20% above cash guaranteed: Would you invest?

[Trembling Hand]

please show evidence of exactly how you can beat all the other investments out there....then secondly why would you want to share the profits...
if your scheme is so good...where is the proof....
and why would you be any different to say Bernie Maddoff...or Storm...or any of the others, who promised similar returns ...wink wink, nudge nudge
why dont you borrow the money and make your plus 20% returns....
oh and I can see ample evidence just on this thread, of how people would rush into these sorts of schemes....

back to square 1.............................. again

 

[professor_frink]

Krusty the funny thing is I'm not trading the last two days because I'm meant to be doing all my tax for the accountant to get by end of today. I'm off on a little holiday tomorrow.

But I've started this mess. Whats that thing about 1st things 1st and taking care of biz

Some of the replies on this thread should be more than enough to put you off ever seriously thinking about managing OPM.

 

[tech/a]

T/H

The replies in this thread should make it blatantly obvious why more have and dont do what your proposing.

The whole Idea initially is to escape the Crapp.

Go outside the Cone of silence and back to Crapp.
Business = Crapp.
Self Sufficient Dictatorship = Peace.

Oh did I mention the quick couple this morning.
An 85% increase on yeterdays profits.
Hmmm maybe 20 others could be enticed?

 

[jonojpsg]

I'm in TH - it's funny you have started this up though, I have thought in the time since I started on ASF that given the nature of this forum that someone would have done this before? Maybe all the constraints you have mentioned are too big for most to bother trying to get around?

Anyway, are you aiming for some critical mass of positive resonses or do we just wait and hope

BTW who cares if you're making and taking 60% of the profit - if you can get me 23%pa consistently I'll take it.

 

[Mr J]

Arent these 'to good to be true' investments called a Ponzi Scheme?

Too good to be true? Maybe if it's available to the public, and I'm sure it won't be. Sharp money takes the good opportunities.

please show evidence of exactly how you can beat all the other investments out there....then secondly why would you want to share the profits...
if your scheme is so good...where is the proof....
and why would you be any different to say Bernie Maddoff...or Storm...or any of the others, who promised similar returns ...wink wink, nudge nudge
why dont you borrow the money and make your plus 20% returns....
oh and I can see ample evidence just on this thread, of how people would rush into these sorts of schemes....

1. The other investments? Like with Macquarie or something?
2. Share profits? No, he wants a larger capital base so he can achieve greater profits for himself.
3. If he's a good shorterm trader, I think that is proof enough.
4. Because he can trade.
5. TH?
6. Most people in this thread are skeptical at best.

Obvious stuff, why the questions?

 

[Bushman]

Some of the replies on this thread should be more than enough to put you off ever seriously thinking about managing OPM.

Lol; if you are too emotive about every skeptic then you will be burnt out in no time.

Money = security = primal instincts. As a business man, you should obviously know that investors will put you through the wringer and there is no such thing as a free lunch.

Also the 20% range brings up some classic f**k ups from the last couple of years. Westpoint & Fincorp come readily to mind but I am sure the hedgies will have their examples too. Not dissing anyone's system - rather use it to demonstrate why other investors might be skeptical of a +20% return.

 

[kincella]

whatever...I am already making 22.9% on an investment, which I manage, and will do it again when I find another commercial prop....
cheers
and I would never trust anyone else with my money

 

[overit]

Sounds like you would be better off offering industry standard return and not telling others how much money you are really making from their money! Win-win as you get more money and people are strangely happier that you havent deviated from "conventional" parameters.

No good deed goes unpunished.

 

[Trembling Hand]

Now as this is a "hypothetical" and you would be asked to ignore the fact that my last name is Madoff the most important thing with any ponzi scheme is to get control of the cash away from your "clients" control and supervision. Correct??

Which by the by is not the structure my hypothetical idea would be based on. Maybe more on that later.

But as I just commented to my wife, Ruth Madoff, it is disappointing though that for a stock forum full of supposedly hot blooded capitalist the best business discussion you can get is what account would the funds be held in. And why would I bother?

So here is an idea. Lets say we have wrapped up water tight, to your satisfaction, the bond covering guarantee. OK?

I am gob smacked that no one has seen the leverage I would get for my initial "investment" after the first year. What kind of exceptional wealth (Tech )that would create compounded for 5 years for example, assuming (thats for you gooner ) that I can crack a system that has positive expectancy greater than 20% per year.

comments??

 

[prawn_86]

comments??

You would be effin rich. Even rich enough to fund your expensive lifestyle and put away money for the future generations of little trembling hands

 

[Mr J]

I am gob smacked that no one has seen the leverage I would get for my initial "investment" after the first year.

Ehem:

2. Share profits? No, he wants a larger capital base so he can achieve greater profits for himself.

 

[Ageo]

So when we gonna catch up for that coffee TH :

 

[Bushman]

Ok I needed to do the sums.

Ok, hypothetically, you have $1m sitting in a cash account.

You want to guarantee LIBOR + 20% with the 20% backed by your cash account. So you can accomodate 5 'sophisticated investors' at $1m each. $5m is invested in the overnight market earning the cash rate.

You take your $5m and, through superior trading skills, earn a p.a. return of 60% on your $5m ($3m), $1m of which must be paid to your five investors.

So now your capital account grows by $2m, meaning that you can raise a further $10m from punters.

