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Nassim Taleb's Fund Made $1 Billion On Monday; This Is How The Other "Hedge" Funds Did
You can't say Nassim Taleb didn't warn you: the outspoken academic-philosopher, best known for his prediction that six sigma "fat tail", or black swan, events happen much more frequently than they should statistically (perhaps a main reason why there is no longer a market but a centrally-planned cesspool of academic intervention) just had a black swan land smack in the middle of the Universa hedge fund founded by ardent Ron Paul supporter Mark Spitznagel, and affiliated with Nassim Taleb.
The result: a $1 billion payday, translating into a 20% YTD return, in a week when the VIX exploded from the teens to over 50, and which most other hedge funds would love to forget.
The WSJ reports:
Universa Investments LP gained roughly 20% on Monday, according to a person familiar with the matter, a day when the market collapsed more than 1,000 points in its largest ever intraday point decline. Universa’s profits—some realized and some on paper—amounted to more than $1 billion in the past week, largely on Monday, as its returns for the year climbed to roughly 20% through earlier this week.
“This is just the beginning,” said Universa founder Mark Spitznagel, a longtime collaborator with Mr. Taleb, who advises Universa, lectures at New York University and is known for his pessimistic forecasts about the global economy. Mr. Spitznagel himself has spent the last several years warning of a coming correction, one he viewed as inevitable given accommodative policies by central banks around the world.
“The markets are overvalued to the tune of 50% and I’ve been saying that for some time,” said Mr. Spitznagel.
Universa gained renown for its outsize gains in 2008, racking up more than 100% profits for many of its clients. In 2011, it notched around 10% to 30% gains for clients. During the years in between it posted steady, small losses.
The firm focuses on finding cheap, shorter-dated options on the S&P 500 and other instruments it expects to rise in value amid a notable downturn.
During the past week, the value of such options that Universa bought over the past one to two months jumped, said people familiar with the matter.
The Miami-based Universa and some other “black swan” hedge funds that seek to reap big rewards from sharp market downturns have emerged as winners amid the world-wide volatility of the past week, say their investors, racking up double digit gains in roughly the past week.
Incidentally, this is precisely what a "hedge" fund should do: protect against massive, "fat tail" days like this Monday; instead they merely ride the beta train with the most leverage possible, hoping that the Fed will prevent any events that actually need hedging, and blow up in a fiery crash any time the market tumbles. Needless to say this makes most of them utterly useless, especially since one can just buy the SPY for almost nothing, and avoid paying the hefty 2 and 20 (or 3 and 45) fee, which until recently was merely there to fund trading based on inside information aka "expert networks" and "idea dinner" thesis clustering.
And speaking of non-hedging "hedge" funds, the table below lays out the performance of some of the most prominent names through either Friday of last week, or as of mid-week. You will notice three things: i) a lot of minus signs for entities that supposedly "hedge" market drops, ii) Bill Ackman's Pershing Square, which until last month was among the best performers, was - as of Wednesday - down for the year, and iii) Ray Dalio's "risk parity" quickly has become "risk impairty" in an environment where both stocks were sold by the boatload, at the same time that China was dumping US treasurys - a scenario no "risk parity" fund is prepared for.
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Salut!
Thanks for the article. Taleb is a terrific read. Always.
http://www.fooledbyrandomness.com/
As for Greenlight: oooh ouch ouch.
"Incidentally, this is precisely what a "hedge" fund should do: protect against massive, "fat tail" days like this Monday; instead they merely ride the beta train with the most leverage possible, hoping that the Fed will prevent any events that actually need hedging, and blow up in a fiery crash any time the market tumbles."
Once again, thanks for the article.
Thanks for the link. I've been trying to finish fooled by randomness and the black swan for about a year now. I think I'll just read some of his links for a while before I try and tackle his books again.
Me too, but thats as of Monday. As of today everything probably different. Changes in a minute.
money isnt everything right, RIGHT?
WWJD???
