Druckenmiller and Roditi
Tony Peng
Anyone know of Nick Roditi's background, what got him noticed by Soros
initially?
Bonehead
through MIF spam.
"Matt D" <matt.d...@dial.pipex.com> wrote in message
news:8eftnj$se$1...@lure.pipex.net...
:
: Tony Peng <p4...@flash.net> wrote in message
: news:390AD8D7...@flash.net...
: > Comments about Soros' reorg?
:
: I think he lost his touch a while ago, not surprisingly this coincided
with
: his raised public profile - while managers like Louis Bacon who eschew
: publicity are still going strong. Soros gave up trading 10 years ago and
is
: more interested in politics and philanthropy, and I think Druckenmiller is
a
: great analyst but not that good as a trader. Both Soros and Druckenmiller
: develop strong opinions and will fight the market for a long time - that's
: the mark of someone with an investment background - whereas great traders
: will never have strong conviction if the market is moving significantly
: against them. If you look at some of the recent trades over the last
couple
: of years, they've really screwed up - getting stiffed in the recent tech
: selloff as bad as any penny share punter I think was a real embarrassment
to
: Quantum...they were caught with their pants down just as much as Joe Blow
: with his 5k margin account. They blew almost 1 billion shorting net stocks
a
: year ago, and they also got screwed in the Asian crisis, which I would
have
: thought was one of the best global macro trading opportunities for ages.
: They also got famously rogered in Russia, one of the most obvious looming
: financial disasters of the last 25 years...not only did they lose, but
they
: also bought right at the top. I bet they sold near the lows and didn't get
: back in on the subsequent recovery either. They have made some good
trades,
: but they have made so many bad ones too...almost as bad as Tiger being
short
: the Yen as the Asia crisis bottomed out, and then running that huge losing
: position for 20+ points
:
: One thing I totally disagree with is Soros' comment that it's impossible
to
: make an adequate return on a $10 billion fund. If he had just bought the
S&P
: 5 years ago he would have made 20%+ a year without a problem, and that's
: ignoring all the other great opportunities that occured. The fact is that
: his key managers have made good returns in one type of environment, but
with
: considerable volatility, and they have missed or been on the wrong end of
: lots of good trades during the last 5 years. Other large traders have done
: fine over the last few years. I just think Soros is making excuses for the
: failures of Druckenmiller and Roditi to adapt. As an example, look at the
: decline in the Euro - size traders like Joe Lewis have been short billions
: since the single currency started in 1999, and have made a killing,
whereas
: Roditi and Druckenmiller have been losing steadily by repeatedly trying to
: pick bottoms in a bear market. How can a good trader repeatedly try to
pick
: bottoms, and not even consider going short, over a whole year during a 30
: point decline?
:
: Matt D
:
:
Matt D
Matt D
Tony Peng <p4...@flash.net> wrote in message
news:390AD8D7...@flash.net...
> Comments about Soros' reorg?
>
> initially?
Another comment - Quantum and Tiger quitting the market makes me wonder
whether the bull market might be over. When the last short is out...
Matt D
bp
<matt.d...@dial.pipex.com> wrote:
>They also got famously rogered in Russia, one of the most obvious looming
>financial disasters of the last 25 years...
In hindsight that was very obvious. A buddy of mine who is in
international finance told me that russians were not able to collect
the tax revenue and that the country was going down the tubes.
Quantum fund people must have known and how they could just ignore
them is beyond me.
As for Joe Lewis, I read an article about him in NY Times couple of
years ago. If you have that article can please post it here. Thanks
Matt D
bp <no...@sympatico.ca> wrote in message
news:390c977f...@news1.on.sympatico.ca...
> On Sun, 30 Apr 2000 01:09:29 -0000, "Matt D"
> <matt.d...@dial.pipex.com> wrote:
>
> >They also got famously rogered in Russia, one of the most obvious looming
> >financial disasters of the last 25 years...
> In hindsight that was very obvious.
Well I think after all the Asian pegged currencies were forced off their
pegs and plummeted, it shouldn't have been hard to guess that other
fixed-rate emerging market currencies were highly vulnerable to devaluation.
