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On the verge of opening an underground fund

Discussion in 'Business, Investment and Economics' started by darkhorse70, Jul 23, 2014.

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  1. darkhorse70

    darkhorse70

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    Sup people, as the title suggests im in the process of possibly collecting small bits of funds from a group of friends/associates as well as my own in order to create a pool of money to hopefully generate some returns. I have no license etc and I realise that there are regulations etc to protect investors. My question is can I still trade the capital of investors if they are willingly handing over momey knowing full well or the risks involved etc. Im planning on parterning with partnering woth a very good friend who is in his last year at uni studying law so he is responsible for drawing up legal contracts to protect our selves from being sued etc. I realise I can keep it low profile and get away with it but I plan to target bigger investors through networking. Can I be banned from managing money permanently by doing this. Is there loop holes to managing peoples money with out licenses. This is not the definition of free markets. To many damn regulations...

    Thanks (looking forward to the negative feedback as well haha)
     
  2. minwa

    minwa

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    I think you can manage family and relative's money (not sure about friends), up to a maximum of a million dollars legally for them.

    But one pool of money together is just asking for trouble - unless they give it to you without any legal claim on it and just taking your word that you will return it. I'm sure people do it and get away with it. But if you're one of the few unlucky ones that do get caught, you will be in pretty serious trouble.

    I am not so sure about relying on a fresh graduate who's never practiced in the real world to keep your asses safe in something this complicated.

    Do you have a few profitable years of returns to attract investors ? If you can show you have a history of consistent profitability going down the legal route and getting licensed will be worth the trouble in the long run.
     
  3. Tyler Durden

    Tyler Durden

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    How exactly are you planning to generate returns with the money?

    Also, I think mixing money with friends is a baaaad idea.
     
  4. darkhorse70

    darkhorse70

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    I have ZERO real world trading experience haha. My goal is to collect only 500-$1000 of each friend. I some times post graphs on my fb wall and the idea came to me when my friends girl friend (so she thinks she is haha) offrred me $500 to trade. Initially my response was there is no way in hell that you can ever beat the market woth such low capital. Anyhow people just ask me for advice (not that I would recommend it haha). So my idea was to be able to pool these funds together enabling them to have a low risk investment and enabling me to generate enough funds to make ot feasible to trade. Now my main plan is to generate 15-20% returns with as minimal draw downs as possible. Risk management is my main focus. I plan on tapping into my friends networks who are rich asian uni students ( no offence to asians, my aunty is chinese haha). My business partners friend's dad sent him $1m for him and his brother to buy a house. If I ca tap into these networks the fund can boom. Atm im honing in on twitter/tesla/facebook. Tesla and facebook are in an intermediate uptrend if not primary uptrend. However twitter is the best pick. If the earnings result tomorrow if its tmw goes good I rekon it csn double in a few months. Anyway the point is trade maybe 2/3 times a year when all probability lines up in my favour with precise entry points and extremely high return/risk ratios. Its a risky avenue to try to pursue this, I might damage friend ships etc but this could potentially be a game changer for me. I dont know of any one personally who trades so I basically have a huge marker to myself and I want to make money for my potential clients. The best part would be if I could generate profits for my clients. Its mutually beneficial. If I can take a thousand dollars of a 100 people or 10k of 100 people is my first real goal. For now its about generating 10-20k, showing a consistant return no matter how small then pitching it to potential rich boy gamblers who are not associated to the mafia etc haha. By the way im not an optimistic person in general. Im more of a pessimistic person and I realize that the chances og getting this rolling are fairly small and even smaller to get decent returns but im dedicating my life to trading now till I die so I hope im not a sheep and like to believe I can be a contrarian when it comes to trading haha.
     
  5. Junior

    Junior

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    There are some inconsistencies in your game plan here.
     
  6. darkhorse70

    darkhorse70

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    The only inconsistency there is is the 15/20% return and thats assuming that you cant generate that without low risk which you probably could. A high risk low return set up is low risk. I can risk a dollar for 10 or 10c for a dollar. Haha thats why I got a lawyer as a partber. He can concentrate on the writing part. Plus in reality the people I know are **** money managers. They will blow it on cheap thrills. These are the people who pay 500 dollars to go to a dance festival, take 10 mdma tablets and pay two hundred for a damn ticket. Atleast with me they got a chamce in hell haha.
     
  7. darkhorse70

    darkhorse70

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    Sorry high return low risk.]
     
  8. prawn_86

    prawn_86 Mod: Call me Dendrobranchiata

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    This is not going to end well for anyone involved, yourself included.

    You, yourself not your lawyer partber, should write a detailed business plan in the first place, one that you would be comfortable presenting to a potential 'investor' here on ASF for example. If you cant do that then you shouldn't be managing other peoples money even if they are stupid enough to give it to you :2twocents
     
  9. Vixs

    Vixs

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    Assuming you even make any money and don't lose all of your investor's funds, the return on whatever money you're managing is not going to be enough to warrant running an unlicensed, unregistered managed investment scheme.

