Steve Cohen Billionaire Investor Steve Cohen Just Had His Worst Year Since the Financial Crisis Jen Wieczner Updated: 7:30 AM Pacific Bloomberg, underperforming both the S&P 500, up 9.5% in 2016, as well as hedge funds in general, whichaveraged returnsof about 5.6% for the year. It was Cohen's worst year on record other than 2008, when he lost nearly 28%—the only year the billionaire trader has lost money, though he did outperform the broader market. One thing Cohen currently has going for him is that he doesn't have to answer to anyone else to explain his subpar performance: Cohen is currently the only investor in Point72, having been barred from managing outside capitaluntil the beginning of 2018after his former hedge fund SAC Capital pleaded guilty to insider trading in 2013. Still, in an exclusiveinterviewwithFortunein the fall, Cohen reiterated his desire to not only beat the market, but to be the best among money managers—despite the fact that he doesn't currently compete for business in that industry. "There may be firms out there that are happy being middle-of-the-pack and having modest returns, and maybe don’t work as hard as other people and are perfectly acceptable. That’s not me," he said. "If I’m going to be mediocre—if I’m going to be mediocre, I’m going to question whether I should stay in this business." http://fortune.com/2017/01/18/billionaire-steve-cohen-point72/
It's not a surprise to me that Cohen's performance dropped not just last year but has been mediocre by past standards since 2013.His whole empire, despite his impeccable trading acumen, has been built on insider trading and gray zone dealings. Without it and with much higher scrutiny performance dropped significantly. To me he is one of the industry's black sheep, regardless of how talented a trader he otherwise is.
The actual return if anybody wondered was in the last sentence of the article: "Cohen managed to recover during the remainder of the year, but only just enough to stay in positive territory."
Feds are all over him, so he can't do what he used to do. That's a logical theory. How are you supposed to get info now that your compliance staff is 10x what it might have been? This is a guy who wrote the sec a 3 billion dollar check...if I remember correctly. They modelled billions kind of after sac. Remember the check scene? Cohen wrote the check...maybe 2 billion can't remember. Got to love this sheet....hahhahah
From 1982 to 1984, I was a wire clerk, then floor broker for a member firm on the AMEX. We had institutional clients that traded options. There was on client where the phone line said, "Stevie/Gruntal". "Stevie" legged into reversals and conversion and took advantage of the miss pricing of options, which were more common back then. I did not realize that it was "THE" Steve Cohen until around 5 years ago. Never had a conversation with him. He would just call and say e.g. DIS Jul 45, buy calls, sell puts 100X for a 1 3/16 debit IOC-GO, then hang up. We would have to race to the specialist post to grab the few options that might be there before others could get them. If I took the time to repeat the order, I'd miss them. After we would give him a report, like you did 10 at 1 3/16 out on 90, he would go and hedge with the stock. Very profitable but it was hard to do size. The good old days! Bob
What i'm interested in is how he diverted responsibility. Surely the ones convicted were offered lighter sentences in return for giving evidence against Cohen.
Does it really matter what are your returns when you are That huge already? Could be plus or minus whatever percent or whatever number of millions of other people's money...seems like it's all the same still. Returns are only sexy and interesting for the individual person who has accumulated a couple million+ from trading ...at that point, you basically won the game of life already.
Of course it does, capitalists don't like idle money. If it wouldn't, then there would be no point in running a HF. Also for Cohen it is a pride thingy and keeping score...