Hedge funds have a high correlation to markets these days.... been a long time since they were real hedges - maybe 2000 to 2002 period. Most got crushed in 2008
Great analogy to many things in life and success, even family health. There is no one way to get to that dream. Keeping at it with wide eyes is the key.
What a great read, now I’ll have to watch the movie. We all end up where we need to be, regardless of the outcome or being spent at the end of your swim, have a crack, I think your scenario is inevitable and imminent. I’d like to join you so please send me the prospectus.
BTW - I had no idea (and not sure I agree ) that the Japanese were so intellectually superior ?
I was a top student at high school in Australia. When I went to high school in Japan, i went back a year, so should have been a cake walk. Instead they blasted through all the maths I had already done in a month, and carried on. On top of that, most students went to cramming school, and did even more maths after school.
On the other hand, most students never worked a job that needed that level of maths, so in some ways, it was a colossal waste of time...
Maybe now isn't the right time to put a lot of the short position ideas on, but having a structure in place now doesn't hurt if you think the opportunity will be there in the next year. It makes me think of the Palm Valley Capital fund. I'm not sure if you're familiar with it, but their strategy is long-only small-cap stocks, but they are targeting as close to zero drawdown as possible. They launched in May 2019 because they thought we were getting close to the end of the cycle, and this timing had them basically sitting in cash until the Covid crash when they started putting on positions in size.
The people that didn't miss the boat anyways. But I'm just talking about the timing of your fund launch. I'd say that if you think you'll be able to capture the major themes you've been talking about within the subsequent 12 months, then launching the fund to be ready for the moves would make sense. Obviously, if things don't start materializing until more than 12 months after the launch, then you might get some impatient investors. I just brought up Palm Valley Capital as a case study for that sort of thing. I imagine if Covid didn't happen their fund probably would have closed rather than them having the success they have had.
In the old days, fund managers use to run two funds - a super bearish one, and a super bullish one, and then market the one that worked. Perhaps that still happens today - but luck is important
This was a very poetic ending. Made me want to charge out and do something.
Isn’t the ‘hedge’ in a hedge fund all about keeping something for the swim back?
Hedge funds have a high correlation to markets these days.... been a long time since they were real hedges - maybe 2000 to 2002 period. Most got crushed in 2008
Great analogy to many things in life and success, even family health. There is no one way to get to that dream. Keeping at it with wide eyes is the key.
So what’s holding your back now , to start the short trade ?
Good question. Will do a post
Is it a shorts only swim? (excuse the pun :-))
Or are you still playing with a long book?
bit of both
Is the "saving nothing for the swim back" meant to be a metaphore for being heavily leveraged?
More like dont fear failure... as ultimately he always did have enough for the swim back!
Love that movie too!
What a great read, now I’ll have to watch the movie. We all end up where we need to be, regardless of the outcome or being spent at the end of your swim, have a crack, I think your scenario is inevitable and imminent. I’d like to join you so please send me the prospectus.
BTW - I had no idea (and not sure I agree ) that the Japanese were so intellectually superior ?
Thanks again.
I was a top student at high school in Australia. When I went to high school in Japan, i went back a year, so should have been a cake walk. Instead they blasted through all the maths I had already done in a month, and carried on. On top of that, most students went to cramming school, and did even more maths after school.
On the other hand, most students never worked a job that needed that level of maths, so in some ways, it was a colossal waste of time...
Hi Russell, nice post and I agree it's a great movie.
Minor typo in first sentence of second para:
"...the core story of Gattaca revolves around two brothers [is] a future..."
Thank you - corrected
Maybe now isn't the right time to put a lot of the short position ideas on, but having a structure in place now doesn't hurt if you think the opportunity will be there in the next year. It makes me think of the Palm Valley Capital fund. I'm not sure if you're familiar with it, but their strategy is long-only small-cap stocks, but they are targeting as close to zero drawdown as possible. They launched in May 2019 because they thought we were getting close to the end of the cycle, and this timing had them basically sitting in cash until the Covid crash when they started putting on positions in size.
I think a lot of people went long at Covid lows...
But not very many people were in all cash prior to the Covid lows
Thats fair.. but late 2020 people got long
The people that didn't miss the boat anyways. But I'm just talking about the timing of your fund launch. I'd say that if you think you'll be able to capture the major themes you've been talking about within the subsequent 12 months, then launching the fund to be ready for the moves would make sense. Obviously, if things don't start materializing until more than 12 months after the launch, then you might get some impatient investors. I just brought up Palm Valley Capital as a case study for that sort of thing. I imagine if Covid didn't happen their fund probably would have closed rather than them having the success they have had.
In the old days, fund managers use to run two funds - a super bearish one, and a super bullish one, and then market the one that worked. Perhaps that still happens today - but luck is important