Street Stories: Managed Futures
Robert Wilson is an independant trader profiled at StreetStories
Market Wizards Index: +34%
Compound annual over 20 years
Fund or affiliation
Independent short-seller.
Methodology
Short-selling and busting mediocre concept stocks that get wildly puffed up by hungry stockbrokers.
Research Techniques Employed
Spends two-third of a day on the phone, and one-third of it reading business magazines and telephone messages taken by his secretary. Goes out a lot at night with stock market friends.
He virtually never visits companies or assesses their management firsthand. Did go to WEMA (Western Electronics Manufacturers Association) conference every year.
Buy companies that are doing something new and different, or doing it in a different way. Buy technology companies that could go up ten times in five to seven years.
Dont try to anticipate how fast competition will undercut an established company.
Trading/ Valuation Techniques Employed
He likes to short into strength in a stock, not when its already on the way down.
Points out that only in US market can one take short positions that can be kept in place month after month.
Philosophy and beliefs
Insists on stocks in which there is a major risk, because such a stock is likely to go way up. "Unless there is fear in a stock, it probably doesnt have a great capital gains potential."
Bets on the stock image that he thinks will excite the public in a few months or a year. You get a better move "playing the surprises".
History and other facts
Worked for First Boston, General American Investors, a closed-end fund, and A.G. Becker & Co. Set up his own hedge fund in 1968, gets 20% of any outperformance over S&P 400.
An important patron of New York Metropolitan Opera and Whitney Museum.
Quotes Bernard Berenson: "In order to be comfortable, one should have a little more money and a little less time than one needs."
"Living well is the best revenge."
Following J.P. Morgans dictum "I can do a years work in nine months, but not in twelve."
Examples
Lost $10M shorting Resorts International, which is likely to be remembered as the most catastrophic short play in modern times.
Performance Record
34% over 20 years: "In 1958 he received an initial stake of $15,000 from his father and has multiplied his assets into the tens of millions... in spite of fearful setback in 1978".
