fwiw the market is not cheap. it is only back in line with historic p/e averages. if we get down to a s&p p/e below 10 then things will be looking cheaper.
yeah that mitsubishi deal is saving them. people were very worried the deal was not going to get done due to the collapse in MS's share price.
It's not "common", but yeah, there have been a few that have pocketed over $1 billion yearly. George Soros in the past comes to mind. I remember reading the average hedge fund manager probably pockets on the order of $100-$300 million (that's AVERAGE, so the numbers may be skewed by the billion-dollar boys).
Thanks. I ended up 64% after selling today at 3.90. I just don't trust this market and figured I better take it while I can. I'm still stinging a little from SIRI though. It could be worse though since my average is about 1.20 and I don't have a boatload of shares.
i have a pretty hard time believing those numbers. those numbers have to be referring to something else. remember the average hedge fund pays out 2% of AUM (assets under management) and 20% of profits. the vast majority of funds are not up this year and i'm pretty sure most funds are not over $10 billion in size. wait...just found what you were referring to...you were thinking about the pay for the top 25 hedge fund managers. http://www.usatoday.com/money/perfi/funds/2006-05-26-hedge-funds-usat_x.htm $363M is average pay for top hedge fund managers Posted 5/26/2006 12:21 AM ET E-mail | Save | Print | Reprints & Permissions | By Adam Shell, USA TODAY NEW YORK — James Simons, a mathematician turned money manager who prefers hiring Ph.D.s over MBAs, inched out oil tycoon T. Boone Pickens Jr. as the world's best-paid hedge fund manager in 2005, collecting an estimated $1.5 billion, according to rankings released today by Institutional Investor's Alpha magazine. In rising to the top of what amounts to a who's who list of the secretive hedge fund world, Simons, of Renaissance Technologies, unseated 2004's top earner and first-ever billion-dollar man, Edward Lampert of ESL Investments, who is best known for buying Kmart and masterminding the blockbuster deal to buy Sears. Lampert's earnings dipped to an estimated $425 million last year, down from $1.0 billion in 2004. "These are staggering numbers," said Alpha editor Michael Peltz in announcing its fifth-annual list of Top 25 earners. "It took $130 million to make the list." Pickens also topped $1 billion, earning an estimated $1.4 billion. The average pay of the 26 (there was a tie for 25th place) on the list was $363 million, up 45% from $251 million in 2004. Other big-name managers with big-time reputations in the top 10 included: financier George Soros, who was named "the man who broke the Bank of England" in 1992 after a winning bet against the British pound netted him more than $1 billion; Steven Cohen of SAC Capital Advisors, whom BusinessWeek called "the most powerful trader on Wall Street you've never heard of" in a July 2003 cover story; and legendary trader Paul Tudor Jones II. "These top earners are the best of the best, the real superstars," says Ryan Pearson, senior vice president at hedge fund consultancy Greenwich-Van Advisors. The surge in pay comes amid an explosive growth in the industry, which now has roughly 8,000 funds and $1.2 trillion in assets. A lucrative business model for hedge fund managers, which, on average, entitles them to 2% of assets under management and 20% of the profit, makes these large paydays possible, Peltz says. A $10 billion fund would earn $200 million from the 2% management fee alone. Super-successful managers charge even more. Simons, the No. 1 earner last year, charges a 5% management fee and 44% of profits, Alpha's Peltz says. Simons, whose firm, Peltz quips, has enough "rocket scientists to run their own space program," makes its money trading "often and frequently" with the help of computers, trying to capture small price movements. Pickens profited from the boom in energy prices. The managers didn't just line their own pockets. "I suspect they have made more money for their clients than themselves," says Charles Davidson, hedge fund director at Standard & Poor's.
The hedge fund guys who make 1B a year or more you can count on one hand. Recently its Steve Cohen (SAC), James Simons, (Renn Tech), John Paulson and and local boy John Arnold (Centaurus). The problem with these figures, especially in this market is alot of funds have high watermark numbers. Meaning if the fund is down 30% this year, then next year they will have to make more than 30% just in order to be able to take one cent in performance fees. That is the reason why if a large fund is down 30% or so they will just shut down if they have a high watermark policy in place. It happened to the world's largest commodity hedge fund last month, Ospraie Management. But on the whole the average hedge fund doesn't have assets over 10M. And the average salary is just in the couple of hundred thousand dollars. Most hedge funds don't even last past four years. I've worked in the hedge fund industry for the past 4 years since out of colllege, and I've been with large and small firms so I've seen the vast discrepancy in pay figures between them. Most hedgies are just getting by.
Sorry, I thought that's what we were talking about when he said the managers "make" that much. If not, then disregard my mistake...
damn the amount of time it takes to open an account. I was trying to get in when aapl was below 90.. i'm waiting for funds to transfer to my account still.
I was just thinking the same thing... I bought a few things pre-market including DDM and SSO. Now maybe SDS and DXD? Hehe. I'll have to think about this when I get home. I actually wanted to use this week to begin averaging my way back into the market. That was an incredible ending to a session.
So, I've narrowed down my investment choices to either stock market or Nigerian lottery scam. I'm leaning towards the stock market, but I'm still not sure. Is today's rally an anomaly? Should I hold off on getting into the market? Is AAPL a good buy at the moment?
i met a dude on the plane who i'm pretty sure was trying to get me to fall for a nigerian lottery scam..
