Tuesday, December 23, 2008
Wednesday, December 17, 2008
Mad(off) - is really brillaint
Some strategic gems extracted from Madoff's interview during 2001.I couldn't make head or talil off it (Lots of Puts and Calls involved) but now that there was no "Secret Recipe"
People having the time can go through this great article during 2001 flagging off Madoff...
People who have lesser time can do well to read this gems from the "Financial Expert"
"Market timing and stock picking are both important for the strategy to work, and to those who express astonishment at the firm’s ability in those areas, Madoff points to long experience, excellent technology that provides superb and low-cost execution capabilities, good proprietary stock and options pricing models, well-established infrastructure, market making ability and market intelligence derived from the
massive amount of order flow it handles each day. The strategy and trading, he says, are done mostly by signals from a proprietary “black box” system that allows for human intervention to take into account the “gut feel” of the firm’s professionals. “I don’t want to get on an airplane without a pilot in the seat,” says Madoff. “I only trust the autopilot so much.”
As for the specifics of how the firm manages risk and limits the market impact of moving so much capital in and out of positions, Madoff responds first by saying, “I’m not interested in educating the world
on our strategy, and I won’t get into the nuances of how we manage risk.” He reiterates the undisputed strengths and advantages the firm’s operations provide that make it possible.
Now we know what the strategy was...
Another investment Gem before I signoff
Madoff says the baskets comprise the most highly capitalized liquid securities in the market, making
the entry and exit strategies easier to manage. He also stresses that the assets used for the strategy are often invested in Treasury securities as the firm waits for specific market opportunities. He won’t reveal how much capital is required to be deployed at any given time to maintain the strategy’s return characteristics, but does say that “the goal is to be 100% invested.”
I am highly compelled to add these finishing lines from Madoff (Man this guy is a genius)...it more or less summarises the whole thing... A strategy is a strategy and a return is a return......oh yeah
Madoff, who believes that he deserves “some credibility as a trader for 40 years,” says: “The strategy is the strategy and the returns are the returns.” He suggests that those who believe there is something more to it and are seeking an answer beyond that are wasting their time.
People having the time can go through this great article during 2001 flagging off Madoff...
People who have lesser time can do well to read this gems from the "Financial Expert"
"Market timing and stock picking are both important for the strategy to work, and to those who express astonishment at the firm’s ability in those areas, Madoff points to long experience, excellent technology that provides superb and low-cost execution capabilities, good proprietary stock and options pricing models, well-established infrastructure, market making ability and market intelligence derived from the
massive amount of order flow it handles each day. The strategy and trading, he says, are done mostly by signals from a proprietary “black box” system that allows for human intervention to take into account the “gut feel” of the firm’s professionals. “I don’t want to get on an airplane without a pilot in the seat,” says Madoff. “I only trust the autopilot so much.”
As for the specifics of how the firm manages risk and limits the market impact of moving so much capital in and out of positions, Madoff responds first by saying, “I’m not interested in educating the world
on our strategy, and I won’t get into the nuances of how we manage risk.” He reiterates the undisputed strengths and advantages the firm’s operations provide that make it possible.
Now we know what the strategy was...
Another investment Gem before I signoff
Madoff says the baskets comprise the most highly capitalized liquid securities in the market, making
the entry and exit strategies easier to manage. He also stresses that the assets used for the strategy are often invested in Treasury securities as the firm waits for specific market opportunities. He won’t reveal how much capital is required to be deployed at any given time to maintain the strategy’s return characteristics, but does say that “the goal is to be 100% invested.”
I am highly compelled to add these finishing lines from Madoff (Man this guy is a genius)...it more or less summarises the whole thing... A strategy is a strategy and a return is a return......oh yeah
Madoff, who believes that he deserves “some credibility as a trader for 40 years,” says: “The strategy is the strategy and the returns are the returns.” He suggests that those who believe there is something more to it and are seeking an answer beyond that are wasting their time.
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