Quote from DT-waw:
hey, its good to talk to old ET folks!
i agree that generalizations are in *ghm* general, a bit off the real state of affairs.
Cheers! A toast to the old schoolies.
Quote from DT-waw:
i'd like to meet with rational, sane, both courageous and conservative (at the same time) investors, but....
these are rare and between.
Yes, absolutely and without question. But "rare and in between" is not the same as nonexistent. They can be found!
Quote from DT-waw:
think about it: if big money would allocate money (and more money) to successful AND risk-averse managers - who will lose?
Well, this is exactly what happens when the process works as it should. A great manager does very well by his investors, and everyone is happy. Take Klarman at Baupost or Dalio at Bridgewater for example. Risk averse success is what they do.
And just as there are high profile superstar managers who deliver on the promise of what hedge funds are actually supposed to do, there are smaller, more obscure managers who do this as well, with investors who are just as happy. You just don't hear about them because they aren't widely publicized (if publicized at all).
On the bright side, it is much, much easier to deliver superior risk-adjusted returns with a smaller asset base (i.e. less than $100MM) than it is with billions, though it is still by no means a cakewalk.
The process works, there is just a lot of crap out there. It's like with books and music and movies -- 90% of what gets put out there is crap (if not more), but the 10% makes it worthwhile. There is a fundamental difference between "most music / movies are terrible" and "all music / movies are terrible" etcetera.
Quote from DT-waw:
i'm not saying that rational HF clients do not exist.
they do, but in order to knock at their doors first you have to spend your precious time talking to a bunch of totally delusional investors.
there is a reason why Winton, Altis and QIM accept minimum $20M.
Don't want to waste time with little fish.
It is possible to find smart, savvy, good to hang out with type folks at the small investor level too.
Again, I'm not saying it's easy or that one can find them on street corners. But there are worthwhile investors out there who understand the concept of sober calculated risk -- often via building wealth in their own business, making calculated risk trade-offs themselves over a long career -- and who appreciate the value of logical, dependable risk-adjusted returns.
I mean think about the general population. Net worth aside, how many adults on average are educated, interesting, personable, and all around enjoyable to interact and have conversation with? Maybe 10 or 15% tops? One could expect a similar dynamic with potential accredited investors... some are wonderful to have in your corner. Others aren't worth touching with a ten foot pole.
