Wayward Hedgefund v7

The Retarded
Hedge Fund
Manager
SPREZZATURIAN
INVESTING LESSONS
March 11, 2015

(slightly touched up, March 2016)
Cover by Jack Sheppard
Interior by Unauthorized Media
April 7, 2015
Mik ae l Syding
| iii
FOREWORD
Thank you for downloading my book from mikaelsyding.com
If you didnt, please visit and subscribe to my newsletter. Its at least as
useful and entertaining as this eBook. And free. And spam free.
Also please note that I was a fund manager, not a designer or writer. This
book reflects exactly that. That said, I hope you will enjoy it. E-mail any
feedback to mikael.syding@gmail.com
Mik ae l Syding
|v
EXECUTIVE SUMMARY - NEVER RUSH YOUR

INVESTMENTS
What follows are my most important lessons from 15 years as partner,
portfolio manager and managing director at the best performing hedge
fund in Europe, over the excruciatingly difficult decade of 2000-2009.
The one most important rule of investing is to be patient. understand
that there is never any hurry in investing. There will always be new
opportunities, new cycles, new companies. If you feel rushed, it is probably
already too late. Be patient.
Be patient
There is never any rush to invest: Study/Wait/Pounce
The best way to become poor quickly is to try to get rich
quickly
There are always corrections and new opportunities. Wait,
dont chase
A is A
Reality is what it is. Dont assume things, investigate! Trust
no one.
Losses are in the past. Learn from them. Dont hate, dont
get angry; face the facts, the universe is not out to get you
Always bet on black
Stock prices want to go up. People want to buy, not sell.
Central banks, governments..., everybody in the game
want higher prices, in order to collect taxes & fees and
keep the masses calm
Despite recurring sudden crashes, the markets memory is
extremely short, lessons/losses quickly forgotten, and new
bull markets born.
Be long, or neutral, unless you have extremely good reasons
to be short -which should be around 5-10% of the time.
Never go all in
vi|
THE RETARDED HEDGE FUND MANAGER

Always prepare for being wrong; you will often be anyway
Mind the surroundings, clients, black swans, corrections
and keep dry powder for the next round
There are no absolute truths, so you never know enough
for all-in
Dont panic
Its never as bad as you think. Never as important or last
chance either
Opportunities will cycle back, if you sized your risk
correctly
Never be cocky
Most of your winnings are just luck. Dont confuse with
genius
Valuation and fundamentals are but a small part
Over very long periods, valuations matter
Over up to a dozen years, they dont (at least not vs.
momentum)
Trade, when you can - not when you have to
Manage your risks according to possible rewards and risk
of permanent loss of capital
Dont be greedy. Dont overstay your welcome
Learn from your mistakes, dont repeat them like I did:
a) hard thorough work, and b) grinding in a little well
earned performance, c) some luck, d) some wins, e)
consequent hubris, f) thus too much risk, g) inevitable
losses, h) missed opportunities due to risk management,
i) misfortune, j) despondence, k) slow recovery and l)
regained confidence, and back again to m) hard work
Be independent but humble
Dare to be contrarian, dont always take comfort in the group
But be humble, since the crowd is often right, and fighting
the Fed is often unnecessarily hard
Mik ae l Syding
| vii
CONTENTS
Forewordiii
Executive Summary - never rush your investments
v
Hej!xi
Always be investing
xiii
You say retired, I say retarded
xiv
Pictures of Stockholm
xv
Retarded for a living
xx
My office at the hedge fund (Futuris)xiii

At home - relaxing on my roof terrace hwith a copy of The Economistxiii
The Retarded Hedge Fund Managerxiv
The Swedish Parliament and my dog Ronjaxv

