Tudor reorganizing, PTJ taking a hands-on role

[truetype]

Managing billions of dollars of skittish institutional money is much different from managing a few million dollars in a P/A.

 

[helpme_please]

Managing billions of dollars of skittish institutional money is much different from managing a few million dollars in a P/A.

True. Big AUM kills performance. But big AUM guarantees fat salaries to fund managers given the management fees. I hope to see more funds move towards performance-based fees away from management fees so that they get rewarded as fund managers and not as asset gatherers.

 

[sle]

Besides the challenge of managing a large asset base, most of these traders weren’t good risk takers to begin with. At an investment bank, you usually are a receiver of transaction costs, and you are highly plugged-in into the information flow. A trader in a fund is trying to extract alpha while paying transaction costs and has no informational advantage. Most importantly, a trader at a bank has “the security of the seat”, which changes your relationship with risk a lot.

This is a mystery to me. Goldman Sachs traders should be the elites. What are they not only under-performing but getting shipwrecked? A person of my calibre will never even get a chance to a job interview at Goldman Sachs. Yet, at least, I'm not shipwrecked.

Why do elite traders (not referring to folks here) of Goldman perform so poorly?

 

[Maverick1]

This is a mystery to me. Goldman Sachs traders should be the elites. What are they not only under-performing but getting shipwrecked? A person of my calibre will never even get a chance to a job interview at Goldman Sachs. Yet, at least, I'm not shipwrecked.

Why do elite traders (not referring to folks here) of Goldman perform so poorly?

For the same reason that certain high profile hedge funds can't make money in recent years following the SEC's crackdown. These lords of the scuttle-butt never knew how to make honest money in the first place. There's a difference between being "elite" and knowing how to trade. As it turns out, very few even in the hedge fund space have that raw skill.

What you'll find if you dig deeper is that the vast majority (all?) guys with actual performance do not have a background on Wall Street. It's also no coincidence that Jim Simons at Renaissance makes it a point not to hire from that good ole boy Ivy network.

 

[truetype]

True. Big AUM kills performance. But big AUM guarantees fat salaries to fund managers given the management fees. I hope to see more funds move towards performance-based fees away from management fees so that they get rewarded as fund managers and not as asset gatherers.

"Funds" offer the fee structures their clients are comfortable with. Clients call the shots, not managers. Read up on consumer sovereignty -- there's a Wiki page -- if you're not already familiar with the term from college Econ class.

 

[murray t turtle]

I'd be happy if this proves to be a correct assessment:

'Jones, who has been frustrated with the macro trading environment, said things are "on the verge of a significant change" and that the current market is reminiscent of the bubble of 1999.'

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Its a bull Market you know; I hope PT Jones is right, that would mean QQQ goes up > 80% this year. I'm not much on fine art- I like redneck art, like in NRA magazines or 3 polar bears on a red neck Coka-Cola can, or green yahoo Mountain Dew LOL