Reality Check wrote:Based on that quote it would appear he did predict the period between 2005 and the end of 2007 accurately.
Granted he might have made more money if his investors had not forced him to liquidate some positions in early 2007 rather than late 2007, but the stress was from people who second guessed his rather conservative bets, not because his predictions related to the financial crisis were wrong as to scope or timing.
In 2005, betting against sub-prime, adjustable rate mortgages ( then valued as AAA investments ) where the borrower had no chance of making the monthly payments once the teaser period expires, is no risk at all, unless Sol goes nova or some similar unrelated disaster occurs during that two to three year period.
Terms of a typical CDS contract
The premium payments are generally quarterly, with maturity dates (and likewise premium payment dates) falling on March 20, June 20, September 20, and December 20. Due to the proximity to the IMM dates, which fall on the third Wednesday of these months, these CDS maturity dates are also referred to as "IMM dates".
He was already in the market for corporate credit-default swaps. In 2004 he began to buy insurance on companies he thought might suffer in a real-estate downturn: mortgage lenders, mortgage insurers, and so on.
DeMark: They're dedicated. They're 100% involved and committed- they've all got the same disposition. They're all calculators. They're good money managers. I'd say if one had to break down the reasons for their trading success--it's probably a 20 to 25 % trading methodology and techniques or systems, whatever they might apply - 25% discipline and 50% money management.
DeMark: They're all good money managers. They all are. I can't say they're all good traders. They're not. They can manage money well. Some of them can take pretty big - a large series of hits and at the same time make money and they cut their losses short.
DeMark: It really is money management. Surprising. I have worked with the best. Steve (Cohen) is definitely the best trader. He doesn't have that high a success rate. It's his disposition, he was built for trading. You can't describe it. The ability is something innate. Similarly, John Burbank is the best long term investor I have seen in my career and he is a global investor. Just as Steve is the best trader John is the best investor.
Users browsing this forum: Google [Bot] and 1 guest