Here is the problem in a nutshell, there has never been a single instance in HISTORY where 1.2% per day average for any extended period of time has turned out not to be a scam. To vet that claim yourself post
independently audited results that prove otherwise. You are either setting yourself up to be scammed, or providing a false belief to others that something like this is even remotely possible.
Assuming $1,000,000 in trading capital and trading just 200 days @ 1.2% would imply without compounding $12000 in profits each day or $2,400,000 for the year. The number of funds that hit triple digits in any one year is negligible. While not always the case this type of return often comes after years of poor performance, or a fund that just happened to be in the right trade/sector at the right time. 10 years in a row, go find them.
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To bury down a little further, let's assume there is a cabal of traders that do make this kind of money. They certainly are not making it public, as such they damn sure don't need a bunch of $50 throw in investors funding accounts via quicktender. In fact I would be hard pressed to think of a reason they would need or want funding at all.
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Most of the real money in managed accounts is made from the fees charged by the people managing the money, not their skills as traders. Investors get what is left, if anything. In any given year there are likely to be as many funds that close as open. Almost never do they close because they made so much bank for their clients that they just wanted to return the cash and wish everyone a happy life on the beach.
You could very easily prove this out with information that is readily available.
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Let's make one final leap and assume a trader actually made 1.2% per day consistently for 10 years. (Something I can't do with a straight face) Do we know how they did it or if it will continue for the next 10? The answer is again and emphatic no.
We can be pretty certain that to achieve rates of return that far above the norm they are using massive leverage, one glitch could wipe out years of gains.
This is one of the best cautionary tales of chasing performance and chasing it again...
Victor Niederhoffer - Wikipedia, the free encyclopedia
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Who looks at a fund that does shitty and thinks better get in on that one? Certainly these funds had some track records before this happened...
Since late 2006 at least 117 major funds at 71 outfits have "imploded*
The Hedge Fund Implode-O-Meter - tracking the hedge fund implosion - leverage, speculation, SIVs, CDOs, arbitrage, interest rates, credit bubble
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Business as usual stuff in the investment arena...
In the first half of the year, 461 funds closed, Chicago-based Hedge Fund Research Inc. said. If that pace continues, it will be the worst year for closures since 2009, when there were 1,023 liquidations.
Hedge funds, on average, have returned just 2 percent in 2014, their worst performance since 2011, according to data compiled by Bloomberg.
Hedge Funds Shut as Managers Struggle in Year of Two Percent Returns - Bloomberg
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End of the day anyone can believe what they want. They have found a trader with a secret way to earn 1.2%. So generous that they will take on small accounts. Always available to answer emails. Few test withdrawals go ok. Never in history has this or will this turn out to be anything other than a scam.
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