I went back and took a look and I can't say that was a "crash". Worst 10 day period from Jul 4 2008 was -13% whereas the up move from Nov 2 peaked at +50%. I'm not here to debate what is the definition of a crash. One person's crash is simply volatility for another. My point is NG tail moves are skewed to the upside. Especially at $3. Could it crash to the downside? Sure, but just because it's possible doesn't make it probable.
Everyone here talking about them being in front of Jury need to realize this: First off all their agreement could have had arbitration clause, so they would go in front of arbiter. And most importantly, did they do everything according to d doc? If they did, there is really no case. CTAs do not have fiduciary responsibly per se, they are responsible to trade according to disclosure document.
It's a good analogy. The conductor is responsible for the safety of his/her passengers and community while safely operating the train according to defined operating procedure. The money manager is primarily responsible for the safety of capital number one. Secondary objective in both cases is efficiency. For the conductor, it's getting the passengers to the destination by the due date. For the asset manager, it's achieving a "good" return or beating some benchmark. Give one reason why the analogy is "just off-the-mark". The analogy doesn't have to have anything to do with trading, that's the point. It's a demonstration of how the same principles apply outside the current focus.
I would rather lose all my money (due to my own bad idea of giving it all to one person to manage) than have someone else kill me in a train accident. Death is far worse than financial lose. I can recover from financial loss, I can't recover from death. I agree with your last point about judgement not fit to live among rest of society.
This is exactly why I trade my own capital and not hand it over to someone who did not have to bust and sweat his ass off to earn. I hedge all my trades, manage risk like a hawk and will close out for a small loss to prevent big losses immediately. This guy was busy living the life, drinking his morning wine while listening to his audiophile setup and planning his day. He was not managing or worrying about his clients money jack shit. Totally wreckless and neglegent trading. Look I am not an award winning author from Harvard with degrees in this shit and I know not to do such a stupid trade. He has no excuse for what he did and ignorance or "I did not expect this" is not an excuse. I would not be surprised if he was under the influence while trading. You dont trade intoxicated, thats like flying a plane on drugs.
But that is you, high net worth individuals and family offices have other occupations and allocate their wealth to various managers/programs.
He Blew Up His Fund. Now He’s a Laughingstock https://www.institutionalinvestor.c...m=He Blew Up His Fund Now Hes a Laughingstock
99.999999999999% of his clients won't understand them even if they saw the spreadsheets. That's why they let this guy trade their personal accounts via a POA in the first place.
Even Taleb the infamous guy about tail-risk chimed in on Twitter: Nassim Nicholas TalebVerified account@nntaleb Nov 17 SHOCKING! These people http://Optionsellers.com who blew up were citing me and The Black Swan to propose ... selling TAIL options. Unbelievable. Exactly the opposite of what I write. 34 replies74 retweets332 likes