Perhaps Jesus will grace us with its presence tonite and let us know what it Says. As far as "DO?" no one will ever really know.
- Ned
oh come on junkers.
forgive me.
No, money isn't everything...it's the only thing. ;)
Actually, it is "winning is the only thing"
And coming from a failure such as your name, I'd guess that you don't quite grok the difference.
- Ned
http://www.msn.com/en-us/news/us/amtrak-train-collides-with-a-moving-van...
What the heck was the train doing on the tracks?! Those xx crossings are reserved for broken down cars and moving vans.
Will we have a "grief stricken" father on C(ia)NN lamenting the ease of access to moving vans, and the need to restrict them?!
Zion is a scheme, not an ethnicity.
A slogan a day .... keeps reality away .... Zion is a scheme .... not an ethnicity .... profound .... about time for a slogan change .... and an original thought .... who are you .... stop hiding behind faux gravitas ?
Heaven help but this moving van perhaps was someone's home? Or a transport vehicle for relocating humans.
Not a black swan, but a golden swan.
It was actually a goose laying golden eggs. Bet you didn't see that coming.
-Black Swan
This guy is probably just as connected as the rest.
INSIDE Job
Speaking of so-called "Black Swan" events, I wonder what Mr Taleb says about this? Hot molten metal right, Nassim? Right?
The Woman At The Edge Of The AbyssBah
Nice to see one of the good guys make an easy buck.
in Nassims world, isn't this life changing money ? or was he always a rich fukka ?
He's loaded. He scored on the "87 crash on eurodollar options. Something like $35 million.
Hey Zoomie,
Where's all the sockeye & salmon pate?
& when is your next film coming out?
Cheers,
S. Rex
OK - they made money this year because of an HFT exacerbated sell off. How have they done over the last 7 years given the Fed put?
Good to see, takes balls to leak cash all year waiting on a move like mondays. It also takes balls to see it through when it actually happens! (that's usually the part that gets me).
They probably owned a shitload of cheap "end of the world" put options. No way they could have banked that much trading actual stock in that fast a market. That reminds me, i need to check my Powerball ticket from last week.
i'm really happy for him. /s
Don't piss on his parade and try to tell him it's raining yellow snow.
You're a mean one Mr. Grinch.
This doesnt make sense, Universa manages less than $200M, how can they be up 20% and have made a billlion, are they up 20% or 200%? Even there it doesnt add up. Also some of it paper profit, does that mean at dead low and they never covered it there?
What time period are you from? Didn't you get the Fed memo that you are not supposed to be inquisitive post 2011?
It would mean they had lost money year to date until Monday.
It would mean they had lost money year to date until Monday.
Yep. These moves following China's deval have been wonderful for the most part.
Hope for their sake they don't leave it all on the table.
Investing in FAZ for a few days would have done the same.
I don't think ZH or Talib are up to the Task.
Look he is sitting there looking animated and happy, in the Fascist America that means he didn't learn anything in his studies, doesn't know Industry, doesn't know Economy, doesn't know about the hardship of K-12 and paying for College...
Well, in the USA appearances are everything.
You can have a degree and other strong points, but you are considered unemployable, undesirable, and un-valuable.
We like to eat our young and destroy our young men...
Let' throw our kids in Jail, fuck 'em!
We are reaching a point where people who smile are not considered serious. I'm sure this is true in Ukraine.
It is likely the rule in China and Russia.
Billions may not mean much if the problem is the dollar.
Buy gold, take a loooong vacation.
I want to know how Hugh Hendry did. Did he revert to himself in time?
http://www.ft.com/cms/s/0/823621de-36b1-11e5-bdbb-35e55cbae175.html#axzz...
Nassim is a Lebanese-American Orthodox Christian.
https://en.wikipedia.org/wiki/Nassim_Nicholas_Taleb
Just like Danny Thomas who started St. Jude's Children Hospital. Danny Thomas was Catholic.
https://en.wikipedia.org/wiki/St._Jude_Children's_Research_Hospital
Good guys.
