2018 Hedge Fund contest

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
LadyGeek
Site Admin
Posts: 44363
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: 2018 Hedge Fund contest

Post by LadyGeek » Mon Jan 08, 2018 4:19 pm

It's the same benchmark we've used since Norbert Schlenker started the contest. For continuity, I recommend using the same position and name.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

veggivet
Posts: 235
Joined: Sun Jan 25, 2015 1:07 pm
Location: New England

Re: 2018 Hedge Fund contest

Post by veggivet » Mon Jan 08, 2018 5:18 pm

Oops...a day late. My apologies to our highly valued shareholders. I was out skiing today, and was researching stocks while I was on the lift. I am changing the name of the fund from the Mirage Fund to the Day Late and a Dollar Short Fund. Hopefully, we'll have the same stellar results we did last year, even if we're not included in the official tally.

LONG: NVDA, TELL, VRX

SHORT: JCP, M, APRN

Quantumfizz
Posts: 11
Joined: Wed Jul 26, 2017 9:26 pm

Re: 2018 Hedge Fund contest

Post by Quantumfizz » Mon Jan 08, 2018 11:18 pm

Name: Maximum Volatility

Longs
AEROHIVE NETWORKS INC HIVE
CALAVO GROWERS INC CVGW
EXTREME NETWORKS INC EXTR

Shorts
GENERAL ELECTRIC CO GE
TESLA INC TSLA
ALNYLAM PHARMACEUTICALS ALNY

BackOfTheNet
Posts: 169
Joined: Mon Nov 30, 2009 9:24 pm

Re: 2018 Hedge Fund contest

Post by BackOfTheNet » Tue Jan 09, 2018 10:18 am

LadyGeek wrote:
Mon Jan 08, 2018 4:19 pm
It's the same benchmark we've used since Norbert Schlenker started the contest. For continuity, I recommend using the same position and name.
Great, I had no idea. I added it back.

doingwell
Posts: 14
Joined: Wed Jun 14, 2017 7:52 pm
Location: MA

Re: 2018 Hedge Fund contest

Post by doingwell » Tue Jan 09, 2018 7:32 pm

BackOfTheNet wrote:
Tue Jan 02, 2018 10:31 am

Opening prices will be based on Jan 8th close.
I think the Google sheet is currently be set up with the opening price as the close on Jan 5 rather than Jan 8. And I swear I didn’t notice this because it makes a huge change in my favor. :D

Tanelorn
Posts: 1442
Joined: Thu May 01, 2014 9:35 pm

Re: 2018 Hedge Fund contest

Post by Tanelorn » Tue Jan 09, 2018 10:13 pm

Thank you, doingwell, for pointing out the formula mistake. I've updated the spreadsheet to reflect Monday, Jan 8th, closing prices as the starting point for the contest.

Several fund managers inadvertently included ineligible stocks, which have been removed individually from those portfolios. Common offenders included BABA, YHOO, SNAP, VRX, and FENX that I noticed so far. If anyone notices any other non-Russell stocks, please let us know and they will be removed accordingly.

In light of using Monday's closing price used and having reviewed their portfolios, I also included our two late entries from Monday night - veggivet and Quantumfizz. As they were entered before the market opened today and since their picks are flat or slightly down so far, I see no disadvantage to other contestants to including them. Further late entries at this point will not be included.
Last edited by Tanelorn on Tue Jan 09, 2018 10:52 pm, edited 1 time in total.

Tanelorn
Posts: 1442
Joined: Thu May 01, 2014 9:35 pm

Re: 2018 Hedge Fund contest

Post by Tanelorn » Tue Jan 09, 2018 10:45 pm

The new year's contest is off with a bang! You can see the results below:

Current Standings - 2018 hedge fund contest

whodidtante lost no time taking a fast 8% gain with his appropriately named Bet Against Eddie fund, shorting Sears (SHLD) and named after the hedge fund manager turned retail CEO. Close on his heels is MidwestMike, up 7.5% with his no longer appropriately named Forty Thieves fund, originally long Alibaba but switched to a single long bet on Intrexon (XON), a biotech play, since BABA was not eligible for the contest (and is flat currently, so he made a great pick so far).

