What is wrong with people?

After a great dinner with a few glasses of wine I was sitting in bed with my laptop ready to hit the sack when I came across this article:

What if Elvis ran a Hedge Fund

This entire concept of “rockstar” hedge fund manager really bothered me for some reason I can’t quite pinpoint. Although I respect Ackman and assume he’s a smart and competent guy, he blew up. His first fund Gotham Partners closed down. He started another fund that invested 100% in total return swaps in Target which did equally well, as in blew up also.

I freely admit his analysis on MBIA was prescient, his investment in General Growth Partners was awesome. But I know many individuals, including many that I work with, who made a lot of money in both trades. Did they have the guts to go ALL-IN on the trade. NO! Of course not, to do so would be foolish because in investing and speculation, there are no 100% trades. There certainly are high conviction trades which justify a higher capital allocation but to go all in is just plain gambling and reckless.

Yet Bill Ackman is celebrated as some kind of Elvis. Really? Maybe I’m not giving him enough credit and it’s likely I’m just a bit jealous (or it’s the wine) but this type of icon worship just screams to me how ignorant people can be in the realm of speculation.


~ by largecaptrader on October 15, 2010.

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