This action might not be possible to undo. Are you sure you want to continue?
For Bull Market Alert Subscribers Only
Hedge Fund Secrets Revealed:
A Simple Four-Step Technique to Manage your Money Like a Hedge Fund
One Massachusetts Ave. DC 20001 800/211-4774 Email: editors@NicholasVardy. by Nicholas Vardy.IMPORTANT NOTE: This special report is for information and educational purposes only. based on current data as of February 2012. NW Washington. Hedge Fund Secrets Revealed Copyright © 2012.NicholasVardy. Inc. Published by: Eagle Publishing. or an email update from Nicholas Vardy. No quotes or copying permitted without written consent.com . Do not buy or sell any investments until you have read the current issue of Bull Market Alert. All rights reserved. the current Hotline.com Website: www.
” — Bruce Kovner. While your friends are glued to CNBC. 1. picture yourself standing above the fray — completely in control of your financial destiny. Understand that this is about managing your risk — and not about promising pie-in-the-sky results. even 50% in a grueling bear market.MoneyShow. risk control. the key is risk control. 40%. location. The very best of the top hedge fund managers have a tough time in bear markets. Founder of Caxton Corporation. entranced by the relentless onslaught of the latest negative news from Wall Street. markets have their seasons. With money management. Unlike other shell-shocked investors. Don’t expect your broker or financial planner to know about or to understand this approach. The result? While other hedge funds struggled as they dropped 30%. the upside will take care of itself. I will share with you secrets of how to maximize your profits as a subscriber to Bull Market Alert. location. Like life. we used what I am about to teach you to preserve our capital and were uniquely well-positioned for the inevitable bull market that followed.Hedge Fund Secrets Revealed: A Simple Four-Step Technique to Manage Your Money like a Hedge Fund ______________________________________ “In real estate. So please keep an open mind. risk control. This technique also has served as the basis for my popular seminar “Hedge Fund Secrets Revealed: How to Become Your Own Hedge Fund Manager. Once you have these principals down. In order to benefit from the system in this special report. the key is location. Today’s global investment is as challenging as it’s ever been. one of the most successful hedge funds of all time In this special report.” I regularly present the seminar at the MoneyShows (www. The technique I’m about to share with you provided the basis for a system that I developed to manage a top-performing hedge fund during the post dot-com bust in 2001 and 2002. you can feel secure in the knowledge that your hard-earned dollars never will suffer from the kind of financial meltdown you’d suffer by following mainstream investment advice.Hedge Fund Secrets Revealed . here’s what you need to do: Realize that what you are about to learn represents a fundamentally different way of looking at investments.com) held periodically throughout the year. But imagine if you had access to a technique that would allow you to gain complete control over your trading and investing.
You wanted the “Holy Grail” — and you were hoping that I’d be able to provide it. you’ll learn about investment opportunities you simply haven’t heard of anywhere else.S. currencies. the relative importance of these three decisions is as follows: Entry Exit Position Sizing 10% 30% 60% Let’s look at each of these in order of importance: I. Entry — “Not the ‘Holy Grail’” Although we haven’t actually met. Try implementing the techniques that I outline in this special report on my Bull Market Alert for 90 days. So let’s get started with a question: What is the ONE (and probably the ONLY) question you ask when you look at an investment recommendation? You have three choices: 1) What Do I Buy? (Entry) 2) When Do I Sell? (Exit) 3) How Much Do I Buy? (Position Sizing) If you’re like 99%+ of investors. Based in the heart of London’s hedge fund community.Hedge Fund Secrets Revealed . but you’ll also be a lot richer for it. I’m sure that it’ll not only change your thinking about how you invest in stocks forever. here’s something I already know about you… The reason you subscribed to Bull Market Alert was that you wanted the latest. commodities. 2. And you’ve come to the right place. and foreign stocks. and recommend those that I think are the top investment opportunities — no matter where they are on the planet. greatest. you want to know the “hot stock tip” — in other words: “What to buy. And when to SELL is less important than HOW MUCH you buy.” I’m about to reveal to you something that even some of the VERY TOP hedge fund managers in the world don’t realize: What you BUY is ALOT less important than when to SELL. As a subscriber to Bull Market Alert. and most profitable ideas out there. I analyze U. You wanted an investment advisory service that offered you the top stock tips. According to trading coach Van Tharp.