Lastly, I'm disappointed that none of our esteemed fund managers had the foresight to see how Kodak (KODK) was going to move into blockchain photo technology, as they announced today they would be offering their own Kodak Coin ICO (ala an IPO). Frankly, this seems unlikely to accomplish much but certainly has propelled their stock up 300% as of this evening. Congratulations to the Kodak execs and their stock options! They won't be left behind the technology curve, processing Polaroids while their firm slouches towards bankruptcy like last time around.

User avatar
MichaelRpdx
Posts: 324
Joined: Sat Feb 27, 2010 7:18 pm
Location: Portland, Oregon
Contact:

Re: 2018 Hedge Fund contest

Post by MichaelRpdx » Tue Jan 09, 2018 11:15 pm

[edit to delete]
Last edited by MichaelRpdx on Wed Jan 10, 2018 7:40 pm, edited 1 time in total.
Be Appropriate && Follow Your Curiosity

Mudpuppy
Posts: 5853
Joined: Sat Aug 27, 2011 2:26 am
Location: Sunny California

Re: 2018 Hedge Fund contest

Post by Mudpuppy » Wed Jan 10, 2018 3:08 am

Tanelorn wrote:
Tue Jan 09, 2018 10:45 pm
Lastly, I'm disappointed that none of our esteemed fund managers had the foresight to see how Kodak (KODK) was going to move into blockchain photo technology, as they announced today they would be offering their own Kodak Coin ICO (ala an IPO). Frankly, this seems unlikely to accomplish much but certainly has propelled their stock up 300% as of this evening. Congratulations to the Kodak execs and their stock options! They won't be left behind the technology curve, processing Polaroids while their firm slouches towards bankruptcy like last time around.
You know, I will be a little irked but not surprised (so "disappointed" in the parental sense of the word) if all this speculation over cryptocurrency negatively affects the overall stock market once its bubble bursts.

aristotelian
Posts: 3874
Joined: Wed Jan 11, 2017 8:05 pm

Re: 2018 Hedge Fund contest

Post by aristotelian » Wed Jan 10, 2018 7:14 am

Tanelorn wrote:
Tue Jan 09, 2018 10:45 pm

Lastly, I'm disappointed that none of our esteemed fund managers had the foresight to see how Kodak (KODK) was going to move into blockchain photo technology, as they announced today they would be offering their own Kodak Coin ICO (ala an IPO). Frankly, this seems unlikely to accomplish much but certainly has propelled their stock up 300% as of this evening. Congratulations to the Kodak execs and their stock options! They won't be left behind the technology curve, processing Polaroids while their firm slouches towards bankruptcy like last time around.
I don't think they're in the Russell any more...but I thought their reasoning for going into blockchain seems much better than Long Island Iced Tea and the Vape guys.

paper200
Posts: 260
Joined: Sat Feb 02, 2008 11:40 am

Re: 2018 Hedge Fund contest

Post by paper200 » Wed Jan 10, 2018 9:06 pm

Tanelorn,

The ENDO stock price seems to be incorrect in my portfolio can you please correct it.
Thnks
Having freedom, food and roof is being 90% lucky in life and so is index investing. So, don't let the remaining 10% bother you.

Tanelorn
Posts: 1442
Joined: Thu May 01, 2014 9:35 pm

Re: 2018 Hedge Fund contest

Post by Tanelorn » Wed Jan 10, 2018 9:23 pm

paper200 wrote:
Thu Jan 04, 2018 9:19 pm
Bit-Illusion Gas Fund.

Motto: Bits-in-gas-out

Long: ENDO; FLXN
Short: KERX; TSLA
What company do you mean by ENDO? I don't see one with that ticker in the Russell file.

paper200
Posts: 260
Joined: Sat Feb 02, 2008 11:40 am

Re: 2018 Hedge Fund contest

Post by paper200 » Thu Jan 11, 2018 9:08 pm

Ooops my bad. I meant Endo international plc. Ticker is endp not endo.

