Trading is like Arm-Wrestling... Man Up!

comagnum · Jan 7, 2018

Some of us spend more time at the beach than we do sitting in front of our screen. I sure did not get into trading to become a hermit - far from it, I did not ever want to miss a day on the ocean when the surf was up.

That's the beauty of trading - you can spend as little or as much time as you like & live/work where you want. Some of the market wizards with their incredible winning streak over the decades don't interact with a live market. Proof positive less can be more with trading. Traders can live any life style they desire.

themickey · Jan 7, 2018

comagnum said:
Some of us spend more time at the beach than we do sitting in front of our screen. I sure did not get into trading to become a hermit - far from it, I did not ever want to miss a day on the ocean when the surf was up.

That's the beauty of trading - you can spend as little or as much time as you like at it. Some of the market wizards with their incredible winning streak over the decades don't interact with a live market. Proof positive less can be more with trading. Traders can live any life style they desire.

Yup, the initial years one has to put in the hard yards, just like any apprenticeship.
I'm a sort of old bugger now with time on my hands, during the working week I see all the young people at work making small change for wages and scurrying around. I reflect back on my own life and years on struggle street. I was kicked outta home during my working apprenticeship and my parents virtually disowned me. Never offered assistance.
But I digress, the early years are very difficult, trading these days is not hard at all.

sle · Jan 7, 2018

Maverick1 said:

Maybe someone should do some logical analysis of whatever conclusions this movie comes up with. Let's see. SAC was running tens of billions at the time, big portion of it Steve's own money. It's a multi-manager multi-strategy setup. Most of the AUM had nothing to do with stock trading at all. Between his systematic arm, global macro, CTA etc, only a small fraction of money could have been traded on the inside information. And yet, the stereotype persists.

algofy · Jan 7, 2018

lawrence-lugar said:
Trading is nothing like arm wrestling,

lol

RRY16 · Jan 7, 2018

sle said:
Maybe someone should do some logical analysis of whatever conclusions this movie comes up with. Let's see. SAC was running tens of billions at the time, big portion of it Steve's own money. It's a multi-manager multi-strategy setup. Most of the AUM had nothing to do with stock trading at all. Between his systematic arm, global macro, CTA etc, only a small fraction of money could have been traded on the inside information. And yet, the stereotype persists.

Read the book Black Edge, by Sheelah Kohlhatkar , it will give you a better idea of Stevie and how he use to operate.

maxinger · Jan 7, 2018

Trading is unlike Arm-Wrestling... Wise Up!

Maverick1 · Jan 7, 2018

sle said:
Maybe someone should do some logical analysis of whatever conclusions this movie comes up with. Let's see. SAC was running tens of billions at the time, big portion of it Steve's own money. It's a multi-manager multi-strategy setup. Most of the AUM had nothing to do with stock trading at all. Between his systematic arm, global macro, CTA etc, only a small fraction of money could have been traded on the inside information. And yet, the stereotype persists.

80/20 or 90/10 rule...

toc · Jan 7, 2018

Maverick1 said:
I think the similarities between arm-wrestling and trading are:

- Tremendous concentration
- Relentless training
- Grit!

and

- best guys tend to be the honest ones

While there are many ways of trading but to discuss the above points

Tremendous concentration................may be when developing/testing a system.
Relentless training.............agree, i.e. discipline? also reading vibes sent by the price movement
Grit.............cannot fight the markets movement or market logics. Can't show Grit/defiance to market.

It seems your views suit more to discretionary traders who trade what they see with only "general rules".

sle · Jan 7, 2018

RRY16 said:
Read the book Black Edge, by Sheelah Kohlhatkar , it will give you a better idea of Stevie and how he use to operate.

Sadly, I have read the book. As Mark Twain said, "never let the truth get in the way of a good story". So, while it's entertaining, the book has very little to do with what actually went on there or goes on in the industry (*).

I will right away say that I have never worked as or with a long-short PM. However, being an institutional PM in a very similar shop, I understand very well how this business operates. It would be nearly impossible to run that amount of capital on inside information alone. In fact, it would be nearly impossible to do that even with 1/10th of the capital SAC was managing. My sense is that a some of the long/short edge is the information that would fall into the gray zone, especially considering that the laws are extremely vague. I am also sure that any time they can actually get their hands on anything truly material and truly inside they would use it. However, information that will truly move the stock is very rare and it would be impossible to produce reasonable returns if that's all one used. What actually happens is that this gray or black piece of information goes into the "mosaic" and a decision is made.

* It's probably true about most books written for the general public about anything specialized. Liars Poker had nothing to do with the actual events that transpired on the mortgage trading desk, I worked with those people. It would be interesting to hear from other "far away" professions how well do the books actually relate to reality.

Maverick1 said:
80/20 or 90/10 rule...

As I said, it's nearly impossible to produce returns on inside information alone. It's especially true when you are running AUM in 10s of billions.

toc · Jan 7, 2018

"As I said, it's nearly impossible to produce returns on inside information alone. It's especially true when you are running AUM in 10s of billions.'

Why is it impossible? Inside information is NOT "earnings release" alone. It can do a lot with more important operational information like "a major customer good for 20% of sales is angry and wanting to break off". Contract expires in 5 months and then the news hits and tumbles the stock price down.

Bill Akerman runs a multi billion HF and holds only 8-12 stocks. This type HFs can take a huge position on some information that would show its impact in 2 quarters or so.