Author Topic: Teen hedge fund manager - Wohl Capital  (Read 92629 times)

ScottHall

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Re: Teen hedge fund manager - Wohl Capital
« Reply #20 on: March 21, 2015, 05:25:11 PM »
Good for a laugh, huh.

Way to go, picking on a 17-year-old who is giving it a shot. No one's putting a gun to these people's heads and forcing them to invest alongside.

He sounds like he doesn't understand much about business in his interviews, but he is young and if he keeps at it, he will learn. God forbid someone branch out and try to learn a new field.

He will make mistakes and if he sticks with it, he will learn from them as he goes. Just as all of us have. Props to him for taking a chance; when faced with putting themselves out there, most people turtle up and hide rather than risk failure.

I'd rather fail a lot and learn many new things than hide for fear of losing. That's how I learned to invest, and more recently, how I learned to write copy. You try new things, folks. There isn't a perfect blueprint out there you must follow to achieve your dreams, there's always a little bit of improvisation.

I don't think people are picking on him for the reasons you suggest. I think they are picking on him for doing things that are illegal.

Why is doing illegal things something to mock if the regulations aren't sensible? We should always question authority and even break laws so long as we're prepared to deal with the consequences.

Financial institutions break laws all the time, and frequently settle for less than their illicit profits. This kid isn't even harming anyone unless he's running a Ponzi scheme or something; everyone willingly gave him their capital.


philly value

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Re: Teen hedge fund manager - Wohl Capital
« Reply #21 on: March 21, 2015, 05:30:27 PM »
Good for a laugh, huh.

Way to go, picking on a 17-year-old who is giving it a shot. No one's putting a gun to these people's heads and forcing them to invest alongside.

He sounds like he doesn't understand much about business in his interviews, but he is young and if he keeps at it, he will learn. God forbid someone branch out and try to learn a new field.

He will make mistakes and if he sticks with it, he will learn from them as he goes. Just as all of us have. Props to him for taking a chance; when faced with putting themselves out there, most people turtle up and hide rather than risk failure.

I'd rather fail a lot and learn many new things than hide for fear of losing. That's how I learned to invest, and more recently, how I learned to write copy. You try new things, folks. There isn't a perfect blueprint out there you must follow to achieve your dreams, there's always a little bit of improvisation.

I don't think anyone would blame someone for having a go at investing at age 17 and trying to get experience early. I think the difference here and in some similar cases is that the guy comes across (whether he means it or not) as cocky. Portraying yourself as a "17-year old hedge fund manager" instead of as a 17 year old who is practicing investing small sums while also reading/asking questions at every opportunity in order to pick up knowledge from others. Looking at the website, he makes it sound like he is already an investing genius and will trounce the markets. Given the inability of most professionally-managed hedge funds to do this, and the naivety he clearly shows in talking about his "strategy," this is not a good way for a 17-year old to be advertising himself.

Basically, if he were honest and humble and said, "I am 17, and I am doing my best to learn everything I can about investing because this is what I want to do in life," then the vast majority of people would encourage that. But in reality, his message is, "I am an investment genius, I utilize leverage, options, and buying undervalued stocks like Buffett in order to provide amazing returns. Contact me and invest if you want real returns."

ScottHall

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Re: Teen hedge fund manager - Wohl Capital
« Reply #22 on: March 21, 2015, 05:37:42 PM »
Good for a laugh, huh.

Way to go, picking on a 17-year-old who is giving it a shot. No one's putting a gun to these people's heads and forcing them to invest alongside.

He sounds like he doesn't understand much about business in his interviews, but he is young and if he keeps at it, he will learn. God forbid someone branch out and try to learn a new field.

He will make mistakes and if he sticks with it, he will learn from them as he goes. Just as all of us have. Props to him for taking a chance; when faced with putting themselves out there, most people turtle up and hide rather than risk failure.

I'd rather fail a lot and learn many new things than hide for fear of losing. That's how I learned to invest, and more recently, how I learned to write copy. You try new things, folks. There isn't a perfect blueprint out there you must follow to achieve your dreams, there's always a little bit of improvisation.