Thanks
Having freedom, food and roof is being 90% lucky in life and so is index investing. So, don't let the remaining 10% bother you.

honduranhurricane
Posts: 73
Joined: Tue Oct 18, 2016 10:18 pm
Location: boston, ma

Re: 2018 Hedge Fund contest

Post by honduranhurricane » Fri Jan 12, 2018 10:48 pm

Hard to believe I am actually doing this so soon, but can I close my short on SVU. 22+% works for me.

Tanelorn
Posts: 1442
Joined: Thu May 01, 2014 9:35 pm

Re: 2018 Hedge Fund contest

Post by Tanelorn » Sun Jan 14, 2018 1:03 am

Only a week into our contest and already there has been some significant moves.

Current Standings - 2018 hedge fund contest

On the upside:
goblue100 currently has the lead with a quick 22% gain on his sole short WINS, a sketchy Chinese stock known for its high volatility and whose extended halts and fights over their exchange listing were covered extensively in last year's contest. He had picked this as part of his fund last year, and has bet bigger on it this time around. MidwestMike is in a strong 2nd with 16% gains on biotech XON, mentioned earlier, while FinancialDave's big bet on long JC Penney is paying off nicely at +9% as retail fears abate in the wake of good holiday shopping results.

Others of note:
Water had also made a brief appearance in the top ranks, currently still 5th, when his biotech vaccine pick NVAX saw brief gains of almost 80%. While this is only one of his three positions, his fund was up over 20% as their drug showed preliminary promise in a recent more limited trial. The stock is now "only" up 20% as of the weekend, but could easily see more upside if things go their way. NVAX stock has fallen dramatically over the past several years as they had failed to live up to high expectations and vaccine trial results were inconclusive; NVAX has claimed a couple last place entries in this contest over prior years if I recall correctly and is still off 80-90% from its all time highs.

On the downside:
The short Sears crowd, which includes almost 20% of our entries, saw significant volatility this past week and will no doubt see more to come. SHLD was down 8-9% early on but rallied and is now up 5% and the shorts are down accordingly. Those betting against JC Penney also faired poorly, +9% currently. Lastly, on a personal note, we at Tanelorn capital reflect that we seem to be, as we say in the business, "early" to our short Omnito (OMNT) position, which has risen nearly 20% in just the first week and putting us in last place by a 2x margin over the next least lucky contestant. Surely at this higher valuation, OMNT will be an even more compelling short and we are waiting patiently for their fundamental lack of value to catch up to their stock price. "Early perhaps, but not yet wrong".

Bookkeeping notes:
@aristotelian yes, KODK is in the Russell, although I suspect they were kicked out for a while during their bankrupt period.
@paper200 ok, the spreadsheet reflects the correct ticker for ENDP now.
@honduranhurricane I'll close out short SVU short as of the next day's close (1/16 given the holiday). Congrats on your good short!

azanon
Posts: 1733
Joined: Mon Nov 07, 2011 10:34 am
Location: Little Rock, AR

Re: 2018 Hedge Fund contest

Post by azanon » Fri Jan 19, 2018 11:09 am

Tanelorn wrote:
Sun Jan 14, 2018 1:03 am
Lastly, on a personal note, we at Tanelorn capital reflect that we seem to be, as we say in the business, "early" to our short Omnito (OMNT) position, which has risen nearly 20% in just the first week and putting us in last place by a 2x margin over the next least lucky contestant. Surely at this higher valuation, OMNT will be an even more compelling short and we are waiting patiently for their fundamental lack of value to catch up to their stock price. "Early perhaps, but not yet wrong".
Well, I for one am a believer. Your firm's past results couldn't possibly be just luck! And if you guys ever go public, I'll pay the 2 and 20 fee, because what's 2% when your down 15% so fast. Nothing at all! :D

Jeff Albertson
Posts: 472
Joined: Sat Apr 06, 2013 7:11 pm
Location: Springfield

Re: 2018 Hedge Fund contest

Post by Jeff Albertson » Fri Jan 19, 2018 3:19 pm

Image

https://www.economist.com/news/finance- ... their-high
Clients may think they will be able to pick the best hedge-fund managers, not the average ones. But one group of professionals—fund-of-fund managers—tries to do just that. They did manage to pip the average asset-weighted return of hedge funds in 2017, but failed to do so in any of the previous four years. If the experts cannot manage to pick the winners, why should a pension fund or endowment be able to manage the feat?
Good Luck!

