I may have 500k BP but the most I ever use is about 100k. Generally, I trade one position at a time and need 70k or so per trade (1000 shares of a $70.00 stock). Just because I have a lot of leverage doesnt mean I use it. As a matter of fact,using it would most likely diminish my returns the way I currently trade.
The statements above are full of (false) assumptions on your part, which in turn make you look like a true, certified idiot.
You have got to be kidding me.....I assume the risk, do all the work, and share the profits....sounds like a real winner to me.
is it so unreasonable? perhaps you should think about what every investor is doing when they put money with a money manager. the investor assumes all the risk but the manager shares the profit. if the manager does well, he collects fees. if he blows up, he still keeps the fees but the investor loses all. this seems to be reasonable to the many wealthy and "professional" investors out there. my offer turns this relationship around. besides, the typical fees are 2/20. to compensate for the guarantee, which is miniscule relative to his profits, i raised the incentive to 50%. of course there's also the issue of credibility. after all, i have not met the guy before. so i think it's reasonable. don't you? btw, i knew there would be capacity issues, but thought i would ask to see what he says.
You're buying access to his risk-based haircut as well. A resonable offer would be a 50/50 split on 500 large, not this insult of $5k.
well as we all know, risk-adjusted returns is a nice thing to sell, but the reality is quite different. there are 8,000+ hedge funds out there? how many have >20% return the past 5 years with sharpe >1.5 and drawdowns less than 5%? what % of total hedge fund assets do they represent? you can probably count the result with your fingers and toes. he said he doesn't have capacity for more capital. i knew that before asking which is why i offered 5k. besides, he only has 5K in himself so why is another 5K insulting? if you have a small account then you gotta start small. if you think you can get $10 million from Calpers, try calling them and see what they say. 888-CALPERS.
That is called business....you want risk free returns put your money in T-bills. If you want excess returns, you take risk. Youre only edge is you should choose to put your money with a proven professional....that alone is no guarantee of returns....so you should take one more step....spread your money around....so your fortune rests with no one man or woman. You may find a few desperate souls who will accept your offer, but, will they be able to cover the loss if they blow out? I doubt it.
So that means he won't be able to even use your 5K "investment", since the funds will be in an escrow account. And if he should blow out his trading account during the year, you would still get back your money. I think I know what the term for this business model or arrangement is - it's called "something for nothing."