Danny Thomas was Catholic...
He was the first one I heard mentioned as a kid about wishing to have his nose filled with nickels, being Catholic did not come to mind.
St. Judes has devolved. They like to parrot they turn down no one & that is patently false.
A friends grandson had surgery as an infant for a biliary duct obstruction. Forward to age 8. Medical issues to numerous to name. The Dr. that performed the surgery missed a cancerous tumor on his liver the size of a grapefruit that their dog had been sniffing.
St. Judes turned them down.
Needless to say, that poor child went through chemo hell.
Perhaps it was his color.
were these the guys with the boatload of $0.05 Sept 50 VIX calls we heard about last week?
Sounds like insider information, who knew this was gonna' happen? ;-)
Only certain individuals are supposed to benefit from such "low-probability" situations.
- Ned
Ya really! Who could have known such a move would happen?
I'm starting to think that any certifiable bears who survived that bull market with their instincts intact should be able to command above market compensation.... Should the bull market be over that is.
I tried to give my money to the Universa Fund folks but they don't want to know you if you have less than $5M.
I made $10k on Monday.
And I thought I did good
check out this guy http://www.bloomberg.com/news/articles/2015-08-28/while-many-panicked-ja...
Were you sittin' at your kitchen table and following some advice from some website?
Just wonderin'
- Ned
These gains have not yet been realized. They could easily go the other way in some future crap shoot. Regardless, it is a good illustration of the evils of short-selling. This is a zero sum game in which the gains of a few speculatos are made at the cost of longer term and more serious investors. Yes, Soros was lucky (and ruthless) in his bet against the pound sterling. And what did he do with all his money? He helped the neocons foment revolutions in many countries with the sole goal of agrandizing the American empire at the cost of many lives and billions of taxpayer dollars.
Without short sellers the "market" goes to ZERO in a crash, after the bubble was blown even larger and drew in even more suckers.
And BTW, serious investors HEDGE, whereas fools and get-rich-quick-gamblers...
The Chinese stock market did nicely for several years while prohibiting short selling. Short selling artificially and temporarily increases the supply of stock on offer, thereby depressing prices and enabling the seller to profit on the buy back. Any long term holder who has to sell in these conditions is the loser. Short selling increases the volatility of the market for the sole benefit of speculators in this zero sum game.
You just want the market rigged in your favor.
It doesn't artificially and temporarily increase the supply of stock, it naturally and permanantly increases market liquidity (assuming someone has to actually borrow the shares at market cost before selling it short, unlike a broker dealer in the USSA).
The alternative is the long term holding fool who doesn't panic first, loses the most. It isn't a zero sum game, if you think it is then you shouldn't be in the market, because you don't understand how equity martkets work.
Re: Soros:
"and what did he do with all his money? He helped the neocons foment revolutions ..."
Not buyin' anything that puts Soros into a NeoCon side.
Perhaps u don't know who NeoCons are, do you?
I do buy that Soros foments revolution for his own benefit, and has been forever.
- Ned
Sometimes you just have to believe the flush is coming.
When the pension funds and 401k's can't pay you what they promised, at least here you'll know where some of that money went. You can thank the casino owners and their shills for transferring YOUR money into THEIR pockets. Pure sociopathic behavior as described in Snakes In Suits.
I don't think normal future traders who operate without inside knowledge or market manipulation are sociopaths. They're just playing the game. We shouldn't have a game which encourages are best and brightest to play casino on the financial markets, but hard to blame them for that.
In my opionon futures markets should only be open for producers and consumers for true physical hedging, the rest should be as regulated as normal gambling.
...futures markets should only be open for producers and consumers for true physical hedging...
and the regulations to be applied to "gambling" would differ in what way? I agree with the need for producers to use the vehicle to prevent bankruptcies when times are "good", (bumper crops, etc.), but it falls apart when the producer is someone like Hunt's Sunshine Mining in the 80's and his attempt to utilize his silver production in ways to expose the fed's underbelly. Personally, I wish he would've succeeded and shown the ludicrousness of removing pms from our nation's every day currency / trading standard.
