Next Up…Superfund

As I mentioned the other day, trend followers killed October. John W. Henry was up big, but so was Superfund. Superfund’s ‘A’ fund was up +17%. Their ‘C’ fund was up +35% on the month. Ladies and gentlemen, +35% for one month during the month that was a meltdown for everyone else, is noteworthy to say the least. I am sure I will be posting more positive numbers from other trend followers soon.

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13 thoughts on “Next Up…Superfund

  1. This is great news for Superfund, especially considering the amount of negativity they have received in the past from other hedge fund managers.

  2. “Negativity from other hedge fund managers” ?
    First time I have heard of something like that. Care to explain more?

  3. Please provide YTD returns when post monthly gains or rolling 12 months. We could use a better perspective. I was the long the SPX2x short. Had big gains for one security but was not a reflection for the overall portfolio.

  4. Jake,

    I remember reading an article on Superfund that detailed how the fund was started and some of its success. In one section of the article they had interviewed other hedge fund managers asking their opinion of Superfund, and I’m pretty certain that the founder of Winton Capital, David Harding, was a critic of Superfund.

  5. For what is worth, since I have met many of the people I write about, they are all very competitive. Like great athletes, they respect each other, but trash talking like Michael Jordan would have on the basketball court, ain’t unusual. I find most top traders have great similarities, even if they go about it a little different from each other. At the end of the day, personalities are fun, but performance is the measure for all of these guys. Tough business where you need tough skin!

  6. Thanks Alex and Michael.
    I guess, it’s like what Michael said, you have got to downplay some of the competition at times. In the end, performance will do the talking.

    Cheers

  7. About (other non-trendfollowing)hedge fund blow ups see: http://web.mit.edu/alo/www/Papers/august07.pdf.

    In 2008 hedge funds and banks lost 40 billion USD in countertrend shorting spread between common and preference stocks from VOW (Volkswagen; german car producer). The common stock ran from 170 EUR in january 08 to the ATH of 1005 EUR in october 08. The short squeeze was a desaster for countertrend players.

  8. While I don’t disagree with Superfund’s trading style, their fees seem high. 8-10% annually for admin plus 25% incentive

  9. Michael,

    While I agree that October was indeed the most cruel month, the fact remains that unless one compares a fund over a longer period, it can be a eyewash. Funds that have minted in October will in all proability be short funds, but how have these been performing over last few quarters. Also,what is the Beta of the portfolio so as to understand the Risk:Reward percentage of the stock.

    One great month does not make a great fund. LTCM had 4 Great years before it just went bust.

    Prashanth

  10. Prashanth, I don’t write about traders with lucky one months. We are talking traders often with decades of performance. I am also not just talking the stock market as trend traders did not alone make money shorting the S&P.

    Lastly, since it is a whole other can of worms, judging risk is not just Sharpe ratio. Penalizing traders for upside volatility, which many so called smart folks do, is not so smart.

  11. A good reminder how trend traders won in October 2008 can be seen in how they won in August 1998. The final month, the month that catches the headlines, is set in motion long before you ever get to that month. See p. 124-135 of my book “Trend Following”. Different event today, same thing though.

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