These traders are doin' OK!

[BSD]

Is making a 10% annualised return make you a good trader? Apparently not to the vast majority of people who have no respect for risk adjusted returns.

They have been trading for 16-years with an annualised return circa 10%.

Exactly right.

'Risk adjusted' is the key and the further we get from the last bear market the more people forget.

 

[Realist]

Is making a 10% annualised return make you a good trader?

After all expenses and taxes are removed the answer is..

Not last year.

But over the longterm, the last 16 years, probably the next 10 years, yes 10% annual return is quite good.

I'm amazed at the people that think they can consistently and significantly outdo the market. Many have tried, few have succeeded.

I think my signature says it all about this subject.

 

[NettAssets]

Chicken & Egg.. or a good business model?
.....
Assuming Richard Grinham was straight out of Uni 16-years ago, what capital do you think he started with to making $30m a year from trading profits at 10% annualised?
......

Do these guys usually start as trainee with another trader or do they get an account with an overseer
JohnH

 

[BSD]

Realist, these blokes and some others like them, are generating these returns with volatility akin to a bank bill.

Your strategy (and your volatility) is essentially linked to the equity market of one country.

That is what makes the difference.


That said, you need to also understand how they are making the money before getting excited.

If they are clipping small tickets but remaining exposed to some fat tail event - the low vol may be a mirage.

I am not familiar with the strategy of these guys.

 

[Staybaker]

OK, I found the article I referred to earlier - it's available here.

Top-ranked Renaissance Technologies (James Simons) returned 29.5 percent net last year - the "net" result being after a 5% management fee and a 44% performance fee were taken out. The gross return was 60%. It has a 34% annualized net return since its 1988 inception. Pretty impressive. No mention of risk-adjusted return or Sharpe ratio, though.

Cheers, Staybaker.

 

[professor_frink]

Chicken & Egg.. or a good business model?

Is making a 10% annualised return make you a good trader? Apparently not to the vast majority of people who have no respect for risk adjusted returns.
However, in the world of alternative investments its everything. Let's assume my info on the Grinhams is correct (I personally know them so we might be able to squeeze that assumption through), they have been trading for 16-years with an annualised return circa 10%.

Look at Echardt. He has an annualised return of 27% yet manages just $250m. This is because his maxDD is closer to 40% and is too volatile. Whereas someone like Crabel who has an annualised return nearer 10% with a minimal drawdown managed over US$1 bill because he is Mr Consistent AND Mr Low Risk.

Assuming Richard Grinham was straight out of Uni 16-years ago, what capital do you think he started with to making $30m a year from trading profits at 10% annualised?

Also note that many of these fund manager DO NOT have their own funds in the same fund. Some do, yes, but others don't. This is because it allows them to remain psychologically detached from the process and not tinker with the system during bad times.

Hi nick,
Is there anywhere I can find out about the returns/drawdown of some of these people? Is there a website somewhere that lists this kind of thing?

 

[Shane Baker]

PF

http://www.iasg.com

Cheers

Shane

 

[professor_frink]

thanks for that shane

 

[Nick Radge]

Anyone read BRW Yound Rich List? The boys Grinham moved to #2, up $200m this last year.

 

[robots]

hello,

look at rozella's tech, looks like he is creaming most of the big names

wouldnt mind seeing him controlling those sort of sums


thankyou
robots

 

[Milk Man]

Anyone read BRW Yound Rich List? The boys Grinham moved to #2, up $200m this last year.

Just one problem Nick. Under 40 doesn't make you young. :
Pass on my congrats to them.

 

[nizar]

Chicken & Egg.. or a good business model?

Is making a 10% annualised return make you a good trader? Apparently not to the vast majority of people who have no respect for risk adjusted returns.
However, in the world of alternative investments its everything. Let's assume my info on the Grinhams is correct (I personally know them so we might be able to squeeze that assumption through), they have been trading for 16-years with an annualised return circa 10%.

Look at Echardt. He has an annualised return of 27% yet manages just $250m. This is because his maxDD is closer to 40% and is too volatile. Whereas someone like Crabel who has an annualised return nearer 10% with a minimal drawdown managed over US$1 bill because he is Mr Consistent AND Mr Low Risk.

Assuming Richard Grinham was straight out of Uni 16-years ago, what capital do you think he started with to making $30m a year from trading profits at 10% annualised?

Also note that many of these fund manager DO NOT have their own funds in the same fund. Some do, yes, but others don't. This is because it allows them to remain psychologically detached from the process and not tinker with the system during bad times.

Interesting post Nick...