How much did SAC lose on Volkswagen?

goldenarm · Oct 30, 2008

Quote from chipmunk:

why are some of you so happy that SAC "might" have taken a big loss?

Is it just me or is there a lot of jelousy here?
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This phenomenon is called "crab mentality" which is best described by the phrase...."if i can't have it, neither can you".

It's a metaphor referring to a pot of crabs in which one of them tries to escape and instead is pulled down by the rest of them.

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"We all like to see our friends get ahead...but not too far ahead.â -- famous crab mentalist

Equalizer · Oct 30, 2008

Those Germans have a word for everything - it is called schadenfreude

Wayne Gibbous · Oct 30, 2008

Quote from chipmunk:

why are some of you so happy that SAC "might" have taken a big loss?

Is it just me or is there a lot of jelousy here?
More...

I'm sure some of it is "crab mentality", but I think a lot of the animosity toward these hedge guys like SAC and (former) hedgie Crammer, comes from the idea that we respect successful traders. And it seems like more and more we find out that these guys made most of their bux from paying for order flow info, and dirty tricks. Floating rumors and bullying companies down with naked shorts, etc.

Yeah, guys like SAC have to find a way to run billions and we trade just a tiny tiny fraction of that size. But at least we trade. We can't trick our way through the markets.

TSGannGalt · Oct 30, 2008

This is not a guess.

They're exposure to one "symbol" is not large, plus they're very (x100) well diversified, and very good at it.

VW squeeze "single-handedly" is not going to impact them as much as people think. The bigger impact is the general market condition itself.

*I don't trade for/with SAC but well informed with their trading style

flytiger · Oct 30, 2008

http://www.telegraph.co.uk/finance/...ny-got-revenge-on-the-hedge-fund-locusts.html

uptik2000 · Oct 30, 2008

Porsche should start a hedge fund. That was a great play.

goldenarm · Oct 30, 2008

Nice link. This would make a cool movie! What's a good title? "The Big Squeeze?" or "Kraut's Revenge"?

flytiger · Oct 30, 2008

http://www.deepcapture.com/verasun-energy-failures-to-deliver-vs-share-price/#comment-91755

Read this. 500 jobs, gone, and it took two years of raids to do it.

Tell me I should feel sorry for SAC or Einhorn.

mingsphinx · Oct 30, 2008

Rob a guy on the street and the state incarcerates you. Steal from thousands on the market and you are called smart money.

mingsphinx · Oct 30, 2008

Did Lehman not try to raise money too?

SAC's Cohen, Einhorn Raise Money as Most Hedge Funds Shrink

By Katherine Burton

Oct. 30 (Bloomberg) -- Steven Cohen, David Einhorn, Paul Singer and Alan Howard are doing what most hedge-fund managers can't these days -- raising money from investors.

Singer's Elliott Management Corp. added $3 billion in the third quarter and Howard's Brevan Howard Asset Management LLP garnered new cash as they posted investment gains in a year when the average fund has lost 20 percent, people with knowledge of matter said. Cohen's SAC Capital Advisors LLC and Einhorn's Greenlight Capital Inc. have allowed investors into funds that had been closed since 2005, with Einhorn seeking several hundred million dollars this month.

Most hedge funds are shrinking, with client redemptions and investment losses expected to cut industry assets by 32 percent to $1.3 trillion by year-end, according to an Oct. 24 report by Morgan Stanley. Managers raising money can prop up fees while taking advantage of depressed prices created by this year's selloff in stocks, bonds and loans.

``The opportunity has become huge if you have the cash to take advantage of it,'' said Brad Balter, managing partner of Balter Capital Management LLC in Boston, which farms out money to hedge funds.

U.S. stocks have plunged 42 percent this year as measured by the Standard & Poor's 500 Index. Convertible bonds have dropped about 37 percent according to an index compiled by Merrill Lynch & Co.

Executives at the hedge-fund firms declined to comment on their money-raising efforts.

Lehigh Looking

Lehigh University's $1.2 billion endowment is seeking to put money into reopened funds, seeing a chance to invest with top-performing managers who previously didn't want new clients, according to a person familiar with the school's plans.

Lehigh currently has about 20 percent of its assets in hedge funds, which are private, largely unregulated pools of capital whose managers can buy or sell any assets and participate substantially in profits from money invested.

Peter Gilbert, chief investment officer at the Bethlehem, Pennsylvania, university, didn't return a call seeking comment.

James Walsh, chief investment officer of Cornell University's $6 billion endowment, said the unprecedented redemptions in the industry have a silver lining for investors with cash.

``You're seeing good hedge funds that have been closed for years finally opening up again,'' he said at a conference in London last week. Cornell, in Ithaca, New York, has a quarter of its endowment invested in hedge funds.

Money-raising has been easiest for firms that have been profitable in 2008.

$3 Billion

New York-based Elliott, which oversees about $14.5 billion, is in the process of collecting an additional $1 billion, according to investors.

Singer, 64, who specializes in distressed assets, is taking money from current investors and those who are on the firm's waiting list. The fund was up 6 percent this year through September, and has returned more than 14 percent annually on average since Singer founded the firm in 1977.

London-based Brevan Howard, with $27 billion under management, has produced a 17 percent gain this year in its largest Brevan Howard Macro Ltd. fund, which chases macroeconomic trends by trading stock indexes, bonds, currencies and commodities.

The firm, founded in 2002 by Howard, 45, former head of proprietary interest-rate trading at Credit Suisse Group AG, is allowing new investors in to replace clients who are withdrawing money, according to people familiar with the firm.

More investors want to put money into the fund than are leaving, they said.

Track Records

Funds with strong long-term track records are also raising cash, even if they are having their worst years ever in 2008.

New clients are a welcome addition to these managers, since current investors have a high-water mark, meaning they don't have to pay managers fees on any investment gains -- usually 20 percent of the profit -- until all losses are recouped.

Einhorn, 39, raised cash even with his three stock funds down around 15 percent this year through September. New York- based Greenlight, which hasn't opened its funds since November 2005, has returned an average of 25 percent a year since 1996.

Cohen, 52, is opening its SAC Capital International Ltd., its oldest and best-performing fund, to new investors for the first time in three years. Clients will be able to add money starting in January.

That fund, which primarily trades stocks, has dropped 5.5 percent in 2008, Cohen's worst performance since he started the fund in 1996 and well below the 32 percent a year the Stamford, Connecticut-based has averaged since then.
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