Q v3
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Best Public Markets Gig? ER, MM HF, SM HF, or LO AM? | 13 | 3d | ||
+40 | Looking for a Fund Manager to partner with to start a new fund. | 23 | 1h | |
+34 | Law to Quant Pivot? | 10 | 3d | |
+23 | Starting Personal Account | 12 | 1d | |
+22 | People who work at hedge funds, what made you interested initially? | 13 | 2d | |
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+19 | Hedge Fund WLB | 6 | 2d | |
+17 | Most appealing public credit seats out of RX? | 1 | 6d | |
+16 | good fundamentals, bad chart | 8 | 3d | |
+16 | Any R course recommendations? | 12 | 10h |
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why do you think they do it
this is such a dumb & poorly phrased question
X
A long/short manager adds value through the spread between their shorts and longs. If the market rips 20% and your long book goes up 30% while your short book is up 10%, then you've done very well, even though your shorts have lost value.
... done very well? you mean performed exactly like the market..
This hypothetical 20% spread is alpha, not beta.
if you're just playing the intra-sector spread, doesn't matter. just need shorts to underperform longs.
if your shorts are meant to be standalone profit generators, >20% over next 12 months.
it depends on how long you intend to hold the position....generally you are targeting at least 20% annually....but if uoi only intend to hold a position for a few days/weeks....then do the math. 1 year = ~250 trading days 1/250 = .04%
So, you would hope/expect to average 0.04% per day...and so for example, if you make 1% on an outright short position in 1 day...that = 25 days worth of "annualized return" (the equiv of making IRR of 20%*25 = 500% annualized).
Not all position are intended to be held for the long term. If you can make 1% here and 1% there...over the year that can add up to big $$
Prob as long as the investment makes money on its own that may be acceptable
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