Stockholm downtown - my roof topxvi
Humlegrden & Stureplanxvii
Water cityxvii
Clowning around Investors HQxviii
Investing is humblingxix
Rhubarb umbrella & dog moustachexx
Takeaways1
I actually never watch TV; I dont have cable or other means of receiving TV2
Pictures from my apartment3
Bedroom4
Im not interested in conspicuous consumption (anymore)
My sauna5
The Master bathroom6
The lounge 7
Ronja8
At the office9
Always be investing
10
15 year summary
12
Screen shot11
Performance chart13
Defining moments14
My path to managing a hedge fund
16
Flying start for Futuris16
Sprezzaturian - the early years
17
Jukkasjrvi17
Bullied18
Prize winner19
Errand boy
Top ranked analyst
19
20
The ignorant majority21
Becoming a hedge fund manager
22
viii|
The Hedge Fund Manager Of The Decade
24
The Grand Connaught Rooms, London24
The long-only herd made it possible
26
Grosvenor House, London: Eurohedge 2008 awards 27
Inception29
Futuris 63 most important decisions
30
Futuris Stock Market Exposure 1999-201431
Proof is not good enough - you need a story

How To Miss A Billion
Poor marketing, poor schmarketing
32
33
33
Too cocky, too controversial and unorthodox
36
Eccentric wasnt as good as I thought34
Too weird to live, too rare to die37
We were gods... in pain
100% outperformance in 2 years

People matter
Sharing offices with the grim reaper

Futuris was almost thrown out with the bathwater
Marooned in realtime
The Toughest Stock Market In A Century
38
38
38
40
40
41
41
43
The Swedish stock market 1999-201443
The IT bubble taught me valuation hardly matters

Still learning the valuation lesson
44
46
The worst conceivable time to start a new fund
48
Starting a new fund at the peak of an epic bubble

Transition from a wild bull to a growling bear
Futuris produced magically good numbers
49
51
51
Success bred hubris (and a negative bias)

When the bull returned we were wrong-footed
When hubris struck, the grim reaper hung in the shadows
52
53
53
How to Make Award Winning Investments Like A Boss48

Party like its 199949
The magic performance of 2000-2003 - Low Risk, High Return52
Same pose, different tools53
Bullied by the Fed - Futuris near-death experience
55
Lament to Mammon: Oh why have you abandoned us?
55
Hail Mary trades eventually saved us in 2006 - or did they?
59
Golden gods57
Where are the customers yachts?58
Mik ae l Syding
Dont let luck or hope be your strategy
Redemption - the bear returns
Another nerve-wrecking year of extremes
We always saw a light at the end of the tunnel
| ix
59
61
61
65
The comeback kids
65
How a foot in the face can help regain your balance
68
Lamborghini convertible, Midas gialli67
Wolf of Wall Street68
2008 The year of the rat
Secretive Managers - Crazy Good Returns
70
71
Dont short. Dont short.73
Finishing the banner year of 2008 as true professionals74

Spooky precision in 2008
Bailing out of Lehman Brothers bankruptcy
We were wrong
74
74
74
Biggest doofus in the market75

Homicidal psycho on the left, doofus on the right75
The Lehman collapse76
The big bounce and the era of central bankers 2009-2015

77
March 2009 - we got a mulligan...
77
The final hoorah

A tsunami of money
84
84
The peak was glorious - the demise unnecessary
86
Death by central banker
89
Is that a bear I hear?

Light at the end of the tunnel
90
91
Whatever it takes
92
S&P 500 Index
98
Decision paralysis?77
Dare tot ride a bear? Dare fight the Fed?80
Mixed emotions85
So good we were scary86
Close but no cigar88
A sliver of hope still lingered in 201290
It had been the worst of times.We anticipated the best of times91
Mario Draghi92
Draghis effects on PIGS yields were astounding93
Smaug the mighty client96
Market correction 201497
The Greek disconnect - The Alpha & Omega of managing

money100
x|
Summary: Futuris best and worst moments

Single best trades ever
Largest gains on least risk
Best but least appreciated work
Single worst trades
Defining moments
The giga lesson: the cycle of forgotten lessons:
102
102
103
103
104
105
106
2014,The stock market in which Futuris was felled110
Final thoughts on research and investing
110
Holistic research113
Top 10 List Of My Lessons From Futuris 2000-2015 114

