My account value reaches $600,000 for the first time; launching incubator hedge fund
- Thread starter lazar206
- Start date
I'm really curious to see how end of month August numbers end up for you, lazard.
At one level I'm guessing your bias towards FI has led you to avoid the equity bloodbath (though the market is only down 2% this week, despite all the volatility we experienced).
Given your bias towards targeting quality companies that possess "value" I'm curious if you have any stake in financials. Some "value" plays in financials include MS (Morgan Stanley) which currently is trading at .33x of book value nearing its 52 week low towards the close of Friday at $16.90. I thought about purchasing some OTM calls, but given the high vol I'm iffy and certainly am NOT interested in selling bull puts cause I think this baby could be headed lower.
Regardless look forward to your update
At one level I'm guessing your bias towards FI has led you to avoid the equity bloodbath (though the market is only down 2% this week, despite all the volatility we experienced).
Given your bias towards targeting quality companies that possess "value" I'm curious if you have any stake in financials. Some "value" plays in financials include MS (Morgan Stanley) which currently is trading at .33x of book value nearing its 52 week low towards the close of Friday at $16.90. I thought about purchasing some OTM calls, but given the high vol I'm iffy and certainly am NOT interested in selling bull puts cause I think this baby could be headed lower.
Regardless look forward to your update
MONTHLY UPDATE AUGUST 31
⢠Personal account values as of todayâs close is $549,593 The account value in the beginning of the 2011 was 569k, a loss of around 19.5k year to date which is around 3.5% loss year to date. Below I have also included the monthly results since I started this thread.
Value as of,
Today, Agust 31 -$549,593
July 29 -$680,626
June 30-$728,489
May 31 -$732,387.00
April 30 -$711,869.00
March 31 -$645,827.00
February 28 -$616,668.00
End of 2010 -$569K.
⢠Incubator hedge fund: values as of todayâs close was $96,747 which is a $18,353 loss since fund inception (April 1st). (The total amount includes the 100k initial deposit plus the 3k "monthly" deposits.)
Value as of
July 29 , 111,519
June 30, 111,824
May 31 was 110,231
April 30 was $107,030
I hope to have a longer post next week discussing some strategy and performance and "some strategy adjustments I will be doing."
Looking forward for your comments and advice.
⢠Personal account values as of todayâs close is $549,593 The account value in the beginning of the 2011 was 569k, a loss of around 19.5k year to date which is around 3.5% loss year to date. Below I have also included the monthly results since I started this thread.
Value as of,
Today, Agust 31 -$549,593
July 29 -$680,626
June 30-$728,489
May 31 -$732,387.00
April 30 -$711,869.00
March 31 -$645,827.00
February 28 -$616,668.00
End of 2010 -$569K.
⢠Incubator hedge fund: values as of todayâs close was $96,747 which is a $18,353 loss since fund inception (April 1st). (The total amount includes the 100k initial deposit plus the 3k "monthly" deposits.)
Value as of
July 29 , 111,519
June 30, 111,824
May 31 was 110,231
April 30 was $107,030
I hope to have a longer post next week discussing some strategy and performance and "some strategy adjustments I will be doing."
Looking forward for your comments and advice.
If you don't have a drawdown at some point, you are probably doing something illegal and certainly doing something unethical.
Well drawdowns are a fact of life for traders, but a hedge fund that has a drawdown 3.5 worse than the market is going to have trouble attracting money. But what do I know, Victor Niederhoffer lost 100% and was able to attract money for another fund (which did well for a few years before it lost 75% and was closed).
Lazar, sorry to hear that you had such a setback. My advise is the same as it was. If you can find stocks that outperform on the long side, you should be able to find stocks that underperform as well, and then you can short these. Returns will not be as spectacular on the upside or the downside but they can be more reliable. Isn't that what investors want? I know it's what I want - that's why I trade.
I agree drowdown is a fact of life, however my drowdown last month have been too drastic, so that sugested to me that I need to do some changes to my strategies which I hope to incoperate over the coming months.