I don't think anyone would blame someone for having a go at investing at age 17 and trying to get experience early. I think the difference here and in some similar cases is that the guy comes across (whether he means it or not) as cocky. Portraying yourself as a "17-year old hedge fund manager" instead of as a 17 year old who is practicing investing small sums while also reading/asking questions at every opportunity in order to pick up knowledge from others. Looking at the website, he makes it sound like he is already an investing genius and will trounce the markets. Given the inability of most professionally-managed hedge funds to do this, and the naivety he clearly shows in talking about his "strategy," this is not a good way for a 17-year old to be advertising himself.

Basically, if he were honest and humble and said, "I am 17, and I am doing my best to learn everything I can about investing because this is what I want to do in life," then the vast majority of people would encourage that. But in reality, his message is, "I am an investment genius, I utilize leverage, options, and buying undervalued stocks like Buffett in order to provide amazing returns. Contact me and invest if you want real returns."

I mean, no shit. Yes, he's cocky. He's 17. I was the same way at that age, granted I didn't start a hedge fund because I was a recluse and didn't know anyone outside of my immediate family.

As far his marketing goes? Of course it's hype-heavy. That's pretty much how marketing works. This happens in every successful form of advertising I can think of, whether brand advertising or DRM. Coke tries to associate itself with good times, and that it is responsible for making the world a more loving, caring place. And if you think the burgers the hot chicks bite in Burger King commercials look that good in real life, you've got another thing coming.

It's marketing. And you know what? This fucking kid, with this media coverage? He's already proven himself to be a better businessman than the majority of minor league hedge fund managers out there.

I can find 20 guys right now, some on this site, who have outstanding track records and not much more in the way of AUM than this kid does. And they've been doing it for years. The kid gets the "wow" factor involved with portraying yourself as a child prodigy and the free coverage that can provide. Maybe more fund managers should emulate him, rather than the other way around.

philly value

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Re: Teen hedge fund manager - Wohl Capital
« Reply #23 on: March 21, 2015, 05:50:55 PM »
I have to disagree. I think in this instance his short-term success is setting up long-term failure. Based on what we know about his inexperience and the riskiness of the strategies he is pursuing, it's very likely he blows up and falls flat on his face. And then all the hype and bold statements will come back to haunt him. Normally, if you fail at 17 or 18, nobody knows or cares, it would basically be expected. But when you have taken in other people's money by advertising yourself as the next Soros, and then fail miserably, that is going to wreck your image, cost you valuable relationships, and negatively affect your own psyche. Say he fails - after Googling him and seeing this, who is going to hire him to work at their fund or invest their money with him in the future?

In another way, he is also costing himself the ability to build valuable human capital. He could be spending his full time learning about investing and the markets. He could be putting himself in a position to intern or work for a successful investor where he could learn the trade. Instead, he is spending time marketing and talking to the media.

So who knows, maybe there is a tiny shot of him actually succeeding without failing, and if so then he'll have hit a real home run. But I think slow and steady will tend to win the race, and he is IMO focusing on the wrong things at this stage in life.

ScottHall

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Re: Teen hedge fund manager - Wohl Capital
« Reply #24 on: March 21, 2015, 06:09:46 PM »
I have to disagree. I think in this instance his short-term success is setting up long-term failure. Based on what we know about his inexperience and the riskiness of the strategies he is pursuing, it's very likely he blows up and falls flat on his face.

Yeah, you're right. He probably will fail. Most fund managers - or entrepreneurs of any kind, really - do. Not everyone is going to be a winner from their first at-bat.

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And then all the hype and bold statements will come back to haunt him. Normally, if you fail at 17 or 18, nobody knows or cares, it would basically be expected. But when you have taken in other people's money by advertising yourself as the next Soros, and then fail miserably, that is going to wreck your image, cost you valuable relationships, and negatively affect your own psyche. Say he fails - after Googling him and seeing this, who is going to hire him to work at their fund or invest their money with him in the future?

