"Hedge Fund" run by college juniors

This is starting to become a trend. Some idiot college kids who just finished taking Finance 101 pooled some money, threw together a website, and called it a hedge fund.

From the article:


Cefaratti, a 24-year-old graduate of Franklin College, had recently turned down an offer from Goldman Sachs’s private wealth management division to come onboard (unofficially) at Lumina. I asked him if his offer was in Goldman’s New York office; he said, “I’m not sure, it’s kind of a developing thing” and changed subjects.

and later:



He said that although he had never trained officially at a Wall Street firm, he’d learned the secrets of successful investing by studying the careers of Julian Robertson, the hedge-fund legend behind Tiger Management, and George Soros — men he described as “my mentors.”

So wait, I asked: Had he actually met Robertson and Soros?

"No." Then he paused and backed up. “I ... I have to ask them before I actually divulge anything. I think it’s fair to say that I have been to Tiger Management in New York. I should really check with them."

These kids aren't even good at lying.

Links:
http://nymag.com/daily/intel/2012/10/worlds-most-…

http://www.luminainvestments.com/

 

Damn you, I wanted to post a roast about this when I got the time. Absolutely hilarious article and probably one of my new all-time favorites. I love the interview where the guy says something along the lines of "I don't know anything about what the markets were like in the 80s. I don't know anything about what they were like in the 90s. But I know the markets that are going on right now, and they're unlike anything else. Macro events are driving the market now, and we believe it's the new norm." Pure, pure gold.

I hate victims who respect their executioners
 

I dare someone to cold e-mail/call them for an internship. No, I double dare someone to do it. No, wait I take that back. I triple dog dare someone to do it.

In all seriousness, these guys are probably members of this site. Carol, if you're reading this, please PM me. I finally feel like investing some of my bar mitzvah money.

 
General Disarray:
In all seriousness, these guys are probably members of this site. Carol, if you're reading this, please PM me. I finally feel like investing some of my bar mitzvah money.

You got >$100k for your bar mitzvah?! Fuck me, I need to convert.

http://www.adviserinfo.sec.gov/Iapd/Content/Common/crd_iapd_Brochure.as…

The minimum capital contribution required to invest in a fund generally ranges from $100,000 to $1,000,000, and is defined in a fund’s offering memorandum.

Although I have to say, I am deeply impressed by the CIO's resume:

http://www.adviserinfo.sec.gov/Iapd/Content/Common/crd_iapd_Brochure.as…

Name: Ryan J. Mahoney, CRD #6008881 Born: 1991 Education: Currently a Finance and Accounting student at East Carolina University Employment History: Prestonwood Country Club, Cary, NC – Lifeguard May 2007 –August 2007 and May 2010 – August 2010 Park Village Swim Club, Cary, NC – Head Coach May 2010 – August 2010 and May 2011 – August 2011

I trust he will guard your bar mitzvah money with the same zeal and devotion as he did the pensioners at Prestonwood Country Club.

From ADV Part 2:

LUMINA relies on the following resources in its management of accounts:

-Proprietary mathematical model first implemented in 2006 based on historical performance of S&P 500 -Financial newspapers and magazines -Third party research materials -Timing services

Basically, these kids just buy whatever Barron's says looks good and subscribe to a daytrading newsletter that tells them when to go all-in.

All I care about in life is accumulating bananas
 
Asatar:
Say what you like about them, they have a snazzy website!
I've made better in high school web design class.

I love how their testimonials are all from the three guys and a random magazine.

 

I wasn't like every other kid, you know, who dreams about being an astronaut, I was always more interested in what bark was made out of on a tree. Julian Robertson's a real hero of mine. Soros. Soros would be another person who's a hero. The currency speculation he's performed over the years, I don't really understand it, but the fact that he's doing it, I respect that. I care desperately about what I do. Do I know what securities I'm buying? No. Do I know what I'm doing today? No. But I'm here, and I'm gonna give it my best shot.

