Tim Sykes is a hedge fund manager who was featured in the American reality show Wall Street Warriors and also an author of An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund. He currently has a website in which he sells various products giving investment advice from his publishing company, BullShip Press, LLC. At the age of 22, Mr. Sykes started his own hedge fund, Cilantro, which he closed in 2007 after experiencing a 35% loss in 2 years. He then started a new hedge fund called TIM, Transparent Investment Management, with the goal of turning of $12,415 into $1.65 million and documenting his experience on his website. Mr. Skyes has several tips on how to start a hedge fund. From FT's Alphaville. More here and here.
Lesson #1: If you consistently beat the market, you will face endless questions about whether or not you are a fraud.
Lesson #2: Everything takes much more time in the real business world compared to the trading world.
Lesson #3: Focus on trading first; never schedule investor meetings during market hours.
Lesson #4: Do not feel bad about changing brokers if they are ripping you and your clients off. They are not girlfriends; there is always somebody cheaper and better out there.
Lesson #5: The larger the ‘nest egg’ stake the manager has, with the initial startup–the better.
Lesson #6: Focus on what works for you and do not change to accommodate others.
Lesson #7: Raising money does not come easily for a startup hedge fund manager.
Lesson #8: With capital introduction, there’s always a catch.
Lesson #9: This industry is full of frauds and con artists.
Lesson #10: Results are much slower in the real world compared to the trading world.
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