That's completely false. They were on the wrong side of the winter/summer spread for the next several years...Their size did increase the amount of blood but their view on the spreads was simply wrong.
As an example:
These guys are nothing but thieves and gamblers
- Thread starter stock777
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That's completely false. They were on the wrong side of the winter/summer spread for the next several years...Their size did increase the amount of blood but their view on the spreads was simply wrong.
As an example:
lol...people, i never said that these traders wernt wrong....obvioulsy if you lose 35% of your fund you did something wrong.....all i said saying was that its not like they were ripping off people's life savings. As of one month ago this fund supposidly had a return of +20% based partly on their natural gas position. as of today they are down 35% for the year. Yes that seems like a lot but these are also seasoned professionals that have been doing this for 10-20 years and just because they made one mistake shouldnt be raked over the coals and takin behind the woodshed and shot.
They have met every margin call placed against them and so yes they lost some cash and made a bad call as far as natural gas is concerned...but the fund in neither bankrupt nor did it take a death dealing blow.
They have met every margin call placed against them and so yes they lost some cash and made a bad call as far as natural gas is concerned...but the fund in neither bankrupt nor did it take a death dealing blow.
Here's the thing that gets me: do the "professional" traders at most of these 8,000 funds really know how to trade (aka, manage a position)?
Don't know any particulars of the fund in mention, but when you read the story behind LTCM's blowup, you get the feeling that all those guys knew in dealing with a losing position was to double up and throw more capital at it until it goes green. Gee whiz, most people figured that out at Attain boot camp the first week. I guess with opm that's how the r/r sets up for those taking 1 and 20.
Don't know any particulars of the fund in mention, but when you read the story behind LTCM's blowup, you get the feeling that all those guys knew in dealing with a losing position was to double up and throw more capital at it until it goes green. Gee whiz, most people figured that out at Attain boot camp the first week. I guess with opm that's how the r/r sets up for those taking 1 and 20.
I've often wondered the same thing myself. I know of a $400M-$500M long/short utility fund that shut down because the head guy woke up one day and decided that oil above $40/barrel was not sustainable. Lost enough $ making bad directional bets that the big investors pulled out and the fund had to close. He also got spanked in his personal account to the tune of a couple $MM. Kinda makes you wonder.
I tend to agree you can be guilty of career ending incompetence and it will be difficult or impossible to make a criminal charge out of it. Hedge funds are loosely regulated investment pools with assets of $1.2 trillion at the end of June according to Moody's Investors Service.
In addition to the expected costs such as professional services and accounting they often pass along trader bonuses, technology spending and various "other" costs that have swelled the annual take to an estimated 3.5% from the more modest fees of the average mutial fund. When you are talking a few extra percentage of $1.2 trillion ... now that might be consider by some as a crime.
As a tool of wealthy investors and institutions I am not sure how much the common man cares. When Bill Gates told his kids using the "tough love approach" that they would just have to make due on a billion, I shed a few tears for them but they dried fast.
Let the buyer beware or you will soon be down to your last few billion.
