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Friday, June 1, 2012

Hot Sauce Therapy

When things are going well, working at a hedge fund is extremely gratifying and exciting. For instance, owning a stock into a quarterly earning report, your heart races as the market closes and you anxiously wait for the earnings release to come out. WHAT'S THE NUMBER, WHAT'S THE NUMBER you yell to your trader, as you start to see the stock move in the after-market. If you get it right, and the stock moves up 10+%, it's all you can do to keep yourself from dancing around the office in happiness.

The flip-side to this is that when things are going poorly, working at a hedge fund absolutely sucks. Screwing up timing on trades (buy high, sell low!), missing warning signs and getting pummeled on earnings, watching your portfolio get smashed as the lazy Greeks somehow get active and decide to riot against Austerity measures, etc. All of these are painful, and the negative utility from losing money really is a lot higher (absolute basis) than the positive utility from getting things right.

The most recent month has been rough city, especially in my sector (tech) as evidenced by the below chart. Basically owning anything has been a bad idea. Shorts have been successful, but as a general rule investors (and my fund in particular) are usually long biased so at best the short book minimizes the damage.

So what is one to do to combat a miz month like this in the HF industry? Three words for you. 


While the market gets crushed on a daily basis, you self-medicate and burn the pain away. 

THTF Recommended Weekly Therapy Routine: 
Miz Mon: You Can't Handle this Sauce- Start the week off with a bang
Terrible Tues: Widow Hot Sauce- No Survivors- Feels about right
Wacky Wed: Endorphin Rush- Week can't possibly get worse right?
Thirsty Thurs: Smack My Ass and Call Me Sally- Yup, managed to get worse
Freaky Friday: The Beast- End with a nice gentle sauce; congrats on surviving the week!

After a day like today however, (thanks payrolls!) a quick shot of Mad Dog 357 is required to blow your mind and get you out of your funk.

(co-worker BW with his own weekly therapy he starts off with ASS REAPER, and ends with ASS BLASTER. Sounds about right....)

1 comment:

  1. great column.
    hope next work week is "da bomb" and makes you "squeal like a pig" as you feed the rest of the office (other than bw) "wimp retardant x- hot" hot sauce. i will be back in jamestown enjoying my "ass in the hot tub" special reserve amaggeddon hot sauce and planting my ghost peppers