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Monthly Archives: August 2008
Ten year old Elvis pleaded with me once he got in my car.
“Please, can we go over two blocks to see if my brother is ok? Two East Siders were threatening him.”
“Is your brother in a gang?” I asked.
“Yeah, he’s West Side, but he’s on probation.”
“Elvis, I don’t want to get involved in gang stuff and I want you to avoid it as well.”
“But if we go over, they won’t fight him if I’m there.”
“Why will it matter to a gang if you are there?”
12 year old, Anthony chimed in, “It’s called disrespecting. They won’t fight you if your younger brother is there.”
So, I pulled around and we went looking for his brother, Sergio. We didn’t find him. It turned out he took shelter in a friend’s house. I was stunned by this conversation with the Anthony and Elvis, both of whom I’m a mentor to through the Fighting Back mentor program.
We talked about gangs and I started to get a glimpse in how much my mentees have to overcome. Even though we both live in the some town, we live in different worlds.
“I don’t like gangs, I don’t want my brother to die,” Elvis said out of the blue near the end of our conversation. Imagine living in a world filled with stupid, arbitrary gang rules like “disrespecting” and a gang culture that rules the neighborhood.
In the end, there was no real pithy advice I gave them or anything that I could say that would be life altering for them. But I was able to be there for them and show that someone cares for them. And I can keep encouraging them to choose the right path and choose life and not death. For me this is my role as a mentor and for Anthony and Elvis it may keep them out of gangs and give them a chance. At least this is my hope.
Do you wonder why the market is so wildly volatile these days? I think it is because we are seeing a growing trend of money managers and specifically hedge funds managers trading like crazy and turning over their portfolio at ridiculous levels. One extreme example is Greg Coffey with GLG partners who turned his portfolio over 56 times in May alone.
That works out to 2.8 times a day he turned over his portfolio. That is almost twice what I turned my portfolio over for the year! (My portfolio to me seems a bit high, but I actively manage the short portion of my fund to minimize risk)
I have a friend who is a hedge fund manager, who I respect. He tells me he has been trading this market and making something on the order of $100,000 a day. That’s nice work if you can get it, but it doesn’t last. This is called gambling, and it may work for the short run, but in the long run you lose or you do no better than coin flipping.
Watching all of this volatility should make long term investors very, very happy. Because this means that all of this short term trading and schizophrenia means that there are some long run opportunities to see past the turmoil and make great returns. So, bring on the volatility! For value investors this is the best kind of market to pick up bargains and take advantage of irrational investing.
The part that bugs me is who is giving people like Greg Coffey money? By the way, all of that trading didn’t seem to help, when last I checked he was down 13% plus for the year.