User avatar
LadyGeek
Site Admin
Posts: 44363
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: 2018 Hedge Fund contest

Post by LadyGeek » Fri Jan 19, 2018 3:42 pm

If you want dive into this further, see the: Callan Periodic Table of Hedge Fund Strategy Returns (printed pages 13 and 17, pages 14 and 18 by Adobe's count).

It's in the wiki: Callan periodic table of investment returns, under "External links" --> Periodic Tables

My "All in the same boat" market research team may or may not have used this chart as part of our low-cost research effort.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

User avatar
LadyGeek
Site Admin
Posts: 44363
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: 2018 Hedge Fund contest

Post by LadyGeek » Sat Jan 20, 2018 8:03 pm

Revised for 2018, the hedge fund and Bogleheads (S&P 500) contests are in the wiki: Bogleheads® contests
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Tanelorn
Posts: 1442
Joined: Thu May 01, 2014 9:35 pm

Re: 2018 Hedge Fund contest

Post by Tanelorn » Sun Jan 28, 2018 6:17 pm

Here are the updated standings are we finish up our first month in the contest.

Current Standings - 2018 hedge fund contest

On the upside:
goblue100 continues to hold first place with his Two Minute Portfolio, up 32%. He has been notching up additional gains recently as his single bet against the recently high flying Chinese finance company WINS continues to pay off.

csm14 is close on his heels, a newcomer to the top ranks in 2nd with his Kuzmania fund, up 29% currently. His long-only fund had a big winner in Juno Therapeutics (JUNO), which jumped over 70% when they received a $9B buyout offer from Celgene. JUNO may not have much upside from here given it jumped to nearly the $87 merger price on the rumors and finally on the confirmation of the buyout, but the Kuzmania fund may continue to benefit from any biotech advances they make since they also hold stock in the much larger acquirer, Celgene (CELG).

Various Sears bears are back at the top of the list, headed by whodidntante and his Bet Against Eddie fund. SHLD stock is currently down 25%, with his fund up accordingly; this is a 30% swing in the stock price just since two weeks ago when it was up 5%! Sears recently announced proposed stock-for-debt swaps which should buy the firm more time and reduce their interest expenses, but also put pressure on the stock.

On the downside:
Tanelorn Capital is no longer is last with -15% (currently second to last). We could have done worse to bet against Karyopharm Therapeutics, a smaller drug company who recently agreed to sell one of their promising treatment approaches to a much larger company. KPTI is up 22% on the news.

Other notes:
We would be remiss to mention the importance of naming your hedge fund, as a catchy name can go wonders towards improving a fund's prospects. Not their prospects for profits of course, which might matter to their investors, but much more importantly to the fund's ability to raise capital and hence earn fees for its managers. As such, we commend fund managers unclescrooge, of McScrooge's Blockchain Capital Mgmt, and Daryl, of Blockchain Technologies, for capturing the public's interest in all things bitcoin / crypto / blockchain. Apparently this was so much of a problem that the SEC recently forbade companies from changing their names to include the word "Blockchain", as that technique had been (mis?)used to propel unrelated smaller stocks up several 100%s just from their appearance of being related to the Bitcoin Bubble.

https://www.sec.gov/news/speech/speech-clayton-012218
SEC Chairman wrote: Before I move on to the next topic I want to raise one more narrow, distributed ledger or "blockchain"-related legal issue by means of a hypothetical. I doubt anyone in this audience thinks it would be acceptable for a public company with no meaningful track record in pursuing the commercialization of distributed ledger or blockchain technology to (1) start to dabble in blockchain activities, (2) change its name to something like "Blockchain-R-Us," and (3) immediately offer securities, without providing adequate disclosure to Main Street investors about those changes and the risks involved. The SEC is looking closely at the disclosures of public companies that shift their business models to capitalize on the perceived promise of distributed ledger technology and whether the disclosures comply with the securities laws, particularly in the case of an offering.
For this reason, two recent ETFs that seek to invest in companies that may benefit from blockchain technologies were cryptically rebranded to gain quick approval as "Amplify Transformation Data Sharing ETF" (BLOK) and "Reality Shares Nasdaq NexGen Economy ETF" (BLCN). They already raised nearly $250M in assets combined, showing that at least a good ticker and a good theme makes for good marketing even if you can't call your fund exactly what you want anymore. We hear things are going well over at McScrooge's Blockchain Capital Management and Blockchain Technologies on the fundraising side, and I've personally heard of two hedge funds proposing to invest in the crypto space and that's without even trying to find them. I wish them all the best of luck, and hope they manage to live up to the "hedge" in their name if or when the bubble should pop in cryptocurrencies.
Last edited by Tanelorn on Sun Jan 28, 2018 8:53 pm, edited 1 time in total.

