Hey surfer, Wouldn't you agree that making money is more important to staying on top? There is no trophy given for first place in this business. In this business you are only as good as your last trade. There are no BCS standings or bowl games, no playoffs, no tournament. At the end of the day, it's what you have in your account that matters. And when you blow out, well, that's like going 0-16.
If I'm ever at risk of being 'ranked #1,' I'll take some easy losses in order to dip back under the radar screen, or close my fund and take a year off to get some perspective. Any money manager that would allow their 'ranking' or status to trump their risk control deserves to blow up.
lets face reality, its just not good to go to 0. it feels like sh*t and everyone loses money. Not to mention the ego is reduced to nothing. Lets look at the traders out there who have blown up at one point or other: Niederhoffer, Richard Dennis (repeatedly), , Marty Schwartz (didn't blow up but couldn't handle the pressure of a fund), Soros (didn't blow up but severe drawdown in 2000), LTCM (Meriwether might've been the greatest trader ever before that blowup), not to mention numberous funds that blow up each year that previously had great returns. This year alone there was a fund within the Clinton Group, Gotham Partners, and last year a fund within the Lipper Group. Then you have the numerous funds this year that are run by great, even legendary traders, who are falling prey to the mutual fund timing scandal. Why did these great traders (allegedly) succumb to the easy money: Izzy Englunder, Stern. Trading is a hard game. And when it comes to judging failure I'm sure none of us can throw the first stone. I just hope I can learn from these guys so I can avoid some of the mistakes they made. Although I'm quite sure I'll eventually find a few brand new ones to make.
Well said. Idiots never learn, smart people learn from their mistakes, and truly wise people learn from other's mistakes. The Niederhoffer (sp?) saga is an invaluable cautionary tale.
one way to judge success is to look at the people one has mentored who have gone on to great success. In Victor's case the obvious answers are: Toby Crabel, Monroe Trout, and Roy Niederhoffer. Toby Crabel's 3x fund has been returning 18+% a year with sharpe > 1 and no down years. Trout's record was reported on in New Market Wizards and was incredible. And Roy's fund just made it over $1B in assets so someone must be happy with him. One thing about Roy that sets him apart from the others and makes me admire his result even more than Crabel's is the fact that he was down 33% in 1999 when the market was up huge. Honestly, I would've been so depressed at that that I probably would've quit. I hope thats not true but my gut wrenches even at the thought. Roy's assets fell to less than 100M and it looked like he was going under. But next year he was up 60%, then 10%, 22%, and this year 5%. Now he has $1B in assets and is probably making $20-40M a year for himself. Coming back from the depths is a sure sign of success. Victor is climbing back as well. His fund this year was up an incredible amount.
vic's fund posted very impressive gains last year, the attached article talks about the current success and future plans: http://www.dailyspeculations.com/Letter/totalreturnarticle104.html enjoy !!!!! surfer
I admire Vic and wish him well. I just pray he respects the market more now and has incorporated a valid risk management structure into his trading strategy.