I don’t want that to happen to you. you already know that unless you have a plan in place to manage each and every one of your stock picks. As important and as valuable as each individual stock pick is. he speeds into an intersection. And sticking to your stop will put you ahead of EVERY SINGLE mutual fund manager out there… BY LAW.” Well. And that’s the purpose of this Special Report. I can send you 10 consecutive winners in Bull Market Alert. only to see it drop? But you held on. Think of it this way… Imagine that your neighbor has a teenage son who is a reckless driver… As testosterone charged as he is. he thinks he can get away with anything… Then one day. As a Bull Market Alert subscriber. I also provide you with a “stop” (or exit) price. you can actually lose money even if you invest in nothing but the world’s top-performing stocks. gets hit by truck and WHAM! Result? 3. he regularly speeds through red lights… But because he’s never been in an accident. there are many. You ignore these stop prices at your own peril. A scattershot approach is not the way to achieve long-term investment success. How is this possible? Just think for a minute… Have you ever bought a stock which turned out to be a big winner. In fact. it can be pretty darn near useless unless you have a disciplined framework for investing. II. you can lose money on each and every one of them. But unless you know what you’re doing. if you’ve had this happen to you. You’ll be surprised to learn that those stop prices are three times as important as your picks — if you know how to use them. hoping that it would bounce. and resume its upward trend? Then what happened? The stock collapsed and you still held on — rationalizing that it was “too late to sell. trading psychologists have shown that if you don’t have a disciplined plan for managing your stock picks.But I’ll let you in on a secret. And it’s one that you already probably know — but this is probably the first time you’ve had it pointed out to you.Hedge Fund Secrets Revealed . Exit — “Don’t Run the Red Light…” With each Bull Market Alert pick. many things that can keep you from locking in big gains.
It’s really common sense… But as Voltaire said: “Common sense is not so common”… III.A totaled car… and (if he’s lucky) a seriously chastened teenager… So think of ignoring your stops as a lot like going through a red light… …You can ignore your stops… and you may even get away with it a few times… but at some point. Let’s say that you’ve decided to call the bottom of the meltdown in U. You can SELL anytime you want. It’s as close to a “sure thing” as you’ve seen. As long as you keep investing and trading.” 4. don’t even THINK about giving him your money. financial stocks. I can tell you that your mutual fund manager is actually breaking the law if he is not fully invested in the stock markets — even if the stock market is headed straight down for the next 10 years! You. on the other hand. but WHEN. You’ve decided it’s time to bet on a big turnaround. You have $50. By determining your stop price at the same time you buy your stock. He just doesn’t know it yet… Let me illustrate the importance of bet size with this example… It’s early September 2008. He and his investors are bankrupt already. don’t have your hands tied like this. you KNOW your worst case scenario EVEN BEFORE YOU GET IN THE MARKET. and you decide that this is a once-in-a-lifetime opportunity to hit it big. In fact. it’s not a question of IF.000 to invest.S. You’ve just heard your favorite analyst on CNBC talk about how financial stocks are due for a bounce. you even heard that hedge fund guru George Soros has placed a large bet on Lehman Brothers’ recovery.Hedge Fund Secrets Revealed . So why will following this single rule make you better than the best mutual fund manager out there? As a former mutual fund manager myself. You decide to “bet the farm. Position Sizing: The Secret That Accounts for 60% of Your Trading Success Ask any hedge fund manager who has been around for more than a few years about the most important thing in his trading… and he will tell you it is position or bet size… If he gives you a different answer. you ARE going to get hit by the equivalent of a Mack truck.
You made a novice’s mistake and bet much too big on one idea. the minute you buy the stock. a terrorist attack. on Monday morning. you spend your days glued to your computer watching every tick in Lehman’s stock price. And even if you do consider yourself infallible. you had psychologically accepted that this could happen. You place your stop at the same time that you buy your stock. given that you knew your worst-case scenario ahead of time.So you buy $50. You know that as smart as you know you are. you are not infallible. frankly. Sept. remember that there is always the possibility of some external event beyond your control — say. one of two things can happen: One. and you make five times your money. 15. your bet works out. or other “Black Swan” event — that can cause Lehman Brothers and the market to drop unexpectedly.000 worth of Lehman Brothers stock… At the time you placed your bet. In fact. Every drop in Lehman’s price is PAINFUL… and is reducing your net worth considerably… After a weekend wracked with worry. You actually feel good about yourself for having stuck to your discipline. an earthquake in California. and you are literally blown out of the game. Let’s say you’re willing to place a bet that Lehman Brothers is going to make it… But now that you understand the importance of exits and position sizing. Contrast this high-stress image of you with your new “enlightened” self once you understand the risk-management technique I’m about to give you below. you hear the news that Lehman Brothers went bankrupt. You think you are a genius — and calculate that you only need to do this six more times to become a billionaire… (Do the math yourself…) Or two. So you calculate your position size so that the WORST that could happen is that you lose 1% of your portfolio. And because you bet all your money on Lehman Brothers. You’ve lost everything. I can tell you exactly how that Monday morning felt…Because I actually placed that bet on Lehman Brothers myself! So what was my reaction to Lehman’s demise? “It’s not that big of a deal!” 5.Hedge Fund Secrets Revealed . So how would you feel that fateful Monday morning? You may be a bit disappointed — but. That idea didn’t work out. the scenario is very different. Lehman Brothers starts plummeting on rumors of an imminent collapse.