GoldenFinch
Posts: 1509
Joined: Mon Nov 10, 2014 11:34 pm

Re: 2018 Hedge Fund contest

Post by GoldenFinch » Sun Jan 28, 2018 8:31 pm

^^^ Regarding fund names, Commonwealth of Buckaroo Dough Holding represents all individuals who wish to be a Buckaroo, not just people who live in the Commonwealth. All you have to do is say you are a Buckaroo and you can invest in the fund. We welcome everybody and promise stellar overall returns! We charge fees, but they are small compared to others and we promise we will be happy if you invest with us.

Best regards,

GoldenFinch
Commonwealth of Buckaroo Dough Holdings
“We hold your Dough, and make it grow!”

Tanelorn
Posts: 1442
Joined: Thu May 01, 2014 9:35 pm

Re: 2018 Hedge Fund contest

Post by Tanelorn » Sun Feb 04, 2018 6:48 pm

Well there was some volatility in the markets this past week (first significant drops in the major indexes in many months), so let's check in on how our fund managers are handling it.

On the upside:
The top three have switched spots but are all the same crew. Currently whodidntante and his Bet Against Eddie fund pulled into the lead of the group, up 31% as Sears fell a bit more than other stocks in last week's market drop. goblue100 and csm14 trail at 28% and 26% respectively. All excellent results for a single month's performance.

A newcomer in 4th, Agggm's Luna fund is next and is up 20% with their long only big tech portfolio consisting of Amazon and Netflix.

Not too much else of note for now.

Current Standings - 2018 hedge fund contest
Last edited by Tanelorn on Sun Mar 04, 2018 8:12 pm, edited 1 time in total.

User avatar
whodidntante
Posts: 3099
Joined: Thu Jan 21, 2016 11:11 pm

Re: 2018 Hedge Fund contest

Post by whodidntante » Mon Feb 05, 2018 8:22 pm

Sears had a gut wrenching day. Huzzah!

Tanelorn
Posts: 1442
Joined: Thu May 01, 2014 9:35 pm

Re: 2018 Hedge Fund contest

Post by Tanelorn » Tue Feb 06, 2018 1:02 am

Better long Sears than XIV or SVZY, some inverse VIX products that seem to have lost 90-100% of their value today. Stocks go up and stocks go down, but to really screw things up requires Financial Engineering.

https://www.cnbc.com/2018/02/05/xiv-exc ... rcent.html

FinancialDave
Posts: 1541
Joined: Thu May 26, 2011 9:36 pm

Re: 2018 Hedge Fund contest

Post by FinancialDave » Tue Feb 06, 2018 11:39 am

Yes,
I think I heard XIV is bankrupt.

I know this was an inverse ETN, but the same is something that can happen to anyone with a short position! It can go up farther than you have money.

Something for those Hedge Fund Managers with only a short position to remember.

:sharebeer

fd
I love simulated data. It turns the impossible into the possible!

Tanelorn
Posts: 1442
Joined: Thu May 01, 2014 9:35 pm

Re: 2018 Hedge Fund contest

Post by Tanelorn » Tue Feb 06, 2018 7:52 pm

desafinado wrote:
Tue Jan 02, 2018 8:55 pm
Everything Is Awesome Hedge Fund

Long:
XIV
YINN
TQQQ

Short:
None!
I had mentioned earlier that desafinado's bullish ETF and ETN portfolio didn't qualify since this was a stock picking contest (ETFs and ETNs aren't included in the Russell index we use as our universe). However, since he seems to have been included in the spreadsheet by accident, I thought we could keep him at least as an unofficial contestant and a cautionary entry. As you will see below, his Everything is Awesome fund is currently down 28% due to a near complete loss in one of the three leveraged fund positions he took betting on the market's continued rise.

