NFA does "exempt" those who do not represent themselves as "pros". Filings do have to be made that "prove" a person is not a "pro". Filings occur via IB's and it is imcumbant on IB's to meet the periodicity and "exent". A lot of gaps are being closed on this stuff. So I was used to completing forms from NFA via my IBs on a periodic basis. Also on file at all times (with IB) were the authorities I had. The IBs always double checked and kept me out of the pro category. Thus, I avoided a lot of filing requirements that you have in two ways: I avoided having client money and I avoided all income from clients. You cannot avoid, however, being monitored by enforcement agencies for improper and unfair trading practices. I really went through the wringer with repect to this, vis a vis the SEC. My profile trading these collective accounts as a "bundle" where the IB apportioned the blocks among those I had standard POA's for, appeared to th SEC as "insider trading", i. e., it was not possible for me to do what I WAS DOING. Fortunately, the SEC was extremely methodical in a mistaken manner. It turned out that I could not know and traffic with such a diverse population that the SEC was citing me for. Reason, did not prevail but the persistence of the SEC flagged as they continued to cite, retract and apologize. Not citing became a short cut that eliminated the two follow on aspects. The sour part of these years was that the IB lawyers would not pursue allowing me access to the SEC, less than satifactory, electronic monitoring software. My interest was to go through it and suggest "fixes" that would "differentiate" trading strategies from real insider trading. There was also another concurrent theme. IB's coattail trade client strategies that lead the markets. So the SEC was citing my IB for not following the rules that brokers have to follow. The financial industry is oriented mostly to making money on "activity". Coatailing at high profitability for clients was contagious. Sales techniques strayed from objectivity and having a factual basis. It seems that the broker made up stuff that "linked" my trades to other trades or ownership I did or had. One incident required (meaning the SEC required IBM's T J Watson and Tang of Tang industries to have to make a "joint" statement regarding present and future plans. this stupidity in itself made for great trading on a short term basis. MLPFB had to pay fines for "national" story telling all through their office system. It was very unpleasant for me to be "tracked down" by the SEC to get the facts straight. I changed brokers to facilitate disconnecting from authority. It is hard to explain how skill is used to make money in an industry whose operation is based on sales and commissions. Also there is a tendency for regulatory organizations to have employees who are limited in their scope of processing facts in their particular operating setting. Today, the humor of the contemporary scene has deepened way beyond Gordon Gekkoness. Imagine, if you will, a brief four year series of AIR's vis a vis the IRS. The length of AIR's is getting longer, their frequency is diminishing and their request for response within a given time is absolutely static. Several pages of an AIR turns into 15 pages with 40 Q's, two levels of subQ's and hunderds of pages of attachments. One year of an IRS team's work is required to generate this non insightful paper. I have two calendar weeks to respond. As as expected they want to know WHEN I will respond when they set a new deadline for me to preserve my rights (I had responded and pointed out the time variations). This is more than you wish to know, perhaps. It is not a rant or anything like that. this is simply an opservation on what is is like year after year when trading is done that is outside the pale of those who are employed by regulators and when regulation is a very hiumorous thing to behold. I'm writing a five book suite. The IRS is pissed that I feel like giving them free to those I choose. It is unfair and the IRS is threatening to tax me on my non existent future book sales income. They want, deeply, to know, how I can do what I am going to do. One of their examples of my unfairness stems from BABAK's blog where I am cited (an 11 page attachment to the AIR) for posting HERE in a manner that is not fair to those who cannot understand what I post. How can I be fair and treat all persons on an equal level? The AIR cites 148 pages by Hypostomus in ET. The thread title is "Anti Jack Trading". The IRS makes it clear that I am unresponsive to some people and responsive to others. I never saw the thread before. I think hypostomus is one of the funniest ET'ers to ever set foot here. Now, he knows the IRS reads his every word so they can state I have to explain my unfairness. I feel like taking Andy Rooney's place on 60 Minutes and do all the federal agencies one by one. So I am immune to regulation. I keep it that way. I want everyone to be making money by taking the market's offer. For years and years and years I made it possible for professionals who help those in need to give regular, reliable and FREE help. There is NO way those donations of professional time and a whole lot of other things given to people can be valued and I get taxed for that. There is NO way the tangible stuff I give to others in anyform whatsoever is going to be valued and taxed where I get to pay the tax. Again this is not a rant; it is just a very very humorous anecdote on the state of our regulators. I do not own a Gordon Gekko shirt and if I did, I do not feel I can be taxed for giving it away. The IRS wants to know how and where I make money helping others learn to trade. They want to know why I am so unfair in who I help and who I don't help. No one at the IRS wants to learn how to trade.......lol. Ask me about who is in charge of redacting information provided to the IRS...... lol Sorry about the long post.... this stuff is just too funny to pass up.. Good luck to everyone in the thread for getting started and keeping going..... If you want a nice feeling, trade for some professionals like psychiatrists, etc... who then can help people who have really gotten a raw deal in life.