I remember in 1998 a guy at my firm was saying Lukoil was really undervalued
since it was only at about 5 times earnings, I just said "well wait till the
rouble devalues and I bet you'll get it a lot cheaper". Obviously having an
opinion is a lot easier than actually trading the thing, but I think if you
were following the foreign market coverage, you could at least have prepared
for the possibility. This stuff was in the emerging markets pages of the FT
(and I assume the WSJ) every day for several months before it became front
page news - people just got caught out because they don't bother to follow
the markets in Russia, Indonesia, Hong Kong or whatever.
> A buddy of mine who is in
> international finance told me that russians were not able to collect
> the tax revenue and that the country was going down the tubes.
> Quantum fund people must have known and how they could just ignore
> them is beyond me.
Yes I just don't understand it myself - it's so different to the way Quantum
used to trade those types of situations in the 70s and 80s. It was a real
shock to me to see them caught out along with everyone else. I could
understand if they went short too soon and closed out too soon, or if they
just didn't trade it - what I can't understand is why they pumped in $2
billion to Russia during a spell of intense stockmarket speculation (the
stockmarket had risen 8 fold in 2 years), and when the devaluation risk was
not exactly unforseeable. Also, their investment in Syzinvest (sp?) was a
real hostage to political fortune - it was so big that there was no way they
could exit, and the government/owners could do pretty much what they liked
with minority shareholders.
I think everyone knew Russia was in trouble, what made the problem so large
was that lots of speculators bought the government debt once it had gone
really low to 50c in the dollar or whatever, since the implied yield was so
high. I think they reckoned it was going to get bailed out just like Mexico
a few years ago. I remember Niederhoffer talking in his book about how he
bought Mexican debt during the Peso crisis - he thought it was a good trade
but I think he was just getting paid for taking on default risk. It was
Russians' decision to default that caught everyone out, and obviously if you
buy a bond at 50, then they default, it goes to 2 or 3 and you lose pretty
much the same as someone who bought at 100.
Also the people trading this were proprietary bank traders and a bunch of
hedge funds that had only setup in the last few years, they were highly
leveraged and almost everyone had the same positions i.e. long emerging
market debt, maybe short T-bonds as well (to "hedge" the interest rate
risk - turned out more like a texas hedge). When you get leverage, everyone
having the same positions, then a shock event which moves the market the
other way, well that's a recipe for pure panic. Maybe if you want to invest
in a hedge fund you should find someone who made money in the 1998 meltdown.
> As for Joe Lewis, I read an article about him in NY Times couple of
> years ago. If you have that article can please post it here. Thanks
Actually I've tried searching the web for stuff on him, since he seems like
one of the best traders around, but I've found it impossible to find
anything except for a brief mention in this article
http://www.ex.ac.uk/~RDavies/arian/lindaemu.html , which just says "...I
could be like Joe Lewis, the secretive British FX billionaire, reputed to
have made over a billion dollars in one year from FX trading from his
Bermuda base, incidentally, reversing the charges every time he rang his
London brokers". Fair play to the guy, he must pay millions in commission,
why not get some back? :)
There was a supplement in the UK's "Sunday Business" (called "the UK's top
100 adventure capitalists" or something like that) which had a brief profile
on Lewis including a photo. It mentioned the fact that he used to manage
part of a London hotel, and found himself spending a lot of time following
currency moves since that was one of the main factors affecting how well his
business went. He started trading the currencies then moved to the Bahamas
to trade tax free (the UK had top rate income tax in the 80%+ range in the
mid 1970s, and it was still 60% until the mid 1980s), and built up a
considerable fortune of several billion. He made a few investments in the
1990s that I read about - he bought into one of the art auction houses
(can't remember which, Sotheby's or Christies) but I heard he sold out
recently; he also bought into a Scottish soccer club (Glasgow Rangers I
think). Sunday Business carried an headline a couple of months ago saying he
had "turned bullish on the Euro" at around 1.01 - he said he had seen strong
buying around the parity level, but the article then went on to say this had
just caused him to lighten up his shorts i.e. he was still bearish, just not
as aggressively. In the light of the subsequent Euro decline below $1, I
would assume he got short some more on the way down.
That's all the stuff I've read about the guy - if anyone has any information
on Mr Lewis or any other successful but secretive traders I'd love to hear
about it!
Matt D
Matt D
Bonehead <john...@notmicrosoft.com> wrote in message
news:QcLO4.5560$F.16...@news4.giganews.com...
> Great post, Matt. It's posts like these that makes it worthwhile to wade
> through MIF spam.
