Interesting article. "His greatest fear about shutting down his fund, Tilson says, was that "I would actually have to go get a job and work for somebody. When you've been an entrepreneur for 30 years, the idea of actually having a boss, and having somebody else decide which hours of the day I have to work, when I can go on vacation or not, was an unappealing prospect." " The fund was 200m at the peak, and he must have made quite some performance fees on the way up. If even hedge fund managers like that struggle to put three daughters through private school, maybe the new golden opportunity is to open and manage private schools?
Just by reading this post without reading the article via the link or knowing further about his fund's strategy, it looks to me that his hedge fund is either a contrarian fund or a value-investing fund which does great when the market itself is not doing too great but when the market does pick up and trends strongly up, it actually underperforms or even makes losses.
The fund used a value investing strategy per the article. It tells me that the fund manager just got lucky in a certain period and he had no real trading/investing skills. Kinda like everyone is a winner in a bull market and goes kaboom as soon as the bear market comes around, as it will inevitably.
%% A bit more south, iron chief,i mean iron chef; Liberty Lifelong Learning was my school- good name ...... We cant blame game Harvard; that's the school Bill Gates quit+ Mark Zuckerberg quit.LOL + true
Just the nature of the markets. Do one thing for a while, do something else later. A good trader is always aware of how things are changing and adapts. (Difficult to do, which is why there are so few good traders over the long haul) Players sometimes make a lot of money "understanding" something and are correct. Unfortunately, they can believe they understand something later and be wrong. And sticking with their conviction, maybe averaging their loser, end up being wrong big time. Many examples....like Ackman(?) and his Herbalife short, Niederhoffer, Hunt Brothers, LTCM, that hedge fund guy who was buying Nat Gas hand over fist @ $20+... before it plunged to <$2, etc... many more we never hear about.
I think I posted a few days ago, but while many thoughts re changes in mkts, etc., in this thread are correct, there really is only one macro change: QE by Central Banks. Other than QE, there have been constant changes in mkts, new technology, news delivery, etc. since Cave Man. But QE almost fully removed volatility; encouraged ETFs, & trading approaches, that meant it did not matter which indiv stk you bought, they all moved together -- or correlation > 90%. Winds are changing. QE has stopped, & started to reverse. And in a few years, all those brilliant traders/managers, who only know to buy the dip, will be out of the business, & this site will wonder what went wrong. BTW, pay little attention to the actual incr in Fed interest rates; that is mis-direction. Watch the Fed's 4 Trillion balance sheet, & in a few months, the actions of European & even the Japanese central banks. Old adage on Wall St: Don't confuse brains with a bull market. QE made bull markets everywhere, all instruments, world-side. The times they are a changing.
In the US, the 4T on Fed's balance sheet means little. The paper purchased through QE is being held until maturity and then being extinguished. Compare to Europe. Dragi stated recently he will be reinvesting... IOW, the carried debt will NOT retire or extinguished. I pity the Euro currency. Back to the US No mis-direction there... you'd BETTER pay attention to (US and elsewhere) interest rates! Unlike the declining and eventually disappeared 4T debt on the feds balance sheet, the deficits created by the Washington morons won't expire or be retired in our lifetime, or our childrens lifetime, and require constant buyers for roll-over. This is why interest rate is crucially important. Alternatively, QE all over again, but with the short AND long term duration being bought. Don't you think that would make for some good times? The 4T USFed balance sheet is less than 20% of the US deficit. The ECB and JCB do not compare. It's beyond stupid to think Yen is a "safe-haven" play. Still, I pity the Euro currency more. http://www.usdebtclock.org/