Just saw this: "To Our Valued Brookstreet Members, Disaster, the firm may be forced to close... Today, the pricing system used by National Financial has reduced values in all Collateralized Mortgage Obligations. Many of those accounts were on margin and have suffered horrendous markdowns and unrealized as well as realized losses. National Financial and the regulators expect Brookstreet to pay for realized liquidated losses and take a capital charge for unrealized mark to market losses. This firm has done a valiant if not Herculean job of managing the liquidations and capital charges to the firm's net worth and net capital. We had reduced the margin balance significantly; we had liquidated and reduced exposure by 80%. That still left a $70,000,000 margin balance against around 85,000,000 of value. Unfortunately the pricing service used by NF revalued many CMO positions downward last night. We went from a positive net capital of 2.4 million, down from 11 million at the end of May, a negative net capital of 2.1 million. It would take a capital infusion of at least $5,000,000 to keep the company in compliance with no guarantee that additional markdowns will not be forth coming. I cannot in good conscience request that anyone put money in the firm, I think $10,000,000 would be a minimum without consideration of the horrific customer complaints to follow. I have told many of you that you are always in danger of not being paid on your last check when working for any broker dealer, which is why I have always paid twice per week and maintained huge net cash positions, generally in the realm of 15,000,000 on average. I will try to get enough money from our account at NFS to complete our upcoming payrolls. Since I have been writing this letter I have received three hurried inquiries about re capitalizing the company. I will negotiate an arrangement that guarantees that everyone gets paid, to the best of my abilities. Please stay at Brookstreet at least until Friday so I may do my best for each of you. Unfortunately we are on "SELL ONLY." I believe I will be able to reconstitute another opportunity for everyone that will result is a minimum of change and disruption. There will be disruption. Please give a day or so for us to come up with the best strategy. This has happened to us in one day, amazing. All of our family net worth is in the firm, please give me time to present a new plan."
coooool!! did you get to meet the king?? someone told me his wife is hot and quite nice...... your book is excellent... there is nothing else like it on the market. totally entertaining and insightful. perhaps the neuvo livermore classic for the hedge fund age. . 2 surfer thumbs up! surf
Tim.... Got to have a chance to view WSW and all I can say is I agree you in many ways in terms of going at it on your own in trading. Your views on trading and going at it solo explained at the sushi restaurant on your date with that Florida tennis chic is right on. As for the golf match with your banking buddy and your Mom cleaning up your joint..... WTF???? Bwahahahahaha. That is another story.
Glad you enjoyed it, hopefully it sells like Reminiscences of a Stock Operator, too! Well, you gotta take the good with the bad. Once you read my book, you'll understand me much better so wait until then to pass judgment--remember, reality shows have to put a spin on whatever they can or else nobody watches.
Who knows--I write what I know and that's microcaps. Obviously, I wish I'd devoted the past eight years to mastering a more scalable strategy, but I never planned for any of this so here I am, for better or worse. I do hope to show that microcaps aren't as all out risky as everyone believes--I think much of why people think that is because nobody's ever really honestly described this niche before-- I hope to change that and show that much of the extreme volatility is predictable and more importantly, exploitable.
Exploitable to the extent that your fund is down 30+% this year? I really dont know what your fund is doing, but based on what you were doing on WSW you really look like a super-newbie trader. Way over emotional. Maybe you were just doing it for the camera. You can always tell when traders run into drawdowns and know they're a flash in the pan. They try to make $ writing books, selling seminars, go on TV (hi Jim Cramer)....lol. The real deals are the guys who try to keep a low profile. SAC, Dunn, etc. Good luck though.
He is on his last leg. Obviously his trading isnt working out, so now he is doing the next step. Writing a book and hoping to make a few bucks. Probably wont sell much as a majority of the trading world has no idea who he is. He reminds me of a lot of kids who started in those days....flash in the pan. Obviously he cant adapt to changing market conditions.
First, don't trust anything you see on TV--unfortunately, my trade setups are very rare and the days that we filmed, there wasn't much doing. And on CNBC I was picking stocks for a contest that paid no mind to downside--just not good examples of anything other than my ability to entertain. Second, oh how I wish I could comment on performance, but I cannot. Also, I never claimed to be the master trader--in fact I suck at timing trades--the point of my book is to show that there are plenty of opportunities in this niche as evidenced by my experiences, even if I was never quite able to master it all. Third, I think somebody who has huge returns and huge drawdowns can offer many more valuable lessons to readers than somebody who's never made many mistakes or trades with billions of dollars. Not to mention that I've had a wild ride and you're gonna be entertained when you hear it all. Fourth, you can't judge me to be the real deal or not until you read the book--its that simple. Right now its 69,506 words so talk to me after you read them. Last leg hardly--I'm 26!! The world is my oyster. Making a few bucks--if that's the case then why did I reject Wiley's $35k advance offer? I wrote this book to help all the wannabe traders and hedge fund managers who are forced to deal with an industry in which everybody has some kind of an angle and there's nobody telling them the whole truth. No idea who I am--sorry you missed my show, but we're on our 500th airing now and I'm getting 40+ emails/day from people inspired by my story. I am Queens Boulevard. Can't adapt to changing market conditions-- please, I've been doing this almost 9 years, I've seen a ton and I'm still doing it. I can see how you guys think that you understand me, but you really just don't have any idea...you're really making me want to release this book early just so I can clear everything up!