Actually rereading it I think the post was too harsh on Quantum. Despite the
big losers in the 1990s they have still made about 30% annually (although I
think a lot of that is due to the returns from the early 1990s), and they
made some great trades e.g. the british pound in 92, and getting long tech
last summer. I'm just surprised at how many times they got caught out (e.g.
recently in the tech selloff). I am sure that the size of their positions
has something to do with it - it must be a lot more difficult to make the
decision to sell out when you know that will move the market a fair amount
against you. Even so, there have been opportunities for them to make some
great trades e.g. the turmoil in 1998 is the kind of market environment
where you would expect a global macro fund like Quantum to do really well.
As another case, I was amazed when I heard that Julian Robertson's funds
were short the Yen all the way from the bottom in 1998 - I mean the amount
of panic and bearishness on the Yen at 145 was so great that you just have
to think ok, even if this is not the bottom, I have to be careful not to get
caught if the market reverses because it could really go a long way. I know
it's easy to say things like that, but I think you can at least anticipate
the possibility. A good example was the Nasdaq after that huge losing week.
Another example for the future is the Euro. Right now people are not yet
really panicking, but if it got lower e.g. around 0.80-82 to the dollar and
people are really panicking, it won't necessarily make me get long, but I'll
certainly be on the lookout for signs of a bottom. If some kind of climactic
event occurs and everyone is short, well I'm just going to have step in and
buy. Certainly there's no way I am going to be short and ride it all the way
up to parity! But if it's at 82 and everyone's complacent, well I'll bide my
time.
Matt D
RiskArb
we to judge Quantum's performance? Soros, Druckenmiller, et al,
have produced return on capital that we couldn't dream of.
Anyone can produce a good return on 5-6 figures, another thing
entirely to return 30%/year on billions, year after year.
arb.
"Matt D" <matt.d...@dial.pipex.com> wrote in message
news:8ekv3a$1jk$1...@lure.pipex.net...
bp
<matt.d...@dial.pipex.com> wrote:
>> As for Joe Lewis, I read an article about him in NY Times couple of
>> years ago. If you have that article can please post it here. Thanks
This is the article i was talking about.
Into the Island Lair of a Currency-Trading Tiger
By TIMOTHY L. O'BRIEN
JOSEPH C. LEWIS is a private man. He lives regally, but quietly, in a
low-slung, beachfront manse that abuts a golf course and a
yacht-filled marina in this luxurious, palm-swept enclave. His
neighbors include others who value their privacy, and the ...
May 10, 1998, Sunday
Money and Business/Financial Desk
Here is something else you might find interesting. An assasination
attempt on him! I went to the Independent web site but couldn't find
the article.
Title: Who wants Joe Lewis dead? Sophie Goodchild and Yvonne Ridley
on the mystery surrounding an attempt to kill Britain's fourth richest
man
Summary: JOE LEWIS is reputedly the fourth richest man in Britain
with a fortune of pounds 2bn - not bad for a man born into poverty in
the East End of London. But with money like that enemies are certain -
and someone is trying to kill the international financial trader.
Details are slowly emerging of a failed murder attempt in a remote
part of Argentina.
Source: The Independent - London
Date: 10/17/1999
Citation Information: FOREIGN; News Section
Author(s): Sophie Goodchild and Yvonne Ridley
Copyright Holder: 1999, Newspaper Publishing PLC
Document Type: Article
Matt D
> >> years ago. If you have that article can please post it here. Thanks
>
I just downloaded the NYT article. It was fairly basic - strung together
basic details of his background with a few meaningless sentences about
currency trading, british pound in 1992 and the usual cliches :) Useful but
not exactly the height of investigative journalism. As for assassination
attempts - that is strange! Can't think why anyone would want the guy out of
action...unless maybe the ECB? ;)
Matt D
Matt D
RiskArb <sigma...@hotmail.com> wrote in message
news:iQoP4.664$b46....@nntp0.chicago.il.ameritech.net...
> I haven't read the original thread, but c'mon people, who are
> we to judge Quantum's performance? Soros, Druckenmiller, et al,
> have produced return on capital that we couldn't dream of.
> Anyone can produce a good return on 5-6 figures, another thing
> entirely to return 30%/year on billions, year after year.
