Wednesday, November 11, 2009

Misery upon Misery

Im 36, I run a tiny hedge fund that does not pay me what I need to live but we just started 9 months ago - so I have to keep plugging away - besides I hear the job market aint great these days. When I was in my late 20s I made a bunch of dough trading but that well is running dry - or at least almost. I live in a world where most people have good incomes, take vacations all the time, drive the nicest cars, live in enormous houses etc....Im slipping, falling, starting to worry about every dollar and for good reason, Im the father of four wonderful kids that I need to provide for - I have to - I cant let them down or my wife. So I get up everyday at 545 AM to do the only thing I know , (or at least some days I know) trade. I buy and sell stocks, options, commodities, and bonds. If I make my investors money I make money - I need to be right about the market, about my arbitrage positions, about my timing, about everything. I report my progress ($$$) to my investors monthly but I know how Im doing every second of every minute of every day - from the seond I wake up at 545 AM, flip on my blackberry to see where stock futures are trading till the second I go to sleep at night and see what overseas markets are doing.
My fund has returned about 11% YTD, good but not great - I want great - remember Im trying to attract more capital - everybody loves a winner. We started off great - back when the big boys this year were shitting in their pants we were scooping up preferred shares and hedging with options at literally once in a lifetime prices, markets were hopping, up , down all around - but then about 3 months ago the markets became an orderly place again, stocks while reviled back when we were buying em became the objects of peoples adoration. So for the last three months we have sat here and not lost money but battled each and every months to survive - b/c I am so bearish I cant see straight. When you are working with a bias which I most certainly am its tuff, but it is impossible for me to be bullish right now when I read the macro news, state budgets are disastrous, employment sucks (just tonight AMAT and ADBE cut more jobs in the beloved tech sector), the dollar is being kicked to the curb, treasuries are stubbornly bid, and gold is a G-D damned moon shot. And oh yeah stocks have had the sharpest recovery since the great depression - how bout a little yin and yang - how bout a gut wrenching selloff once in a while - how bout some fucking fear - how bout the fact that the market is led around like a little bitch by the likes of AAPL,AMZN,BIDU,GS,GOOG and other insanely overvalued companies is not a good thing. I am not a dumb guy, Im not a genius either - is it wrong for me to believe that after 7 days of rallying in a row that we could get a monster downday - I mean who comes to work everyday and says buy em, buy em buy em - (ok besides Cramer)? Dont get me wrong I have longs as well and have long positions in companies capital structure but as far as the overall averages go we are so due for a pullback - one that lasts, that shakes people, not a one day wonder, not a week , but a month or two of pain.
Bottom line is once again Im struggling at the outset of a month and I hope I'll be able to pull it out - but the stress ah the stress. I love trading and I hate it - but I tell you if I ever become wealthy running this hedge fund I will call it quits - because that means I have done right by my investors, by my family, and by myself and then Ill sit back, stare at the ocean and probably just start crying and hopefully when Im sitting there my wife and kids will be next to me b/c doing this for a living aint easy on them either.

JB

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