  • Founder of Lumina Investments
 
Press0:
I wasn't like every other kid, you know, who dreams about being an astronaut, I was always more interested in what bark was made out of on a tree. Julian Robertson's a real hero of mine. Soros. Soros would be another person who's a hero. The currency speculation he's performed over the years, I don't really understand it, but the fact that he's doing it, I respect that. I care desperately about what I do. Do I know what securities I'm buying? No. Do I know what I'm doing today? No. But I'm here, and I'm gonna give it my best shot.
  • Founder of Lumina Investments

FUCKING BRILLIANT!!!!

 
droking7:
Press0:
I wasn't like every other kid, you know, who dreams about being an astronaut, I was always more interested in what bark was made out of on a tree. Julian Robertson's a real hero of mine. Soros. Soros would be another person who's a hero. The currency speculation he's performed over the years, I don't really understand it, but the fact that he's doing it, I respect that. I care desperately about what I do. Do I know what securities I'm buying? No. Do I know what I'm doing today? No. But I'm here, and I'm gonna give it my best shot.
  • Founder of Lumina Investments

By the way, if anyone remembers Zoolander, that bark on a tree quote is taken directly from there. Who knows, maybe they'll ponzi their way to personal returns FUCKING BRILLIANT!!!!

 

The thing is: who will invest in these guys? No one. No one is going to give their money to a group of guys fresh out of school talking the way they are in media interviews, not to mention young guys who have limited experience. They can't even sell themselves on their own product.

An investment strategy driven by macro-events is a good strategy in theory however it cannot be done because the market fluctuations are so random and unpredictable.

If one person besides their friends and family were to invest in them, they had better capitalize on the opportunity. I wish them the best of luck, and they will really need it.

 

That video interview was eerily reminiscent of every awkward UG presentation ever given. Bunch of kids in their monkey suits trying to sound like they know wtf is going on to some old dude who doesn't give a fuck about what they're saying.

GBS
 
mashed potatoes:
yea, these kids can now kiss any chance of a wallstreet career good bye..

It shows initiative at least. They don't seem to bright but they got the young and stupid excuse going. I'm sure rape charges would be much worse.

Competition is a sin. -John D. Rockefeller
 

I love everything about this article and their website. Solid investment philosophy. Horrible grammar and even misspelling key words. All of this screams three kids with a nice photographer and a school that really has zero going for it trying to get attention. What dean of a school would ever interview these clowns unless it was the only thing happening in Wilmington, NC.

Love all of this

 

This kills me, since I was just considering joining a student-run hedge-fund club. Still a student, though, and not planning to go it alone once I'm out, but I do wonder what these people are going to be like.

 
FirstTimeMonkey:
I am clearly not one of them. I really am curious as to the negative consequences of something like this aside from scoffing.

A potential negative consenquence is a loss in credibility, reputation, image, etc. It's not good to ruin your reputation in finance before you've even had the chance to earn one...

 

Wait, so if my friends and I pool together money, open an E-Trade account... that is not a hedge fund? Time to revise my resume...

The difference between successful people and others is largely a habit - a controlled habit of doing every task better, faster and more efficiently.
 
ladubs111:
Hmm looks like they come from some money. That website is nicer than Greenlight Capital, Berkshire Hathaway, and my firms....
I hope you're kidding.. You actually think that Berkshire Hathaway's website is so simple due to lack of money? This website could be created in under 100 hours and the work would cost no more than $5,000.
 
Pancakes:
ladubs111:
Hmm looks like they come from some money. That website is nicer than Greenlight Capital, Berkshire Hathaway, and my firms....
I hope you're kidding.. You actually think that Berkshire Hathaway's website is so simple due to lack of money? This website could be created in under 100 hours and the work would cost no more than $5,000.

lmao cmon dude

I hate victims who respect their executioners
 
BlackHat][quote=AllDay_028]So, when they last filed, they apparently had 2 dollars under management lol</p> <p><a href=http://www.adviserinfo.sec.gov/iapd/content/viewform/adv/Sections/iapd_AdvAllPages.aspx?ORG_PK=158918&amp;RGLTR_PK=50042&amp;STATE_CD=NC&amp;FLNG_PK=03F744980008016401AC778003F485B1056C8CC0&amp;Print=Y[/quote rel=nofollow>http://www.adviserinfo.sec.gov/iapd/content/viewform/adv/Sections/iapd_…</a>:

maybe they're levered 500,000x?

Weekly options baby.

