Thursday, 23 October 2014
Last updated 15 hours ago
Jun 6 2012 | 10:38am ET
Astenbeck Capital Management is in an unfamiliar place: the red.
The $3.1 billion commodity hedge fund, led by former star Citigroup trader Andrew Hall, suffered its second-worst month ever in May, dropping 14.4%. The losses wiped out its impressive first quarter gain and leave the fund down 6.4% on the year, Reuters reports.
Hall called May a "mensis horribilis," echoing—on the occasion of her diamond jubilee—Queen Elizabeth II's 1992 proclamation of an "annus horribilis." Hall, who is also CEO of Phibro Trading, told investors that "we clearly should have sold in May (actually on the first of the month) and gone away but did not."
"Oil prices were particularly hard hit," he wrote. "We have reduced our risk and adopted a more defensive posture," a far cry from Hall's bullish take on oil in April.
Hall had posted gains in his strategy, first at Phibro and then at both Phibro and Astenbeck, every year between 1997 and 2010. Last year, he suffered his first-ever annual loss, dropping 3.8%.
But the firm is used to volatility. It swung from 12% down in August 2010 to finish the year up 12%. Last year, Astenbeck was up 18% through April and down 10% through August. It recovered, but lost 18% in September—its worst-ever month—but managed to get back to even by October before ending down.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...