His long position in XIV, a daily inverse volatility ETN, spectacularly blew up yesterday when there was a sudden jump in volatility right around the market close, and lost roughly 95% of its value. In addition, the sponsor, Credit Suisse, has decided to shut down the fund and in a few weeks it will be liquidated at whatever value remains. While it took them many hours to decide the fate of XIV, during which time trading was halted and many panicked traders were unable to sell, the company spokeswoman was quick to reassure the markets as early as 6am that Credit Suisse themselves had suffered no losses (unlike their product shareholders), that "Everything Was Awesome!", and also please stop hammering our stock in the after market on speculation we owe tons of money for having their fund blow up for more than a 100% loss or for having been long XIV. We want to reiterate that we were definitely not dumb enough to hold our own product"(**). CS stock had been down 10% in the after market, but quickly recovered on this news.

** - perhaps not a direct quote from the corporate spokeswoman, but you get the idea.

Tanelorn
Posts: 1442
Joined: Thu May 01, 2014 9:35 pm

Re: 2018 Hedge Fund contest

Post by Tanelorn » Sun Feb 11, 2018 7:39 pm

With all the volatility in the market, I thought it would be a good time to take stock of where our esteemed crew of hedge fund managers stood in comparison to the overall market. Real hedge funds often underperform, but claim that they would perform better (or less worse anyway) than the broad market during down market periods. It makes a good marketing pitch (and perhaps an excuse for underperformance generally), but is that true of our group?

Current Standings - 2018 hedge fund contest

Here are some stats from our current contest:

Benchmark (long Vanguard Total Market, VTI) return: -5% YTD
total funds: 71
average fund performance: +2%
funds that are up: 40 funds, 56% of total
average up fund performance: +9%
funds that are down: 31 funds, 44% of total
average down fund performance: -7%

Average long positions per fund: 2.2 (out of 3 possible)
Average short positions per fund: 1.7 (out of 3 possible)
Net long position: +0.5, hence long bias

If you assume the average monkey would pick a stock that would perform with the current average -5% performance of the total market (ignoring market cap weighting effects, as small caps measured by IWM vs VTI are down a similar -5%, a bit more actually), you would think that the average fund in our group would be -2.5% since it is net long 0.5 (i.e. half) of a stock pick. Instead, our group is up +2%, showing we are outperforming our beta-adjusted benchmark by nearly 5%.

Keep up the good work everyone, and nice work to our current and often first place manager whodidntante, who is up 37% by betting against Sears.

Tanelorn
Posts: 1442
Joined: Thu May 01, 2014 9:35 pm

Re: 2018 Hedge Fund contest

Post by Tanelorn » Sun Mar 04, 2018 7:15 pm

Tanelorn wrote:
Sun Feb 04, 2018 6:48 pm
A newcomer in 4th, Agggm's Luna fund is next and is up 20% with their long only big tech portfolio consisting of Amazon and Netflix.
Congratulations to Agggm for taking first place! Both their long picks, Amazon and especially Netflix, powered higher in February, gaining 10-20% each even as the broader market remained mostly flat. Luna fund investors are now up 31% for the year in just two months.

Another contender who just broke into the top ranks at 5th place is vitaflo with their Short Circuit fund, currently up 21%. Their fund consists of only short positions in three retail stocks - Sears, Office Depot, and GameStop. Most recently, ODP fell 20% on poor guidance in their most recent earnings report.

On the downside, XIV, the short volatility ETN mentioned previously as an accidental entry, fell 96% for the year at the end of February as volatility returned to the markets and the short volatility index lost nearly all of its value. There won't be a chance to recover for XIV shareholders either, as it recently liquidated at $5.99, down from over $144 at the start of the contest.

