There have multiple threads on this topic over the past few weeks. The common theme has always been some dudes with a combination of subpar school or GPA, belief that their ignorance is an asset, arrogance, and youth. The reaction from the WSO user base has ranged from “lol” to “rofl”. I honestly believe though that if some 2.0 Biology major or some kids from the boonies of North Carolina want to start a “fund”, more power to them. Please, do it.
I admire these kids’ go-getter spirit. Who hasn’t dreamed of having their own fund, raking in billions and getting all the perks to go along with it? These boys are out there trying to make it happen, and they should have our encouragement. They can learn a lot from the experience, not least how to deal with failure.
What I’m most curious to know is what their motivation is for doing so. Do they honestly believe they found some secret sauce to make a ton of money, or do they just think that if they have a logo, a website, tie bars, and some sexy business cards then they’ll be able to get more pussy?
I just can’t wrap my mind around the idea that if they are going to go to the trouble of actually executing one of these half-baked plans, why oh why do they have to advertise it to the world? What does that bring other than ridicule and embarrassment? They haven’t the foggiest idea what they’re doing, and it shows. That’s not going to be good for business.
I’m sure feels good as a college sophomore to get dressed up in a suit and talk about money with old people. But you can also do that as a teller hawking CDs and savings accounts down at the local First National branch, which is probably a more suitable position for kids of this intellectual level.
I mean if I had figured out some genius way to beat the market, the last thing I would be doing is getting on here and blathering about it to you folks. Why is it anybody else’s business what my friends and I do with our money. And when we lose it all we only have to apologize to ourselves, but maybe also our grandmas. We can brag about it all we want after we rake in our first billion.
It’s not really my place to discourage somebody from pursuing what is hopefully a dream and not just a lame attempt to get in some chick’s pants. I only request that they keep it to themselves, at least until they actually make money on the deal.
I think they're all working off of the last decades info. good post.
Currently, there's a bubble in delusional thinking... these boys are just riding the wave
It's just to make themselves feel smart and important. It's not that they truly believe they can produce results or anything. They want to put it on a resume, talk about it to friends who won't ask informed questions or make fun of them when they talk ignorantly about "macro events" and their ability to take advantage of them, and it's fun for them to pretend. You saw this every once in a while back in college where someone was tired of just being another face in the crowd and wanted to feel special for a while. The registration fees to the SEC and doing all the paperwork that comes along with starting up a shell company is all worth it to them since it feels so good to seem "official" and "professional." Hell, one day you even get a website and maybe your grandma will give you a couple hundred bucks and all the sudden you're an "investment manager." It's not about pussy. Managing a hedge fund never got anyone pussy, trust me. When I met her, my fiancee thought a hedge fund was money you set aside to get nice landscaping done. Once people realize that this is an actual industry where people are actually employed and do real work the fairy tale world starts to tear away and these kids will probably realize they're probably better suited to be a financial adviser for upper-middle class gophers. At least that way they don't hurt anyone or make a fool out of themselves on their way to feeling important and wearing a tie to work.
My boss wears this: http://2.bp.blogspot.com/_bEBzZgZ5Tmc/SMdx34y1zdI/AAAAAAAAK60/QAbx-KUsc…
It's funny because back in the day we were all mini-hedge fund managers. Before the asset management model took over (and before the fucking Internet), stockbrokers all managed their own books, bought for clients what they thought made the most sense, and basically tested their own macro theories in the real world. We all raised our own money, too, mostly by picking up the phone and cold calling. There wasn't a lot of glamour in it but the money was right and if you were good you could be absolutely HUGE in your early 20's.
Now I see all these pretenders and I just have to wonder how they're paying for their drinks.
I know someone who created a "hedge fund" in Texas. All they do is buy gold and absolutely nothing else, and only a % of it in physical stuff the rest is GLD. They have made millions off idiots. Makes me sick(and jelly).
Wow, I thought I had found the hedge fund with the least value add (I saw one that owned ~3 mega-cap tech stocks). But this is hilarious. How are they getting investors?
There are multi-billion dollar funds doing this. For one, Sprott Asset Management.
I always wonder if it's a project for some HTML/web design or marketing class and you all are the real idiots for making fun of kids for some project they got an A on. And by wonder I mean I almost always hope that's the case
Found another one of these. It seems his parents have seeded him with $50mm:
http://www.youtube.com/embed/TkrKaUYaTEk
Frankly, I don't think it is unthinkable for a bunch of university students to start a quantitative hedge fund based on a valid strategy without any industry experience. Ken Griffin would be a fine example of this when he focused on convertable bond arbitrage through Citadel's inception. However, to read the 'Alchemy of Finance' or 'you can be a stock market genius',and then subsequently start a 'macro' or 'special situation' hedge fund is laughable at best.
That was fucking hysterical
Certainly, there's nothing to be gained from pointing and laughing aside from empty self-reassurances of superiority. I see this ridicule more as an expression of feelings of inadequacy than anything else. Live and let live, and if you do feel this way, find your way to the other side of their trades and let your PnL speak for itself.
I'm glad this topic is benefiting from further discussion. The kid above is very different from the kids i mentioned in my original post, they told me that quantitative strategies were "pure speculation" and that they would only follow the tenets of Benjamin Graham from his book "Security Analysis" while taking point and figure charts and technical analysis into account.
Again these kids have very weak quantitative and analytic skills, 2.0 GPAs, and one is a damn BIO major! They also have over inflated egos and told me that "if one believes hard enough, and without any doubt, they can fly if they want to"
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