Some have said that severe drawdowns (greater than 20%) could be the 'kiss of death' for CTAs/hedge fund mangers. However looking at the iasg.com database, one does see examples of spectacular recovery in terms of assets under management (AUM) and performance by some traders with severe drawdowns. Take R.G. Neiderhoffer who recovered from a 41% drawdown in 1999 and less than $100M AUM to now close to $1B AUM. http://www.iasg.com/SnapshotPT.asp?ID=249 So my question is what prevents a severe drawdown from becoming a kiss of death and just a temporary stumble. For example, if R.G. had lost all his investors in 1999 would he have made his comeback? So I guess a part of his recovery was due to the fact that he could still stay in the game as not all investors abandoned ship during the major storm he faced. I am interested in all thoughts on this issue and ancillary issues like- managing investors expectations, managing investors during drawdowns, managing yourself as the trader during a drawdown and managing the business of trading. Thanks.