Personal trading on buy side (Hedge fund)

[Black_Swan]

@Nerdyblop

personally i dont like instamodels. too muc variety. i dont like thickness.

now what’s wrong with l brands? the same problem with most retailers.

it trades based on its earnings. from a balance shset perspective, if it were liquidated it would be worthless. it generated about 750m in fcf on its last 10k. it has a ton of lease obligations and debt. if we were to look at net debt alone, its about 5b or a 6x multiple to fcf. to make matters worse the business as you said is in decline. and that is the main problem plaguing all retailers. the rise of tech cos with online sales or easy advertising with social media has hurt their biz and brand.

Yeah but Lbrands story is unique in that it got crushed by the whole millennial fashion move and bralettes. Assuming any fashion cyclicality (and it feels approximately there on the timing) there should be some form of top line recovery in the works at some point. Even if you assume online is an issue, VS can sell with brand distinction online and justifiably command a premium since it’s a differentiated product. So I guess my question is more around whether the push up bra and more generally bobs are coming back into style yet.

[GorillaNerd]

no idea. i dont know much about fashion history, cyclicality, or overall trends. also on vs online, if you look at any retailer with an online component, they usually seperate their online to show it is doing extremely well and usually on par with other publicly traded online only company. the issue is truly their leases which are locked in compounded with the declining comp sales, or the level of debt they carry. the only retailers that are doing well are discounters/home improvement/auto parts as far as i can tell.

i personally like bralettes more. the more revealing the better.

[Gigaloo]

Thanks for your inputs guys. I have decided that it’s just not worth the risk. I do plan on making a career in this industry (hedge funds) so I’ll have to come to terms with this fact sooner or later. I’ll try to develop other hobbies/interests to fill the gap.

I had already stopped trading after I signed the offer letter, but recently my manager didn’t take a position on 3 good medium to high conviction trades recommended by me, all of which occurred exactly as expected. I genuinely hate missing opportunities and therefore this desire to personal trade surfaced but again, perils of this industry I suppose.

Thanks again everyone, let me know where you guys discuss investment ideas, would love to participate.

[Sweep_the_Leg]

@brain\_wash\_your\_face

Guys, you should never use cliches. They’re old hat. And, not to be a broken record, but don’t repeat yourself. It’s redundant. And lastly, noone anywhere should ever, under any circumstances, generalize.

Only a Sith deal in absolutes.

[pejp]

I worked for a very large global macro hedge fund for 12 years. We had minimum trade size of $5k, everything had to be pre-cleared, and we could only sell out in less than 30 days at their discretion if we suffered a significant loss to the position. Basically, we were told that the occasional trade is fine, but we had guys putting in multiple trade requests per day, to the point that management started to ask if they were there to do their job, or to personal trade. It was basically discouraged.