Alright so, there are two guys at my non-target school that are really starting to get on my nerves. One of them is a biology major and the other is an econ major. They both have ~2.0 GPAs and have very weak quantitative skills (took calc1 with both of them and they both failed, even though it's a ridiculously easy class).
Now, for some strange reason these two numskulls are completely convinced that upon graduation they are going to launch a successful hedge fund and become millionaires within a year. They have absolutely no experience in the finance industry and neither of them have ever so much as set foot within a financial institution front office, even though they are both set to graduate next December. When I asked them how they would select investments and generate trading ideas they promptly replied that, "it would be easy, and that they would use a combination of 'point and figure charting,' technical analysis,and strategies they learned from reading the book, "Security Analysis"
When I asked them why they wouldn't do an internship or do an analyst gig first in order to learn about the industry they said, "F**K that! I'm never going to work for someone else!" and they told me to read the book "Think and Grow Rich" and to learn about the "law of attraction."
So I was wondering, what do you guys think of this? And what do you think I should say to these guys? I've been in countless arguments with them in the past and they are so stubborn on their points it seems to me that they may very well go through with attempting to start this hedge fund... and we all know how that's going to turn out...
Wow that'll be an epic failure.
Why the hell would you even waste time on these guys? Just sit back, relax, get some popcorn and watch the hilarity ensue.
Exactly. Grab a beer and laugh as they spontaneously combust.
inb4 lumina investment
Totally.
You must be going to school with these chumpstains:
http://nymag.com/daily/intel/2012/10/worlds-most-oblivious-hedge-fund.h…
Constantly ask them what positions they have on and take the other side of those positions in your personal account. You should double your account within a year, without any leverage.
I met a guy who basically did the same (he worked as an analyst for 2 years at a no-name mutual fund) and hes not doing so bad right now. He's in his late 20s and runs a 100M multi-family office doing FoF, equity long/short, and VC investments.
If you're really rich and your parents can teach you how to invest, the only reason to do some analyst program is to meet people and to expose yourself to different investing styles.
Can't tell if serious
you really didn't need to post this lol.
tons of people like this in the world.
And why beholdest thou the mote that is in thy brother's eye, but considerest not the beam that is in thine own eye?
Oh I get it.. this is one of those 'my "friend" may have slept with a hooker without a condom, should he get checked out thing?' Of course this is a good idea. Go for it
You're not the only one who has seen people like them. Personally I would sit back and let them try. I'm not the one giving them money so....
How can I invest? Very interested in their strategies, would like to hear more
They will likely get run over, but I'll take the other side of the argument. The experience they will gain from this, regardless of how they do, will be incredible. They will also be privy to some incredible networking that most undergrads won't ever encounter. Furthermore, imagine the conversation they could hold in an interview, should they eventually want to work in the finance industry, about the successes and failures they encountered. I'm not at all saying the way these guys are going about this is right, but I think too few people take paths less traveled after school.
Oh, come on, you don't have to be a quantitative guru to run a hedge fund, you can hire a quantitative guru.
In other words, all your mates need to do is hire the right people, then sit back and sip the champagne when it starts flowing.
Allan Mecham
This guy never finished college and now runs a mutual fund with 100 million AUM and has posted returns of more than 400 percent over a 12 year stretch.
http://www.smartmoney.com/invest/strategies/the-400-man-1328818316857/
This sounds like the guys in every intro CS class who are "totally going to make an awesome video game" after graduation. They could potentially be successful...but the odds are not good. Terrible, actually. Probably lower odds than every waitress/receptionist/stripper who wants to be an "actress".
Just ask them if they know what a 13-f is. Hell, ask them what the SEC is. These guys sound like they read one investing book and now think it's easy. Which is the equivalent of reading "The Universe in a Nutshell" and saying that you'll become a physicist.
Don't think they'll have to worry about filing 13Fs...
OP, why let this bother you? If they succeed, good for them--there are always exceptions to the rule. If they fail, will anyone be shocked? Probably just them. That being said, how are they raising capital? That should tell you how serious they are about this and how much (read: little) they know about what it takes to make it.
Should be interesting how they attempt to get funding unless as someone said, they come from a rich family so can leverage their family network and lose it all.
Yeah I asked them about that too... they come from very working class families so they are going to start out with un accredited investors. They plan on doing this by keeping the overall number of investors in their fund low when they are starting out.
This is the kind of thing class action lawyers fap to.
So they are going to start out with a limited number of investors who aren't in a position to invest substantial amounts. Ignoring the legal consequences of non-accredited investors, how exactly are they going to generate sufficient management fees to pay rent?
why don't you whine some more?
You sound like a 5 year old who isnt getting that much attention.
Black swans happen, but reading two books doesn't help this happen.
Never underestimate!!!! THE KING Carl Ichan got started like this. He borrowed money from rich uncle.
carl icahn also put himself through princeton by playing poker. i have a feeling that these two knuckleheads aren't quite as clever.
Yes! You are right! He did play poker and got philosophy degree from Princeton.
You should tell them not to beg you for rides when they can't pay for gas.
