I was just wondering why a lot of you seem to just day trade with your own money. Wouldn't it be better to trade with OPM? I believe that the hedge funds that don't blow up seem to under perform the market on average yet the managers are making a killing charging a ridiculous 2% of assets and 20% of profits. Better yet look at the mutual fund industry. 80-90% underperform the market and it doesn't appear that anybody can consistently beat the market. They still make a shitload of money. Please post your thoughts.
I trade with my own money because I don't know of anyone who is willing to give me their money to trade with. At least not a significant sum.
Margin yes, but you can get margin for managing a portfolio as well. And if you blow that up they can't come after your personal assets. If you blow up.. you are fucked.
I believe in my abilities and I don't want to pay out 80% of what I make to someone else. Isn't that REASON enough? Yeah.. there is an argument that I could MAKE a heck of a lot more if I were to trade OPM. But, lets face it, after you have about $50-$100 million, there is not much of an incentive for you to risk & work too hard. (I am not saying that I have that much money, but what I am saying is that that is my goal in the near term and I believe I would have an easier time getting there without OPM)
I think it's a matter of exponential earnings. Take Cohen at SCA compared to Zanger. Cohen manages billions, earns 20%+ per year and walks away with $900 million (admittedly he re-invests it back into his own fund, but still!!). On the other hand, Zanger makes triple digit returns and earns $22 million. It would take Zanger a tremendous amount of triple digit years to even think of catching up with Cohen. Meanwhile Cohen gains political/informational IOU's from prominent investors that he can collect on if he needs to boost his earnings or get out of a pinch. That said, it is much easier to start an account where you trade YOM that to start a fund where you manage OPM. Great question. Regards lee
I think I could live off 900 mill. It'd be hard though because 900 mill just doesn't buy what it used too, but I could make it work.
Someone has to manage my money. I do not need to hire someone to lose money for me. I am perfectly capable of losing money by myself.