Prominent Fund Down 14% – Get a Coach
2017 was not a good year for hedge fund performance. 2018 is not shaping up any better.
As per a Bloomberg report a prominent hedge fund manager is down 14% in just the first quarter this year. According to reports he didn’t do well the previous year either. Obviously, something is not working for this fund manager. Advice to this fund manager – get yourself a great coach!
Bobby Axelrod in Billions had one. And every fund manager should too.
Fund managers and their analytics teams expend enormous effort in researching trade ideas, back testing models, developing trade structures, and managing risk. While this focus is necessary, it is not sufficient. Little if any resources are directed towards an intangible yet critical component – developing the mindset of a disciplined approach to the process of risk-taking.
Let’s face it. How often does FOMO or FUD influence trader decisions? How often has a trader not cut losses because he/she feels trapped in a position and can’t or won’t let go? How often has hope overtaken risk discipline? How often do traders react in panic or feel paralyzed and unable to act? How often do traders make poor decisions under duress?
Yes, there’s nothing new about this but you get the point. In spite of knowing all of this traders and risk managers still make these mistakes frequently. Yours truly here, pleads guilty to having committed all of the above in the 30 years he traded the markets. It’s psychology. The human mind acting under emotional stress. Greed, fear, frustration, anxiety and every other emotion known to humans is at play here. But it does help if one can train the brain and develop a disciplined mindset to counter the stresses of performance and risk-taking.
The fact is that very little effort and emphasis has been put into training and gearing the mindset of traders and fund managers. With the help of cognitive sciences and advanced coaching techniques resources are now available to help traders develop a disciplined process and overcome self-limiting beliefs and blind spots. A training and coaching program that is uniquely customized to each individual. One that supports and brings out their best performance, consistently and sustainably.
Billions highlights the need for coaching even for the biggest and brightest of hedge fund titans. While it’s just a show, and an entertaining one at that, the concept of trader coaching is sound and essential. Perhaps the show will inspire other fund managers to include coaching as an integral part of their business.
Try it. This just might make the difference.
The author, a former derivatives trader with 30 years trading experience, is the founder of Chopra Coaching. He specializes in coaching investment professionals, executives and entrepreneurs. Learn more about him at www.chopracoaching.com.