Think it’s too late? The world’s greatest fund manager didn’t make money until he was 52

Jim Simons had modest wealth at 52; now he’s worth $ 23 billion

Jim Simons

Financial markets — and risk taking in general — are largely the domain of the young. Early adulthood is the time to swing for the fences while middle age is a time for prudence, perhaps risking a manageable part of the nest egg.

Yet that’s not always true. It’s particularly untrue of some of the world’s greatest investors.

Among them is Jim Simons, the king of quants. Yesterday Gregory Zuckerman published “The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution.”

It details how a 40-year old math professor walked away from a job at Stony Brook University to try trading currencies. He had no idea what he was doing but raised $ 4 million with a few partners. He recruited renowned mathematicians to help him. It didn’t work and losses topped $ 1 million.

“If you make money, you feel like a genius,” he told a friend. “If you lose, you’re a dope.”

He gathered more data and persevered through the 1980s with a mixed record. In 1989 he lost 4%.

Finally, Simons along with recently recruited colleagues Henry Laufer and Elwyn Berlekamp, started to focus on short-term patterns — Monday’s price action often followed Friday’s, while Tuesday saw reversions to earlier trends.

It worked and the Medallion fund gained 55.9% in 1990. It hasn’t stopped. His fund as generated average returns of 66%, racking up gains of $ 100 billion. No other fund or manager is even close. A $ 10,000 investment 30 years ago excluding fees would be worth $ 40 billion today. Even after fees, it would be worth $ 195 million.

How the fund makes money is one of the world’s most-closely guarded secrets but it’s story isn’t. Simonds certainly had mathematical talents but he know almost nothing about markets when he started out at age 40 and managed to amass one of the world’s great fortunes.

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Your Money: U.S. teachers take hands-on approach to financial literacy

© Reuters. FILE PHOTO: Wood-cased coloured pencils are pictured in a shop at Faber-Castell manufacturer in Stein © Reuters. FILE PHOTO: Wood-cased coloured pencils are pictured in a shop at Faber-Castell manufacturer in Stein

By Chris Taylor

NEW YORK (Reuters) – There are a lot of hard truths about money, but here is one of the hardest: We are really bad at passing along money smarts.

As it stands, only 57% of American adults can be considered financially literate, according to a global survey by Standard & Poor’s.

A new initiation from education fundraising website DonorsChoose.org and the Charles Schwab (NYSE:) Foundation is aiming to change that with a new hands-on approach. Rather than kids reading about starting a business, why not actually open a school store? Rather than reading about concepts like supply and demand, why not start making T-shirts, and see if they can sell them?

The “Innovation Challenge” prompts teachers to craft creative FinLit projects, helps them get funded, and then monitors which ones pay off.

“Experiential learning is so important, especially for lower-income families,” said Casey Cortese, managing director of Schwab’s community services, which is taking a new hands-on approach to teaching financial literacy. “If you make lessons tangible and real, it really cements learning.”

This year’s overall winner of an online fan vote: Students of Rapunzel Galang in Lanham, Maryland, undertook virtual-reality field trips to different historical landmarks through time. They did that using VR headsets – but first they had to plan, budget, and pay for such trips, by researching about the places they wanted to visit.

Another innovative project: Xavier Lewis in Dayton, Texas, combined financial literacy with a “Mission to Mars” STEM project. Students earned money in their virtual bank accounts with attendance, class participation, and completing assignments. They could then spend that money to buy supplies to assemble rockets, rovers and hovercrafts for a simulated flight to Mars.

Other projects included creating a virtual-reality bank, filming a how-to video series on personal finance, using dinosaurs to pass along money lessons, and teaching the idea of “wants versus needs” via dramatic play.

KEEP IT GOING

While 92% of teachers say financial education is important, only 12% actually undertake it – because they just don’t have the resources, said Cortese.

To combat that with the Innovation Challenge, 15 of the top projects were developed into full lesson plans. Teachers across the country could then download them for free and use them in their own classes. The first 200 teachers who did so, and submitted a report on how it went, got a $ 250 credit to apply to future projects on the site.

