4 ms·
The Man Who Lost $6 Billion
- markm 18y agoHunter is not especially arrogant or intense or brash. (He is Canadian, after all.) Shudders. Do small generations like this make anybody else cringe?
- hugh 18y agoWell, this is an especially poorly-written article. I stopped reading and skipped to the comments after the second sentence was: As Jane Austen might have said, it is a truth universally acknowledged that a man who single-handedly loses a large fortune, especially one that wasn't of his own making, must be way more interesting than the average man.
- bingtan 18y agoHad he made money on his trade, he'll most probably just be one of the nameless millionaires (billionaires?) making a killing on the markets on a regular basis. Trading can teach you a lot about doing business - put your money where your mouth is; high risk, high returns; trade like you don't need the money. Maybe one thing he should have learned first though was - never trade anything you can't afford to lose. Bing
- fallentimes 18y agoIt wasn't his fund though; he lost investors money (plus, obviously, what would have been his bonus). It's the fundamental problem plaguing investment banks and hedge funds: you're rewarded ridiculously well for exceptional performance and punished very little for poor performance. This encourages taking substantial amounts of risk in the name of superior returns. Hunter is set for life and never has to work again. The legal crap will be tied in court for a while as bureaucratic shitkickers shuffle papers around and Hunter will eventually "admit no wrong doing but pay some nominal fine". It's the SEC special.
- jodrellblank 18y agoYou say that as if he should admit some wrong doing. People paid him to manage their money, asking him to make as much as possible, knowing that he could win or lose, and he did and lost. Where did he "do wrong"?
- fallentimes 18y agoI don't think he did anything wrong - at least not that I'm aware of. Granted I didn't work with him or anything so there's no real way for me to "know." I was just trying to spell out what's most likely going to happen and why it (i.e. massive loses) happen so frequently. These stories, as a whole, exemplify why I'll always have the majority of my money in a low cost, no load, diversified fund.
- jodrellblank 18y agoAh, ok.
- aswanson 18y agoThese stories, as a whole, exemplify why I'll always have the majority of my money in a low cost, no load, diversified fund. Good call: http://www.sanfranmag.com/story/best-investment-advice-youll-never-get http://www.sanfranmag.com/story/best-investment-advice-youll... http://www.fooledbyrandomness.com/fortune.pdf http://www.fooledbyrandomness.com/fortune.pdf
- lutorm 18y agoAwesome book. Check out "the Black Swan", too.
- byrneseyeview 18y agoBut the agent-principal conflict shows up in every kind of business. You hire a plumber, and you have to accept that he can a) just do the job right, b) waste a lot of time, and still get it done, and charge you extra (how are you supposed to know?), or c) experiment with some awesome wrenching and piping methodology he picked up in the latest issue of Plumber Weekly. The difference between the plumber and Amaranth is that it's much easier to quantify when Amaranth is screwing around. Even before a blowup, some strategies have a 'signature' -- high leverage + low volatility + long illiquidity + short liquidity, for example -- that can tell you ahead of time when you're dealing with a crafty gambler.
- ctkrohn 18y agoIn Hunter's defense -- word on Wall Street is that after Citadel and JPMorgan bailed out Amaranth in 2006, they made a killing on Hunter's positions. Hunter had made ultimately profitable trades; Amaranth just wasn't able to withstand the temporary loss.