If you were to start your own HF what would your strategy be?
Bored and waiting for asian markets to open so I am curious what you all would gravitate towards. I am not stealing your ideas as I prefer to go value over majority. I am just curious what you all like.
I prefer shitcoins and going long on amc. I will try to hedge with my analyst, Chad, using his dads wealth to long any investment.
In my dreams I would have a few teams, divided by strategy, one PM and a few analysts/quant per team :
1 l/s equity funda
1 quant equity
1 global macro
1 special sit
1 commo
A kind of mini MM haha
I am not sure if it would be the smartest way to run, but would love to see
why commo?
Definitely beta/market neutral for me. Some of the smartest investors I’ve seen/met in this industry that have sleeves at top funds with full autonomy or have started their own funds have been successful running this strategy. In my opinion strategies with high sharpe/lower vol are the best way to navigate the market.
My strategy would be to do the exact opposite of what Cramer says
https://unusualwhales.com/etfs looks like short Cramer is up almost 11%, the Pelosi ETF is also beating the market 😤😤😤
This is sort of tangential to strategy - but I personally don't think an open-ended hedge fund would be the right move. It's too competitive, too volatile. I'd actually go for closed-end funds with lock-outs. There's plenty of long-term illiquid opportunities with high levered carry available, all you need to do is avoid the mark-to-market. So I suppose I'm saying I'd start a private equity firm rather than a hedge fund. Lines are blurred these days anyway.
Small-micro cap (illiquid/underfollowed) public positions that larger funds can't hold. Mostly equity but would want flexibility to move across the cap structure if I thought something was interesting
Naturally very size constrained but I think one of the few pockets of the market where you can add value
Tbh I just want to make enough money to run this strategy on my own and not worry about outside capital lol
What market caps are we talking about? Companies $500m? If that's the case, wouldn't it be more optimal to do a take-private & LBO to capture the value by yourself without having to wait for the market to change its mind? It's not like your micro caps will be growth stocks anyway so we can expect sufficient cashflow to support the use of leverage.
A lot more manpower/cost is required to be taking a portfolio private and also requires a different skillet that I do not possess. Also may not always be wanting to own the business for traditional reasons (I.e. It could be a shitty business but have some other fhndamental/technical dynamic that makes something in the cap structure attractive).
If I were ever wealthy I'd love to own a couple small businesses privately, though. A few former clients I worked with pooled their money to buy a few businesses for themselves and it seemed like an interesting way to invest.
Buy low sell high
Straight arb. All arb. Risk arb, index rebal arb, SPAC arb, quant stuff, and other random arb. It's sick; pure alpha. Hold positions for like a few weeks / months top. Purest form of investing IMO and it makes so much sense. Fascinating. Idk abt you guys but I find this form of investing so interesting
Starting to believe that mkts are inefficient / mispricings exist, but most mispricings are technical and not driven by fundamentals. Goal of fund would be to take advantage of these. Would print money with the right minds
Merger arbitrage is barely profitable because everyone does it, SPACs are dead. Index rebal, why not, although you need to be massively leveraged to make real money. Sure you're not a bit too enamored with quant shit?
Global Macro and the whole “masters of the universe” spiel
Honestly I would rather build out a desk at an established fund. Having a backing from upper management and being able to lead the firm's foray into a new strategy appeals to me.
Activist. :-)
Thoughts on Ackman dropping his aggressive activism?
https://www.institutionalinvestor.com/article/b1xgm75lj26k2k/Why-Is-Bil…
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