Posted by: jhamon | June 23, 2009

Humor: Dangerous Fund I

From Johnny Debacle, at comes this announcement of a new fund:

Dangerous Fund I will specialize in positions that lack defensible absolute return theses. Assets will be allocated so as to leverage Tinderbox Capital’s expertise in trades of which they have little understanding, so-called “dangerous” trades. These trades will include vega convergence bets, investments in opaque levered pass-through instruments, naked red/black hedge trades, and proprietary coin-in straddles. Their due diligence process will include a rigorous “bottoms up” analysis that is comparable to the processes of Fairfield Greenwich Group and other top Fund of Funds. 

Tinderbox Spokesman Johnny Debacle:

“We see a clear need for an investment vehicle for people who want to lose all their money. Competitors out there have lost on average 30-40% in this cycle. We think we can lose more, especially with our so-called ‘dangerous’ trades. Our trades are dangerous because we don’t fully understand them. Frankly, we may not understand them at all. Take a vega convergence bet where we form a pair trade with options with two assets with similar, but not the same, underlying. We make that trade and we’re pretty sure something happens we just don’t know what it will be. Does anyone? I may not have the details of that trade correct either. That is a core strength of our investment process…”

More here.


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