Epilogue116
Are you a subscriber?
117
Subscribe117
mikaelsyding.com117
Karl-Mikael Syding118
Awards and Nominations for Futuris
119
Obviously no consequences ahead120
Reading tips:
Contact Information
121
121
The Last Party as a hedge fund manager122
Mik ae l Syding
| xi
HEJ!
My name is Karl-Mikael Syding, but I often use the handle Sprezzaturian
(from sprezzatura, which means approximately studied nonchalance making hard things look natural and easy)
Here I am in Ibiza in July 2014
Dont worry, Im not a douchebag (just posing)
xii|
In January 2015, I retired as Managing Director of Europes best

performing hedge fund, Futuris (Brummer), with a double digit million
USD net worth.
This picture is from the same Ibiza trip in 2014 - thats me in the air, with a suit on
Definitely not a douche. Rather, quite the happy camper: rockin and
arollin.
I want to take this opportunity to share my story...
Mik ae l Syding
AlwAys
| xiii
be investing
My ofce at the hedge fund (Futuris)
I (white) and and one of my colleagues (trader extraordinaire, Patrik J, in

black) at Futuris Stockholm office.
At home - relaxing on my roof terrace hwith a
copy of The Economist
xiv|
you sAy retired, i sAy retArded

I am currently enjoying retirement (I turned 43 in January 2015) with
my 8-year old rescue hound Ronja (a german shepherd-doberman mix).
Having finally had time to let my mind calm down, all the while absorbing
the placid beauty that is Stockholm - the city Ive come to call home, Im
eager to share my experiences with anyone wholl benefit from them.
Its difficult to gain acceptance into hedge funds (not many people even
know what they are). As such, I felt it proper to deliver a discourse on how
it worked out for me, what I learned about investing and life in general and what I currently (March 2015) think about the stock market.
Update, March 2016: my thoughts on the stock market are more or less
exactly the same. Buy gold, anticipate a bottom in brent oil and look out
below for crashing stocks
The Retarded Hedge Fund Manager
Mik ae l Syding
| xv
pictures of stockholM
The Swedish Parliament and my dog Ronja
Sweden probably has the least well guarded prime minister and King in
the world. Imagine taking this picture in the US or UK...
xvi|

Stockholm downtown - my roof top
I spend most of my summer days up there, reading, listening to podcasts,

investing (not financially).
Mik ae l Syding
Humlegrden & Stureplan
I usually walk Ronja here, right next to party central

Water city
Stockholm is built on several interconnected islands
| xvii
xviii|

Clowning around Investors HQ
Wallenbergs Investor has been the undisputed #1 powerhouse in Sweden

for a century. This statue is situated right outside Investors HQ right in
the city centre of Stockholm
I dont always goof around, I actually go
out for Pod Walks (listening to NPR/
TED Radio Hour, Discovery, Nature,
Brain Science) several times a day.
This book is about sharing my perspective
after an unlikely and successful career
that just might help you launch your
own.
Mik ae l Syding
| xix
I wrote this guide to help

anyone who wants to learn
what it takes to make &
manage a lot of money
(especially in high finance)
If you give me one hour, Ill give you 50 lessons I picked up along my 15
year rollercoaster at Futuris.
I dont profess to know everything (indeed, I often ask if I know anything),
but my recount of hits and misses should nevertheless be instructive for
an inquisitive mind.
Investing is humbling
xx|
RETARDED FOR A LIVING