This is where we disagree. I'd be willing to bet that most people wouldn't hold it against him if he does fail, and some would probably look at it favorably because it shows that he has the drive to try something on his own. That's something a lot of employers look for for a wide variety of gigs, not just in investment management.

And who is going to let him work for their fund or let him manage their money in the future? This happens with hedge funds all the time. John Meriwether helped blow up LTCM - one of the biggest financial blow ups of any kind ever - and he still managed to raise money for several more funds after that. And he's not the only one, either. The world is generally more willing to award second chances than we think.

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In another way, he is also costing himself the ability to build valuable human capital. He could be spending his full time learning about investing and the markets. He could be putting himself in a position to intern or work for a successful investor where he could learn the trade. Instead, he is spending time marketing and talking to the media.

He could, but what's the value in that, really? Would you rather have another $1 million in AUM or another 100 basis points of return? You can learn about the markets until the cows come home, but after a point, there's not a whole lot of value in outperforming the market anymore than you have to to attract capital. And you don't even really need to beat the market to be a successful hedge fund manager so long as you market yourself correctly, and help "solve" a different problem than the maximization of returns.

The active management industry has lasted decades while losing to the market in aggregate. ETFs and index funds are taking share, but it's still a huge business and probably will be for the foreseeable future.

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So who knows, maybe there is a tiny shot of him actually succeeding without failing, and if so then he'll have hit a real home run. But I think slow and steady will tend to win the race, and he is IMO focusing on the wrong things at this stage in life.

Well, if he does nothing, there's a 0% chance of success. By trying to launch his own fund, he has a small but real shot of obtaining ungodly amounts of wealth. It's like writing copy; if you don't have a headline, it doesn't matter how good your body copy is because no one's going to read it anyway.

Same principle here.

merkhet

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Re: Teen hedge fund manager - Wohl Capital
« Reply #25 on: March 21, 2015, 06:16:51 PM »
Good for a laugh, huh.

Way to go, picking on a 17-year-old who is giving it a shot. No one's putting a gun to these people's heads and forcing them to invest alongside.

He sounds like he doesn't understand much about business in his interviews, but he is young and if he keeps at it, he will learn. God forbid someone branch out and try to learn a new field.

He will make mistakes and if he sticks with it, he will learn from them as he goes. Just as all of us have. Props to him for taking a chance; when faced with putting themselves out there, most people turtle up and hide rather than risk failure.

I'd rather fail a lot and learn many new things than hide for fear of losing. That's how I learned to invest, and more recently, how I learned to write copy. You try new things, folks. There isn't a perfect blueprint out there you must follow to achieve your dreams, there's always a little bit of improvisation.

I don't think people are picking on him for the reasons you suggest. I think they are picking on him for doing things that are illegal.

Why is doing illegal things something to mock if the regulations aren't sensible? We should always question authority and even break laws so long as we're prepared to deal with the consequences.

Financial institutions break laws all the time, and frequently settle for less than their illicit profits. This kid isn't even harming anyone unless he's running a Ponzi scheme or something; everyone willingly gave him their capital.

Picking on should have been in quotes. It's difficult to continue running money in the future when you run afoul of regulations. Therefore, running afoul of regulations tends to be pretty stupid if your long-term goal is to run money -- regardless of whether the regulations are sensible.

As a side note, letting people break laws they individually think aren't sensible is not a terribly great way to run the republic either.

ScottHall

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Re: Teen hedge fund manager - Wohl Capital
« Reply #26 on: March 21, 2015, 07:33:26 PM »
Picking on should have been in quotes. It's difficult to continue running money in the future when you run afoul of regulations. Therefore, running afoul of regulations tends to be pretty stupid if your long-term goal is to run money -- regardless of whether the regulations are sensible.

As a side note, letting people break laws they individually think aren't sensible is not a terribly great way to run the republic either.

I mean, I guess he'll see for himself, right? I think there's every chance that he can play the, "oh but I'm a kid" card and claim he didn't know (truthfully or not), promise not to do it again and get away with a slap on the wrist. But he'd still have the base of capital he'd raised to that point to draw upon.

