Starting a fund / raising capital

Quote from njrookie1:

I am confused by this:

"But surely if I sustain these results for 5 or 7 years, then raising several mil should be no problem? "

Assume you have 1/2 million of capital now. Let us the lower the performance to "only" 50% a year. If you can sustain this level of return for 5-7 years, you should have

from

0.5*1.5^5 = 3.8 million

to

0.5*1.5^7 = 8.5 million

Then you would already have your "several million". If the concern is scalability, then you should never manage OPM anyway.

I do not mean to sound mean. I have gone through similar thought processes again and again. The number just does not work out.

njrookie
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I am aggressively targeting a scenario where I can compound closer to a 100% for the next few years, but you never know with this game - the actual returns could be zero or negative. Also my living expenses are about 50k a year right now or a bit higher. Almost all my gains are short term and you didn't factor in taxes. And I have about 0.73mm of capital right now.

Still that compounds very nicely over a period of 7 years.

Why do I want to raise capital? Well perhaps it is the nature (or flaw) of most men to want more.

Also I should mention, that while small funds have a great advantage of being nimble, they face many disandvatages versus a large fund:

-I have no access to the street and the type of informational flow that takes place there.
-I have no access to management teams. An incredible amount of information is disseminated in private, of which I have access to none.
-I have to cover over 200 names, severely limiting the amount of deligence I can do on each one. This in turn restricts the nature of the investment decisions I can make.

Also it is gets lonely doing this myself. Its much easier to gain flashes of inspiration when working with others. I'd like to hire people and to build a business.
 
Quote from the1:

A CPO is a Commodity Pool Operator. Think of a mutual fund manager except in the futures markets. A CTA is a Commodity Trading Advisor who can either advise clients on futures positions or trade a client's account using a power of attorney form that gets filed with the broker. I don't give any advice. I trade for clients. As a CTA you never take possession of the money so there is much less paperwork involved. As a CPO you do take possession so the paperwork is seemingly endless and you're always dealing with accountants and attorneys. Running a hedge fund really took the fun out of trading for me. When I switched to the CTA setup trading became fun again except for when the clients get nervous when I take a wallop every once in a while, and I definitely do :)
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I am not familiar with these various structures. It seems like the CTA structure only pertains to if you are trading commodities? I suppose there is a similar structure for an equity manager like myself whereby I can invest the client's funds without taking possession of the client's money, thereby limiting paperwork and some barriers to raising money?
 
Quote from bwolinsky:

Nice comeback?

The man's lying about having a fundamental strategy that produces those returns.

If you all weren't so gullible, only if he told you which stocks were in that portfolio and what proportion of them were invested in the fund could we see passed those lies.

Now, doublet, which stocks did you invest in to produce your returns?
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My biggest positions so far this year on the long term l/s side of my portfoilo are long Z TFM FRAN TRIP TTWO ZIP, and short P (recently covered), WTW, AMZN, AWAY. Have about 30 total positions in the long term portfoilo right now.

These do not include the more opportunistic trades I've mentioned, which are mostly intraday in nature, and event based.

I'm not about to provide a detailed accounting and historical attribution of my returns, since you haven't made it worth my time. And I could easily be making things up.

But in the spirit of fairness I will throw this out there: my biggest long position right now is in Z, by a substantial margin. I think the upcoming earnings will be a very positive catalyst for the stock. I could certainly be wrong, and this is a very speculative stock that could be down a lot if I am, in which case I accept the fact that you will probably come here and laugh at me.
 
Quote from doublet83:

Max daily DD during this period has been around 2%
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Sorry but your numbers don't add up. If your monthly DD Peak to Valley is 5% and 4%, your daily Peak to Valley can't possibly be 2%. So either you are making things up, or you don't understand what P to V DD means.
 
Quote from macintash:

Sorry but your numbers don't add up. If your monthly DD Peak to Valley is 5% and 4%, your daily Peak to Valley can't possibly be 2%. So either you are making things up, or you don't understand what P to V DD means.
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I'm not giving you a peak to trough draw down. As I said in my original post, I'm giving you my max DD based on returns calculated on a monthly basis. Also, the down 2% was my worst day.

Yes the 2% daily loss is high relative to the max monthly DD if this is what you're trying to get at. If you believe returns tend to follow a normal standard distribution, they may do so under certain trading strategies, but clearly not mine. Its a function of how I've invested and traded. Based on your thread I assume you believe sharpe is a very important measure of performance. It may be for your strategy but it is not relevant to mine and I've never even calculated what my sharpe is or trade to manage around it.
 
Either this is a scam or simply a trollish post. Every other month there is someone who comes out with a system or starting a fund with near 100% returns and wants you to send them money.

Maybe the guy is for real. If thats the case, then post up a 90 day journal with real time entries and maybe a brokerage ticket so we can properly evaluate the performance.

scam-alert.jpg
 
i am certain you never made those kind of returns with those kind of drawdowns! NO WAY!

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2011: 87.2% return. Max drawdown (based on monthly returns) of 5.0%. Profits of 330k
2012 YTD: 36% return. Max draw down of 4.1%. Profits of 200k.
 
Geez mate for a pro. guy don't tell me you actually believed his results? RMOSE

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You need to start to establish returns your can market, possibly have audited in the future. Helping small funds is something we do well. My advise is to establish a relationship with an Introducing Broker like myself. Open an account for either an investor or a group of investors that will stay with you through the process. This can either be an LLC or an LP.

We can help now with the Introducing Broker relationship by setting you up with platforms and a prime broker. Monthly statements to show investors. Then when the time is right, introduce you to attorneys, administrators high net worth individuals and Fund of Funds. We can help you through the process.

Please contact me directly for more details.

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B*S*!

Let me know when you blow up!

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I am aggressively targeting a scenario where I can compound closer to a 100% for the next few years, but you never know with this game - the actual returns could be zero or negative. Also my living expenses are about 50k a year right now or a bit higher. Almost all my gains are short term and you didn't factor in taxes. And I have about 0.73mm of capital right now.

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I think you are a dreamer kid!
 
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