    Assuming you do lose investor's funds and they want it back, you're 100% screwed and likely to see the inside of a cell. Up to 5 years and $22k fine for the unregistered scheme, and up to 2 years and $22k fine for operating a financial services business without an AFSL.

    Don't know what kind of FUM and what kind of fees you'd be targeting, but I sure hope it will compensate for work done plus lost earnings while in prison and permanent damage to employment prospects!

    Maybe stick to saving and building up your own account for the time being darkhorse70 - it seems a recurring theme is under-capitalisation. These things take time, in the meanwhile continue to invest in your earning potential.
     
  10. Julia

    Julia In Memoriam

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    +1. haha.:rolleyes:
     
  11. Value Collector

    Value Collector Have courage, and be kind.

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    Is this a joke?

    I think it might be a joke,
     
  12. VSntchr

    VSntchr

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    Get some results. Track your results and show us some metrics. What do you expect a bunch of people on the internet to say when you ask if you can manage other people's money when you have "zero real world experience".

    This idea needs more MUCH more planning and refinement before you can even think about implementation.
     
  13. skc

    skc Goldmember

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    +1. And a pretty bad one at that.

    Where's that face palm emoticon...

    Found it.

    :facepalm:
     
  14. skyQuake

    skyQuake

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    The part in bold should be your primary concern. They can also try to sue u for fraud if things don't work out.

    If you wanna break into trading/investing, play with your own money first.

    The percentage of traders who have blown their acct early on in the careers is exceedingly high.
     
  15. darkhorse70

    darkhorse70

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    Prawn I am going to make a 'business plan'. Its going to be one month worth of your so called business plans with legal contracts etc. We are actually going to base our structure or ideas by looking at the way other funds operate. And how am I going to jail. Im going to video record every deal, clearly outline the risks and all that bs which im not going to outline because this is just a summary. And if I do face court ill tell the judge that this is no democracy. Stuff all your regulations and bs tapes. If an individual cant freely hand over his money to some one and is clearly aware of all the risks and assuming the manager of the money was operating under the best intentions of his clients then this aint a just system. I got to go to uni and get these licenses through these business mediums (or however its spelled) while they make a tonne of money. How is that democracy. I understand in some industries like doctors/engineers etc u should be qualified but heck you get these 25 year old shmucks who have all these degrees but dont know what the hecl they are doing. Plus thats why my friends going to get his finance license if it gets to a point while I operate in the back. Theres always a way around. If a bank robber gets 15yrs but a CEO who conned billion gets 2years then hell the systems broke eitherway haha. You crack me up Julia. If im in my 50's sitting on a stock forum and lets assume youve been trading for a decade or two and you are chatting on a forum on a regular basis. If im at that caliper in 20years ill retire from this industry and walk away in shame. If youve got time to make posts at 12pm then clearly youve got to much time on your hands. One last thing, I only asked if its possible etc. I dont cae about your doubts, maybe you got no guts but thats your problem. I dont want to get a bias opinion or negative thoughts to confuse me when im on a path which I can see clearly. Im only asking for the technical stuff and not about if u think I can succeed or not. I go over that a million times in my head daily. And dw in 30 years time I can assure you ill be a trader, 10 times your caliber. Good day haha
     
  16. darkhorse70

    darkhorse70

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    Its only a joke till its reality brother. I will have the primary stake in the fund.
     
  17. DeepState

    DeepState Multi-Strategy, Quant and Fundamental

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    Term Sheet

    Manager: DarkHorse Asset Management Netherlands (hereafter "DAMNED")

    Fund: DarkHorse Quantum Emergence I
    "Physics states that particles appear within a total vacuum. Why not money?"

    Investment Approach: TBA

    Objective: High return, Low risk

    First Close: TBA

    Historical Audited Performance Composite: Confidential

    Principals (Years with firm/Total Industry Experience):
    DarkHorse70, Founding Partner. Zero Real Life Investment Experience
    Unnamed Partner, Founding Partner, Final Year University Student - Law.
    Combined investment experience (yrs): Zero

    AFSL: Not available - Underground fund.

    Minimum Investment: Negotiable

    Target Funds: $1bn, with potential for a subsequent $1bn at manager's discretion

    Lock-up: At manager's discretion.

    Legal Jurisdiction: Not Relevant - Underground Fund.

    ------

    The above is actually what your business looks like right now. Just saying...
     
  18. prawn_86

    prawn_86 Mod: Call me Dendrobranchiata

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    As i thought, quite obviously a troll.

    I will leave this thread open for laughs
     
  19. McLovin

    McLovin

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  20. Craton

    Craton Mostly passive, contrarian.

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    From the tone of darkhorse70's posts, one would have to agree.

    Not so u/ground by posting here hmmm?

    High return/low risk. Sound familiar? Haha indeed!
     
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