Congress should've sided with him instead of amping up the CFTC's power at the cost of diminishing their own.
jmo.
I guess he trimmed his horns and took an "ice bath" before that "photo-op".
Unibet not in the list?????
So he won a billion at the casino, who lost? A pension fund, some 401k's, an insurance annuity.
Who lost? Whoever are the complacent assholes who held the other side of the bet is who.
Since your handle seems to be "long-only" perhaps someone could come along and help you to lose some money in the future?
- Ned
Wow some real hatred. My handle is a joke towards the system, but I guess you are so consumed with anger you can't understand a little bit of humor.
Some trusted "the system" under (and with) the very best of intentions to all involved, only to find they themselves were the marks.
Hatred, hmmm, now thats a special word.
My ex-boss looked at me today when I told him I had bought and sold our companies stawk and made myself a tidy profit on it with that same kinda look I assume...hatred...at first.
Then it dawned on him, it was time for him to get out too, I just took some of his money perhaps, now he was going to get less of someone elses.
I guess thats what that look was ;-)
I know that look nmewn. Good on you!
[Then it dawned on him, it was time for him to get out too, I just took some of his money perhaps, now he was going to get less of someone elses.]
Yeah, I know how to play their stupid game all to well and it probably pisses off the bookmakers that some small fry risked 25% of his 401k and walked away before they could snag him but thats just the way it goes.
They still ripped me off a little (by the structure) giving me the bottom of the day instead of when I actually got out.
But I fucking raped their ass...and they know it ;-)
Stay flat. Keep your powder dry.
I thought about you a couple of days ago.
I wanted to sell some scrap gold and the guy offers me spot.
I laughed and started to walk away.
He says, " are you in the business?" I said NO, I'm a currency trader, and the margin between paper and physical is 8% with carrying/flooring costs.
We settled our deal. ;-)
nmewn we're going to meet soon. Do you like hunting for treasure? I love finding and exploring.
Your wife will grow to hate me. Joking
Well, as a matter of fact Mrs.N and I have an "expedition" set up right now in a month or so, maybe we'll find a little Mayan gold. Or jade...lol. And yes, I think we would recognize each other immediately friend Yen. Of course there's all forms of "treasure" out there to be discovered.
Sometimes one discovers it's been right there in front of them the whole time ;-)
Y'know kid, I do have the ability to do hatred, just not at u. Anger? You haven't seen anger.
But y'know, posting with emotion, why that is an excuse for me to tease your ass. Please don't bring your D-Game if you can get better.
I'm a'guessin' that this was your best shot.
Epic Fail, put another quarter into the machine and try again.
- Ned
and that's my reddie on ya. Bring-it!
Who lost? I'm guessing it's the stupid peope who insist on holding onto very over valued investments. Bulls make money, bears make money, piggies get slaughtered!
Why I step around these here parts very carefully, don't cha' know. - Ned
I'm guessing this guy's parents will be wanting some rent money this month. http://www.bloomberg.com/news/articles/2015-08-28/while-many-panicked-ja...
Mr. Taleeb, you too joined the "what's under my pillow group." Let me tell you one thing. The riches that are being plundered in this ZIRP era will not be celebrated. Your kinds are raising a whole generation of gamblers. You borrowed and that is the reason why FED is successful. Run as much as you want... you will realize it was a mistake.
http://just-a-thought-from-thinair.blogspot.com/
Perhaps you should read one of his books and then rethink your statement.
Or you could read some of his wacky comments trying to defend religion on his Facebook page, such as saying Richard Dawkins is not a scientist (?!), and criticizing him for having the gall to "judge a non western audience by a western metric". (GASP!)
