Yeah, but LTCM was trading vol and off the run Treasuries, legitimate trading albeit w/too much gearing. Ask any option trader if a bull vertical is going to return 12% in a bear-market.
So the smart ones figured he was cheating, but it was ok as long as they were reaping the profits from it? hmmm...
When you look at people like Warren Buffett who has a masters in economics from Columbia and John Paulson who has an MBA from HBS, then compare it to all the other MBAs and economics majors and look at where they are now there is still a wide disparity among them. Even George Bush is the only president to have ever earned an MBA (from HBS too).
You call the messes ignorant & apathetic yet you are stupid and/or naive enough to think that SEC was just incompetent? Wow!
No. Imagine how nervous he is from that stratedgy when it becomes a bear market and the profit is still big. Now it could make other people question the fund, but before they would not. So was he afraid the people not as smart like him can see something is wrong now, because it is more obvious in a bear market? So he tell Stony Brook to take the money out? I am just imagining why.
Incredible, isn't it? Jim Simons is a hero of mine. That said, it is so easy to convince oneself that because you are really smart, and you know trading, that you are then qualified to give advice on anything related to trading. Let this be a warning to us all. I don't know, let me find out, is a good answer.
Yeah, he is a man and realized he made a mistake. I doubt he told the SEC, but that is instinct, not fact.
He gave a good advice to get out of that fund in 2000, but they did not listen to him. So he can be your hero.