This was my first real setback in my 30 month trading, and there where some imprtant lessons that I learend over the last month, I hope that would be help me in my traind going forward. Some of the things that I learend are
â¢Never underestimate the matket making a sharp turn even when you don't quite see the basis for that happening.
â¢Check how your strategies corelate one with another! Each strategy might be a small part of your portfolio, but combined they can be a big part of the portfolio.
⢠Don't ignore market short term! While I'm a long term investor, one needs consider how short term market movement will affect his strategy.
And some more..
Going forward, my priority is NOT to gain back my losses over the next couple of months. Rather my priority is to work over my strategies, so that it could be profitable long term, and be more stable short term.
For now I think I will take off from my monthly update for one quarter, so I could focus fully on refining my strategies, but I intend to be back here by the end of the yr.
The problem with running institutional money is they want something for nothing (all the reward none of the risk).
The more you try to give them what they want, the more you will end up either A: Tracking a macro-oriented tactical portfolio, or worse tracking or underperforming an equities benchmark, or B: You'll end up with a similar performance over a 10 year period to everyone else in the middleweight class once you get enough AUM.
I despise institutional money. That game is about pumping AUM until you check-out. It seems rather unethical to me from all sides involved except for the hapless pensioners etc that make up the underling money.
Be sure you want to go down this path as maximizing risk/return is not really the name of the game with institutional customers.
Are you sure you wouldn't be better off running your funds + some iron-bellied high net worth individuals with a style that is better suited to taking the money from knuckleheads who have institutional golden handcuffs on?
The more you try to give them what they want, the more you will end up either A: Tracking a macro-oriented tactical portfolio, or worse tracking or underperforming an equities benchmark, or B: You'll end up with a similar performance over a 10 year period to everyone else in the middleweight class once you get enough AUM.
I despise institutional money. That game is about pumping AUM until you check-out. It seems rather unethical to me from all sides involved except for the hapless pensioners etc that make up the underling money.
Be sure you want to go down this path as maximizing risk/return is not really the name of the game with institutional customers.
Are you sure you wouldn't be better off running your funds + some iron-bellied high net worth individuals with a style that is better suited to taking the money from knuckleheads who have institutional golden handcuffs on?
Sorry Lazard, but it was only a question of when not if until you see a massive setback on your account. The way you were positioned was irresponsible at best and incompetent at worst. I don't want to hammer you here but you said you like to hear comments.
In your last comment you said you were completely surprised to see the sell off. Huh?? This market was screaming sell off for months. The ONLY thing it held up for so long was the QE2 liquidity. As soon as that ended there was no holding back from the downside. It has gone way too high.
What I don't get is how can you position yourself so much to the long side with all these huge problems out there? Economic data in the last few months have been terrible. Not just for the last few weeks. The EU debt problem was a constant risk hanging over this market. Same as the debt problem in the US. Catastrophic housing data, huge unemployment numbers in the US and the S&P more than doubled from it's lows in 2009 within 18 months and yet you are surprised to see the big correction? That can only be explained because you are a newbie in the markets like you said yourself you are only trading for 30 months. I don't mean that as an insult but this correction was written all over if you follow the macro situation one bit.
If you didn't sell most of your long positions at the end of september which you probably didn't do, I guess your portfolio is way below 500k right now. Not nice to see. Good luck for the future!
In your last comment you said you were completely surprised to see the sell off. Huh?? This market was screaming sell off for months. The ONLY thing it held up for so long was the QE2 liquidity. As soon as that ended there was no holding back from the downside. It has gone way too high.
What I don't get is how can you position yourself so much to the long side with all these huge problems out there? Economic data in the last few months have been terrible. Not just for the last few weeks. The EU debt problem was a constant risk hanging over this market. Same as the debt problem in the US. Catastrophic housing data, huge unemployment numbers in the US and the S&P more than doubled from it's lows in 2009 within 18 months and yet you are surprised to see the big correction? That can only be explained because you are a newbie in the markets like you said yourself you are only trading for 30 months. I don't mean that as an insult but this correction was written all over if you follow the macro situation one bit.
If you didn't sell most of your long positions at the end of september which you probably didn't do, I guess your portfolio is way below 500k right now. Not nice to see. Good luck for the future!