I'm not as up on the regulations as all of you are, but based on your reactions I'm guessing this sort of marketing is much more effective than what is allowed. So it very well could be a calculated risk on his part, and as far as I'm concerned, there's nothing wrong with that. Heads he gets a much larger starting capital base. Tails he's out of the business, maybe. Given his age and that he's not relying upon this, it seems like a shrewd bet to me.

As for your comment regarding letting people flaunt the law... well, I guess we'll have to agree to disagree on this one. As long as no one's hurting others and everything's consensual, I don't care what people do. I didn't go to school, and people claimed my parents were abusing me because of it. Fuck them and fuck the government for thinking it has any say in how I live my life and educate myself.

Similar thing for the kid and his customers. Why should they care what the government thinks if they're happy with their relationship with each other? He's not dumping toxic chemicals in the river or anything.

investor-man

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Re: Teen hedge fund manager - Wohl Capital
« Reply #27 on: March 21, 2015, 08:27:24 PM »
ScottHall++
Ferengi Rule of Acquisition #3 "Never spend more for an acquisition than you have to."

merkhet

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Re: Teen hedge fund manager - Wohl Capital
« Reply #28 on: March 21, 2015, 09:08:30 PM »
Picking on should have been in quotes. It's difficult to continue running money in the future when you run afoul of regulations. Therefore, running afoul of regulations tends to be pretty stupid if your long-term goal is to run money -- regardless of whether the regulations are sensible.

As a side note, letting people break laws they individually think aren't sensible is not a terribly great way to run the republic either.

I mean, I guess he'll see for himself, right? I think there's every chance that he can play the, "oh but I'm a kid" card and claim he didn't know (truthfully or not), promise not to do it again and get away with a slap on the wrist. But he'd still have the base of capital he'd raised to that point to draw upon.

I'm not as up on the regulations as all of you are, but based on your reactions I'm guessing this sort of marketing is much more effective than what is allowed. So it very well could be a calculated risk on his part, and as far as I'm concerned, there's nothing wrong with that. Heads he gets a much larger starting capital base. Tails he's out of the business, maybe. Given his age and that he's not relying upon this, it seems like a shrewd bet to me.

AFAIK, there's no mens rea component to following securities regulations. It's not a real defense to say that you didn't know what you were doing was wrong, and my guess is that if he doesn't go to jail over it, he's not going to keep his capital base. (I mean, Stevie Cohen was reduced to trading his own capital, and he had really high priced lawyers.) Also, when you register with the SEC and/or various regulatory agencies, one of the questions they ask you is whether you've had regulatory action taken against you. Hard to raise capital when you have to continually disclose that you ran afoul of securities regulations even if you were a kid at the time.

The highlighted sentence below:

Why is doing illegal things something to mock if the regulations aren't sensible? We should always question authority and even break laws so long as we're prepared to deal with the consequences.

Is different than:

As for your comment regarding letting people flaunt the law... well, I guess we'll have to agree to disagree on this one. As long as no one's hurting others and everything's consensual, I don't care what people do. I didn't go to school, and people claimed my parents were abusing me because of it. Fuck them and fuck the government for thinking it has any say in how I live my life and educate myself.

Similar thing for the kid and his customers. Why should they care what the government thinks if they're happy with their relationship with each other? He's not dumping toxic chemicals in the river or anything.

The reason being that you have moved from a "subjective" framework of what is sensible to an "objective" framework of not hurting others and consensual acts. The former statement allows for, say, Charles Manson to make a reasonable claim on the sensibility of cannibalism (a real-life Modest Proposal, if you will), whereas the latter statement forecloses that option entirely.

FWIW, I tend to agree with your second statement, though there should probably be limits on things that fall even within your objective framework. We should probably regulate heroin use even though it's not hurting others and is a consensual act -- Pre-Heroin You and Post-Heroin You are effectively different people, and IMHO, the government probably has a right to advocate on behalf of Post-Heroin You -- but I suspect we might disagree on this one.

