What's the fuss about HFs and investing? As a 17 year old who read around 15-20 books about economics/finance, even for me investing is really easy. Also ,why do billionaires give their money to HFs??
I'm a 17-year-old high-school senior. When I was 15, my parents bought me a couple of economics 101 and investing 101 books, then opened me a custodial brokerage account and gave me $3000 dollars to learn about 'personal finance' and 'investing'. I invested $2000 of it in securities and the rest of it in crypto. (Don't ask me about my crypto returns, it's the biggest scam of our century and I didn't know that). It feels like I exceeded their expectations and should manage their portfolio but yeah... I'm 17 so that's not happening any time soon.
Since I'm killing it at math at school and made better returns than most hedge funds out there in 2 years, we could say that I may be a financial genius.
I saw the returns of hedge funds this year and I'm laughing at them for months. On this forum, everyone talks about hedge funds like Tiger and Viking or tiger cubs but even they're down what like %50-%60? How is this happening? Do they not know that Inflation -> Higher Product Prices/Higher Stock Prices -> Decrease in Consumer Confidence -> Central Bank Policy Change -> Increase in Interest Rates to Stabilize Inflation -> Higher Currency Value, and Lower Stock Prices. Come on its econ 101
You guys are talking about these guys and saying things like 'They only hire the smartest guys from Harvard/Wharton/Stanford' or 'You can only go there from MF PEs' but these guys don't even know how the inflation causes central banks to change their fiscal policies and increase their interest rates, thus making the currency more valuable while slowing down the economy and decreasing the prices of stocks.
If these are the guys that are getting paid millions of dollars, by the time I'm 40, probably I will be a multi-billionaire.
My parents opened my account around August 2020.
My 2020-21 performance: I bought a couple of hotel stocks since their value was down like %50 because of COVID. The books I read were mentioning BB IBs a lot, so I also bought their stocks. Then because I love Warren Buffet and watched his videos a lot, I also bought a couple of more traditional stocks like VISA, etc. My 2020-21 return was around %54.
My 2021-2022 performance: I live in Europe, and because of the green transformation, every newspaper was basically mentioning the possibility of an increase in natural gas prices so I thought buying a natural gas ETF would be good. I bought my first ETF. My 2021-22 returns were closer to %70 when I was in profit close to %120 with my ETF, but now I'm down to %41 - still better than most hedge funds though. Because I'm smart enough to not forget Econ 101, I didn't long any securities except my ETF this year. I shorted big tech stocks, some traditional stocks, and a stock of a BB IB. My current yearly return is around %41.
I didn't even value stocks or did an technical analysis or something. I just looked at it from an economical macro perspective and picked stocks according to the news and my personal analysis. Still, made better returns than most HFs.
I don't really see the point for billionaires to give their money to HFs when they're basically losing %50 of their money. Why are they giving their money to HFs?
This is not satire btw. I just tried to sound a bit cocky in my post to feel cool and because I outperformed people who studied at Ivy League schools. My question is still valid
SB for satires
Console yourself into believing that this is satire. May help to ease the pain you feel from your yearly returns.
Nice troll lmao
Fast forward to "Investing at 17 is paradise"
What's all this fuss about medical school? I read WebMD for two weeks straight and am able to diagnose my illnesses with 95% accuracy. Allegedly these med schools only take the best and brightest but I could easily outperform Stanford's brightest, all I need is access to my PC. Even the specialty areas of medicine arent all that difficult. I have practiced surgery on many of the homeless people roaming my city via Youtube videos I watched online. This is not satire and I am not a troll.
Yours truly,
An underprivileged, under-acknowledged, soon to be M.D.
You now have every disease known to man and possibly a few new ones as well
😂😂😂 lmfaoooo
This would be funny if it wasn’t such a depressingly accurate representation of NPs.
Hedge funds sell a product and need to stay within the "rails" that they pitch their investors.
For example, volatility is a rail. Investors might be buying a product from a hedge fund to ease X pain point.
Deploying billions of dollars also has tons of practical issues that are not a problem when you are investing $3000. $$$ AUM demands that you find suitably large companies b/c you'd run into liquidity issues with very small companies.
can't you actually play illiquidity to your advantage? if I had billions, I would pick a handful of small companies that consistently make decent profit (i.e. unlikely to go bankrupt) and just accumulated a significant position in them, then placed a big limit order that the market can't stomach at my current cost basis and sold puts at the same strike price. the price has nowhere to go but up. then when price goes up, can move my order a bit up and sell puts at higher price. I could probably live off of just puts premiums and never sell. or can sell covered calls if return is good enough and want to sell. if they don't expire in the money, keep selling and collecting premiums.
