Comments on: How to Avoid the Next Galleon Group (or Madoff)

By: Alex

Alex — Sun, 22 Nov 2009 12:08:00 +0000

Thanks for sharing . This information is useful for me.

By: marketfolly

marketfolly — Wed, 21 Oct 2009 04:22:16 +0000

don't forget they also hold a ton of options positions as well which is tough to replicate.

By: phoneranger

phoneranger — Tue, 20 Oct 2009 23:56:48 +0000

Cloning just the long side of a long-short fund is problematic. Even so you'd think that their end of quarter holdings would at least match the SP500. Otherwise why bother?

By: marketfolly

marketfolly — Tue, 20 Oct 2009 23:22:16 +0000

don't forget they also hold a ton of options positions as well which is tough to replicate.

By: phoneranger

phoneranger — Tue, 20 Oct 2009 18:56:48 +0000

Cloning just the long side of a long-short fund is problematic. Even so you'd think that their end of quarter holdings would at least match the SP500. Otherwise why bother?

By: JeremyG

JeremyG — Tue, 20 Oct 2009 17:44:09 +0000

Galleon's returns are actually very good – but the clone doesn't reflect that for the various reasons mentioned. Galleon's Buckaneer fund had a 3 year avg. annualized return at the end of 2008 just slightly under 10%.

By: JeremyG

JeremyG — Tue, 20 Oct 2009 17:31:16 +0000

I think what would be interesting would be to see if holding this same basket of stocks over a 5 year time-horizon (perhaps dollar cost averaged and adjusting proportions for newer issues) would have beat Galleon's “claimed” returns. Probably not, but given that it is a very tech heavy portfolio, I'm sure it would have done fairly well.