Firms skirt the rules and hedge. What the firms actually do is up for debate, but my personal experience is that firms either front run(flow) or they do a sort of arb and collect dividends. Now, if I share it then I'd be stupid. But, let's just say the line between market making and prop trading isn't as firm as regulators would like you to believe. I've never seen directional bets with firm money unless they're tier 3, and even then it's a shitshow after Dodd-Frank.
He's positioning. Short term returns are irrelevant. It's not like he doesn't know what he's doing. It's just you don't understand what he's doing. Remember those short bets he placed in the billions without margin calls? Those are going to make him even richer once 2018 comes. Seriously, you question the activities of a man who's whole life purpose has been to make money and trading has been his specific vehicle for the past twenty years. If I had an ISDA, I'd copy every move. That man has connections to the creators of our entire financial system worldwide. That isn't me, that isn't an ET bloke. They are the gods of money.
Whoops....I went a little too harsh on you. For that, I apologize. Buy his stock? I'm leveraged on my long term holdings to the T, but I won't put my concrete positions in until I'm told what is going to happen (I'm short the indices in more ways than one.) I trade and invest, but one can never really know what will happen in the markets until the gods decide what they're officially going to do.
Like you said just give your money to the investment gods and let them do all the work for you. Read buffets annual report, he makes a lot of money trading derivatives on his long term holdings. We all must do the same. Buy and pray doesn't help.
It does? I like buffets strategy but my pockets aren't as deep. That could be good and bad. But most don't read between the lines, it's disclosed in BRK annual report, he uses derivatives. Many won't understand anyway...
The najarians buy 1 cheap contract on 1000 stocks. Then no matter what moves, they claim they were IN IT (true) Subscription sales skyrocket, and they bank on that