I'm new to this forum. I'm not a trader/broker but an investor. I'm now thinking of adding Managed Futures to my portfolio: more or less US$1,250,000.00 I found 5 programs that seems to be interesting. I already exchanged email with a few brokers. My feeling? A lot of then are very good salesmen! ;-) But I need more than that... I need someone who have the expertise to look under the "hood". To analyse for me the disclosure document.. To "proof" the product that I will invest in... Diversification, sharpe, volatility, correlation, scalability, etc... Where can I find this kind of "expert broker"? Any advices will be appreciated!
Just set some reasonable expectations. Don't expect 2+sharpe ratios. Taper it down to 1 and ignore the drawdowns if your sharpe is at least 1. This way you can find comparable programs and scale your allocation to those strategies accordingly to your risk. Only trust autumngold.com, iasg.com, barclayhedge.com, worldcupadvisor.com, and Stark Research. By requesting disclosure documents from them if they aren't giving you summary statistics such as drawdown and sharpe be wary, but otherwise these particular websites will help in your search. Know that subscriptions are more scalable, and seeking incentives for your CTA's come from their type of compensation, so always emphasize greater performance based compensations but don't make performance compensation exclusive. Really, they need to be paid for the time it takes to manage your assets, and that should not exceed 2% so expect j-curves. In your performance based compensation the real advantage in whoever you choose is their interest in the growth of your assets, so if you do not qualify as an accredited investor but it looks like if you're looking for a $1.25 million investment then you do make sure the compensation schedule has adequate incentives and long enough trade histories that your performance is more probable than being ignored for the sake of quarterly or monthly management fees.
Hi 1prometheus, I havenât read the whole thread so if you have already seen my answers from someone else; sorry about the redundancy. Very true! My first job in the CTA/Hedge Fund world was with one of Europeâs oldest CTAs. When I joined they had about a 12 year run of no annual loses yet during that period about 85% of their managed accounts net lost money due to coming in on the highs and exiting on the lows. It was a real eye opener on how people in general just arenât very good at the asset allocation business. Small funds look terrible since they usually donât stay around very long so I disagree from my industry perspective. Small funds are small for the simple reason they have no successful long term track record and have not invested in the infrastructure to pass a professional asset allocators due diligence. If a small fund has a sustainable track record and can pass a due diligence that confirms they can handle size etc they will not remain small. Big guys are big because they did everything right and small guys are small for the opposite reason. Not hopeless, the best asset allocators take survivorship into account in their own internal indexes and databases. I do not know why most of the public index providers do not do the same. As for your diversification comments I am an internal proprietary trader at an offshore asset group and for example of diversification in the last credit crises we were the only group that provided a windfall return vs the long only equity/fixed income/real estate/private equity/infrastructure etc portfolios. A huge asset allocator is more interested in CTA (long vol) type of returns for their diversification value away from traditional long only equity/fixed income or short vol hedge funds returns than the CTA as just a stand alone investment. Interesting ideas but in the real world your ideas are totally impractical for a emerging CTA that is fighting tooth and nail to get to critical mass. I donât know how you are defining âthe managed futures industryâ? It appears to me you are referring to the âretailâ side of the industry where ma and pop are being screwed by brokers and salesmen. The âoff shoreâ institutional side of the business is incredibly sophisticated and the business as practiced by this huge pool of assets in my opinion is very different from your experience with the âon shoreâ retail side. Or at least it is from my view which is clouded by the fact that I donât know the on shore side very well after being offshore for over twenty years. All the best! Warmest Regards, Smoker
Try a black market investor. The licensed ones always loose money. Their two ordinary just like all the other Tom, Dicks, and Harries.
Why does no one know the difference between lose and loose? Did they quit teaching grammar in high school?
HAHAHA - The thing is I am a human I could of made a mistake? My question would then be, why does no one know the difference between opinionated and free? Did they continue to brainwash you past your school years? http://www.youtube.com/watch?v=acLW1vFO-2Q
First of all I must say I am not affiliated with what i recommend here. I think i would chose the following three managed futures funds: 1. Winton 2. Estlander and Roennlund 3. Alfakraft with Thomas Stridsman. Here is why: The First two are around a very long time and they have both an excellent track record - I follow their returns for a long time now and they are real established players. The third one is not around very long but Thomas Stridsman wrote two books that are excellent and he is one of the few writers in the Active Traders Magazine that is real professional. I mean no bullshit blabla and instead real PL numbers of all his ideas. Great guy and I invest soon myself. If you dont trust me then just try to read some of his articles and books and you know you are in good hands Maybe in 3 years time you come back to my recommendations and thank me for it - hahahahha -- anyways important is to stick with it and also count in a 20-30 % drawdown - Good Luck
It's careless, and I saw someone say choose when he meant chose. That is the only time in the last two weeks I've seen it, and both times were incorrect. Lazy teens, or people that don't care about grammar. It's not inhuman, it's just stupidity.