000. top trader interviewed in Jack Schwager’s “Market Wizards” put it: “Never risk more than 1% of your total equity in any one trade. If the trade went in my direction. I will sometimes give you some guidance on this.5% (that’s ½ of 1%) on any one idea for any of the hedge funds that I traded. But the very best hedge fund managers think differently. STEP 2: Decide how much you want to risk on a Bull Market Alert investment idea. and not to take risks that could actually destroy me.” Here’s my personal rule of thumb: I never risked more than 0. As Soros says: “I’m very concerned about the need to survive. the highly volatile Turkish ETF) or “low risk” (like a very steady currency ETF). you can be 100% sure that it was due to a hedge fund manager getting too cocky and taking too big of a position in his fund — or. the next time you hear about a hedge fund blowing up. What’s the total amount of money you are willing to play with in your short-term trading portfolio? For the purposes of this example. By risking 1%.The lesson: Be sure that you NEVER bet too big on any idea — no matter how great it seems… And I’ll let you in on another secret: sophisticated hedge funds screw this up all the time! In fact. George Soros lost hundreds of millions on this bet on Lehman Brothers. But his loss still was manageable — given the size of his portfolio. 6. I will assume it’s $100. A Simple Four-Step Technique That Can Save You Millions over Your Investment Lifetime So here it is: A simple four-step technique to manage your risk on any single Bull Market Alert (or ANY) investment idea.” Or as Larry Hite. not sticking to his stops. Keeping your risk small and constant is absolutely critical.Hedge Fund Secrets Revealed . I will often say whether the idea is “high risk” (say. STEP 1: Establish the size of your trading portfolio. I’d just add to it… But those are details I can’t get into in this Special Report… IV. I am indifferent to any individual trade.
you may be more comfortable with some ideas than others. Sometimes. Say you’ve decided to risk 1% of your investment capital on this month’s Bull Market Alert idea. you will always find a stop price for every pick you get with Bull Market Alert. and you are willing to risk more on your investments.For whatever reason.) By the way. For the purposes of illustration. or $1. each stop price is tailored particularly to each pick’s “personality. (That assumes you “don’t run the red light” and you stick to your stops. You should know that I put a lot of thought into each stop price. you are risking the entire $100. you are risking $15 per share. STEP 3: Calculate your risk per share.000 portfolio). Although I can’t go into details here. let’s say you are willing to risk 1%. You do both of these at the same time that you buy the stock with your online broker. and divide it by the $15 per share you are risking on each share. you think that if you buy a share for $100.” That means I’ll give more volatile picks more room to move than relatively stable picks. STEP 4: Calculate how many shares you should buy.” Or maybe the overall market has entered a bullish phase. Others will be as near as 7% or 8%. So here is what you are REALLY risking: $100 entry price – $85 stop price = $15 dollars risked per share Here’s what is most important to understand: Once you place your stop. you are only risking $15 per share.000) that you are risking on this week’s Bull Market Alert idea. how much you are willing to risk on any idea is up to you. This is a crucial step. But ultimately. But from now on. Or maybe you have some special insight into that portfolio pick that gives you an “extra edge.Hedge Fund Secrets Revealed . a stop will be as far away as 30% from the entry price.000 (out of your $100. Here’s the important part: Take the 1% of your portfolio (or $1. Let’s say you buy a stock at $100 and you place your “Good ‘til cancelled” or ‘GTC’ stop price at $85. Based on the difference between the stock price and the exit price. on the current investment idea. 7. I want you to think about “risk” in a very different way. If you’re like most people.
you’ll realize that you’ll be able to “ride the bike” as “fast” or as “slowly” as you want. you are limiting your TOTAL RISK on this one idea to $1. But within that. That means that you can buy 67 shares of this pick. (And if I were you. And voila! You have the number of shares that you should buy. based on the amount you are willing to risk. Or. for a total of $6. If you are feeling skittish about the market. Note that this many shares amounts to a 6. say. Use the formula a few times until you get the hang of it. or 67 shares (rounded up). The point is to focus on the “risk” that you are taking on each position.66. I like to tell my seminar audiences to view this technique like a set of training wheels on a bicycle. $500 per trade. Let Me Land the Plane Here… I strongly recommend that you use this approach to calculate your risk and position size for each and every one of your Bull Market Alert picks.000.) So every time you get your issue of Bull Market Alert: Decide how much you are willing to risk on that investment idea (I recommend you start small!). or 1%. or even $100. Subtract the recommended stop price from the share price to calculate how much you are risking per share.7% position in your portfolio… which is probably a lot bigger than you expected… BUT… because you have placed a stop of $85 on each share. if you feel particularly bullish about the market or a certain investment idea. Once you really get it.000. I’d use it for every single one of your other investments as well. you can “dial back” the risk you are taking to. Divide the total amount you are risking by the amount you are risking per share. Here’s the formula: Number of shares = $1000/$15 per share = 66. The point is: It’s all up to you… You… and not the market… are in control… 8.700.This will give you the number of shares you should buy. of your portfolio. you can vary your position size to suit your own risk appetite.Hedge Fund Secrets Revealed . you can decide to risk $2.
Hedge Fund Secrets Revealed . Editor. how much your entire portfolio is always at risk.And by adding up the total number of dollars you are risking on any set of trades in your portfolio. Bull Market Alert 9. Once you do it three or four times. you always know your “worst-case scenario” — that is. So try this technique and see how it works for you. Vardy. it’ll become second nature. Here’s to investing like a hedge fund! Nicholas A.
NicholasVardy. NW • Washington.com BMA015-0212 . Eagle Publishing • One Mass. DC 20001 800/211-4774 • www. Ave.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.