A friend of mine kept sending me links to these ridiculous funds saying ‘I just want to punt’, and asked my views on these firms that make 1000% a year.
Naturally I gawked, I would never touch anything like this, but genuinely what’s the deal with these gigs? (See below)
Surely these funds go bust after a couple good years, extorinately high leverage, caught on the wrong trade and wiped out? Any firm that made this kind of money sustainabily would be fully funded by rationale investors all over the world, yet they are not.
I tried to tell him, that funds that have made this kind of performance already, are unlikely to repeat that again and that he has missed the boat, but generally these funds make me very suspicious.
Can’t be true. Only a C.F.A. can guarantee those kinds of superior returns.
Most people don’t understand finance as well as they think they do. You have to say things to them to get them to realize why it’s not right, such as “if these had consistent returns of x%, don’t you think everyone else would be doing it too?” If a firm had these kinds of returns, I an promise you every other firm in the world would be doing/trying to do the exact same thing. Anything with returns like that is too good to be true.
even if it is legit its likely not scalable. Same problem plenty of guys who run successful funds run into. Your trades are a bigger chunk of the market and make move against you instead of skimming.
The performance table that link opens up…If that guy started with $100k back in 2015, he would have $1 billion by end of 2018. He is already very rich.