 
BlackHat][quote=AllDay_028]So, when they last filed, they apparently had 2 dollars under management lol</p> <p><a href=http://www.adviserinfo.sec.gov/iapd/content/viewform/adv/Sections/iapd_AdvAllPages.aspx?ORG_PK=158918&amp;RGLTR_PK=50042&amp;STATE_CD=NC&amp;FLNG_PK=03F744980008016401AC778003F485B1056C8CC0&amp;Print=Y[/quote rel=nofollow>http://www.adviserinfo.sec.gov/iapd/content/viewform/adv/Sections/iapd_…</a>:

maybe they're levered 500,000x?

Weekly options baby.

 

[quote=AllDay_028]So, when they last filed, they apparently had 2 dollars under management lol

http://www.adviserinfo.sec.gov/iapd/content/viewform/adv/Sections/iapd_…]

I love how they indicated that their clients consist of pooled investment vehicles and high net worth individuals on their Form ADV, while simultaneously indicating they have 0 clients.

I wonder if they know that lying or misrepresenting on your Form ADV is a pretty big deal.

 
CJayB][quote=AllDay_028]So, when they last filed, they apparently had 2 dollars under management lol</p> <p><a href=http://www.adviserinfo.sec.gov/iapd/content/viewform/adv/Sections/iapd_AdvAllPages.aspx?ORG_PK=158918&amp;RGLTR_PK=50042&amp;STATE_CD=NC&amp;FLNG_PK=03F744980008016401AC778003F485B1056C8CC0&amp;Print=Y[/quote rel=nofollow>http://www.adviserinfo.sec.gov/iapd/content/viewform/adv/Sections/iapd_…</a>:

I love how they indicated that their clients consist of pooled investment vehicles and high net worth individuals on their Form ADV, while simultaneously indicating they have 0 clients.

I wonder if they know that lying or misrepresenting on your Form ADV is a pretty big deal.

Don't worry, they have "really really good lawyers."

All I care about in life is accumulating bananas
 

Well, i guess you need funds before you can hedge them and start a hedge fund, but if they had any idea they could still start a consulting agency specializing on market analytics. At least, if they stumble upon that word one day to forumalte their USP. Or at least a SP.

As long as it works, I mean. They can lend each others consistently some money arbitrary close to zero and promise abnormal returns to the lender and if the number is small enough they can still consistently outperform the market without ever risking a single cent. They would also evade legal issues as long as the AuM remaind under 1 dollar

"Make 'Nanas, not war! "
 
Jerrey:
They can lend each others consistently some money arbitrary close to zero and promise abnormal returns to the lender and if the number is small enough they can still consistently outperform the market without ever risking a single cent. They would also evade legal issues as long as the AuM remaind under 1 dollar

What on earth are you trying to say?

All I care about in life is accumulating bananas
 

i give u an nth of a dollar and you promise me to repay with 30% interest. them you lend me the same plus interest and promise same interest and so forth. if the lending horizon is large enough the process does not need too many transactions to gemerate excess returns on investment. So its jus a ponzi scheme that never gets too big ;)

"Make 'Nanas, not war! "
 

If I interviewed them I would question everything that comes outta there mouths.

This Carol kid is stupid and in la la land. He has absolutely no clue what he is doing. I can tell he thinks hes some big shot fund manager but really he is just a wannabe a poser!

I've read 2 or 3 articles about these kids and even the writers of these articles have written in there article that it seems like the kids don't know what they are doing. And a majority of the comments on these articles think these kids don't know anything. What Carol says has absolutely no substance he does not sound like a pro.

Carol thinks his lack of experience is a positive. He also says he knows nothing about past markets like the 80's and 90's and is not interested about past markets only what's going on today. This is just some proof he knows nothing any decent investment book will tell you to learn the past markets and historical data!

“This is as real as it gets,” he said. “We have very, very good lawyers. We have real clients. And we are here to compete against the best hedge funds in the world.”

  1. Whooo you have very good lawyers? Does that really make you a good legit hedge fund? NO!
  2. Family & friends usually are not considered "real clients"
  3. Your a long way away from competing with the best funds in the world. When you add at least several billion to your AUM then you can say that!
 
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