I'll tell you when i get there :) Remember Druckenmiller did it during a
period when the S&P returned about 20%. Given that he used leverage, and was
largely long stocks for most of this period, a 10% outperformance is not
incredibly impressive. What is impressive is Quantum from 1969 to 1981, with
Jim Rogers and Soros working together, averaging 40% compound during a
period when the S&P was flat for 12 years. That is about the best relative
long-term record I've seen.
I was reading thestreet.com recently and was a bit taken aback to see James
Cramer casting Jim Rogers in the same light as Grant, Prechter and all the
other hopeless bears. Well excuse me Mr Cramer, but Jim Rogers retired in
his mid 30s after helping to contribute to one of the best hedge fund
records of all time. The guy does not manage money for other people anymore,
he has a far better audited record than Cramer (I am assuming this - not
seen Cramer's numbers but I bet he didn't outperform the S&P by 40%
annually), and then he quit and spent his time travelling round the world
and pulling leggy blondes half his age. Quantum has never got even close to
the same outperformance over the S&P since Rogers left. Meanwhile Cramer has
been managing a 95% stockmarket hedge fund for 13 years...during the biggest
stock bull market of all time. I wonder how Cramer would do during a period
of 10% annual inflation and zero percent stockmarket returns for 12 years.
Matt D
Yuri K
<matt.d...@dial.pipex.com> wrote:
:I was reading thestreet.com recently and .... <snipped>
Cramer is an asshole extraordinaire, creme de la Kremlin type.
you really lowering yourself simply by mentioning his name.
Barrons' Alan Abelson was quoting Cramer's record for either 1997 or
1998 - I really do not remember, do your own search. It was a laughable
number: something in 0.1% to 0.2% range.
bp
<matt.d...@dial.pipex.com> wrote:
>I was reading thestreet.com recently and was a bit taken aback to see James
>Cramer casting Jim Rogers in the same light as Grant, Prechter and all the
>other hopeless bears. Well excuse me Mr Cramer, but Jim Rogers retired in
>his mid 30s after helping to contribute to one of the best hedge fund
>records of all time. The guy does not manage money for other people anymore,
Rogers did not quit. His partner went insane on him, yes Soros. Here
is an excerpt from an article in (www.forbes.com) Forbes (97/04/07)
"Beware of billionaires bearing gifts". Look for the sidebar titled
"Instability".
------------------------
The key to understanding George Soros is that he skirts, by his own
admission, a kind of lunacy. It's both his strong point and his weak
point. "Next to my fantasies about being God," Soros told British
television, "I also have very strong fantasies of being mad. In fact,
my grandfather was actually paranoid. I have a lot of madness in my
family. So far I have escaped it."
Just.
One bout of instability came in the early 1980s. His fund was doing
extremely well when he walked away from his partner, first wife and
family. It was a "very intense emotional process to correct errors [in
the financial markets]," he explains. "The psychic cost of running the
fund was very high. The more successful I was, the more I was punished
by having more money to run."
During this turmoil Soros walked through the City of London and was
convinced—wrongly—that he was having a heart attack. "It made me
realize that maybe it wasn't worth it. To have a heart attack and be
knocked out is really losing the game."
---------------------------
I love the quote "very intense emotional process to correct errors [in
the financial markets],"! He is correcting all the wrongs in the
market. No wonder he has fantasies about being God.
>he has a far better audited record than Cramer (I am assuming this - not
>seen Cramer's numbers but I bet he didn't outperform the S&P by 40%
It is inappropriate to compare a guy who trades four-letter tech names
with PE ratio in the 100s and 1000s with S&P 500. A more appropriate
comparison is ND-100 or the ND-Composite. You have to compare apples
to apples.
bp
> Cramer is an asshole extraordinaire, creme de la Kremlin type.
>you really lowering yourself simply by mentioning his name.
>
>Barrons' Alan Abelson was quoting Cramer's record for either 1997 or
>1998 - I really do not remember, do your own search. It was a laughable
>number: something in 0.1% to 0.2% range.
Let me preface my response by stating that I am NOT defending Cramer.
Some of what he says is indeed over the top.
Yes Cramer did have a poor year and I think it was '98 but let us give
credit where credit is due. He realised he had failed and he changed
his style. Quantum fund did the same thing in 4Q of '99 when they
invested heavily in techs but it was very late in the game and they
got caught long.
guilherme....@gmail.com
> Comments about Soros' reorg?
>
> Anyone know of Nick Roditi's background, what got him noticed by Soros
> initially?
Dane christian Neilson
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