20% above cash guaranteed: Would you invest?

[trainspotter]

Was that some kind of Japanese Haiku response I did not understand tech/a ?

 

[Trevor_S]

If a hedge fund offered you 20% return above Australian cash rate annually would you invest in that fund?

Nope.

 

[So_Cynical]

Nope.

I'm with Trev...No Thanks.

Sure lots would and that's why we have disasters like Storm, Madoff, Timbercorp, and Aust Capitol reserve and a thousand others...and most of them didn't have to offer 20%.

 

[Trembling Hand]

T/H

I dont understand.
$800-$14K.
Regularly I am lead to believe.
Friends Give $1000s to help them out when
down and out from your own trading account
cause your a great guy.

1-10 Contracts up to $250/tick
and youve been doing this for sometime.
Surely you have either many $100s of K cash
Diversified investments. Compounding capital base.
Can leverage your brains out as you have No or very little risk.

Why On earth do you need to trade massive size?
How many Millions is enough or indeed needed?

Cant see the point?

I guess there's lots of reason. I've been in all sorts of niche businesses for some time. Looking back the biggest regret I have is not exploiting the edges when they were relatively unexploited. Prime example is the closing up of the SPI with bots.

Second reason how long would someone want to sit in a room isolated from human contact as a way of life. Involving others becomes more important after a point.

Thirdly and didn't want to out myself but linked to the last. What if our hypothetical trader can see a huge opportunity to duplicate a method by bringing in other traders and and providing them with access to capital and in the process produce an ongoing business. One that frees them from a 1 to 1 business to 1 to many. Basic business sense.

But like I said a couple of post ago.

it always surprises me for an investing forum the complete lack of Entrepreneurial spirit and thought of some.

But tech why am I needing to explain this to you?

 

[Julia]

Originally Posted by Trembling Hand View Post
If a hedge fund offered you 20% return above Australian cash rate annually would you invest in that fund?

Nope.

I'm with Trev...No Thanks.

.

Me neither. I will never give any of my money to anyone else to manage.

No reflection on you personally, TH, but I can't believe how trusting people are. You're offered a 'guaranteed return'. What is your recourse if it doesn't happen?

 

[ROE]

No

My view of the hedge fund is you take in lot of other people money
you leverage up as far as you can, you place so called control bets
that could deliver huge return, not impossible, all possible

while the return is good you milk very nice fee, and if it doesn't
its someone else money you lose and you already rich from pocketing the fees ..the tricks is in the fees not the return

Suppose you got 10M for your fund and you can deliver 20+ return.
you milk 5% of that 10M each year for few years....you goes bust some year later....you already pocket a million plus for zero dollar down
that to you is more than 20% a year return compared to the people who put in the cash.

say you put in 1 dollar initially, 4 years you milk a million buck of fees
that an annual rate of return 3000% a year compounded for 4 years for someone who run the fund... 1 dollar - 1 million.

Long term capital has a formula for selling options that they thought was flawless, they make good money for a few years until the Russian default on their debts.

 

[Judd]

Go the Bell Curve. Three Standard Deviations will accommodate 98% of probabilities but, sadly, the 1% event cannot be accommodated.

Ergo, I don't believe.

 

[Trembling Hand]

Me neither. I will never give any of my money to anyone else to manage.

No reflection on you personally, TH, but I can't believe how trusting people are. You're offered a 'guaranteed return'. What is your recourse if it doesn't happen?

Julia and others fair enough. I understand the reaction thats why I started the thread. But in such a hypothetical situation you dudes are missing many details. Maybe even unfairly putting the idea down without any understanding.

In such a set up the money would NEVER leave YOUR account in YOUR name. FULL STOP.

Cash would be held in escrow to cover the guaranteed return. So its already there if the trading doesn't produce it. Like I said Guaranteed.

So would a draw down amount (20%) be held in escrow to cover losses in case of such.

 

[trainspotter]

https://www.aussiestockforums.com/for...ad.php?t=12683

and here from page 2,

https://www.aussiestockforums.com/for...=weekly+income

I think these need to be read first ... comment second. Opened my eyes up like this

 

[Trembling Hand]

No

My view of the hedge fund is you take in lot of other people money
you leverage up as far as you can, you place so called control bets
that could deliver huge return, not impossible, all possible

while the return is good you milk very nice fee, and if it doesn't
its someone else money you lose and you already rich from pocketing the fees ..the tricks is in the fees not the return

Suppose you got 10M for your fund and you can deliver 20+ return.
you milk 5% of that 10M each year for few years....you goes bust some year later....you already pocket a million plus for zero dollar down
that to you is more than 20% a year return compared to the people who put in the cash.

say you put in 1 dollar initially, 4 years you milk a million buck of fees
that an compound annual rate of return 3000% a year for 4 years for someone who run the fund... 1 dollar - 1 million.

Long term capital has a formula for selling options that they thought was flawless, they make good money for a few years until the Russian default on their debts.

Good one ROE did you even read the opening post? Because you are off on a rant that has nothing to do with what I'm talking about.

 

[brty]

Hi TH,

This thread is moving so quickly! For myself the answer is a clear No, but if you had a product available I know of others that would drop in many tens of thousands on my recommendation. Like many others here I have clearly learnt much more about you than I know of most hedge fund managers.

As tech said, Why? go down this path? If company is needed then open up an internet cafe and work from there, it doesn't matter if it makes no money. Same for thousand other things.

How much is enough?? Do you have plans to spend vast amounts, do you want/have a need, to be in the next 'Market Wizards' book??

There are plenty of people on this forum who obviously need someone to look after their money for them, your 20% guaranteed will be a huge winner, but I hope you are prepared for the grief the punters will give you for every minor setback.
I wish you well.

brty

 

[nunthewiser]

personally , id probably take a chance with the guy only on the basis of what ive seen here .

it would be of an amount i could afford to lose without stopping my progress in life

i would need more info on him tho other than being a forum/trading wizz

 

[jersey10]

personally , id probably take a chance with the guy only on the basis of what ive seen here .

Me too. I'd undertake his training program and trade for him as well.

 

[Timmy]

I think I got this offer straight

My money sits in an account in my name.
Capital guaranteed.
The return is guaranteed to be Aussie cash rate, with scope to go as high as 20%.

What do I have to do?
As far as I can see I sit on my ass watching TV and eating potato chips. (OK, I know I don’t have to do this, but this is what I would do).

Sounds great, I’m in.

The question you have, TH, is how I am going to feel after I get my 20% and I find out you made a lot more than that, right?

If I am a rational economic agent I shouldn’t care, my capital is guaranteed and my return is phenomenal compared with cash. People aren’t rational, though. I would be happy. Many people are driven by greed and jealousy, they wouldn’t be happy and would go off in search of a ‘fairer’ opportunity and give their money to sharks ready to exploit their greed and jealousy.

 

[doctorj]

Presuming we can agree a structure for the guarantee that gives me suitable comfort, where do I sign?

 

[Mr J]

No

My view of the hedge fund is

That's the problem. You're taking the bad apples of an industry and applying it to every fund.

Me too. I'd undertake his training program and trade for him as well.

Oh, I'd put my hand up for that.

I have no problems with 20% guaranteed, as I know how unlikely it is for an edge with volume to not be able to achieve that with smaller amounts. Those that have a problem with the guarantee probably aren't shorterm traders, and probably don't realise how reasonable it is to achieve year in year out.

 

[tech/a]

But tech why am I needing to explain this to you?

Has to be the offer of a Carton of Coopers when you cant get a drink in Melbourne.

Interesting exercise.
There are many who find themselves in the situation our hypothetical genius finds themselves.
Hedge Funds
Managed Funds
Bucket shops
Black Box methods
Grey Box methods.
Seminars
Training camps
Software.

There is a great deal of entrepreneurial business being offered in this industry.
get it right and You'll make far more than any trading will give you with less risk,and a better consistency.

But you cross a line from Trader and skills in trading to Business and Business skill. Amazing trader doesnt necessarily equate to amazing business operator.

My Daughters Boyfriend ---an excellent cabinet maker came to me all eager and wide eyed.
"Im going into my own business"
"Great what do yo know about it?"
"Everything I need to I've built most everything"
"Yeh but never a business".

Trading entrepeneurship is NO DIFFERENT.

The smart ones will realise that Building relationships is the key to building a strong business foundation.

Clearly Tech/a has NOTHING to sell now or in the future!!

By the way the using your own account method has been and is being done right now!
Not a duplicate of what your suggesting but a variant.

 

[Sean K]

Sounds like a good deal to me, but I've been doing better than 20% anually, so I'd be losing money. :

However, I do have some cash sitting around waiting for this mythical W5, so I could chip in a few bucks to see what happened.

Smells like a nice Ponzi in the making.

As long as it could eventually buy that barque trainspotter is floating about on after 5 years. Deal.

 

[gooner]

Presuming we can agree a structure for the guarantee that gives me suitable comfort, where do I sign?

Which is the crux of the matter. Your standard capital guaranteed product will have a guarantee from one of the majors, which carry a AA credit rating. So not actually guaranteed, but you have a AA level of confidence which is pretty good, as long as you are will to put aside the Standard and Poors debacles over recent years.

TH is saying 20% guaranteed. I am not aware of any product that offers 20% guaranteed and has actually turned out to be genuine. Of course, TH could put in $20 of his own money for each $100 an investor puts in and lock this up, but then what is the point of that. We all gain at TH's expense ..........

There again, give TH's penchant for flaming, I would not have a problem with that.

 

[Ageo]

TH as long as we meet for coffee and i know where to find you incase the deal went sour i would have no problem with 20%.