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Hedge Fund Manager Loses 99.8% In 9 Months, Tells Investors He Is "Sorry" For "Overzealousness"
Day after day, mainstream media proclaimed December the month to be in stocks: seasonals, Santa Claus rally, and performance-chasing funds would 'guarantee' upside. For Owen Li, former Raj Rajaratnam's Galleon Group trader, and the clients of his Canarsie Capital hedge fund, December 2014 will never be forgotten. According to CNBC, from around $100 million in AUM in March 2014, Li told investors in a letter, the fund had lost all but $200,000 and he was "truly sorry," for "acting overzealously" in the last 3 weeks.
A hedge fund manager told clients he is "truly sorry" for losing virtually all their money.
Owen Li, the founder of Canarsie Capital in New York, said Tuesday that he had lost all but $200,000 of the firm's capital—down from the roughly $100 million it ran as of late March 2014.
"I take responsibility for this terrible outcome," Li wrote in a letter to investors obtained by CNBC.com
"My only hope is that you understand that I acted in an attempt—however misguided—to generate higher returns for the fund and its investors. But even so, I acted overzealously, causing you devastating losses for which there is no excuse," he added.
...
Li said in the letter that he made a series of "aggressive transactions" over the last three weeks to make up for poor returns in December. He said he bet on stock price options, predicated on the broader market rising. But stock indexes instead fell, causing the huge losses along with several undisclosed direct investments, according to the note.
Li is a former trader at Raj Rajaratnam's Galleon Group, which collapsed amid insider trading charges.
Li's lieutenant at Canarsie is Ken deRegt, who joined in 2013 after having retiring as the global head of fixed income sales and trading at Morgan Stanley.
To Mr. Li's less than sophisticated investors we have a short clip summarizing what just happened:
As for Mr. Li, we look forward to his next "hedge" fund reincarnation so that we too can give him some of our money to manage because it really is not easy to find someone who can blow through $100 million in less than a year. And who knows: if someone is willing to fund a guy that dumb and that clueless, next time he actually is due to hit it out of the ballpark.
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Yep. It's hard to make money when you never really learned how to do it in the first place.
P.S. When you get back on your feet please consider sending me more money....I'll get it right next time !
OXOXO, Owen
and I thought I was depressed the last three years as the price of gold kept going down.....this guy in 8 months tops that...does he still get his 2 and 20 though...he needs money for chop suey still.....
Good job not losing the 0.20%. Go get a new job, a lot of funds are hiring.
I guess he's a [former] member of the school, "Stawk prices never drop."
... until they do!
Is his name Jim Kramer Jr.?
Creamer, Jim Creamer, if you please.
Duly noted.
So when does this dude get his own CNBC show?
Je suis sucker.
Il a peur de cloueuses.
I am a charlie.
Its an issue if timing. The FED has destroyed 99% of the purchasing power of the dollar over the course of 100 years. The public views the FED as doing gods work.
lol. The guy obviously attended the 'Tony Hayward Skool of Apologies'.
that piker thought he was the london whale.
I know that feeling...
HAHA
life goes on
Classic video!
Owen Li: "Sorry a-holes, it's gone. Thank gawd you stooges were paying me $1.8 million a year or else I'd be screwed as well!"
The bloke obviously doesn't understand what "hedge" means in hedge fund management. I thought he might be chinese with a name like Owen Li, but apparently not. Maybe that's how he got his jobs - his employers thought he would be good with numbers? LOL What a farce.
I'm guessing deRegt is a Dutch sir name, which matches the pasty white mug shot.
I think the correct spelling is Owin'.
That's why he's called a 'broker'
Should call them 'croupiers' instead.
Forget starting another hedge fund - this guy has serious political potential - Governor maybe? political bundler?
He still have $200K. May be he can bet on some pony or buy some penny stocks to GET RICH QUICK !!!
He should leave and become a politician.
$200k of Power Ball tickets please!
Ha.. These guys are amateurs compared to central bankers when it comes to destroying investments.
Ha what a retard. At least now I know who's on the other side of those options I sell every month.
Zero Fucks Given
Gauranteed that virtually every investor is already wealthy. Cry me a fucking river.