Ad infinitum.

Your trading skills presumable allow you to leverage up against your capital and, given you are a nefarious hedge fund raising money under an IM, you are able to seriously leverage up your positions in the short-term, allowing you to make your 60%. From my laymans grasp of your trading style, you are 100% cash overnight?

Is this the plan? I can see how this would pay-off in FUM terms if you make it through the first year and presuming you can, indeed, beat your guaranteed return. It is a 'velocity of money' type scheme.

How would you handle redemptions i.e. a run on the fund?

Edit: actually, given you close out your intra-day positions, no need to worry about a run on given your short-term trading objective. So you will be 100% cash and be able to exit the scheme after paying out your 20% guarantee at any time. Also you will profit if you do not re-invest 100% of your profits into your capital account and take investor funds against that capital. So it really comes down to your trading and money management skill and making sure you don't blow a hole in the account through a leveraged position moving against you.

 

[Trembling Hand]

Edit: actually, given you close out your intra-day positions, no need to worry about a run on given your short-term trading objective. So you will be 100% cash and be able to exit the scheme after paying out your 20% guarantee at any time. Also you will profit if you do not re-invest 100% of your profits into your capital account and take investor funds against that capital. So it really comes down to your trading and money management skill and making sure you don't blow a hole in the account through a leveraged position moving against you.

Now we are getting somewhere, hypothetically of course.

So If we can lock away the guarantee problem of merely an administrative problem ie something for lawyers & bean counters to figure out. And we can even set up accounts so the money stays in the investors accounts Name such as this to alleviate the ponzi scheme problem.

The question becomes one of can a day trader or group of day traders trade size and make over 20% per year without a significant drawdown?

 

[MACCA350]

whatever...I am already making 22.9% on an investment, which I manage, and will do it again when I find another commercial prop....
cheers
and I would never trust anyone else with my money

70% return on investment after 9 months through shares(after costs), I want to crack 100% by 12 months

cheers

 

[gfresh]

These may be stupid questions, however:

1/ As far as I can gather your method of trading works on exploiting inefficiencies in the bid and ask que on the futures every few seconds... surely as you are trying to provide greater dollar returns to get your 20% y/oy you have to trade more and more money around these areas, in the end say millions of dollars at a time, therefore providing the liquidity, the lack of which you are exploiting?

2/ Assuming you are eventually recruiting more and more trading cohorts as your capital base grows, don't you run the risk that you are effectively trading against yourself in the bid/ask if they are all running a similar trading method?

 

[Cartman]

Now we are getting somewhere, hypothetically of course.

So If we can lock away the guarantee problem of merely an administrative problem ie something for lawyers & bean counters to figure out. And we can even set up accounts so the money stays in the investors accounts Name such as this to alleviate the ponzi scheme problem.

The question becomes one of can a day trader or group of day traders trade size and make over 20% per year without a significant drawdown?

Interesting stuff TH ---- not too many traders would back themselves to perform at those levels guaranteed --- with their own doe !!!

For those that don’t realise --- you are taking all the risk in the proposed scenario --- the punters money is simply a means to an end for u to achieve the leverage u need to multiply your returns exponentially ---

Couple of questions;

Hypothetically speaking --- I assume u may have an imaginary start up capital base u would consider being suitable to get started with? --- ie too small, no real advantage --- too large, might (maybe not) create unnecessary performance anxiety early in the scenario??

I don’t doubt your ability and confidence for a second, but how would your psych handle the pressure of the extra size required to be traded to cover the punters investment guarantee -------- cause u r essentially using your money to create the trading profit ---- and -----

Once u prove your ability to the mass of punters (cause i know u would -- and get a squillion more punters jumping on board, is there a point where the instruments u r trading become liable to under-performing ie the size u need to trade becomes restrictive instead of productive (not saying there is a ceiling on that, but do u have a perceived area where the rate of decay sets in ---- ie no more punters allowed unless I drop the guaranteed rate of return)

Cheers ---- good thread.

 

[Naked shorts]

Some of the replies on this thread should be more than enough to put you off ever seriously thinking about managing OPM.

+1
A fund manager once told me trying to raise funds was the worst thing they ever had to deal with, basically all investors are clueless.

 

[MR.]

The question becomes one of can a day trader or group of day traders trade size and make over 20% per year without a significant drawdown?

Once u prove your ability to the mass of punters (cause i know u would -- and get a squillion more punters jumping on board, is there a point where the instruments u r trading become liable to under-performing ie the size u need to trade becomes restrictive instead of productive (not saying there is a ceiling on that, but do u have a perceived area where the rate of decay sets in ---- ie no more punters allowed unless I drop the guaranteed rate of return)

Cheers ---- good thread.

At a guess wonder in Madoff began in a similar way but couldn't continue to show the same returns. So he made them up! I bet even he wonders where he turned the corner. Get this straight, I'm not suggesting TH would think down that track but volume certainly is a barrier. And ofcoarse this is just a discussion.

Before Cartmans post I was thinking more about from point A (as you trade now) to B (a sizable increase on what you trade and what you are used to)

Surely just from A-B would dent your current record without intoducing a C.


As for the original question off memory it matters not what your cut is, it is what you can show as a return for the investor.

 

[Trembling Hand]

Nah gfresh

Point 1/ not so.

Point 2/ the markets deep enough. Plenty so.