What risk management techniques does Crispin Odey use to survive 27 years and become ultra-rich?

Discussion in 'Risk Management' started by learner88, Jan 26, 2019.

  1. From this article, it seems that this money manager Crispin Odey has poor risk management. However, I don't quite believe it since he is ultra-rich, close to being a billionaire and survived for 27 years. If he had poor risk management, he would have been wiped out much earlier on. His achievements suggest he does have good risk management techniques.

    Can the more knowledgeable folks here shed light on how Crispin managed to achieve this miracle? He does not seem to use conventional cut-loss risk management techniques.


    Odey’s fans and critics alike describe him as bold, but lacking controls. In the middle of the financial crisis, when the representative of a family office asked about risk management, Odey told him that he was just another “crappy” investor and even called him a “jerk.” In the interview, he pointed to hundreds of millions of dollars of his personal wealth that he invests alongside clients. “That’s the risk management.”
    Last edited: Jan 26, 2019
  2. trader99


    I don't like his style. He's a bad trader. He has strong views of the market which is good but you have to be flexible to price action. He's not. His returns are all over the map. When he wins he wins big. When he loses he loses big. Down huge. Up huge.

    He trades like I used to in the beginning of my trading journey. Now my equity curve is smoother and better when I stop fighting the market...
    "Odey courted potential investors, to no avail. At one meeting in 2016 at a Michelin-starred restaurant, he hosted a small group over lunch and three bottles of fine wine. Throughout the meeting, he kept coming back to the same argument -- he was right and the market wrong, according to a person who attended. The investors left unconvinced. Odey’s fund lost half its value that year and 22 percent the next."

    "Odey made about 220 million pounds ($283 million) in a day when the British currency slumped following the decision to leave the European Union. The trade continues to cause outrage on social media, because Odey is seen as profiting from problems at home while pushing the country towards uncertainties. He lost that money in a matter of weeks as markets rallied."
    murray t turtle, cvds16 and tomorton like this.
  3. Palindrome


    I would never invest with anyone born into wealth. The guy just gambles other people’s money.
  4. smallfil


    What they say is he is a contrarian. Looks like he has poor risk management. Like Optionseller.com, you can get away with a lot with a huge capital to trade with. However, it takes just one black swan event to put him away for good! And when he makes that huge mistake, you can be sure all the hedge funds that see it will be in a feeding frenzy. They are not going to cut him any slack! Nothing personal, just all business. If he had proper risk management, he probably, would have been doing better with huge gains to boot!
    trader99 likes this.
  5. Handle123


    I know from my own experiences, being a Contrarian is usually being to early for the ultimate turns, so you must hedge. Otherwise you are purely betting red or black. At some point, you have to be using trendlines on one's equity curve or suffer.
    Bernard111 likes this.
  6. TommyR


    I rate the boy he goes in size anywhere where there is a massive risky. He thinks any good news is a hoax and if the stock market goes up he’s happy coz he can sell more. And overtime his returns are consistently very good (plus 40pct last year) and he does actually kill it when’s it’s very volatile doesn’t have wrong volatility issues. Respect
  7. subban


    If you look at the bar graph of returns from the article from '08 to '18 his average yearly return for those 10 years is 5%. Now, if I was an investor I don't think I would want to go through the vagaries of those ups and downs for a 5% return. You can easily just put it in a triple A rated corporate or muni bond for those 10 years for a 5% return. Maybe even a financial bank corporate bond for even a higher rate of 7%-9% and your initial price wouldn't be down as bond prices have been stable over that term.
    murray t turtle likes this.
  8. subban


    I would have to disagree, when he is wrong his volatility issues just exacerbate the problem and create bigger and bigger losses.
    murray t turtle likes this.
  9. %%
    He's got some good equity curves/chart ;
    but i have no idea if that news article ''bet the ranch'' is accurate . But for 50% + more drawdowns i would rather do it myself. Actually fairly reasonable drawdowns except for 2013 thru 2018.

    I respect him + his equity curve shows why almost not many or any put money in the market @ one time or in small period. I would not blame a 50% loss on'' the market being wrong'' LOL but i still respect him.:cool::cool: