You mean to tell me George Soros is against Tits and Ass...just kidding Amazing he doesn't use any T.A. all fundamental.....amazing returns for fundamental. He's got amazing knowledge if all he is using is fundamental. How do you time the markets that well with fundamental
For those interesting, although not a book on Soros, this is a good collection of interviews with many global macro traders http://www.amazon.com/Inside-House-Money-Traders-Profiting/dp/0471794473. Highly recommended.
I can't imagine that Soros (or the people he hires) doesn't use T.A. in some capacity. Perhaps the fundamentals are simply the driving force behind his long term positions.
Hedge funds in general operate on the aura of mystique and exclusivity, couple that with kid glove hand holding and sure it certainly has an appeal to some rich people just like the mark blithely enjoys the grifters set up. True smart money gravitates towards running a hedge fund or investing with DFA mutual funds. Ignorant or high maintenance customers pay higher fees for that privilege and thus gravitate towards being hedge fund customers. The reason for this is easy to see as the problem is quite well explained by Sharpe: Just because someone is rich or the family has generational wealth does not make them automatically financially astute. As a matter of fact the wealthier they are the more likely they are to survive bone headed moves anyway.
I find it kinda interesting that the bar is set so low (20.3% for 22 yrs) for "earning ... a spot among the most successful speculators ". Ill have to keep those stats in mind in my "take the Index Piker challenge" because it's a rate of return that certainly appears within reach for me to achieve in a 10 yr period. Although My goal of annualized returns is 15% or greater: 20.3% appears high but within plausible range.
What you don't realize is that it makes sense to allocate PART of ones capital to hedge funds (not all). Many HNW investors would allocate e.g. 20-40% of their capital to hedge funds/CTAs, 20-40% to indexed equity ETFs/mutual funds and another 20-40% to bonds/income investments. Look up Harvard and Yale endowment portfolios. Just because you pay only 0.15% fees in an indexed equity ETF doesn't mean that investment is superior in all circumstances to a higher fee product.
The key is the long period. You will find it incredibly difficult to deliver constant high returns without big downside volatility over a long period (say 10-20 years). Also don't forget Soros' 20% over 20 years is net of fees. Internally, his trades generated closer to 25% annually.
So now I have ground your answers down from: to: and finally it's just boils down to: That's just hilarious and really searching for the needle in a haystack to justify the lousy record of hedge funds. 1) Endowments have basically an infinite time horizon, which is very different than most hedge fund customers. I'll grant you that some ultra rich families possess the same horizon. 2) HARVARD AND YALE pay whole teams of researchers millions as a full time job to find alternate assets that fit their portfolio. a)very few people or groups can afford to take due diligence to such a level and even less so ,skillfully. The rarity of finding a swenson so that you can find a soros is astronomical . Due diligence of this level is like comparing a bottle rocket to the Challenger. The average hedge fund customer is a mark albeit a rich one. b)Even with all this exceptional situation, infinite horizon best due diligence teams and research money can buy and guess what: They are STILL stuck with large losses in any one particular year. It's just the nature of the beast and it's a story of risk . If you want higher returns you pay for in it in volatility no exceptions. I'll say it again in case you folks missed it. The average hedge fund customer is a mark albeit a rich one.