His performance wasn't too bad in the past year and a half, and then all of a sudden, it plunged. If I am not mistaken, this is a sign of an average down strategy. Maybe he was using multiple average down strategies as well to smooth out the equity curve, but when things move, they move all together. One day hedge fund investors need to smarten up about investing in hedge funds. They need to realize no matter how complex these hedge funds portray themselves to be, there are really 2 types of funds in the hedge fund world. One employs average down strategy, and the other does not. This is the thing that matter the most because it indicate how the fund manage risk and it will directly impact on the value of their investments. PA
"The objective for the fund is double-digit annualized returns with a positive rolling 12-month period with a maximum drawdown of 10% and a standard deviation of 5-10%." Lol. At first I thought this was so bad it must be a spoof. I'm still not 100% convinced this fund actually exists - is it April Fools day yet?
From what I read, blowing-up in their early trading career is the rule, not blowing-up in their career is exception.
Why they even exposed to a 95% drawdown? Besides, no major price move happened recently. These morons were overleveraged.
It seems everyone knew they had cornered the tin market last year so when they felt the squeeze and margin calls came in who else on the lme is going to be buying? They would slam it down on them, same way traders drove LTCMs positions into oblivion to teach them a lesson
They said they were 'dealt an awful hand' , poor bastards, it wasn't their fault anyone dumb enough to trust these guys got what they deserved.
I don't see a problem here as they were trying to stick with their Buy & Hold Regardless Trading Plan rules but... Some extraordinary circumstances forced the Ebullio Commodity Fund to liquidate and/or cancel parts of the physical book and to liquidate some long held speculative positions, mainly in LME non -ferrous metals. So stops were not hit and there was no need to panic yet as clients were only down 95%. Without their hand being forced there was room for more downside in their rules and then all it would take is a patient recovery. Extraordinary circumstances like down, more down, further down, wow I didn't think it would go that far, what more selling, how can it keep going down, oh blast that's unbelievable, I don't believe that, this is idiotic, the market is rigged, it's gotta go up now, that's just panic selling into a bottom, how can it keep going down, there can't be any sellers left, not more selling, this market is a joke.
Apparently one of the partners at Ebullio Capital Management, Greg Cain, has already had several blow ups in his career. He was a futures day trader at Refco Trading Services and only lasted 6 months. After that his career doesn't seem too impressive: Incapital Europe Limited 05/12/2005 31/10/2006 (10 months) Sunrise Brokers LLP 03/11/2006 29/06/2007 (7 months) City Credit Capital (UK) Ltd 06/02/2008 26/09/2008 (7 months) Got question why he can't hold onto a job for at least a year....