Current Standings - 2018 hedge fund contest
madpunster wrote:
Wed Jan 03, 2018 7:43 pm
Bitqueen Advantage Trust Co
Shorts: MDGL, SGMO, STRP
Longs: FTR, EPE, RAD
Madpunster - a quick update on your Straight Path (STRP) pick. They were bought in a stock merger deal by Verizon, which closed recently. Let me know within a week if you want to close out your STRP short at the merger price; otherwise I'll arrange it so you'll still be short the successor VZ stock (which you can then close out whenever you want, or not, as usual).

User avatar
hornet96
Posts: 408
Joined: Sun Nov 25, 2012 6:45 pm

Re: 2018 Hedge Fund contest

Post by hornet96 » Tue Mar 06, 2018 10:24 am

Please close my position in TGTX at the end of today's trading session (for the Hornet Capital Pairs Trading Fund). Thanks!

Tanelorn
Posts: 1442
Joined: Thu May 01, 2014 9:35 pm

Re: 2018 Hedge Fund contest

Post by Tanelorn » Sun Mar 18, 2018 10:01 pm

Not too many shakeups in the top ranks, where Agggm's Luna fund continues to hold 1st at 38% for the year as Amazon and especially Netflix perform strongly. MidwestMike's XON pick has him in 2nd with 34% and whodidntante's short against Sears has him in 3rd with 32%.

Current Standings - 2018 hedge fund contest

Less impressive, but defying the stock picking odds, Grok87's consternation partners are up only 6% but are notable for having all 6 of their picks, 3 long and 3 short, being positive as of now (funds with fewer than six picks were not considered).

On a statistical basis, our fund managers continue to demonstrate their stock picking skills so far. As I mentioned earlier, the average fund is net long about 1/2 of a stock pick (i.e. average longs - shorts). Given the benchmark is therefore 0.5 * VTI, currently basically flat for the year, the fact that the average of our contesting funds is +5% is roughly 5% alpha on a very crudely risk-adjusted basis. This has been holding up so far, and I'll revisit this from time to time to see if it's consistent or just another type of luck.

Keep up the good work!

MidwestMike
Posts: 47
Joined: Fri Jun 30, 2017 10:12 pm

Re: 2018 Hedge Fund contest

Post by MidwestMike » Thu Mar 22, 2018 5:43 pm

I would like to propose a rule for the next contest. I believe any position, long or short, should not be allowed for a security under $10 per share. It unfairly ignores the effect of the spread and in the case of a short there probably are no shares to borrow.

User avatar
whodidntante
Posts: 3099
Joined: Thu Jan 21, 2016 11:11 pm

Re: 2018 Hedge Fund contest

Post by whodidntante » Thu Mar 22, 2018 5:53 pm

I am hoping for a triumph of the pessimists. :P

Tanelorn
Posts: 1442
Joined: Thu May 01, 2014 9:35 pm

Re: 2018 Hedge Fund contest

Post by Tanelorn » Thu Mar 22, 2018 11:48 pm

MidwestMike wrote:
Thu Mar 22, 2018 5:43 pm
I would like to propose a rule for the next contest. I believe any position, long or short, should not be allowed for a security under $10 per share. It unfairly ignores the effect of the spread and in the case of a short there probably are no shares to borrow.
Smaller spreads and available shares to short are mostly related to liquid, medium sized or larger companies. By size, I refer to market value of the company, which doesn't care whether they have a $1B value by having 10M shares at $100 or 1B shares at $1. This is why we have the Russell index as our universe, which requires stocks to be around $200M in minimum market cap. Much smaller than that the effects you mention become more important. There's certainly no guarantee of good liquidity just becuase a stock has a high price - look at WINS, to pick an example from the contest - it's $140/share and trades a round lot probably only once a day on average.

Gropes & Ray
Posts: 1067
Joined: Wed Jul 16, 2014 7:28 am

Re: 2018 Hedge Fund contest

Post by Gropes & Ray » Fri Mar 23, 2018 3:11 pm

Please lock in my Yelp short.

Mr. Smartypants says the smart stuff* is to bet tech is going up, up, up over the long run.