The initiative has encouraged educators to think bigger and more creatively than just using a crowdfunding site like DonorsChoose to cover things like basic supplies. Since the Innovation Challenge first got started, “There has been a 66% increase in FinLit projects posted,” said Rianne Roberts, partnerships manager for the fundraising site.

Financial literacy is a long game, though. You can teach a third grader about money smarts today, but you will not know for years whether those habits have actually taken root.

When the Schwab Foundation first started partnering with the site in 2017, 350 teachers participated in its financial literacy campaigns, reaching 36,000 students. In 2019, in comparison, they have already reached 1,600 teachers and 250,000 students.

So far this year, Schwab donated $ 375,000 to the Innovation Challenge, and $ 500,000 total to DonorsChoose. Of those teachers who used the resulting materials, 98% said they plan to keep teaching financial literacy in schools.

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Former Maldives president pleads not guilty to charges of money laundering

By Mohamed Junayd

MALE (Reuters) – Abdulla Yameen, the former president of the Maldives, pled not guilty to charges of money laundering on Sunday, in the first hearing of a criminal court trial into the matter.

Yameen, who drew the Indian Ocean island country closer to China during his tenure, is accused of receiving $ 1 million of government money through a private company, SOF Private Ltd, which has been implicated in a corrupt deal to lease tropical islands for hotel development.

The corruption scandal, originally uncovered by an internal audit, has also implicated several other leading politicians and businessmen, all of whom have denied any wrongdoing.

SOF Private could not immediately be reached for comment.

Yameen, who unexpectedly lost an election last year, was arrested in February. He has repeatedly denied the allegations against him.

During Sunday’s hearing, which was broadcast nationally in a historic move, the court dismissed five pre-trial motions filed by Yameen’s lawyers challenging the validity of the charges against him.

The defense’s arguments did not amount to a valid reason to not proceed to trial, the judge ruled.

The prosecution’s witnesses will begin to testify at the next trial date on August 4. If found guilty, Yameen could face a jail sentence of between five to 15 years.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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YOUR MONEY – Do the math before you pick the expensive school zone

© Reuters.  YOUR MONEY - Do the math before you pick the expensive school zone © Reuters. YOUR MONEY – Do the math before you pick the expensive school zone

By Chris Taylor

NEW YORK (Reuters) – For John Bohnsack, it was a classic parental dilemma: Get a small, expensive house in a high-quality school district, or pay less and get more house in a worse neighborhood.

The financial planner, 34, and his wife opted for the better school district in College Station, Texas, a university town that is home to Texas A&M. His two girls, 5 and 8, are thriving.

“It comes down to your values: Is it worth it?” said Bohnsack, who estimates their monthly payment is about 10% higher than it would be for comparable homes in lower-performing school districts nearby.

The choice is not an easy one, but it is common across the United States. A whopping 58% of parents admit they are paying more for rent or their mortgage to be in a good school district, according to the latest “Parents, Kids & Money” survey by Baltimore money managers T. Rowe Price.

“People recognize that there is a trade-off involved,” said Stuart Ritter, senior financial planner with T. Rowe Price. “School zone is important, but at the same time, it has to be integrated with other financial goals too.”

Getting into a good school zone affected 42% of families’ finances to a “considerable” degree, the T. Rowe Price survey found, while 20% said it was more like an “extreme” amount. That takes away from other necessities like funding retirement or the kids’ college fund.

For parents, the trick is to strike the right balance.

Some tips:

* Research school quality.

The rankings site Niche.com puts out a report of best national school districts (https://www.niche.com/k12/search/best-school-districts/). Its top performers in 2019: Jericho, New York, Solon, Ohio, and West Lafayette, Indiana.

At the site GreatSchools.org, parents can crunch the numbers to discover which schools may be a good fit.

Beyond general rankings, you can add your own screens for factors that are critical to you. You may be most concerned with student-teacher ratio, graduation rates or special-needs services, so drill down into what matters most.

Then follow up with in-person work, suggests GreatSchools spokesperson Carrie Goux. Visit on-site, talk to other parents and read reviews, all of which give you valuable insights that numbers may not.

* Compare with housing prices.