Overzealousness wasn't the problem, incompetence was.
How many double-or-nothing bets did this take?
Im not sure why he wasted his time with a letter to the investors. Unless he is trying to cover something up. I mean any normal person would just turn off the lights and leave. This guy authored a letter? Insurance fraud maybe?
Gee. Tough break. I'm guessing none of those investors ever came across ZH. In the meantime, it's an American tradition for criminals and such to get together over a beer. I'm thinking this hedge fund manager ought to give Jon C. a call, they can sit down and discuss their "frustration".
I'm in hopes Mr. Li goes home and gets beat, then tied to the footboard of his bed while his wife has multiple sex encounters with several of his best friends. Followed by a few days of GoPro video of her talking to divorce attorneys of how to steal him blind.
Then after a few weeks, dropped off under a bridge in NYC with the other homeless losers.
As to the boudoir action - how about you switch the wife and his roles just for the laugh.
I thot ur post was a bit harsh, but after another shot of wild turkey, I thot it over. Ur right, he's not worth wasting a nail on. Put the nail gun away and just chunk him off the bridge.
Hedged (?) Fund Manager?
These are just paper loses, double down until you make your money back.
"You fucked up, you trusted us!"
- Otter
made me go pop in my animal house blueray.
The good news is that most of the $$$ belonged to Raj!
Must be a summa cum laude graduate of the Jon Corzine school of investing for manager profit.
The old long Oil short 30Y T-Bond trade strikes again!!!
To bad the 200,000 left goes to the firms risk manager for services, he told them not to do it.
YOU'RE NOT CHINESE!
you can tell by the way he DOESN'T takes a fag from time to time... in between two shags.
Just quoting Nicholson in Chinatown!
I was quoting George's mother in Seinfeld.
whats a matta with ya, ya fuck just like a chinaman.
Why does anyone think degenerate in a suit , is any different than a degenerate at the racetrack. They will never ever stop and tell you truth until they are flat busted out. This is where we all headed with The Fed.
He is taking personal responsibility????
How exactly?
The only way that works is if he reduces his personal wealth to the same proportionate loss as his clients.
-otherwise Owen Lots maybe.
That letter is ripped off word for word from Jim Cramers small print disclaimer on Mad Money
After reading this, I ran upstairs to check on my funds at the Bank of Serta. Cash: all there. PM's: all there, although that mattress is getting rather lumpy. Then I went out to the pond where I had that catestrophic boating accident a couple of years ago. Yup, nothing disturbed.
Therefore, I can conclude that I, a retired guy without any financial training, has a better one-year record (indeed a better 10-year record), than this pole-smoking dufus in keeping my AUM intact and liquid. I'd love to see the line outside his door when his bill for two-and-twenty goes out later this month. I imagine thugs and little grandmas standing there with brass knuckles, baseball bats, tasers, and lengths of rebar waiting to discuss the recent events with him... Oh, the humanity. Oh, the horror... Oh, well, not my problem. Got to go feed the cats and wander down to the road for the mail.
Overeducated moron. If he needs to pick up some cash, I really should clean out my septic tank this year so the job is his.
We never node the prices of houses, err options or options on options could go down.
Can't believe he came out with this now. When he still had 10 million or one million, did he still hope to "win" the 100 million back??
Should have just put it all on black.
I'd like to see his F/X portfolio. The fucking idiot is probably still short the euro.
The trend is your friend until it ain't... Every asset class and currency trade is at extremes.
Keep your powder dry, and enjoy some popcorn... Driving at night with your headlights off can be hazardous to your health.
this guy has "regulator" written all over his future resume...
How does one get this gig ... I could lose it a lot more slowly
Yeah, or not at all. Buy 10-year or 30-year Treasuries. A tiny return is LOTS better than a 99 percent loss. Or, hell, just keep it in hundreds in the office, go in every morning and roll around in it for a couple of hours like Scrooge McDuck, and go home. Or like Smithers and Mr. Burns, have a money fight. Afterwards, wipe the spluge off and go out for a nice long lunch.
why blow it all in a year when losing it slowly ensures more years of management fees........
