elitetrader or collective websites hoping to profit by charging a monthly fee for monthly picks.

Baron must be sleeping on this one.

Quote from paysense:

OK The public may now "auto-trade" with me at www.collective2.com. The exact trades I make in my funds at www.kingdomcapital.com will be made in "Kingdom Capital Covered Call Fund" at C2.

As they say...the proof is in the puddin' and I'm not "puddin'" anyone on when I say these funds rock. But we'll let YOU be the judge!

paysense

 

[paysense]

Quote from Cache Landing: Those of us who really do this recognize that these are the most basic questions.

...good, bad, indifferent.

Is your choice of medicine. Results are what matter, so if we can agree...THIS is what we are bent on!

Paysense

 

[Cache Landing]

Quote from paysense:

...good, bad, indifferent.

Is your choice of medicine. Results are what matter, so if we can agree...THIS is what we are bent on!

Paysense

I agree that results matter. What we are suggesting is that in order to get those results over long periods of time, a manager needs to actually know something more than the basics. Sadly, most people don't even know the basics.

You are getting a lot of grief from others on this forum because you are nothing new to them. Someone who knows how to use one basic strategy. As soon as the market characteristics turn favorable for that strategy, the self-proclaimed guru thinks he can manage large amounts of capital with continued success.

You're correct in that results are the only thing that matters in your personal account, but that is not the case in the world of managed money. It isn't just about making money. It is about making money at the right pace, under the right circumstances, with the right volatility, etc.

In any case, the chart you posted proves my point. Your strategy only performs well under one type of market. Any funds that you gather as a result of 50% annualized gains will be gone after the first bearish year. This type of money is very slippery. Your strategy even on a small scale performed horribly during 01'. That is completely unacceptible to institutional or high net worth investors.

If you get even a fairly informed investor on the line and tell him you base your strategy around covered calls, you'll lose him. There are 5,000 more just like you that have >$100MM AUM and are much more credible.

Someone like Atticus on the other hand, is much more rare. His strategies don't rely on bullish markets, and his experience and knowledge are much less common. Someone like that attracts sticky money and is not likely to experience huge liquidation issues at the first sign of underperformance.

 

[talontrading]

Quote from paysense:


The very best will likely go on to manage "REAL" funds of substantial $$$. Even still, most "hedge funds" that produce in excess of 100% annual returns end up 5-10 years later - back to zero. [i.e. +200, +100, +50, -150, -50, +300, -400...]


paysense

who are you? do you really think that string of percentages adds to zero????????????

 

[paysense]

to be susccinct -

Who really cares what you think or what I think? What I deem as valuable will stay as such until I deem otherwise.

Making money and even success with a good strategy is at best a side note. Some may do well, others not. But life goes on and that's just fine. Gilbert