The real estate site HomeUnion went a step further and combined affordable zip codes with the best public schools around the country. Its nationwide winners for 2017 were: Blue Springs, Missouri; Tuttle, Oklahoma; Fenton, Missouri and Boca Raton, Florida – all of which offer average single-family housing prices under $ 200,000.

For average home prices in your local zip codes, check out sites like Zillow.com or Trulia.com.

* Think outside the box.

If a particular school district is terrific but it’s just too expensive to live in, then you may need to look at other options. High-performing kids may test into schools that are outside of their home districts, for instance.

You may also make the determination that it is cheaper to live in a more affordable neighborhood, but then look at charter-school options or pay for a private education.

Average annual K-12 private-school tuition for 2018-19 is $ 10,671, according to the site Private School Review. It’s $ 9,631 for elementary school, and $ 14,575 for high school. Over 12 years, if the differential in house prices is more than $ 150,000, it might be worth it.

* Keep your head.

Realize that if you are paying more to get into a good school district, that gives you less financial flexibility, and you will likely have to cut back in other areas. In the T. Rowe Price survey, almost one in 10 parents said more than 50% of their income is going toward rent or mortgage – that is a lot of money.

On the plus side, if you do locate in a prime school zone, that will help you when the time comes to sell. According to Zillow’s 2018 Consumer Housing Trends Report, a home in a preferred school district is very or extremely important to a whopping 66% of buyers with kids. That is enough to make anyone house proud.

(The writer is a Reuters contributor. The opinions expressed are his own.)

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2018 Bitcoin summary – How CFD traders can make money during the downtrend

A look at how bitcoin performed in 2018

While the leading currency lost over 80% of its value since the “peak Bitcoin” in December 2017, many day traders made fortune during the downtrend placing the right orders at the right time. Let’s go through some examples, so you can decide whether it was within your reach.

2018 was a dramatic year for cryptocurrency HODLers. They spent most of 2017 with head in the clouds checking every morning how much the value of their crypto wallet has gained overnight, and probably buying more and more.

The bonanza was at its full speed in late November – early December and then… the crazy rollercoaster happened. Bitcoin nearly reached $ 20,000 on December 17. In the next 5 days, it dropped almost by half. Then in the first days of January, it climbed back to $ 17,000, only to plummet to $ 6,400 in the next month.

The bullish traders were fighting the downtrend throughout the first three quarters. Then in September, the volatility decreased. The BTCUSD entered a sideways drift that lasted until November 14. Bitcoin broke the $ 6,000 and then $ 5,500 support levels. In the time of writing this article, it’s testing the support levels from September 2017.

Cryptocurrency enthusiast wanted a trend reversal that never happened. The price of Bitcoin is going down, and 2018 was 100% of the time bear market.

Not a bad year for CFD Traders

In the long run Bitcoin and cryptocurrencies have a bright future. The blockchain technology is developing and being adopted in new fields with success. Bitcoin as a long-term investment proved to be a horrible choice for the people who hunted for buy low occasions in 2018. On the other hand – who knows, maybe we have reached the bottom already. We’ll learn in the next days, weeks or months.

While the cryptocurrency market capitalization fell from almost $ 831bn in January 2018 to $ 104bn in mid-December, crypto CFD traders have nothing to complain as a well-trained eye can see strong technical analysis patterns that navigated the traders through the uncharted waters.

For skilled traders, the first half of 2018 was a great period as Bitcoin Volatility Index stayed above 7% in January and February, then fell to average levels. The third quarter was a lazy time for Bitcoin day traders as the volatility fell below 2%. Things came back to life in November and by December it was way above 5% again.

Some profitable CFD trades were made across the world. Let’s take a look if the 2018 trading opportunities were within a reach an intermediate individual trader and check if a beginner trader could have made some money.

We’ll retrospectively use just the basic indicators: Japanese Candlestick Reversal Patterns and Fibonacci Retracement Tool, and see if it was doable. We’ll take a look at the BTCUSD chart – the most important cryptocurrency – in a different scale – from macro 1-week view to the most detailed 1-minute. Let’s go!

