I know a lot of guys, come and gone. Some made a fortune. Most were so crooked as to make a corkscrew look like a plumb bob. And you know, each and every one of those pricks had an attitude. Here, you seemingly, and I say seemingly only because I haven't examined the books, have someone who not only carved out a niche, made a goodly sum, but did it honorably. In this business, that is not always a given. Tough to find someone to look up to in the securities industry.
don always and i mean always gave me crap about computer trading saying the human mind is better etc. well i have yet to see my computer program lose millions. i have often seen people lose millions. perhaps don will embrace computers now and be interested in out real time back office risk controls. but you can't help a hard head who will not adapt and i think the dinosaur slipped into the tar pit this time. mb
If the stock was in fact ELN, it's very doubtful that any risk controls other then what is already provided with REDI would have prevented this loss. It had two very large overnight gaps. Now, if your backoffice software can predict these events in advance, then sign me up!
The Elan rumor has been on the IRC poker chats since yesterday, possibly earlier. Certainly you can't predict ten-sigmas, but I wouldn't allow someone to take a large spec in a drug stock into news.
I think there is some lessons on this, yours is one. the reason I posted this is not because of jealousy or other speculations some posters hinted I got this from a poker forum and it seems that it is from the trader himself. it isnt 100% confirmed, but I'd say its 95% confirmed "wow. first of all, there is some truth to this post. i recently lost a staggering sum in trading. bob bright and i are on very good terms --- the original poster is way out of line and bob surely won't appreciate this post when he sees it. i simply can't go into details here. suffice it to say that bob and i are both mature gamblers; we had a unique arrangement, the risks of which were well understood by both; there was a fairly impressive blowout. the blowout was bad for him and bad for me, but the possibility of a blowout was well-anticipated. we had plans in place for dealing with it and we are now proceeding with those plans. i have to catch a plane, but i suppose i can give the broad outlines... july 15. i have 2.2 mill equity at bob's. july 16. had 10mill long, 8 mill short. roughly normal book for summer. i lose 700k in one day. short portfolio up 6%, long port down 2.2%. short a decent number of financials. financials have biggest up day ever. july 17. continuation of above. lose 300. gotta run.... july 29. see chart for eln. july 31. see chart for eln. also heavily long TE. long oil, commodities. short financial. anyway, no more details from me. bob and i gamble. some times things don't work out. but bob and i are on great terms and to OP --- thanks bro, good luck, i'm sure you'll go far." I guess another lesson is if you have 8-1 in exposure in crowded trades and biotech stocks dont think thats a 'normal book for the summer'
here is the link for the above post from 2p2, the big poker forum. Brandon Adams was the trader. http://forumserver.twoplustwo.com/showthread.php?t=278512&page=6 Fun stuff when poker players get into trading. Our idea of bankroll management is a little different from 1% risk per trade etc. lol edit to add: that is a "news, views, gossip" section of the poker forum, and I don't know if any of it is true or not. It does seem to be confirmed by the real Brandon A., but no way to say for sure.
Here is an excerpt from one of Don's posts back in July... top 5 for year...just started trading at Bright in March...big blowup a few weeks after this post...coincidence or eerily prescient? I think the Harvard professor part foretold much of this story personally... Looking at the dates of this versus Brandon's post on 2+2 he lost about 50% of his equity in two days after this post by Don. I guess being heavily long commodities and short financials at the same time will do that. This was before the ELN gap down. Amazing that he didn't just liquidate then and regroup. He would only be down half his equity and not in hock to Bright. Oh well, risk management is a bitch to learn in reverse. http://www.elitetrader.com/vb/showthread.php?s=&postid=1988810&highlight=brandon#post1988810