Right, to each his own, BUT the reason the fund manager takes investor money is to make a far more substantial income than he could as a prop trader, proven that his strategy is scalable. The better traders, for the most part, say the hell with prop trading, I can make way more as a fund manager!!! I know you are trying to sell the dream- trade with Bright, use our capital, etc, but come on man, be realistic. Hedge funds are the biggest money making area of finance- does Eddie Lampert ring a bell?? To say that fund managers are trying to make their funds "legitimate"by borrowing money is wrong. They are legitimized when an investor performs due dilligence and deposits a nice chunk of change in the fund. You make it sound like fund managers are guys who can't trade, so they decide to just milk the management fee. Maybe some do, but not the majority....If they couldn't trade, they would be out of business very quickly. Many fund managers/ traders do start out as prop guys to build a track record first, you are right there. However, some of your other statements make seem like you are pushing people to trade prop (at Bright maybe?? ). Don't ever believe that trading prop is easy boys and girls!! Consider who you are trading against, plus the fact that the equity market is over-saturated- try futures, options or FX for some real fun!!!
Let's take a step back, and "pretend" that any hidden agenda or conspiracy is non-existent....and, for sake of discussion, that I am "selling" only what I truly believe are the best tools for success in this business (money, market access, and training by serious professionals), and then take one more "leap" and realize that I was in the same boat as many newer traders a while back. My brother and I took advantage of the "tools" (capital) provided by SLK (GS), and the education of successful traders on the trading floor to get to where we were a while back. We now are able to offer these same tools, and are able to do so without our traders having to buy exchange memberships (as we had to do "back in the day"). Some will make a success out of trading, and some won't...but either way, their odds for success are greatly enhanced by the above (use of capital, market access, and professional training by those who actually "do" rather than just "teach"). Do we make money from BT, absolutely (who would want to throw their hat in a ring of losers?), do we work 250 hours per month to make our family business successful, yes we do (and we couldn't or wouldn't if we didn't enjoy what we do). We certainly don't need to fund a retirement account, but on the other hand, we want our successors to be able to carry on the marquee that we have worked so hard to grow over the years. Back to topic...yes, there are a "very few" fund guys who are successful, granted....but there are many (many) more successful traders who are able to expand their financial horizons with BT and other successful groups. And, as I said: "to each his/her own" - I chose not to be an "employee" with all the risks involved, as do my successful traders....independence is a wonderful thing (and it's even better with a few bucks in the bank). (BTW, in case you don't know it, we have several hedge fund groups in the BT family, and have some BT traders who operate outside the BT family for such purposes). I just like those interested in trading for a living to know the alternatives available. And, again you speak the truth "trading is not easy"...I concur, but if you're going to do it anyway, why not do it right? (And, yes, BT is only 1 viable option, there are obviously a few others). All the best, Boss....trade well!! Don
Don, to your credit, you are a gentleman. I understand that you have a business to run and that these forums offer a way for you to attract new clients. I am not trying to discourage anyone from trading prop, merely I am pointing out the disadvantage that an individual trader has against the large funds and wall st. institutions. That being said, if someone decides to venture out into trading solo, I do believe that Bright understands the business well and offers useful tools, but you charge people a significant premium for the leverage provided.
Thank you, but just clarify, there is no charge whatsoever for using capital (intraday)....and I don't think eTrade or even Schwab or IB will let a trader use a $million or more every day, free of charge. But, yes, there is a "haircut" (risk) fee charged to those who need' to use a significant amount of overnight $$ (they don't seem to mind paying a bit if it helps their bottom line, much like a revolving line of credit). And, to your credit, you seem to come up with good questions, and your skepticism is actually mirrored by me (as it relates to our industry)....I respect those who do their due diligence (and you know very well that I suggest that any new trader check balance sheets, check SEC records, etc. before aligning themselves with any business partner). All the best, once again. Don
Uhm Don is right, anyone with the skill and experience can get any BP he/she needs. People start hedge funds to leech off the investor money. Hedge funds are hot and if you have some contacts and a pinch of sales skills you can get the capital together. Most hedge funds are a joke and can't make money but they still collect the fees, hey just like mutual funds what a surprise. There is a bunch of hedge funds at our office, some of the firms love them cause they pay high rates. Don't matter to the fund managers, it's just investor money that is getting ripped off.
First off, I would say that out of the thousands of hedge funds in existence, there probably are quite a large percentage who do simply subsist on the management fees. They de-leverage to a point that large drawdowns are near impossible, likewise outsized returns are equally improbable. The downside to this approach is that as the risk free rates of return on treasury instruments increases, investors will no longer park their money in these glorified money market type of funds. For 2-3 years, these hedge funds had a window of opportunity as the Fed continued to cut rates to historical lows and these investors were sitting on piles of cash earning nothing. To think that there aren't legions of funds out there simply "gathering assets" is pretty naive. The smart ones know they will pick up money when the aggressive funds start hitting big drawdowns, and by comparison, their measly single digit returns will look outstanding.
Then you haven't been on this board very long, have you? My point is clear. I don't recall ever seeing current or past prop shop traders validating their LONG TERM success, or even claiming to have long term success, on this site. It strikes me as curious, or even obvious, as to why responses to these questions always seem to come from Don Bright. If there are indeed successful traders who have been at it for some time with, or from, prop shops, where are they? And why does this question disturb you? And as for the 90's. LOL!! Taxi drivers were writing books about how they made millions in the 90's. And the sad part is, people are still living with that dream. It is 2005. But as a Jar Head you are excused for losing track of the year. Thanks for serving, anyway.
Then please, enlighten me. Where are they? Where do I find long-term profitable traders from prop shops?