He did a long post about how religion is impervious to attack because it means different things to different people - cultural, spiritual, traditional, yadda yadda yadda. He talks some sense but I can't wade through drivel of this magnitude.
BTW? WTF is Tulip Trend Fund, about 10-15 line items down?
I'm going to dig into this so called accredited ,exchange traded, capitalized > NDQ -$20b<
Who was the underwriter? Google sucks!
I'm being facetious. I'll find the registered agent yesterday.
Perhaps Mark Spitznagel could cough up $100 million for Ron Paul's sons Presidential campaign - That's chump change to him now and enough for Donald Trump to blush
Kudos. One of the best financial engineers around who talk real math. Disliked by the "Spinners" as they are threatened by his exposure of the frauds. Now, He put his money where his mouth is.
CHICAGO (Reuters) - It's an unlucky time to hit the jackpot in Illinois. The state's budget crisis has frozen millions of dollars in lottery prize payouts, state officials said on Friday.
http://news.yahoo.com/lottery-dreams-turn-nightmares-illinois-budget-cri...
take it from a guy who knows, having a few big days and making tons of money in options is no different than the lotto ticket buyers who, after years of buying them, hits the $10,000 jackpot that his friends all hear about and envy.
Trouble is, he either laid out $50,000 to get to this payday, and he will give it all back plus a whole lot more, chasing the next jackpot.
Funny thing is that in America, almost all males could have learned that simple lesson as kids at county fairs.
How much did that big, stuffed bear that your girlfriend carried out that night actually cost?
Okay, after some "due diligence", her's the Tulip/Hedge Fund investment profile.
LMFAO!
An Offshore Trust/, and I could be wrong>
Fund factsheets | Progressive Tulip Trend Fund Overview | Progressive Capital Partners | Offshore Mutual | FE Trustnet Offshore
Look at the blue line as it dives across the revenue line. I can't stop laughing~
TRUSTNET-OFFSHORE. lol Look at this chart
WTF? I'm taking a screenshot! This beyond laughable!
The base currency is JPY in the report.
Fuck You money.
Two sides to every trade, well there should be, but these days who knows. For them to win One Bigun, somebody else must of lost One Bugin.
Sooooo, who did they steal from ?
There are two sides to every trade, even if someone is trading with an affiliated counter party, but it's only even possible to be zero sum if BOTH parties to a trade are CLOSING positions and realizing gains or losses. Price is simply a reflection of the last transaction to post, and unrealized gains or losses are simply a function of that price.
I work at home and earn $100000000000000000000.00 an hour! You could almost match this if you would pay attention. Now who would say anything like this?
"a centrally-planned cesspool of academic intervention" .... did someone NOT make a billion dollars .... tsk, tsk ?
I hope Nassim Taleb is a Jew .... and not a Muslim .... here´s hopin´hooray for our side .... booyah !
Too human to be a joo.
The wake is over .... I really didn´t care for George Carlin .... his Football/Baseball comparison was good .... a lot of his shit was unfair and cheap shot .... he took it too far .... a lack of balance .... and a lack of genuine affection for his country .... which was pretty good to him .... I´ll take Bill Cosby over Carlin .... call ne a nigger lover .... in this case !
If you think Taleb consistently beats the market you're nuts!
Unrelated...but just read that HSBC will be the next Lehman...$1Trillion in losses in the last month. Apparently the Charles Schwabb "glitch" yesterday (mentioned on ZH) was directly related to HSBC's (secret for now) implosion.
Taleb is a charlatan. He wants you to think he discovered or invented something very smart. But all is said is well known for long among mathematicians and statisticians (fat tails etc). Nothing new. Those who think otherwise are simply ignorant of quantitative finance techniques and history.
How much of "Sheeples" Money is there in that $1 Billion...?! ;)
is he hiring?
Not a real bear market until both the Bears and the Bulls have been hurt
I've been a big fan of Taleb since reading his first book several years back.
Delighted that this fund he advises made a killing on Monday.....I'll hazard a bet that they are up 100% by EOY.