This Hedge Fund is Up +88% This Year
This week 13Fs came out.
And the talk of Twitter and almost any financial news piece was that Michael Burry had a bearish bet on the markets.
Everyone is talking about how it is “93% of his portfolio and $1.6B” and it could not be further from the truth.
Meanwhile, you have one of the world’s best energy traders up a staggering +88% this year or roughly $390 million.
Does it make the news? No, why would it - why would a hedge fund manager who was not famous in a movie be cared about?
Even though, he’s probably near a billionaire at this point and returned +200% last year and over +100% the year before.
This is almost +400% in 3 years on HUNDREDS OF MILLIONS OF DOLLARS.
And yet, here the internet is obsessing over incorrect data on Mike Burry having a $200mm position short the market.
We live in interesting times.
You see, when I came up in the game, I looked at the likes of real traders like Michael Marcus, Bruce Kovner, Paul Tudor Jones, Andy Hall….
Not some person on Twitter with a fake profile photo and charts with indicators all over them.
I went and said, who’s here making the big money and how are they doing it?
What is their edge?
The thing is most of this is staring most of you in the face.
But you’re obsessed with what mainstream media wants you to be obsessed with instead of looking around for who’s really doing it.
I learned this lesson at a very young age to be true.
Because most of what you think applies, especially in financial markets, could not be further from the truth.
Markets are vast. That manager above is a CTA which is short for Commodity Trading Advisor.
What that means, if you’re wondering “what stocks he has”, is that he has zero.
That fund traffics in natural gas futures and natural gas options.
For the record, I have traded Nat Gas options, but WTI CL is where my comfort zone is.
And you can bet that this manager also traffics in other financial products because when you understand how this all works, at the end of the day, it’s all the same thing.
But let’s be clear - most cannot handle the volatility (P&L swings) that it takes to put those numbers up like that.
It takes a certain type of personality, in my humble opinion.
He talks a bit about his career in this video below and it’s a good watch.
This is an interview he did (Not a fan of Pomp but this is what we have)
There are a few gems in there and I’ll leave it to you to decide what is of value.
For me, the takeaway from traders like this has been the same as it was for me when I began decades ago.
You trade massive size when you have conviction.
Volatility is to be expected and embraced.
Find the edge; in whatever situation or asset class that happens to be!
That all involves having a repeatable investment framework.
One that allows you to look across the world and assess situations and then decide how to best put that money to work to extract gains.
We’ll be covering cross asset trading and discussing how to find an edge in any market environment there is.
Enjoy that watch above and I’ll see you in the next post.
This article is presented for informational purposes only, is an opinion, is not intended to recommend any investment, and is not an offer to sell or the solicitation of an offer to purchase an interest in any current or future investments. Any such solicitation of an offer to purchase interest will be made by a definitive private placement memorandum or other offering documents.