Im not that crazy, just a little bit retarded... so please dont expect anything
like Wolf of Wall Street. This is about as far as I go (publicly):
Rhubarb umbrella & dog moustache
Please forgive me for using the word retarded. For me, its just wordplay
(retired HF manager that is contrarian and, uhm, special), and I figured,
since its directed toward myself it wouldnt offend anybody.
Mik ae l Syding
|1
TAKEAWAYS
This is the story of how our hedge fund, Futuris (Brummer), came about.
how we outperformed the stock market 7-fold, during arguably
the toughest economic environment since the Great Depression
(turning 1 euro into 7, while the market went nowhere, via a
dizzying booms and devastating busts)
culminating in becoming the European Hedge Fund Of The
Decade in 2010, and the wind-down in September 2014. I
resigned in January that year but agreed to stay on as just the
Managing Director for the rest of the year.
Here is some of what I hope you can take away:
A collection of investment rules of thumb
Professional money managers are just normal people
There is no correct path to join the club of high finance
Running a hedge fund is not for everyone (e.g., me)
A warning regarding the current state of the stock market, just as
valid in March 2016 as it was in March 2015
Always be investing (in yourself)
Hedge funds will have their own quirks and ways of doing things.
Ours was no different - if you want to create real value, you have to
be prepared to go against the grain & trust your individual instincts.
Although I would require a much larger guide to explain everything,
I hope you can take away an idea as to what it took for us to generate
returns for our fund.
My path to becoming Partner and Managing Director of Futuris was not
linear. Im just an ordinary guy from a small town in the very north of
Sweden. I had no contacts, no network, no role models, but still floated
to the top (like a turd)
- I hope it can inspire you if you are interested in using the power of your
mind in the financial services sector. But, in a world where it seems you
2|
can make huge fortunes from a computer screen, I have to warn you that
there is no rose garden.
We had a good ride, but it was stressful. I dont want to leave you with any
false impressions. Personally, I wouldnt do it again, but I am thankful
for everything I learned (as well as my financial independence).
I actually never watch TV; I dont have cable or other means of
receiving TV
Mik ae l Syding
Pictures from my apartment
|3
4|

Bedroom
Ronja and some of my plush dinosaurs

I really am not a douchebag. This is not an ode to money.
In fact
Mik ae l Syding
|5
iM not interested in conspicuous consuMption

(AnyMore)
For a while there, I bought sports cars and expensive Swiss watches. But
between my Ferrari and Lamborghini I suddenly realized I wasnt really
interested in stuff, or money.
I found more joy in learning, teaching, mindfulness and taking care of
my body and brain than in champagne spray parties and luxury. By the
way, regular heat torture (sauna) both increases your testosterone levels
and makes you smarter.
My sauna
6|
Still, I cant deny I made a lot of money; money that makes me comfortable
and gives me time and ability to explore what I really want in life.
I know how it feels to be without money, and one of those feelings is
wanting money, but please take it from me, having a lot is really not such a
big deal. Its not worth ruining your body and wasting your best 20 years
for - in particular if you happen to join the majority that never become
rich anyway.
The Master bathroom
Buying large living quarters, Swiss mechanical watches and Russian art
seemed natural when money came easy, but money is not what defines
me. Investing is.
Mik ae l Syding
|7
The lounge
As long as youve got food on the table, tools to use and something
meaningful to keep you occupied, youre doing better than 99% of folks
throughout the world.
Investing (the science of leverage), using larger numbers to build wealth,
knowledge, a network, etc, are part of the game...
... the game of life.
You dont need a lot of money to play the game. Investing is a lot more
than just money. Investing for me means building, growing, learning and
acquiring tools to become better at becoming better. And yes, you can
invest money too using the same principle.
However, many people put the cart before the horse - thinking money is
the answer to their problems.
Money only solves immediate issues (getting a cab, hiring a web designer);
it does not solve long term problems, which are the root of most peoples
woes.
8|
Sure, I dont have to worry about buying groceries, paying for BBQs,
taking my girlfriend out on spontaneous romantic gestures, or helping
out students who want to learn from my experience by spending real
time with them.
Yeah, I bought a few nice cars, and got fed up with them. And yes, I live
well (albeit no MTV crib life style; Im just not attracted to that), but first
and foremost I have learned that experiences and accomplishments beat
stuff every day of the week.
Ive been on massive highs, and terrible lows, as youll see later in the
book.
But in the end, now that Im a retired (retarded) hedge fund manager,
I value nothing more than the lessons I picked up along our 15 year
rollercoaster. And my dog, Ronja.
Ronja
She has nothing, and she is happy
Mik ae l Syding
|9
If anything, I hope my story shows you that you really dont need contacts,
massive brainpower, some magical talent or anything else to earn a lot
of money.
You simply need to be yourself, some grit, and learn how to invest (never
rush, build consistently), how to grow value exponentially over the long
run.
I am proud of my wealth, but am certainly not ostentatious.
If youre here for easy money, fast cars & fast women, Ill have to disappoint...
Ive turned off the fast lane.
This book, and my entire life, is about investing (in yourself) for the long
term.
At the ofce
About as crazy as it gets -officially (unless you count ripping off your shirt,
10|
bending over backwards and showering in champagne with colleagues

