HF Momentum Trading PM
been working with this PM for some years.
He has always been judging investment recommendations based on daily/weekly share price movements, without putting in much thought into the core investment thesis. The result is excessive buying and shorting the same stock back and forth. The thesis kept changing when the share price moved against us.
In essence, it's churning trade ideas, capturing profits until it ends, or cutting losses before it blows up.
This makes the analyst's life extremely difficult. Sometimes you are right in 6 months but the share price moves against you in the first month, a good idea turned out to be a loss.
Does anyone here have a similar experience? care to share you experience?
This is 90% of discretionary PMs. That’s why 90% of them get fired
How long is his/her track record? Did he stay in the market for a while? As long as he can pick them correctly, he should be doing alright - I know, this is a million dollar question for anyone. Also, you can try to look at the problems from different perspective. Probably for him, he's more looking for behavioural alpha based on how stocks are reacting - or "price reactions." From analysts' perspective, some of them tend to ignore valuable information on price action because they are so focused on fundamentals/valuation of the firm. If you can find the balance between the two where you are not too narrowly focused on valuation, while continuously monitoring price actions, you may find the holy grail in trading.
My PM (at a big 4 HF) is exactly the same, he's been successful doing this for the last 15 years.
I quiet don't understand why he hired me as an analyst since he's basically doing short term trading without real thesis plays.
It's the worst setup to grow as an analyst. I'm looking to move elsewhere for this precise reason, even though I could sleep at my desk and have a decent bonus every year.
Because he wants to fade you
Classic PM that hire fundamental/intellectual/pedigreed analysts just for show (marketing-wise)
I'm a PM at a known multi-strat but I know how PMs trade well. People always underappeciate just how much of the game is smoke and mirrors. Unless you're running pure algo 100% systematic with zero PM input, it's all just discretionary price action trading. The majority of great PMs will explain their process and method to you, which sounds complex/specific/etc, but if you ever watch them trade, there's no correlation to what they explained. It looks random, and really it's just intuition and random quirks they've uncovered that deliver alpha.This applies to the greats like paul tudor jones, soros, druckenmiller, etc. They'll give you this eloquent pitch then bail on the trade 15 mintues later cus they don't like the price action and some broker's tipped them off to some flow they don't want to get in the way of.
Haha actually, this is not as terrible as u think…. Would you rather prefer a super process driven/ only trade on fundamentals PM? Think twice before you answer that. Your PM sounds like someone who has survived the pod world and knows what he is doing. A lot to learn from someone like that and as an analyst that’s what matters the most. At the end making money > blowing up and he’s not always gonna trade to your fundamental calls and that’s part of the deal
We didn’t survive the 2020-2021 boom years due to high portfolio turnover. We didn’t even capture 20% of the upside. Back then, a 10% downward swing was determined as thesis broken, hence throw the idea into dustbin, never touch again. Then the fundamentals improved dramatically, missed all upside
well. I understand the difference between fundamental call and trading call. sometimes he does not understand the difference. As long as the price is going up this week, he firmly believes that the fundamental is strong and I'm wrong. next week, market hype dissipates but sells too late.
if you say hes been doing this for 15 years and hasn't gotten fired, maybe you should pause to think he is, in fact, right and you are wrong
Facts!! If anything, OP is lucky to be under someone who knows how to play the MM game efficiently.
Who gives a shit if he makes decisions on fundamentals or not. If he’s survived the pod game for 15 years, I’d just be doing what he does so I can be rich as fuck
1) His strategy is definitely not scalable.
2) If we simulate his last 15years an infinite number of times, I'm not sure his average number of years survived would be that good.
3) I don't really care about making short term money for the moment, I rather have very solid bases and a some sort of mentorship since I want to last long and why not launching my own fund.
4) If platform hedge fund keeps growing, I'm also not convinced this strategy will keep working as it did.
Hi there.
i believe we work for the same type of PM who focuses on short-term trading, and generating ideas based on 1D or 5D charts.
I am repeatedly told this over-generalized statement that the market is always right. so even when the market is price-to-dream, it is right. How can we as fundamental analysts predict the irrational behavior of the market all the time?
Do you always get shot down for your thesis, or explanation whenever the market goes against you? no chance to explain?
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