To get rich trading you MUST manage other people money?

Discussion in 'Professional Trading' started by crgarcia, Aug 23, 2008.

  1. Even if you "only" make 15% per year on the accounts.

    You can't make it really big only with your own account, even if you have 0ne million to invest.
    You just can't get 100%+ yearly profits in a consistent way with moderate risk.

    This is why all the rich traders like Warren Buffett, George Soros, Paul Tudor Jones, etc, made billions. They all manage other people money.
  2. Warren Buffet made the majority of his billions managing his own money. From 1969 through the end of 1998 (when General Re was acquired for stock) Buffet owned 50% of Berkshire Hathaway.
  3. bkveen3


    Or get enough money that you can hire and train other people to trade your money. Effectively breaking down your account into smaller accounts in which larger returns are possible.
  4. you don't need to manage other people's money, you just need money, period. preferably allot of it.
  5. ssbc19


    In some of the interviews in market wizards the traders say that managing other people's money is like a call option. They have limited downside and unlimited upside, as long as they don't trade all their personal money
  6. Small accounts can make 100% a year with moderate risk. This is why Paul Tudor Jones made 100% a year for 5 years in a row when he had only a few millions under management.

    Smaller accounts are more agile than bigger accounts. This means a $1 million account can trade systems and markets that a $100+ million account would not find viable due to increased slippage and market impact costs.
  7. I say yes in order to BE RICH. You must trade others money atleast in one part of your career.

    Most of his Billions Yes. But age 26 Warren Started his career with $100. dollars of his own and $105,000. of Friends and Family. Began trading on his own out of his one Bedroom apartment.

    $100. to millionaire from age 26-30.

    So without his OPM and percent of the profits, he might not have started and been the Warren of Today. Some Academics even argue that Warren in this regulatory environment wouldnt have been able to structure and trade those styles if he had to do it over again today.

    And he now only owns 56.5% Down From (70%) a few years ago only because of his Charitable givings %.
  8. Agreed... institutions struggle to make 20%... those of us on this board who have been in the game a while recognise that 20% is a rock bottom return for our retail accounts...

    Our advantages against the institutions are:
    1) We can swing trade equities that don't have enough liquidity for big money...
    2) We can trade as frequently or infrequently as we like, vary our position sizing strategies and go long/short without regulatory constraints... many institutions can't do this...
  9. achilles28


    Forex can take Institutional money. A 2 Billion dollar fund could day-trade the EURO!

    From what I hear, the EURO Dollar market is even deeper.

    So this Gigantism argument doesn't pass the smell test.
  10. Absolutely... but I am talking equities, the less liquid kind...
    #10     Aug 24, 2008