and clients, or snowboarding naked, or...)
By the way, if money is that important to you, the inevitable losing might
hit you too hard.
You will lose
If you want to play the money markets, youre likely going to lose. Even
the big guys lose.
And all that talk... the macho chest-beating you get in the financial
world... its all baloney.
No-one can predict the future.
No-one has superhuman powers.
Everyone loses. Everyone wins. Sometime.
All in all, the more you invest, the more youll gain back over time
Its generally a slow and not always particularly steady process
If someone seems to be doing better than you, it might very well only
be temporary, depending on whether he and you use sound principles or
not. They might be speculating rather than investing.
Always be investing
Whether its reading, working out, testing new strategies, the difference
between the best & rest, is the best are always investing (in skills, in sweat,
in contributions).
They are prepared to go without in the short-term, for compounded
gains in the long-term. Financially and personally.
I believe this is what made our little Stockholm hedge fund the European
Hedge Fund Of The Decade.
Mik ae l Syding
| 11
Screen shot
This is where I made my fortune. Pretty boring? By the way, the chart on
paper depicts bank Loan Loss Provisions, one key metric for predicting
bank losses and financial crises.
12|
15 YEAR SUMMARY
Tack. As a Thank you (tack in Swedish. Pronunciation) for taking
time on my site, I want to give you this introspective look at the inner
workings of our hedge fund.
In the most difficult stock market in a century, including two career
crushing crashes and three meteoric bull manias in just 12 years, we
delivered > 600% net return after fees to our clients (with below-market
risk), while the stock market produced nothing but ulcers. Read on to
find out how we did it.
The last few years were a different story though. More about that later:
The walk of shame. Oh, yes, it wasnt always a rose garden.
Having become a decamillionaire managing money doesnt change the
fact that I would have chosen a different career, if I could go back 25 years
in time. I now know that money is not what makes me tick; its investing.
Robotics, AI, water purification, pollution, insect protein etc. is where I
would go if I was young again.
If youre interested in entering the world of high finance, or want to
know what its like away from imperious Wall Street; or maybe are just
interested in how rich guys do business, I would hope this guide serves
your needs, even if I wanted out.
Mik ae l Syding
| 13
If youre savvy with financial growth charts, this is our fund, Futuris (red),
compared to the market (grey and black):
Performance chart
Dont let the compressed nature of the graph fool you. The market
exploded upward at the end of 1999, crashed down to less than half its
peak 3 years later, tripled, halved again and finally tripled again!
Many careers and fortunes were laid to rest during those 15 years. We
(although it was very difficult) thrived. Well, financially at least.
By the way, I see another halving of the stock market coming
soon. Dont get caught fully invested in that one. This statement
is still valid in March 2016.
14|

