Quote from Rodney King:
An interesting read : http://www.quantnet.com/forum/threads/i-am-hedge-fund-partner-and-its-not-that-great.5960/
Yes, that was my first thought as well. If they need 7x leverage just to attract investors + generate interesting returns... then they should get out of the game. And for that matter, I have no problems getting 7x leverage from much smaller institutional brokers with just a few million in assets.Quote from Cache Landing:
Most of his problems in the article are caused by the fact that he has made himself a slave to the prime broker. IOW, his returns are such that he needs PB leverage to be attractive to investors and produce enough return to make it worthwhile. He is faking success in order to impress people enough to invest in his fund. So he is forced to buy this successful appearance.
My opinion is that if a person can't be successful with reg-t margin, they shouldn't be starting a hedge fund.
Quote from heech:
Yes, that was my first thought as well. If they need 7x leverage just to attract investors + generate interesting returns... then they should get out of the game.
On the other hand, maybe his strategy requires trading OTC, and no one will deal with him if he's not setup with a larger prime broker?
Quote from zouy2000:
The performance so far this year is not good. no gain, no loss either as I am busy developing auto-trading program with Amibroker and my portfolio is in defensive mode which only holds a couple of high dividend stocks. I am still contemplating what to do for the next few years, but for now the rational thing for me to do is probably to perfect my trading methodology and make target of 50% gain per year.
Lazar, have you considered RIA route? I have a IB Family and Friends advisor account, I consider it is much simpler than hedge fund structure and you can also trade other people's money like a simple account.
let me know how your hedge fund goes.
Quote from Rodney King:
An interesting read : http://www.quantnet.com/forum/threads/i-am-hedge-fund-partner-and-its-not-that-great.5960/
Quote from Ghost of Cutten:
IMO this article misses the point. If you can crank out 15% a year with a shitload of leverage, yeah you don't deserve funding. If you are the next George Soros or Steve Cohen, you are making 30%+ with normal leverage.
If you can make 30% a year, then how on earth can a typical small fund nut stop you? On 1 mill capital that is 300k per annum, just work from your living room and keep cranking it out. If you get 3 years + of 30% compound return, and do a modicum of marketing, people will start to get interested. It's not like world class traders grow on trees. Superb returns are FAR rarer than investment capital.
Worst case, no one invests - but if you can make 30% per annum, who the fuck cares? Just compound and get rich without any investor or regulatory headaches.
Quote from lazar206:
A RIA account would not be any use for me âright nowâ since I donât intend to manage other peopleâs money now. The idea of the incubator is to start having an official track record that I could use down the road. Hope to post my monthly update next week the 31st which will include my progress on the incubator.
Regarding your goal of 50% a year, while I think earning 50% a year is great; having a TARGET of 50% a year might be to aggressive and can lead to too much risk.