He would have got them a better outcome by just putting their money in a dammed mattress... LOL
CALPERS will be there if he can figure a way to hide the fees
'Turn those machines back on!'
- Mortimer Duke
The Black Helicopters are full of lawyers, landing on the roof of 1733 Rockaway...
Too big to f ...uck!
Now that's what I call deflation!
Guess the guy didn't believe in hedging anything.
He should have just put it all on black and spun the wheel.
Fucking idiot; so much for that "fundurrmentals" trading approach. And yet ... sheeple will probably follow him to the next start-up and get that capital loss they so much desire. WTF.
www.traderzoo.mobi
thank god it was december. just think how bad the losses would have been without santa claus. any other month and they might have gone broke.
Next chairman for the FED!
In March 2014, the SP was around 1820 ... What did this guy invest in that he could lose that much when the market goes up 10%?
What frustrates me is that these cons and shysters somehow keep coming back.
For them it’s tails you lose and heads I win, again, and again, and again, and again………….
Is his client/investor book for sale?
It is somewhat ironic that the client contact details list is now the most valuable asset of the fund.
zero hedging
When I said that Jamie Dimon was king of finance and that the FED worked for him and not the other way round, and that in case of meltdown he would prefer to go down all guns blazing--and not like Saxo Bank-- who cried the CBs are MAD, here is the proof of it one day further on :
http://www.marketwatch.com/story/ante-up-jamie-dimon-says-us-dealt-best-...
He is not scared of the future in his official role !
BTW : What we see happening today is that in Spain the shadow banking; aka private equity funds; are buying hand over fist the banking junk debt in Spanish RE...new trend that helps the Euro banking cabal without solving the insolvency conundrum.
Fun n games, as shadow banking comes to TBTF banks' rescue so as to "improve" their official books in line with Basel III.
The former smartest guy in the room!
The other side of the trade IS the smartest guy in the room
.
Classical example of ignoring very simple Risk management postulate. Risk management in Hedge funds should be the a first priority not a word without menaing:)
Here is more on Risk management basics: http://prudentvalueinvestor.blogspot.com/2015/01/risk-management-part-1....
The old Frozen Concentrated Orange Juice trade!
The #1 Master Beta on Wall Street!
One must wonder if he is related to david li, the slippery turd that came up with derivatives bundling formula that caused the 2008 crash....
Not sure! But I do know that he has one leg shorter than the other and that's why they call him Li Ning!
How long before news breaks that most of the money he "lost" was actually stolen by him?
Pls. help: Because english is not my mother tongue I just want to ask if "overzealously" is the english word for "kamikaze" or "Selbstmordunternehmen"? ;-)
The linguistics department is thru the last door on the right, at the end of the hall.
$100 million sounds like a lot but you can't even buy a decent penthouse apt in NYC for that these days.
Sounds like $200k of the fund was hedged!
Well, at least he is "taking responsibility" so.....
Yes!!!
if I were a client and he had not said he was (at least) sorry, I'd have been upset.
Yeah, a real stand-up guy
It should be understood that in today's world, $ 100 million FRNs is the price Larry Ellison paid for better Stereo lighting on his new ship, a bit more than Warren made b 4 breakfast and what would be considered a minimum political campaign contribution to get the stop sign removed from the front of your house.
Context matters. $100MM just doesn't go that far any longer.
Needs moar borrowed tax payer funds!
https://www.youtube.com/watch?v=3ZzAS53gcDg
Lost it?
I think he stole it.
No penalty for "losing it", but a crime to steal it.
Leverage...godz gift...until it ain't.
It can sure make you look smart while it is working with you though.
Apparently 'risk' is a real thing.
'virtually' all their money....let's see $200,000 divided by $100,000,000...round the 6 carry the zeros...I'd call that 'all' their money...I suppost the use of the word 'virtually' is just being kind.
They will need to charge some fees for low account balances
He shuuda bot BitCoin!
Most entities using hedge funds should understand the way above average gains are made. I suspect there are a few people who simply believe that their manager is simply clever. The fact that huge leverage means huger-er risk is not what you read on page one of the prospectus is it.
No risk, No reward, right?
Man!, this whole asset deflation thing musta hit high gear...
-2 and -20?