Dening moments
How Futuris delivered >600% net returns (after fees, commissions etc.)
to clients in a flat market
1: Inception. A rocket taking off in Q4-99; >+50% net return to clients
in 2 months.
x: An agonizing and turbulent sideways year (2000) - had the IT bubble
peaked or not?
y: The loss of one of the two founding portfolio managers - near death
for the young company
19 Sept 2002: One of the two portfolio managers died at the office, but
the fund was thriving
z: Worst month ever, August 2007: -7%
q: 2008, the financial crisis. We were net short, having the time of our
lives, but covered after Lehmans bankruptcy before the market crashed
further.
W: Wow!, we turned on a dime, March 8-9, 2009, from short to long, at
the very trough, buying 150% within 24 hours
H: Hedge Fund Of The Decade gala in London, May 2010
F: Fukushima disaster in April 2011, and three impossibly good trades by
Futuris
P: Peak of Futuris; >+600% in 11.5 years in a flat market
D: Near death experience, as we were >100% net long, right before the
crisis of 2011
: June 2012, we were approaching a new peak for the fund, being
Mik ae l Syding
| 15
extremely net short when CB/Draghi spoiled our party and sparked a
fantastic rally by promising Whatever it takes
s: We were forced to stop our losses in the mid summer 2013 correction
(hardly visible) - a de facto death sentence for Futuris, due to subsequent
ramifications
e: end; Futuris was closed down in September 2014, net long right before
the autumn mini-crash. That was 8-9 months after I officially resigned as
portfolio manager and partner. I was just the Managing Director then.
?:What would have happened? A disastrous stop loss or opportunistic and
successful buying?
16|
MY PATH TO MANAGING A HEDGE FUND

I was never destined to join a hedge fund.
Hedge funds are very difficult to get hired into, let alone create. Planning
a career around joining one just isnt something you can set up from the
outset. Its just too volatile - like a girl saying shes going to marry the
prince.
The chances of joining a hedgefund are so slim because, especially the
small ones, are very concealed enterprises. And the big ones demand you
already have a spectacular career behind you, or youll end up getting
burgers...
Hedge funds typically start up in a small back office with a skeleton
founding team and threadbare capital accounts.
... at least thats what happened for us at Futuris (incepted as Vaagen).
Flying start for Futuris
The legendary Arne Vaagen December 2, 1999 after a fantastic start for
Futuris.
Mik ae l Syding
| 17
SPREZZATURIAN - THE EARLY YEARS

My journey to this fund was no less covert:
I was never interested in finances.
I didnt want to be Bill Gates.
I just wanted a nice quiet Swedish life - free of the

stresses and strains of a normal capitalistic existence.
It was only after I was bullied in school, and my attempt to escape their
ignorance, that I happened onto computers, mathematics, science &
numbers.
Heres my quick background for you:
Born in January 1972 above the Arctic Circle ... yes, it is as bleak as it
sounds.
I almost died during my first week of life - we had an issue with our Ford
Taunus (yes, thats correct: Taunus not Taurus) breaking down halfway between two hospitals (100 miles apart). Thankfully, I made it
Jukkasjrvi
My dad was an engineer, statistician and programmer. Hence, I had

no financial role models when growing up (so it wasnt as if I was
preordained to join the ranks of the sharp-suited traders).
18|
I never really understood what my mother did, apart from being active in
the typically Swedish political movement in the late 70s for abolishing
nuclear power, just not right now...
I was bullied (quite badly) in primary school by the rich kids. Since our
family was not as well-endowed as my primary school counterparts, they
treated me like the whipping-boy; not least due to the fact that I was
wearing cheap clothes and speaking with a funny northern accent.
Bullied
This pushed me into mathematics and computers as my escape, actually

earning my first money programming computer games when I was 1112 years old.
In high school, I thought about studying chemistry in college (acing an
organic [olympic] chemistry competition made me honorary member
of the Swedish Chemistry Society, and I seriously envisioned going after
the Nobel Prize in the future - or just becoming a chemistry teacher).
Mik ae l Syding
| 19
Owing to my exceptional results in math and physics, I did win a slightly

(1/300) smaller award than the Nobel Prize. However...
- I did receive it from the hands of the King of Sweden before a
10-thousand strong crowd (10% of the citys population) on Swedens 4th
of July (June 6, 1990). Not totally unlike my role model Richard Dick
Feynman (quantum physicist and grandfather of nanotechnology).
Prize winner
Eventually - partly triggered by besting one of my former bullies (now

fully forgiven), and later cemented by reading the novel American
Psycho - I chose to study finance at Swedens finest university (where no
bully I knew stood a chance of being accepted), Stockholm School Of
Economics.
Much owing to my proficiency with numbers and programming, I
graduated at the top of my class in business school. Real skills are always
valuable.
errAnd boy
When it came to grow some balls and get a job, I was picked up by a
third tier firm in the struggling Swedish stock broker industry during one
of the worst economic slumps (1991-1994) in modern Swedish history.
20|
Thank you Mikael Marcko for believing in me.