With HF, your LPs can redeem. You need liquidity. Maybe some of the very top performers have capital that is more locked in...but your avg hf definitely can run into big issues if facing LPs that are all trying to redeem.
look at Bill Hwang 2.0 over here
If it's such a small company with liquidity issues who do you think is constantly buying all these puts you're selling?
Stop saying non sense.
Moreover putting large buy orders without the intent of executing them is called market manipulation for obvious reasons
The “illiquidity” you speak of, it’s a double edged sword.
HAHA @SEC
Well, if you get such great returns, then why don't you open up your own hedge fund and see how things work out?
He's about to find out what happens when clients rug pull before your highest conviction pick pays off.
I hope to God I didn’t sound like this when I was 17 but unfortunately I probably did. Ig it’s just a common thing to feel better than everyone else at that age, and then your early 20s completely humble you when you surround yourself with people much better than yourself and realize you ain’t shit.
"When I was a boy of fourteen, my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished at how much he had learned in seven years." -Mark Twain
Im pretty sure it's satire
I've met people like this irl so I wouldn't be too sure if I were you
IU Kelley sounds like a great school for you.
What I would give to be this naive again
.
Try doing it for 3-4 years in a row. It's tough to find conditions like those in Covid where there is so much volatility, I did the hotel stock thing too after I heard Bill Ackman talking about it and I thought it made sense it would go back up eventually. Maybe I should also be in charge of Citadel instead of Ken.
Lmfao
When does the Valley of Despair end? Asking for a friend
Username checks out
If you can replicate this for another 10-20 years, you indeed will become a billionaire. That's basically what Buffett did. Is it likely? Statistically no. But someone has to be the exception, maybe you are the exception, you can only find out if you try.
And as to why billionaires give their money to HFs:
1. Most billionaires don't invest in HFs, they have family offices. Primary investors in HFs are institutionales (and dumbasses who bought into the marketing)
2. If they (the billionaires) happen to invest in any particular HF, its mainly for diversification purposes, they are not necessarily after huge returns. At that level of wealth it mainly comes down to wealth preservation.
Yeah yk, it's simple. When you make a gain, post it as your return. When your position makes a loss, you discard it as an anomaly. After all, the stock dropped, so management must not be in their right mind, so it's fair to discard them anomalies, right?
For someone who has a lot of books, you sure didn't read a lot huh. Lemme know how it feels looking back on this post in 5 years - will be like looking through my old facebook posts from when I was a freshman (facebook was more of a myspace back then) - total cringefest. On the plus side, thanks for the laughs this morning
Lol the fact i got monkey shit for this implies the OP was serious. Send me a DM if you want a legitimate response (or whoever gave me the monkey shit - happy to give an explanation before earnings season ramps up)
tl;dr I just learned I won't be going to a top school, will spend the next decade hating on Ivy kids, want to get that party started ASAP
High quality shitpost
I don't see why you deserve a free pass on this, but hedge funds that invest in a variety of products don't. If you want to do an apples to apples comparison you can't just say that $2000 of your portfolio went up 41% and then claim that is your YTD returns. You need to factor in the crypto losses, and based on my calculations you're much closer to parity if you held significant losses in crypto.
Well done, even down to putting the percent sign in the wrong spot.
You've got a good career ahead of you.
It's not unusual for Americans to assume every country in the world follows their standards but since you're a director at an IB, I'm disappointed.
Unfortunately, I can't say the same about you.
Very argumentative for such a big brain investor.
I'd use some of that sub-$1,000 return to buy some beers and chill out little bud.
For the future, it's wise to use formatting conventions that publicly filed reports use, as that is what people are used to seeing - otherwise it is seen as sloppy and haphazard (not a trait most successful people have).
Best of luck in your fundraising efforts, maybe take the next diatribe to wallstreetbets.
tl;dr: "I lost a third of my LP's money on crypto"
L'mao
We don't talk about that apparently.
OP is just trolling
PM me il send you my money to invest
Decent troll tbh. Just enough over the troll line to be a clear troll without being overtly stupid, while also putting some nuggets of truth in there.
What about your crypto book? PMs don't get to write off 1/3 of their portfolio every year as "discontinued operations" lol
Also if you’re as smart as you say, it’s very unlikely you’ll do finance in the first place
This is such a good troll post that I’m legitimately questioning whether someone actually wrote this in seriousness…
They have really riled up a lot of people, I TSS a good troll.
Okay…54% and 41%…in the biggest asset bubble/bull market in history….with $2000. You are probably one of a kind…
I bet you are probably read to manage 50 billion, from multiple investors, throughout multiple market cycles while keeping it legal and risk adverse. Go for it!
Hey man, what's your name on social media
You should start a financial advisory TikTok account. A god-given gift like yours should be shared to the rest of the world.
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