Perfect bearish engulfment

We’ll take a look at a broad picture with weekly candles and see if the big trend reversal was preceded by any sign. It turns out it all started with a strong bearish engulfing pattern.

The green candle representing 12/10/2017 week is fully engulfed by a huge red candle in the next week. Furthermore, the pattern is confirmed by the next red candle. Taking into consideration just this strong sign a novice trader (you usually start with learning this kind of stuff, when you just learn how to read Japanese candlesticks).

What extraordinary skills were necessary? What can we learn from it? This only worked if you took a multiweek trading strategy. This is a long-term attitude that requires a lot of self-control and discipline, but this shows that in the case of market turmoil it pays to stay calm.

Capitalizing on opportunities with Fibonacci Retracement Tool

Technical analysis tools are very useful in cryptocurrency markets since there are little intrinsic value indicators that would be useful in determining the price. Let’s see if Fibonacci Retracement was useful during the crash.

Fibonacci Retracement Tool works neutral. The call whether it’s just a retracement or a reversal is a different thing. Trying to get into the minds of 2018 Bitcoin traders we connect connect the swing low from November 12 with swing high on December 17. Let’s imagine I’m doing it planning my trading strategy after the New Year’s Eve party on January 1, 2018. Here are the Fibonacci levels projected on a one day chart for the first half of 2018.

The basic support level wasn’t broken until November 24. At the beginning of the year when the local bottom was reached on February 6, both the first and the second resistance levels proved to be useful when taking short positions for traders that included year-long downtrend in their trading strategies.

Now let’s take a look at BTCUSD retracements at a 1H chart in mid-December.

You can see that what seemed to be just a rally in a continuing downtrend proved to be a reversal, which was difficult to predict but proved to be quite obvious once the huge green candle breaking through three resistance levels in one hour occurred.

At this point, even a beginner trader could readjust the Fibonacci Tool, and start placing buying orders. With each confirmation of an uptrend, you could add to the long long position using local pullbacks to get the best price.

What’s next?

If you are a beginner trader, you should go on practicing the basic trading strategies and excel in opening and closing positions at the right time. Nobody knows what will happen with Bitcoin and other cryptos in the next months, and that’s your strength, too. Unlike with stock or forex, you have the same knowledge as the biggest players.

Here’s an interesting opinion. Mark Dow is a former IMF economist, who became a worldwide famous trader as he hit the jackpot opening a big short position on Bitcoin a year ago, exactly at the point of historic “peak crypto”. Since then BTCUSD declined by over 80 percent, and Mark Dow decided to close the trade.

Just as the euphoria surrounding Bitcoin was peaking last December, Mark Dow decided to short the leading digital currency. Almost a year to the day, and after a more than 80 percent decline from its record high price, Dow has closed out the trade.

“I’m done. I don’t want to try to ride this thing to zero,” “I don’t want to try to squeeze more out of the lemon. I don’t want to think about it. It seemed like the right time.” Dow said in a phone interview with Bloomberg.

“People buy into these assets because they believe the narrative, and you look at the asset prices to see if the narrative is weakening or changing,” Dow said. “It’s not easy — you could be wrong, but that’s the sign you look for. But it doesn’t mean you’ll get it right.”

As you can see, it’s much easier to master the basic technical analysis tools than to read the macro trends. While there are many useful tutorials concerning the first, there is as much false advice about the latter.

Pick up a handy CFD trading tool and learn step by step how to recognize trends and execute effective trading strategies. SimpleFX WebTrader is a great app for a start since it offers you a fully functional demo account for practice, and live accounts in any currency with no minimum deposits, so you can gradually increase your investments as your skills develop.

Good luck trading in 2019! Hopefully, it will bring as many trading opportunities as 2018.

This article was submitted by SimpleFX.

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Deutsche CEO says staff in money laundering probe should not be prejudged

© Reuters. 28th Frankfurt European Banking Congress (EBC) takes place in Frankfurt © Reuters. 28th Frankfurt European Banking Congress (EBC) takes place in Frankfurt

FRANKFURT (Reuters) – Deutsche Bank (DE:) Chief Executive Christian Sewing said two employees subject to an ongoing investigation into money laundering allegations should not be prejudged until proven guilty.