The investors (later described as a mob), stood over a bloody pulp of tissue and marrow, commoly referred to the act as being overzealous.
Great plan.
Shove all the investor's funds overseas into personal private accounts and then claim it's gone.
Yeah, I lost 99.8% but watch what I can do with .2%!.......
I have this new 401K. I moved everything to the Fidelity® Institutional Money Market Prime Money Market Portfolio (FID PRIME FUND) today. LOL
They're gonna screw me aren't they.
Yep, that is where they park their losing trades.
"I spent a lot of money on booze, birds and fast cars. The rest I just squandered." George Best
Easy come, easy go.
Make him a Federal Reserve head. He knows how lie, cheat and steal.
Perhaps he can sell one of his homes in the Hamptons and put the 100 Mil back into the company... Oops, can't do that...
How about a pair of $200K Concrete galoshes then?
Don't feel even slightly bad for his "investors". Stop feeding the monkey.
He picked a bad week to stop sniffing glue.
"Joey, we have something here for our special visitors. Would you like to have it?"
I think Owen Li will do just fine. I bet there are lots of people who would pay plenty of money for his list of investors.
212-838-3108
That's their phone number.
I tried to crank call them and gloat, but they don't have a valid mailbox.
"Sorry the person you are trying to reach is really sad right now does not want to talk"
So many hedge fund managers want to hit a homerun and collect gigantic, mindblowing bonuses. If it is OPM, they lose track of all risk levels, as they "go for the gold"!
A world economic reset, might also put that crazy degree of greed at a lower level. Will have to be one hell of a shock though......ugh
Don't worry Owen I hear Jon Corzine is recruiting.
Don't worry sir, EVERYTHING IS AWESOME!
Oh, wait...umm it's gone.
Thank you anyways.
NEXT!
We vàporized some folks's money......
And Gold is 6000 years bubble??? Willem Buiter, go and fuck yourself.
He fuk up bad.
This assho fuk steal my money no funny... shit..
My wife going be mad..She say, you no money you no man...Now I no money she no love me no more fuk..
Possible white collar crime? Bah! Don't bother the FBI about it. They're too busy selling dummy suicide vests to entrap homeless retards so they can pad their anti-terror arrest statistics.
Somewhere, someone is oiling up a nail gun.
Nailguns are only for those betraying the bank - when the fund manager betrays the investors that gets extra bonuses.
Those greedy investors can only blame themselves. My only comfort to them; this is only the beginning, it will be much worst when the currencies going like a yoyo.
Won't someone pleez fink of da shill-dren? FREE CORZINE!!
BWAHAHAHAHAHAH funniest thing i read all day!!! ROTFLMAO
Adding insult to financial injury, Owen tried to conslol his clients with two YouTube links in his letter; one to Taylor Swift’s “Shake It Off” and the other to Idina Menzel singing “Let It Go”.
You can also hear these tunes as background music on his iPhone voice message, which he never answers.
The money's gone?
I await the followup story when we find out the money made its way to a different jurisdiction where Mr Li's family and friends are.
Kefka finds this amusing.
https://www.youtube.com/watch?v=CyZoe-r9qb0
^^^What I'm listening to while reading the post.
I wonder who was on the other side of these bullish options.
Hmmm you write a Call far out deep into nowhereland at vastly inflated price so it will expire. I'll go in and buy it from you.
I'd almost respect him more, if he'd confessed to blowing it all on hookers and blow.
If you let someone else manage your money, you have too much of it.
Overheard in the Goldman Sachs elevator:
#1: Every unemployed asshole in a bathrobe with a Bloomberg free trial calls himself a hedge fund these days.
#2: Morningwood Capital.
Andy Cramed from Deadwood says it best:
www.youtube.com/watch?v=Q0XBHpXLkUs
Cooda ben wers, he cooda lost it all byng fizzical PM's.
The old magic beans trick...
The SNB probably blew him up.
I guess his bonus will be $200,000 now.
But HTF do you lose all of your money?? I wanna see a list of his transactions.
$99m on 32 black...? Oh Damn, oh well.
Another Wall Street crook loses most or all of his clients monies. Where's the story? Isn't it a truism to ask a broker, "But, where are the clients sailboats?" I'll bet one thing though: that he didn't lose any of his own money!
