“What ever happened to Gary Cooper?” is a theme carried throughout The Sopranos – a question that Tony keeps asking as observes the men he is surrounded by.
Lately, I have been asking myself a similar question as I survey the hedge fund landscape. I don’t know what happens after the screen goes dark at the end of Tony’s world, but I do know what is happening in the hedge fund community and, friends, it is not good.
Today, right now as 2008 gets started, every Tom, Dick, Harry and Sue Wall Streeter thinks that they can become a hedge fund manager. They think that because they buy expensive jeans, wear expensive shoes and may have made a few bucks that they know how to make money in the markets. They believe that without a doubt they can turn themselves into the next Soros, Steinhardt and Robertson combined.
Wall Street has become all about hedge funds. You can’t talk to anyone about anything to do with the market without the phrase “hedge fund manager” coming into the conversation. It’s a wild and wacky thing that we’re all experiencing. The fact is that most -- and I do mean most -- of the people who call themselves hedge fund managers at cocktail parties and while making investor pitches are full of BS. These people, to quote the great Gecko, “Don’t know preferred stock from livestock!”
It’s amazing to see these people in action. It used to be that they were relatively easy to pick out of the crowd. Today they are the crowd. They believe they really have nothing to lose in the only business in the world where you can invest so little and potentially make so much. That’s what the hedge fund world has become, and it’s scary, really scary.
You need more than a shoeshine, a smile and a couple of hundred thousand dollars of seed money to become a great hedge fund manager. You need to have a special chip in your head that allows you to process information in a way that makes money. There are very few in the grand scheme of things that have this kind of chip, not to mention the ability to act promptly on the information the chip serves up. Most so-called managers are just bit players glomming on to the hottest trend.
It’s spotting trends, not following them, that keeps winning hedge fund managers ahead of the pack. Right the followers seem to be everywhere and the spotters nowhere to be found.
©DASP 2008 All Rights Reserved
Monday, January 14, 2008
Sunday, January 6, 2008
A Pep Talk of Sorts...
It’s the first full trading week of the New Year and, ladies and gentlemen, it is time for you to do something in the market. Start making trades, start finding ideas and start making money for your investors and yourself. Over the last few weeks, I have been hearing a lot managers and would-be mangers crying in their beers about the fact that 2007 was a tough year. Well, guess what? The year is over and it is time start anew.
One of the most beautiful things about being in the money management business is that come January 1 the slate is wiped clean, you start fresh and the past is truly behind you. That being said, it’s time for hedge fund managers to get up and start making money. It is what you should thinking about and acting on right now. You’ve got to look for opportunities, find them and then exploit the hell out of them. The bottom line is that it is time to shake the cobwebs off, stand up, be proud, stick your chest out and get out there and make some money.
I get calls and e-mail all asking the same question: How do we get started? How do we do this? How do we do that? The answer is simple: Just do it. Find a prime broker, hire a lawyer, retain an accountant and get the machine moving. Get started already. Investors are in search of managers to put their money to work. Unless you get started you won’t get access to any capital whatsoever.
Remember the following five items for the New Year and beyond:
1. Investors are looking for performance.
2. Investors are looking for consistent performance
3. Investors are looking for consistent management strategies.
4. Investors are looking for managers who implement simple, self-contained, money management strategies that are easy to understand, that are easy to get their arms around and that they know will perform regardless of market conditions
5. All of the above is why you are paid one percent and twenty!
If investors wanted mediocrity they’d buy an index fund or they’d buy a long-only mutual fund. Investors are paying for your brain, they’re paying for your brawn and most important they’re paying for your ability to make them money. So, here’s what I’m telling you: Get out there and make money. Find opportunities. There are always opportunities in the marketplace. It is your job to find them. Get out there and do it.
©DASP 2008 All Rights Reserved
One of the most beautiful things about being in the money management business is that come January 1 the slate is wiped clean, you start fresh and the past is truly behind you. That being said, it’s time for hedge fund managers to get up and start making money. It is what you should thinking about and acting on right now. You’ve got to look for opportunities, find them and then exploit the hell out of them. The bottom line is that it is time to shake the cobwebs off, stand up, be proud, stick your chest out and get out there and make some money.
I get calls and e-mail all asking the same question: How do we get started? How do we do this? How do we do that? The answer is simple: Just do it. Find a prime broker, hire a lawyer, retain an accountant and get the machine moving. Get started already. Investors are in search of managers to put their money to work. Unless you get started you won’t get access to any capital whatsoever.
Remember the following five items for the New Year and beyond:
1. Investors are looking for performance.
2. Investors are looking for consistent performance
3. Investors are looking for consistent management strategies.
4. Investors are looking for managers who implement simple, self-contained, money management strategies that are easy to understand, that are easy to get their arms around and that they know will perform regardless of market conditions
5. All of the above is why you are paid one percent and twenty!
If investors wanted mediocrity they’d buy an index fund or they’d buy a long-only mutual fund. Investors are paying for your brain, they’re paying for your brawn and most important they’re paying for your ability to make them money. So, here’s what I’m telling you: Get out there and make money. Find opportunities. There are always opportunities in the marketplace. It is your job to find them. Get out there and do it.
©DASP 2008 All Rights Reserved
Subscribe to:
Posts (Atom)
