Chicken & Egg.. or a good business model?
Is making a 10% annualised return make you a good trader? Apparently not to the vast majority of people who have no respect for risk adjusted returns.
However, in the world of alternative investments its everything. Let's assume my info on the Grinhams is correct (I personally know them so we might be able to squeeze that assumption through), they have been trading for 16-years with an annualised return circa 10%.
Look at Echardt. He has an annualised return of 27% yet manages just $250m. This is because his maxDD is closer to 40% and is too volatile. Whereas someone like Crabel who has an annualised return nearer 10% with a minimal drawdown managed over US$1 bill because he is Mr Consistent AND Mr Low Risk.
Assuming Richard Grinham was straight out of Uni 16-years ago, what capital do you think he started with to making $30m a year from trading profits at 10% annualised?
Also note that many of these fund manager DO NOT have their own funds in the same fund. Some do, yes, but others don't. This is because it allows them to remain psychologically detached from the process and not tinker with the system during bad times.