Encourage it and then laugh your ass off everytime they come to you with failure stories. I wouldn't feel guilty doing this if I were you b/c you've tried to help them already.They're not gonna find the money to get off the ground and if I'm wrong then whoever invests with them has got to be a complete idiot. Play along with them and laugh at their stupidity or stop worrying about them and find something better to do with your time. It's probably just a fad with these guys. Some people deserve to be humored; these guys are asking for it.
:D
seems like you already envy them. :P
seems like you already envy them. :P
Drooling with envy
Typical jokes far detached from reality that assume it is easy.
Encourage them with overly enthusiastic comments like "Damn you guys really do know your shit." and "Yea honestly a bio major really does prepare you well for stock picking".
Then give them a link to the Lumina fund as evidence.
Then, most importantly, keep posting about them.
good story)
LOL i know these two guys. They pop Vyvanse before trading, and do not believe in the education system. FTM and I, think that they have both gone mad after reading the book "Think and Grow Rich" and by watching the film "The Secret". One of them them told us that, "If one thinks hard enough, they could be able to fly"...
As much as it pains me to say this... this is all true.
Priceless.
College Grad Starting Hedge Fund (Originally Posted: 03/22/2015)
I know this an out of the blue question but I just wanted to get some feedback. I am a current senior at a tier one college with a job offer in corporate banking at a BB firm in NYC and a job offer at one of the best proprietary trading firms in NYC. Over the last 4 years I have annualized a 47% return and grew my personal portfolio to north of 600,000$ dollars. In addition to this I inherited around 40 million dollars from my grandfather almost all in the form of Hedge Fund Investments. My family has always had close ties to the HF industry so I have been able to keep the money with the managers as we were some of their first investors. The managers include David Tepper, Ed Mule, Bill Ackman, Chuck Davidson, Alan Fournier, and a few others. I am very reluctant to withdraw any of this money out of Tepper, Mule, Ackman, and Fournier, however that does leave me with about 7 million dollars. Based on my returns many Fund of Fund managers have recommended that I start my own fund, and two of the FOF's said they would contribute 5 million each, I also have an older business colleague who is ready to add a million dollars. I assume if i did some active fund raising I could raise about 5 million more dollars. In addition I have a trader from a top notch BB ready to quite is job and join me as a partner, and I also have a young man lined up to be head of fund raising who currently does fundraising for one of the major PE firms, I won't specify the firm but it is either Carlyle, Blackstone, or KKR. Long story short I have had tremendous success so far investing, but I still have loads to learn and I have been investing in a one way market. All in all do you think I should pursue the HF dream right out of college or continue my training go to business school and then try to branch off on my own. Many Thanks.
Word.
take that as a yes?
The hard thing is who you are going to pull money from, the disaster at Everest Capital made that an easy decision so I can get out of all that, maybe get rid of some perry partners, and definitely Xanthus and Susa. Tepper, Fournier, silverpoint, and york are off the table.
The hard thing is who you are going to pull money from, the disaster at Everest Capital made that an easy decision so I can get out of all that, maybe get rid of some perry partners, and definitely Xanthus and Susa. Tepper, Fournier, silverpoint, and york are off the table.
The hard thing is who you are going to pull money from, the disaster at Everest Capital made that an easy decision so I can get out of all that, maybe get rid of some perry partners, and definitely Xanthus and Susa. Tepper, Fournier, silverpoint, and york are off the table.
you seem like a good dude btw, find it funny how 3/4 of this site flips out when u say u have money and they all act like they are fucking masters of the universe hahaha
The problem is what managers to cut down on. The debacle at Everest Capital made getting out of Everest an easy decision. Could cut down on Perry Partners, as well as Xanthus and Susa. Appaloosa, Pershing Square, York, Pennant, and Silverpoint I would never take a dollar from.
guess not a bad problem to have
What the hell is going on in here?
i am completely confused. did you just have a three way dialogue by yourself?
.
No he didnt
yah my thing is fucked up and sometimes posts the same thing multiple times.
but why does it look like it?
He definitely did.
Get rich(ER) or die trying? In my opinion, you're obviously extremely well off and have no need to work a day in your life (depending on how affluently you want to live). With this, I would personally strive to land a job in a HF as an analyst and climb your way through the ranks (at least 4-6 years). This way you will learn way more than if you decide to just jump ship and try to start a fund, and you will be more optimally able to manage money and invest. Running a hedge fund isn't as easy as "I've crushed it in my personal account and have access to millions so I can start my own HF". You have to manage clients and their expectations, manage risk and return on a level so critical I doubt you're ready for it now, and much more.
100% agree with you, the only clients I have right now are close family and friends and to be honest I started off with a real bang buying Intermune for all my clients so I haven't had many complaints and I have performed very well. That being said you are totally correct. Being in a family that is lucky enough to have gotten into the fund of funds business at a very optimal time, early 90's, back when you could invest 400,000$ with David tepper and Jack Walton (peppers original business partner) I'm very used to being on the customer side. We personally try to be as least disruptive as possible and in return u get much better service. As you said you can have some real obnoxious people as well, and being 23 I agree i do not believe I am ready to handle it, although I do have a team in place and investors lined up when/if we make that decision. BTW my thing is fucked up and it posts my comments like 3 times.
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