I have to fully agree with âTrader KGBâ .3% is really over diversification/conservative, I would much rather agree with a rule of like 1% and when there is a special opportunity go as high as 5%. Having said that I my comfort level is really with ETFâs not individual stocks. ETFâs of giving me the privilege of continually purchasing shares and not being afraid that it will eventually go to 0. (yes, I do have access to foreign exchanges but rarly using them) I would love to hear from other member on the form if they are using the .3% rule or 1 to 5%. Thanks
well good luck at trading 1-5% and not skewing your costs.. i hope you have really good injection algos then ill just offer one more piece .. its best to start with a prop business before becoming a hedge.. especially starting with nothing. Investors seem to like the idea of investing in an operation when the traders assume the risk and there money works to leverage.. and its easy to slip right into a hedge setup once everyone is trained and the money is backing the business.. and the account statements are there. least thats how I did it.. lemme know if you wanna see some marketing information that we use.. may help in your pitches to see our system
You're a stock picker with no quantifiable edge that obviously uses max leverage on his long term position trades. Any investor that has been around the block would not take you seriously. There is no way you can prove that it wasn't you just being lucky with your picks. I'm sure you're not throwing darts at the board, but I am also sure that there is nothing you're doing that dozens of experienced long time pro money managers are not. Your type of story comes up all the time in the industry. It's nothing new. While your results are great, they won't pass scrutiny. There is no free lunch, if your returns are that high, you need to have an explanation for them. Do you have some amazing exclusive edge or is it just luck & high leverage? What exactly makes you believe you can repeat that performance year over year? Is the liquidity & opportunity even there for you to accept additional capital? My real reaction is that I do not see why you would even want to try to be a hedge fund & manage other people's money. It's a lot of hassle. If you believe in your results and you ability, you should keep it simple and keep growing your own capital. Maybe form a LLC/LLP, take on a partner for a simple prop firm like structure.
If you have to ask for advice on ET, do you think you're ready? Do you think hedge funders read ET? Would you ask someone that didn't have a fund for advice on how to start one? The markets since 2009 have been wonderful with the S&P almost doubling since Mar 9, 2009. Could you get such a return without such a wind to your back? How would you react if the market broke suddenly and we had a 40% correction in a week?
You're 100% correct. A good friend of mine, who's a household name reads this site for entertainment reasons only. I read this site to find journals of guys that I want to fade. Some other friends read ET for much the same reasons.
Thanks for your comment. To answer your question I am not actually using a lot of loan/margin etc. In 2009 I had 40k in margin during March-April when the market was tanking. Right now the amount I owe on margin is $4,300. You say âbut I am also sure that there is nothing you're doing that dozens of experienced long time pro money managers are notâ, actually I think there is a lot experienced long time pro money managers that are making a heck of a return. As it turns out at the same time I was buying preferred bank shares, David Tapper who runs Hedge fund with 10 employees has been doing the same. Where do I think my strength is? I would say most importantly is the following famous quote from Warren Buffet in his Oct 16 2008 NYT article âA simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investorsâ⦠while that seems pretty easy, its not. Also I am always trying to take advantage of dollar cost averaging in order to buy most shares when the market is low. A very recent example of fear was just last month, there was a lot of anxiety on the street regarding the letter from PIMCO and the NY fed to BAC to buy back 48 billion of mortgages. That has caused BAC stock to plunge, and their preferred stock dropped the most in a year. It seemed to me at that time, that the risk of BAC not paying their preferred dividend is minimal because of several reasons, so I bought BAC preferred. Now the stock is up 6% with a current dividend yield of 6.8%.. should the anxiety return again I would start buying on a monthly basis⦠Thanks
You would also be surprised what kind of relationships & dealings are initiated from this site. It may be full of clowns & jokers, but to a few here & there it has been an invaluable resource. lazar, I will reply to your PM.
Hi Lazar, just checked out this forum but it seem halted since last year end. Would like to know whether your plan has been success? If yes, can you share abit on how actually it go, thanks.