The Geniousness of Paul Tudor Jones

[marketsurfer]

Quote from oldtime:

I hear ya, two types, one owns a business, he is already at high risk, no need for a hedge fund, the other has a high income, he's already diversified in stocks and bonds, he has a need for a hedge fund

in fact, by diversifying into a high risk hedge fund, he is actually diversifying his total risk

less in just the stock market or bonds

and he wants a big swing, up or down

Yes, exactly correct, oldtimer. You CAN NOT make large returns consistently ( year after year) without the corresponding high risk. AND-- some hedge fund managers are paid to take this risk-- win or lose,,,,,

Its very funny the way these armchair money managers don't understand ideas like high water mark and being forced to beat it every year, not to mention staying ahead of the competition with far more resources and access than you could every had. Competing on the world's stage is something they will never quite get and I am ok with that.


surf

 

[Visaria]

Quote from Ash1972:

IMO any trader who blows up EVEN ONCE, EVER should be permanently demoted to the back office. Of course, this is an industry in which well connected mediocrities thrive, so I doubt that will ever happen.

George Soros busted his own personal account when he was in his thirties.

Allegedly, PTJ was fired by Ellis Tullis for sleeping on the job.

People make mistakes.

 

[marketsurfer]

Quote from Ash1972:

IMO any trader who blows up EVEN ONCE, EVER should be permanently demoted to the back office. Of course, this is an industry in which well connected mediocrities thrive, so I doubt that will ever happen.

Man, you really are naive and ignorant about how things really work in the business. Listening rather than commenting would be my advice. \

If you look at the facts, those who blew up spectucullarly are generally given multiple chances with even more capital each time. Wall Street and real hedge fund investors understand that taking big risks sometimes results in blowing up---- obviously, I am talking about legit funds and not fraud-- commit any inproprietary against your investors and you are finished forever.

 

[oldtime]

the one that always confused me was, we had an agreement that once a CTA hit a 50% drawdown the account would be closed and all the investors would get half their original investment back

why 50%?

why not just invest 100%?

what was the other 50% for?

 

[oldtime]

Quote from oldtime:

the one that always confused me was, we had an agreement that once a CTA hit a 50% drawdown the account would be closed and all the investors would get half their original investment back

why 50%?

why not just invest 100%?

what was the other 50% for?

I guess so you could always say, "No matter how bad it goes you will always get 50% of your money back."

Like somehow that was supposed to be comforting.

oh well, it made the sale

 

[oldtime]

the thing is, I had one client who was actually a success story.

He was an accountant at HP

we had a CTA that went all in on silver

and he made a big deal about it and all the investors knew that was his position

and sure as shit, silver went up the limit

and this one success story closed his account after that trade and paid off his mortgage

(and mortgages out there in Sunnyvale were not that small back then)

 

[oldtime]

Quote from oldtime:

the thing is, I had one client who was actually a success story.

He was an accountant at HP

we had a CTA that went all in on silver

and he made a big deal about it and all the investors knew that was his position

and sure as shit, silver went up the limit

and this one success story closed his account after that trade and paid off his mortgage

(and mortgages out there in Sunnyvale were not that small back then)

like the man said,

"There's a big difference between quitting, and quitting while you are ahead."

 

[murray t turtle]

Quote from newwurldmn:

Just because he talks like its gut feel feel, doesn't mean that it is.

===============
Amen to that. nor does that mean gut feel is near the top of his list.

Bloomberg article [May 16] notes he [Tudor Investment Fund]sold all his AAPL, last quarter; his gut probably is feeling fine about that.

 

[Ash1972]

Quote from marketsurfer:

Man, you really are naive and ignorant about how things really work in the business. Listening rather than commenting would be my advice. \

If you look at the facts, those who blew up spectucullarly are generally given multiple chances with even more capital each time. Wall Street and real hedge fund investors understand that taking big risks sometimes results in blowing up---- obviously, I am talking about legit funds and not fraud-- commit any inproprietary against your investors and you are finished forever.

I'm very sorry Mr Surf, but the instance of blowing up clearly demonstrates that you don't know what you're doing. A <i>drawdown</i> is perfectly acceptable and a part of normal trading. Investors should button their lip and simply put up with these. However, when something happens that you never thought possible and this is accompanied by recriminations that "it was someone else's fault" etc. etc. then the trader is merely demonstrating his stupidity.

Seriously, what good is a fund that could have a de facto 100% drawdown? It is failure in its purest form.

Yes, I probably am ignorant "about how things really work in the business". I'm a sole trader trading my own savings and really don't give a damn about "the business" as practised by the likes of Corzine, VN, Merriwether, the geniuses at Lehman etc. My aim - and I know this sounds terribly quaint - is primarily to stay solvent.

You, the delinquents listed above and "the business" are the very core of the problem. It's all part of the rewards for failure culture, and why lousy, arrogant traders and dishonest financial advisors bounce back time after time to extract more money from credulous investors.

Please have a think about that.

 

[zdreg]

Quote from Ash1972:

I'm very sorry Mr Surf, but the instance of blowing up clearly demonstrates that you don't know what you're doing. A <i>drawdown</i> is perfectly acceptable and a part of normal trading. Investors should button their lip and simply put up with these. However, when something happens that you never thought possible and this is accompanied by recriminations that "it was someone else's fault" etc. etc. then the trader is merely demonstrating his stupidity.

Seriously, what good is a fund that could have a de facto 100% drawdown? It is failure in its purest form.

Yes, I probably am ignorant "about how things really work in the business". I'm a sole trader trading my own savings and really don't give a damn about "the business" as practised by the likes of Corzine, VN, Merriwether, the geniuses at Lehman etc. My aim - and I know this sounds terribly quaint - is primarily to stay solvent.

You, the delinquents listed above and "the business" are the very core of the problem. It's all part of the rewards for failure culture, and why lousy, arrogant traders and dishonest financial advisors bounce back time after time to extract more money from credulous investors.

Please have a think about that.

you left out his buddy victor neiderhoffer, who has been bankrupted a few times.