the 50% performance fee he charges after meeting cetain benchmarks, according to forbes. My guess is he takes 30% of returns until the number he promised, and only than takes the 50%. But what are his returns like? Anyone know? All that strength, and i bet he probably can't even do 100%! We all know media tends to exaggerate things, so has anyone even heard of what kind of performace this guy delivers???? Wall Street is full of bullshitters, we all know that; how do we know that this guy doesn't make his money by doing the same and producing some moderate returns? After all, he had to get the money to manage by talking to people, otherwise known as bullshitting. My guess is that this guy couldn't produce a consecutive return of 100% or more per year even if his life depended on it. If i wanted to go after private money management, i could produce great results as well, and according to my present numbers beat out this guy within a few years. So, does anyone actually know any of his number?
To hear one lot traders argue whether or not Steven Cohen is "real" or not. Implying they have similar talents. Got to love this sight.
40% or whatever on a $1 billion fund is just a tad more difficult than on a $50k IB account. Cohen is also one of the few fund managers who did well in 1999 AND after the bubble burst. 15% is his worst year! Ok, so getting called first is more about $$$ clout and contacts rather than trading skill, but I am sure that is not the only way he makes money. Maybe he would average 20% or 30% instead of 40% without that edge, but I doubt he would make nothing. Anyway, if you could make an extra 10%+ per year by getting the first call, and it was legal, wouldn't you do it? Information is a commodity like anything else. If it's undervalued, then why not buy it?
You know, the whole term "illegal" has lost meaning in this country. Something being illegal only matters if the locals or the feds want to make an issue out of it, otherwise it's a free-for-all. How many "illegal" aliens do we have in this country? About 10M maybe? When one is stopped for a traffic violation, in many jurisdictions, he is only ticketed for not having a license and sent on his way. The police are not even allowed to inquire about his citizenship. DC made guns "illegal" there in 1973. At least 10 years out of the last 30, they have ranked #1 as the firearm (per capita) homicide capital of the country. Why are "soft dollars" considered legal on Wall Street? Little does more to promote "illegal" behavior, IMO. Cohen is effectively giving soft dollars for research information. As long as he discloses that he has soft dollar arrangements, he's fine. As long as his returns are far above the market after fees, there will be a line at his door. If Spitzer or the next "hero of the people" who seeks higher office ever choose to make an issue of it, they probably will. In the meantime, Martha Stewart is easier pickings.
count me in as one of those who thought hedge funds traded a "holy grail" technical setups, or coupled with rumors.. This sheds an entire new light on how these things operate... The basic premise is the edge= getting info first. This is what gives you the "meat and potatoes" of your returns. Basically, if you want to be a big fund, invest $$$$ into contacts on the street, the more, the better... trade of the info, GROW AND BECOME POPULAR (where your trading influences the street) and then you can supplement teh info with trading games, (aquezzes, taking the street, etc) I somehow see the SEC coming down on this sooner or later..
========================= Steve Cohen is unusual in the sense that he actually came up with something practical to tell Jack Schwager that he learned in college applicable to trading.
This information simply further confirms the reasoning of why managers are willing to pay higher commissions.....higher than what a $5000 prop account pays.... Think about it.....Think about Peter Lynch...the Magellan Fund and new offerings etc. etc...money buys edges...good ex-sec lawyers... You wanna play...ya gonna pay... Wall Street is not about justice...it's about money....
Of course, they do. They get most of thier first calls from this message board. The normal returns of most traders at ET beat those at SAC by several miles. I bet they pay millions to Baron every year to keep this site up and running. http://www.elitetrader.com/vb/showthread.php?s=&postid=251786#post251786