*Mr. Smartypant's makes no guarantee that his smart stuff stocks will go up. Mr. Smartypants has had a lucky run, but over long term he badly trails the S&P 500.

grok87
Posts: 7865
Joined: Tue Feb 27, 2007 9:00 pm

Re: 2018 Hedge Fund contest

Post by grok87 » Fri Mar 23, 2018 10:21 pm

Tanelorn wrote:
Sun Mar 18, 2018 10:01 pm
Not too many shakeups in the top ranks, where Agggm's Luna fund continues to hold 1st at 38% for the year as Amazon and especially Netflix perform strongly. MidwestMike's XON pick has him in 2nd with 34% and whodidntante's short against Sears has him in 3rd with 32%.

Current Standings - 2018 hedge fund contest

Less impressive, but defying the stock picking odds, Grok87's consternation partners are up only 6% but are notable for having all 6 of their picks, 3 long and 3 short, being positive as of now (funds with fewer than six picks were not considered).

On a statistical basis, our fund managers continue to demonstrate their stock picking skills so far. As I mentioned earlier, the average fund is net long about 1/2 of a stock pick (i.e. average longs - shorts). Given the benchmark is therefore 0.5 * VTI, currently basically flat for the year, the fact that the average of our contesting funds is +5% is roughly 5% alpha on a very crudely risk-adjusted basis. This has been holding up so far, and I'll revisit this from time to time to see if it's consistent or just another type of luck.

Keep up the good work!
thanks for the shout out tanelorn. I'm hoping to be the tortoise that wins the race!
:-)
cheers,
grok
"...people always live for ever when there is any annuity to be paid them"- Jane Austen

Tanelorn
Posts: 1442
Joined: Thu May 01, 2014 9:35 pm

Re: 2018 Hedge Fund contest

Post by Tanelorn » Sat Mar 31, 2018 11:48 am

Well the first quarter is behind us, and many index investors will not be sad to see it go. High volatility returned after years of relatively calm markets, leaving broad stock indexes -2% for the YTD in terms of total return despite having been as high as +8% in January. Bond markets fared no better, also -2% as the Fed followed through on their rate hikes at the past several meetings and handed investors losses on longer term bonds as interest rate risk has showed up for first time since the 2008 crash.

As always, it was a stock pickers market and our best stock pickers have done quite well. Here are the current standings as of the end of March:

Current Standings - 2018 hedge fund contest

1. Short Circuit by vitaflo +31.02% (short only, various retail)
2. Two Minute Portfolio hedge by goblue100 +28.79% (single short pick - WINS)
3. Luna by Agggm +27.68% (long tech)
4. Hornet Capital Pairs Trading Fund by hornet96 +22.65% (diversified, long/short)
5. The Bet Against Eddie Fund by whodidntante +21.93% (single short pick - Sears)

Congratulations to vitaflo for his excellent take on the declining retail sector, which also handily outperformed the various consumer sector ETFs that might track a similar area with his short picks in Sears, Office Depot, and Game Stop. His 31% for his Short Circuit fund investors is quite an achievement.

Now not everyone can pick the best fund managers like the top of our list currently and notch up 20-30% gains in a single quarter, but even our average fund manager is performing very respectably so far. Currently 2/3 are in positive terroritory with an average return of +3%. Not bad for a bear market in both stocks and bonds.
Last edited by Tanelorn on Sat Mar 31, 2018 7:31 pm, edited 2 times in total.

Mudpuppy
Posts: 5853
Joined: Sat Aug 27, 2011 2:26 am
Location: Sunny California

Re: 2018 Hedge Fund contest

Post by Mudpuppy » Sat Mar 31, 2018 12:12 pm

I feel like we should also give a shout-out to the bottom of the list:

Everything Is Awesome Hedge Fund by desafinado at -39.74% (all long picks)
Warren Snuffit by krill at -33.40% (one short pick)

It's impressive to underperform so swimmingly, particularly with a single short pick in a declining market as krill has done.

grok87
Posts: 7865
Joined: Tue Feb 27, 2007 9:00 pm

Re: 2018 Hedge Fund contest

Post by grok87 » Wed Apr 11, 2018 4:41 pm

Consternatio partners just broke into the top quartile (17th out of 68). Memo to self- alert CP’s marketing department in case this is short lived...
:)
"...people always live for ever when there is any annuity to be paid them"- Jane Austen

Post Reply