Curious to know why the government claimed your parents were abusing you because of home schooling. People are allowed to home school their children, so why would your specific case be any different? Or are we talking about people in general saying that?
« Last Edit: March 21, 2015, 09:10:31 PM by merkhet »

ScottHall

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Re: Teen hedge fund manager - Wohl Capital
« Reply #29 on: March 21, 2015, 10:37:48 PM »
AFAIK, there's no mens rea component to following securities regulations. It's not a real defense to say that you didn't know what you were doing was wrong, and my guess is that if he doesn't go to jail over it, he's not going to keep his capital base. (I mean, Stevie Cohen was reduced to trading his own capital, and he had really high priced lawyers.) Also, when you register with the SEC and/or various regulatory agencies, one of the questions they ask you is whether you've had regulatory action taken against you. Hard to raise capital when you have to continually disclose that you ran afoul of securities regulations even if you were a kid at the time.

It looks like mens rea is a component of securities law, but the issue is apparently much more complicated than in most other forms of law. Who knows if it'd even get to a courtroom; most cases are settled out-of-court, so I wouldn't be shocked if something similar happened here. I don't follow anything other than bankruptcy law, so if you say the thoughts on those links are dated, I'll trust you on it.

https://www.ropesgray.com/files/Publication/cd588b54-a9b6-428b-969a-9e35d87251e0/Presentation/PublicationAttachment/febf3138-00da-4652-98e6-9f1e4f828c7a/Article_2001_Willfulness_McPhee.pdf

http://www.jstor.org/discover/10.2307/40687701?sid=21106197091793&uid=380122351&uid=60&uid=3739936&uid=3739256&uid=2134&uid=380122341&uid=3&uid=2&uid=70 - Requires free log-in

Quote
The highlighted sentence below:

Why is doing illegal things something to mock if the regulations aren't sensible? We should always question authority and even break laws so long as we're prepared to deal with the consequences.

Is different than:

As for your comment regarding letting people flaunt the law... well, I guess we'll have to agree to disagree on this one. As long as no one's hurting others and everything's consensual, I don't care what people do. I didn't go to school, and people claimed my parents were abusing me because of it. Fuck them and fuck the government for thinking it has any say in how I live my life and educate myself.

Similar thing for the kid and his customers. Why should they care what the government thinks if they're happy with their relationship with each other? He's not dumping toxic chemicals in the river or anything.

The reason being that you have moved from a "subjective" framework of what is sensible to an "objective" framework of not hurting others and consensual acts. The former statement allows for, say, Charles Manson to make a reasonable claim on the sensibility of cannibalism (a real-life Modest Proposal, if you will), whereas the latter statement forecloses that option entirely.

FWIW, I tend to agree with your second statement, though there should probably be limits on things that fall even within your objective framework. We should probably regulate heroin use even though it's not hurting others and is a consensual act -- Pre-Heroin You and Post-Heroin You are effectively different people, and IMHO, the government probably has a right to advocate on behalf of Post-Heroin You -- but I suspect we might disagree on this one.

Try not to overthink it, dude; I hate thinking about concepts within arbitrary systems. Like legal systems. So my first words shouldn't be taken literally, but be judged based on what would generally be considered common sense. I don't think people should go around murdering others just because they're willing to go to jail or get executed, but I figured that would be obvious.

So yes, the second is closer to what I actually think, though I don't really view the statements to be confusing to any sensible audience. I really doubt they were confusing to you, either, as you're generally pretty sensible. Let's not waste time, alright?

Quote
Curious to know why the government claimed your parents were abusing you because of home schooling. People are allowed to home school their children, so why would your specific case be any different? Or are we talking about people in general saying that?

It was the neighbors who claimed abuse; the government just threatened to arrest my mother if I didn't go to school.

This was before I transferred out of the system; I just quit going for several months because I hated it. Once I left the school district, no one cared that I didn't re-register in another one. While I was homeschooled in the original district, I'd have to go in from time to time and show that I was progressing. Once I moved, I didn't, because the new school district was unaware I was even there.

Or so I was told.