From Trading Commodities to Trading Stocks

What has caused me to evolve and drop the commodity stuff and go straight into all stocks is a really good question. I started trading commodities –same as what your S&P 500 is in the Australian market, which is called the share price index. That was 1995 or 1996. I dabbled around in shares all the time. It wasn’t anything systematic, it was always commodities. That’s my history, that’s where I started off, mainly financials. I remember it vividly, it was after the tech boom, and we were running a commodity hedge fund and we had some investors that weren’t happy. We were making 15%, 16% a year and I remember vividly an investor for Hong Kong, he was in the markets and he turned around one day and just said, “Why am I investing with you guys at 16% per annum?” He started putting out these text documents that were basically doubling every three weeks. It was money for jam and tech boom. His strategy and logic was froth with danger, because it was all based on a big boomer. He did get me thinking that there is a lot more money to be raised with equities, than there is with commodities. Remember, I was running a commodity fund, and the name of the game is raising assets.

Back then, for every fifty thousand dollars, you could put it into a commodity fund, you could probably get half a million dollars to go into an equity fund because people understood equity funds –they were much more common, and that’s where it really started to shift. Back in the late 90’s we started moving away from cash only equities trading in Australia, to more margin driven CFD kind of stuff. So that opened up a lot of doors and that was really the driver to move from commodities into equities. Simply that I could raise a lot more money to manage in equities, than what I could with commodities.