The interview with weekly Bild am Sonntag comes shortly after a two-day raid at Germany’s largest lender linked to the "Panama Papers" leak of documents about offshore finance. According to a source, the raid included police searching the offices of all the bank’s board members.

Investigators are looking into the activities of two unidentified Deutsche Bank employees alleged to have helped clients set up offshore firms to launder money, the Frankfurt prosecutor’s office said.

"It’s about two employees that, at the time, helped to work through everything surrounding the issue of the Panama Papers. In my view the presumption of innocence clearly applies until proven otherwise," Sewing told Bild am Sonntag.

"If we would prejudge our own employees at Deutsche Bank – most notably those that are working through relevant issues – something would be going massively wrong."

The investigation was triggered after investigators reviewed the so-called "Panama Papers", millions of documents from Panamanian law firm Mossack Fonseca, which were leaked to the media in April 2016.

"Since the publication of the Panama Papers in 2016 we have reviewed the whole issue and, in doing so, cooperated closely with the regulatory authorities. For us the case was concluded," Sewing was quoted as saying by the weekly.

"We have thoroughly worked through the Panama Papers, there are independent expert opinions on the matter."

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Vision Direct hack puts customers' money at risk

Vision Direct says a hack attack has exposed thousands of its customers’ personal data including payment card numbers, expiry dates and CVV codes.

The contact lens retailer said anyone who had entered their details into its site between 3 and 8 November could be affected.

It added that it had identified 16,300 people as being at risk.

It said a fake Google Analytics script placed within its websites’ code was the apparent cause.

The company’s UK site was involved as well as local versions for Ireland, the Netherlands, France, Spain, Italy and Belgium.

Under investigation

A spokeswoman for Vision Direct told the BBC that 6,600 customers were believed to have had details including financial data compromised, while a further 9,700 people had had personal data but not card details exposed.

“This particular breach is known as Shoplift and was already known to our technology team, who installed a patch provided by our web platform provider to prevent this form of malware,” she added.

“Unfortunately, this current incident appears to be a derivative against which the patch proved ineffective. We are continuing to investigate the breach and have made numerous steps to ensure this does not happen again.”

One expert said the involvement of card security codes made the breach particularly serious.

“Being able to provide the CVV number usually indicates that you have the card in your hand when making a purchase,” commented cyber-security researcher Scott Helme.

“Now the attackers have the full card details including the CVV number, these checks carry less value.”

Apology

Vision Direct describes itself as Europe’s biggest online seller of contact lenses and eye care products.

A statement on its site says that anyone who updated their details during the stated period, or had an order or update submitted on their behalf by its customer services team, should contact their banks and/or credit card providers.

“The personal information was compromised when it was being entered into the site and includes full name, billing address, email address, password, telephone number and payment card information, including card number, expiry date and CVV,” said the alert.

“We understand that this incident will cause concern and inconvenience to our customers. We are contacting all affected customers to apologise.”

It added that customers who had used PayPal during the period might have had their names and addresses accessed, but said their payment details should still be safe.

Vision Direct’s site had previously said that all card payments made to its service were “totally secure” and that it had never once heard of a case of them being misused.

Compensation pledge

Vision Direct was acquired by the French firm Essilor International two years ago.

It says it has contacted the UK’s data watchdog as well as Google to tell them about the hack.

“We will compensate any customers who have suffered financial loss as a result of this breach,” a spokeswoman added.

It is not clear how the fake script was placed on Vision Direct’s sites.

A spokesman for UK Finance said that affected customers should be protected against this and other cases of unauthorised fraud on their debit and credit cards.

“Card issuers already have advanced fraud screening systems in place to detect and stop any suspicious transactions,” he explained.

“The finance industry has previously called for new powers on information sharing to allow banks to share data to detect and better prevent financial crime, particularly when it is the result of a data breach in another sector.”


Have you been affected by the Vision Direct hack? Tell us about your experiences by emailing haveyoursay@bbc.co.uk

Please include a contact number if you are willing to speak to a BBC journalist. You can also contact us in the following ways:

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