Bonus-Whoring-Funded-Trend-Following-Fund. Opinions please:

[otctrader]

Interesting idea, but please read Neiderhoffer WRT the viability of trend following systems; many of the "legendary" trend followers were either products of good timing and/or benefactors of random probability distribution.

Having said this, many trend following systems DO backtest profitably, although frequent whipsaws, false breakouts, and false re-entries cause massive variance as Richard Dennis would point out. Drawdowns in excess of 50% for the Turtles were NOT uncommon, and the Sharpe ratio for any such system is often not pretty.

Whatever the case, best of luck.

[parttimepro]

What a coincidence! I was going to offer a very similar fund. Here's how it works:

1. Everyone gives me $2000.
2. I go to Las Vegas and put it all on black.
3. Profit. You've doubled your money! And all I want is a 25% cut.

Everyone sees how this is basically a freeroll for baulucky, right? He'll take some crazy risks in the market. If he loses, he hasn't lost any of his money, and if he wins, he gets a very substantial cut. And you can't cash out for 15 years, so he gets to keep spinning the wheel until he finally loses.

[irongarden]

[ QUOTE ]
[ QUOTE ]
No fund manager anywhere has had a long term return that is mroe than 20%.

[/ QUOTE ]

This is incorrect. Do a google search for "Managed futures Funds" and see for yourself. It depends a lot on leverage.

[/ QUOTE ]

I'm searching, but the "Managed Futures Funds" mostly takes me to links to people who want to sell me managed futre funds. What I'd like is for you to point me to just 2 funds that have better than 20% annual return over a 10 year period. One of the sites from the search brags that

[ QUOTE ]
Commodity indices have far outperformed stocks, bonds and real estate since 1998, where the Rogers International Commodity Index has risen over 100%

[/ QUOTE ]

Yes, a 100% return in 7 years is doing better than the S&P, but it's still only 10% per year. Perhaps a great fund manager could beat this substantially and get 16% per year, but again, this is during a boom period for commodity trading, at a time when the stock market was being spanked. Looking at these years and considering them typical might be similar to looking at the late 90's stock market and calling the internet bubble typical.

From the Morgan Stanley website (which came up doing your recommended search):

[ QUOTE ]
Typically, managed futures investments are speculative, involve a high degree of risk, have substantial charges and are suitable only for the risk capital portion of an investor's portfolio.

[/ QUOTE ]

As other posters point out, this is just a freeroll for you, since you have nothing to lose, but everything to gain...

[Baulucky]

[ QUOTE ]
As other posters point out, this is just a freeroll for you, since you have nothing to lose, but everything to gain...

[/ QUOTE ]

Fair enough. I only have time to lose... same as every other investor in the fund that actually does the bonus-whoring to fund the investment. I would be losing a lot of my time, compared to the investors though.

The freeroll idea is the whole point of the deal. Freeroll for me, freeroll for everyone else.

[buffett]

[ QUOTE ]
a 50% yearly return ... in 20 years

[/ QUOTE ]

(Note: I haven't read any of the other responses yet.)

This is a joke, right? Please tell me this is a joke. 'Cause if you're not joking then you have officially designated yourself as a huge "fish" in the investment world.
-web

[Baulucky]

I take it that you would not be investing in the fund. Correct?.

[irongarden]

[ QUOTE ]
The freeroll idea is the whole point of the deal. Freeroll for me, freeroll for everyone else.

[/ QUOTE ]

How is it a freeroll for everyone else? They have to invest money. The fact that they got that money from whoring poker sites doesn't somehow make this a freeroll. Anybody who has earned the bonuses has the option to take that money and use it however they want. Asking someone to fund this using bonus whoring money is no different than asking someone to use money from their paycheck.

And I'd really seriously like to see you point me to any two funds with a longterm return of greater than 20% annually.

[Baulucky]

[ QUOTE ]
And I'd really seriously like to see you point me to any two funds with a longterm return of greater than 20% annually.

[/ QUOTE ]

Since you have been so nice to me, I will endeavour the rest of my life to work free for you, just for you.

To everyone else: It seems this idea does not have any traction at this point. Thanks for taking the time to read it.

[buffett]

[ QUOTE ]
I'd really seriously like to see you point me to any two funds with a longterm return of greater than 20% annually.

[/ QUOTE ]
The big three are (not coincidentally) all residents of Graham-and-Doddsville:
1. Warren Buffett
2. Seth Klarman
3. Eddie Lampert
There may be a few others, but not many.
-web

EDIT:
In golf terms, think of these 3 as Tiger Woods, Bobby Jones, and Jack Nicklaus. To put baulucky's goals into perspective, his 50% annualized return is the golfing equivalent of saying he's going to win on average three of the four major golf tournaments every year for the next 15 years. Preposterous. Do not give him your money.

[Baulucky]

[ QUOTE ]
EDIT:
In golf terms, think of these 3 as Tiger Woods, Bobby Jones, and Jack Nicklaus. To put baulucky's goals into perspective, his 50% annualized return is the golfing equivalent of saying he's going to win on average three of the four major golf tournaments every year for the next 15 years. Preposterous. Do not give him your money.

[/ QUOTE ]

Listen BUDDY: ANYBODY that only did the following, would have outperformed Buffet: Bought BRK on a simple 10% margin.

Those three yuou mention, are simple buy-and-holders, and yes they have done very well, at least till the stock market started going down.

If you want to further your knowledge just a little stretch, investigate the performance of John Henry, and/or Ed Seykota. Those are TRADERS.

In any case, it does not seem that this fund is going anywhere, but I resent your disinformed comments. There are MANY entities making 50%+ per year, especially the small and nimble. There are SEVERAL managing $1 Billion+ and making 25%, those big ones can only participate in a handful of markets, as opposed to the smaller funds.

End of lesson, Watson.