Now Steven Cohen is charged... why ever read another Market Wizard book?

Well now we know the truth. Even the big swinging dicks are just as dirty. You look at Cohen, PFG guy, and Cornine and if those guys can't make money without fraudulent means WTF chance does the avg schmoe have..............he has none.

Hell I wish I could front run Bubble Ben that would be a nice indie that I am sure some have.

The biggest joke was Goldman with their hand out in the crash. They are supposed to be Teflon Don and even they had to beg, but alas they are royalty in this country and hold more power than anyone except Obama. Oh that's right they are in the gov.:D
 
I like this thread. I've read the book as well and re-read it recently and it feels like a classic even though it's only 14 years old. So much of the market dynamics have changed, yet basic principles still stay the same.

Going through some of the recent names you can see:

Mark Minervini is around on twitter, and just recently he released a new book.

For Steven Cohen, I think his team was full of superstar analysts/traders and some with illegitimate information. His trade success rate had to be like 97%+. This type of probability is usually only if its some arbitrage edge that has to be employed with massive leverage. But Steve is a direction guy who I would guess uses fundamentals, techincals and sentiment very well..

For example in the market wizards book (in 1999), he talks about how his AUM is $1B ("I'm running over one billion dollars" pg 273). Yet when Schwager asks him "what was the worse day you ever had?" he says, "one day I lost about $4 to $5 million"... So you're telling me a directional traders worse day of his career was a whopping hit of .5% to his AUM?

This is why he slipped up in 2008 for selling the pharmaceutical companies on inside knowledge that the drug was going to fail. He would of taken a $400mill hit to his $13B portfolio... So his loss could of actually been 3% of his AUM! :eek:

I don't know, this just seems way to good. I don't think this guy has ever taken a hit of more than 10% to his portfolio while people like Livermore have taken 100% hits multiple times. Does this make Steve the greatest trader? He must be the greatest trader in terms of cutting losses very quickly and letting profits run.

I would be worried about the LT impacts. This guy built an empire on short term trading stocks based on fundamental information. This type of information edge could become too powerful that the US could decide to significantly raise ST capital gain tax rates hurting trading for everyone.
 
Just another load of crooks. Not uncommon in the financial industry.


Say about 10% get caught and of those about 10% get charged. It looks like a fertile playground for the legal profession.
 
The SEC has been after SAC for years and couldn't prove anything - he must not have donated to the right party or I'm sure this would have all gone away. The SEC recently admitted they don't have a good case by letting the 5 year statute of limitations expire for criminal charges of insider trading, and are instead going for an easier civil case based on negligence.
 
Quote from MoreLeverage:

The SEC has been after SAC for years and couldn't prove anything
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Neither could the OJ criminal prosecution team. But anyway, if you read what went done with the pharma stocks when they switched to short from long a few days before the negative news came out, it is pretty OBVIOUS they were insider trading...
 
Quote from Maverick74:

I think they are all great traders with personal flaws.
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No one is perfect, of course, but the trading business has always attracted its share of dubious characters either not honest with themselves or not honest with others and I suspect that this share is bigger than in many other businesses because of the allure of "easy" money that somehow is associated with trading and the belief on the part of the public that there are trading geniuses out there that are like gods. Indestructible, infallible.

This series of books by Schwager, in my opinion, has contributed a lot to this myth of trading geniuses and a bit to the myth of easy money too.

Some of these geniuses are not geniuses any more and most of them can lose money as easily as many other less accomplished traders.
 
Quote from electron:
No one is perfect, of course, but the trading business has always attracted its share of dubious characters either not honest with themselves or not honest with others and I suspect that this share is bigger than in many other businesses because of the allure of "easy" money that somehow is associated with trading and the belief on the part of the public that there are trading geniuses out there that are like gods. Indestructible, infallible.

This series of books by Schwager, in my opinion, has contributed a lot to this myth of trading geniuses and a bit to the myth of easy money too.

Some of these geniuses are not geniuses any more and most of them can lose money as easily as many other less accomplished traders.
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+1
 
IT HAS **ALWAYS** BEEN SUSPECTED THAT STEVE COHEN WAS GETTING AN EDGE FROM GETTING REPORTS FROM WALL STREET FIRMS AHEAD OF OTHER CLIENTS (FRONT RUNNING).
INSIDER TRADING IS JUST AN EXTENSION OF THAT...

**BUT** I AM NOT AWARE OF ANY OTHER "STAR" TRADER FOR WHOM RUMORS ABOUT HIS EDGE WOULD BE DOWN TO CHEATING...
 
Quote from Brighton:

http://en.wikipedia.org/wiki/Buddy_Fletcher

Profiled in "Stock Market Wizards" circa 2000.

The Wiki article does not have much info on the the recent history of his firm. It's bankrupt and he's being sued by a couple of pension funds in Louisiana for "guaranteeing" (and not delivering) very high annual returns. Lots of info online including several long articles by the WSJ.

From my recollection of the Market Wizards interview, he started out in an obscure and profitable niche. Maybe it got crowded over the years and he resorted to a Ponzi-like arrangement, which eventually collapsed, like they all do.
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Sad.. altho he s coming from a sell side background (ie banks, which may explain his lack of ethics.. lol)

There was another guy whom interview was taken off the book : got involved in pumping his illiquid stocks valuations.. Michael Lauer
 
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