Announcement: To all those holding "long" market positions, but most especially IRA's and 401k's, your funds will be confiscated after the Global Financial Crisis Phase II to "bail-in" the TBTF Banks and to fund the United States government. That is why those "retirement" investment instruments were created—to retire the debt of the US government.
The Depression Era generation loathed Wall Street post the crash of 1929, the ups and downs of the 1930's market and most especially for the misery of the Great Depression. My parents certainly loathed Wall Street. They thought me crazy to entrust my money to the thieves on Wall Street saying, "You'll lose all your money!" They sure were right, too!
The propaganda effort to convince the Baby Boom generation that their money would be safe in Wall Street's hands, despite all evidence to the contrary, such as the crash of 1929, the 1930's, the 1987 flash crash, the 2000's Internet/Technology bubble crash and the 2008 housing bubble crash, shows how powerful government control of education and the media has become since the Great Depression.
As of today the US Federal government's publicly acknowledged debt is north of $18 billion. But, though the US requires all public corporations to use Generally Accepted Accounting Principles, GAAP, the US chooses to use lies and obfuscations and faulty mathematics. At end of fiscal year 2013 the GAAP-based total obligations of the US government were $92.3 billion, per John Williams' Shadow Government Statistics, at ShadoStats.com, Hyperinflation 2014—TheEnd Game Begins, report number 587, dated January 7, 2014.
Because of consistent understatement of inflation US GDP is actually much less than that claimed in 1Q2014 of nearly $16 trillion. When adjusted by Mr. Willam's Implicit Price Deflator (IPD), to adjust for the BLS's hedonic inflation understatement of about 2% per annum, 1Q2014 GDP is only about $9.8 trillion, all annualized bases, per COMMENTARY NUMBER 637, dated June 25, 2014.
Therefore our GAAP-debt-to-GDP ratIo of greater than 8X is far worse than anyone realizes! The MSM acknowledges a ratio of about 1X. It's mathematically impossible for the US government to ever payoff it's public debt and make good on it's underfunded and unfunded obligations. For instance the Social Security Trust Fund is required to buy US Treasuries and is forbidden to sell them to anyone but the US Treasury. In other words, they are IOU's the US writes to itself. (That's how I became a multimillionaire!) But, the MSM isn't going to cover that story.
I didn't think any future US president could ever be more of a liar than President William Jefferson Clinton. But, President Barack Hussein Obama makes Slick Willie look like a kindergarten child caught with his hand in the cookie jar trying to stammer out, "Who are you going to believe? Me or your lying eyes?". That is one hell of an achievement for which I must give him full recognition. But, according to the Koran a Muslim may lie, among other far worse actions allowed, with impunity to an infidel. So Allah is on his side.
Are you tired of reading the lies published by the BLS, the Federal Reserve Bank, the Treasury, the Office of the Supreme Mullah—oops—I mean POTUS, the President of the United States, and propagated willingly by the anti-Constitutionalists in the MSM about the economic, fiscal, financial and employments conditions of the US? Then go to:
http://shadow stats.com
There are hundreds and hundreds of reports available one may read without a subscription or even establishing an account.
"The truth is out there if you have the will to throw off your blinders and look for it."
$99MM was on blow and hookers....the rest was just wasted on bad trades!
Mr. Li is gonna hate himself even more when the tape he has been shorting all year finally breaks without him. Cannot be early on this kind of thing. Doubtful this happened in one month. Most likely trades on bad trades throughout 2014 and pride.
Guess he did not say who was on the other side of those trades. No wait, that's been explained before: it was th market, black hole, into thin air.
Banker suicides are not very well targeted.
I can relate, just about the same thing happened to me and my investments in the mining juniors. Except of course it was my own money.
I will never understand how people (especially the super wealthy) cannot see the moral hazard in giving someone else your FRNs to watch over.
But, he seemed like such a nice man.
"because it really is not easy to find someone who can blow through $100 million in less than a year"
Oh yah? What about 535 boobs on capital hill? They could blow through 100 mill in 10 minutes.
maybe he literally was using a monkey with a dartboard to make his decisions?