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gill


Total Posts: 200
Joined: Nov 2004
 
Posted: 2018-05-25 11:17
https://www.bloomberg.com/news/articles/2018-04-23/paulson-levers-up-bets-seeking-big-fees-while-risking-his-money

I think pay-off for the strategy looks quite good assuming that the distribution of fund return follows more or less normal distribution.
Any arguments why that could be a bad proposal?

greatsquidkite


Total Posts: 1
Joined: Jun 2018
 
Posted: 2018-06-07 07:52
Check the leverage. Prelude, according to their SEC files, are AT LEAST 13x levered. The other two are 3-4.

goldorak


Total Posts: 1042
Joined: Nov 2004
 
Posted: 2018-06-07 21:07
Dd you read the name of the manager? I mean, common, wake up.

If you are not living on the edge you are taking up too much space.

HitmanH


Total Posts: 461
Joined: Apr 2005
 
Posted: 2018-06-08 01:43
Works well for HFT guys with high Sharpe who need a little more capital
Works well for guys to lever their own cash, a form of levered to F (and downside pain) best ideas fund.

For low Sharpe (look at Paulson last few years), it could be a desperate throw of the dice.
Or - if you had some inside / sure information (not saying he has) - then this is a good way to get more out of it...

ronin


Total Posts: 317
Joined: May 2006
 
Posted: 2018-06-08 10:53

He is desperate, his clients don't trust him.

Won't end well for either side.


"There is a SIX am?" -- Arthur

FDAXHunter
Founding Member

Total Posts: 8362
Joined: Mar 2004
 
Posted: 2018-06-21 10:02
Agreed. This won't end well.

The Figs Protocol.

rickyvic


Total Posts: 125
Joined: Jul 2013
 
Posted: 2018-07-02 13:12
well he's got enough cash to be happy anyway :-)

"amicus Plato sed magis amica Veritas"

gill


Total Posts: 200
Joined: Nov 2004
 
Posted: 2018-07-02 14:59
Did no tknow that he is x13 times leveraged. In that case pay-off might be binary and the difference between expected probability weighted first and second loss is not that big.

goldorak: With a more adequate leverage it is a very nice pay-off structure, even if you believe that the manager cannot generate any alpha.
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