Maybe I’m just a cynic, but does anyone else take issue with the media’s overexposure of certain individuals who “saw it coming,” i.e. the economic collapse? Nouriel Roubini in particular comes to mind. Any chance these people are just eternal bears who were bound to be right eventually? Is there any real reason to believe that they have the ability to continue to predict the future with any accuracy?
i’m… coming… hahahha
Monica Lewinsky
Meredith Whitney is perpetually bearish. So it Roubini.
This guy saw it coming ( not Michael Lewis, the HF manager in the first part). He made a s*** load of money with his insight. http://www.ritholtz.com/blog/2010/03/60-minutes-michael-lewis-the-big-short/
There are enough people out there that you can take either side and given various time horizons you will always be correct. The queston is can you replicate it on a consistant basis
what do they say about a broken clock??
storko Wrote: ------------------------------------------------------- > i’m… coming… > > hahahha LOL
mo34 Wrote: ------------------------------------------------------- > This guy saw it coming ( not Michael Lewis, the HF > manager in the first part). He made a s*** load of > money with his insight. > > http://www.ritholtz.com/blog/2010/03/60-minutes-mi > chael-lewis-the-big-short/ Vanity Fair ran a piece on him. Great read, http://www.vanityfair.com/business/features/2010/04/wall-street-excerpt-201004
I’m sure the guy did make a boatload. But the point is: there are people making bets on 3-4+ standard deviation events all the time because they offer a huge potential payoff. If one of these happens to come to fruition, does that make the investor a genius or just someone who got lucky making a big bet on what the market deemed to be an extremely unlikely event?
yeah it’s the law of large numbers, a few are bound to be correct. There is nothing instrisically different or special about these people except they got lucky.
flynnch Wrote: ------------------------------------------------------- > There are enough people out there that you can > take either side and given various time horizons > you will always be correct. > > The queston is can you replicate it on a > consistant basis Why the envy ? The guy was obviously very smart to start looking at what’s going into the CDOs, he was then smart in determining the high of that market (When he saw negative ARM mortgages being packaged into AAA tranches) and finally he was a genius in finding a way to leverage his insight by buying CDS from the investment banks ( instead of simply shorting the builders which anyone could have done).
mo34 Wrote: ------------------------------------------------------- > Why the envy ? I believe that’s already been covered: “I’m sure the guy did make a boatload.” “He made a s*** load of money.”
No envy my post was just after yours if you look at the time … so I didn’t actually read your post (and still have not) as it was posted while I was posting. But to further my point I can only determine if somebody is smart if they can replicate their activites otherwise I would consider them lucky. Which is fine for them but I am not going to study what they did and see if I can do it because it could be random. To quote somebody famous thier process might work … until it doesn’t.
Yeah, I saw that people would see it coming.
flynnch Wrote: ------------------------------------------------------- > No envy my post was just after yours if you look > at the time … so I didn’t actually read your > post (and still have not) as it was posted while I > was posting. > > But to further my point I can only determine if > somebody is smart if they can replicate their > activites otherwise I would consider them lucky. > Which is fine for them but I am not going to study > what they did and see if I can do it because it > could be random. > > To quote somebody famous thier process might work > … until it doesn’t. It’s nothing personal, but you have to give the people who profited from it some credit. You have people on this board who finish the CFA and feel they’re the next King Kong 
I worked with a HF manger who started shorting the RE market in 2005, he even sold his house in Hollywood and moved to a rental. He is out of a job today after he had to close down his fund in 2007 when he failed to deliver from 2005 to mid 2007. My point is, even if timing the cycle was luck, playing it with the CDS was pure evil genius.
There was a good book about this I recently read called “The Greatest Trade” ever. It follows John Paulson, two other hedge fund managers, and a trader as Credit Suisse who all figured out what was coming and profited huge by it. What I liked was how the author details not only what they did but also why they did it. It’s also important to note none of these managers / traders were of the “permabear” variety.
There was a good book about this I recently read called “The Greatest Trade” ever. It follows John Paulson, two other hedge fund managers, and a trader as Credit Suisse who all figured out what was coming and profited huge by it. What I liked was how the author details not only what they did but also why they did it. It’s also important to note none of these managers / traders were of the “permabear” variety.
monger187 Wrote: ------------------------------------------------------- > I’m sure the guy did make a boatload. But the > point is: there are people making bets on 3-4+ > standard deviation events all the time because > they offer a huge potential payoff. If one of > these happens to come to fruition, does that make > the investor a genius or just someone who got > lucky making a big bet on what the market deemed > to be an extremely unlikely event? the question is, does this strategy outperform? I don’t think the people who make these bets would call it skill. Maybe they’re just smart enough to know that SOMETHING is going to happen at some point and if you gain that exposure through small, highly leveraged bets, you’re bound to hit once in a while with huge upside and limited downside. Maybe they’re smart enough to know it’s better to be lucky than good… No idea if this strategy outperforms, would be interesting to see some data on it.
mo34 Wrote: > It’s nothing personal, but you have to give the > people who profited from it some credit. You have > people on this board who finish the CFA and feel > they’re the next King Kong > > I worked with a HF manger who started shorting the > RE market in 2005, he even sold his house in > Hollywood and moved to a rental. He is out of a > job today after he had to close down his fund in > 2007 when he failed to deliver from 2005 to mid > 2007. > My point is, even if timing the cycle was luck, > playing it with the CDS was pure evil genius. Hey I’m just trying to eak out my meger existance and feed the family so I would be dwarfed by those King Kongs. My point was that your post was not up whne I replied.