What do you think a royally laureled, top of the class financials major got
to do at a lowly third tier broker in Sweden in 1994?
I got burgers for the senior staff (but I was happy to get a job, any job).
To be honest, I actually also did some programming & occasionally
manned the stock and options trading stations, but I basically started as
an errand boy.
However, within three months I got to write my first research report on
a chemical company called Perstorp. After that my real career in finance
commenced.
As if 80 hours a week as a brokers assistant and junior analyst werent
enough, I worked a second job, building real-time paper industry databases
for my fathers company, sometimes reaching 110 hour work weeks.
In 1996, shortly after Netscapes IPO kickstarted the Internet stock mania,
I was headhunted to one of Swedens largest banks to lead the analysis of
hot IT companies.
Top ranked analyst

During my stint there I was ranked 1st in Sweden in Investment Companies
and second in IT. Thats how the following article came about and nearly
ruined my career.
Mik ae l Syding
| 21
The ignorant majority
As year 2000 approached, I had endured incredible sleep deprivation for

6 years, and was considering joining a small Swedish bank & becoming
a bank clerk.
In addition I felt the financial services world had become seriously
dishonest.
22|
BECOMING A HEDGE FUND MANAGER

Regardless, when a friend asked me to join a new hedge fund, Futuris later part of the Brummer & Partners group of hedge funds, I eventually
accepted... And was nearly kicked out before I even began, due to the
glorifying article above (The ignorant majority rules) that was published
right before I commenced my employment at Futuris.
Nevertheless I did become Futuris IT analyst, and just 10 years later,
as managing director, partner and portfolio manager, I accepted the
European Hedge Fund of the Decade award on behalf of the team - in
competition with thousands of funds.
This is the account, and lessons learned, of what happened at Futuris
during 15 years of spectacular international success, near and real death
experiences and our really hard work.
This entire book is about

learning from your
mistakes, picking yourself
up and improving,
growing and excelling, not
despite errors but thanks
to them.
And yet, the overarching
impression is one of
ignored lessons in a
cyclical pattern of hubris
and despair.
Mik ae l Syding
| 23
How did a computer geek that barely survived

his first days in the harsh Jukkasjrvi midwinter
become...
24|
THE HEDGE FUND MANAGER OF THE DECADE

In May 2010, the Hedge Funds Review group (HFR) hosted their tenth
annual European hedge fund awards gala in London.
Several hundred of Europes most successful money managers were
present at The Grand Connaught Rooms, yearning for some recognition
for their hard work. The gala was rather serious, due to the choice of
venue and the weight on everybodys shoulders from ten of the most
toll-taking years in the industry. I am hardly ever serious but ambienceappropriately, I was wearing my newly acquired all black Hugo Boss
tuxedo.
The room was dead quiet, when Gyles Brandreth, former Lord of the
Treasury and British MP, several hours into the evening announced the
winner of the years, actually the decades, most prestigious prize, The
European Hedge Fund Of The Decade:
The Grand Connaught Rooms, London
Futuris, Brummer!
All ten of my colleagues at Brummer & Partners, who were seated
together at a large round table toward the back of the elegant but packed
room, simultaneously rose and roared irreverently. It was the Brummer
groups fifth big, and most important, win that night, ahead of industry
Mik ae l Syding
| 25
giants such as Winton, BlueCrest, Brevan Howard, MAN, BlackRock,

Lansdowne, Marshall Wace, Odey and GAM. And it was mine.
I had already been on the stage collecting the prize for Best Directional
Over Ten Years, dancing a bit of improvised flamenco on the stage
(inspired by the dinner act earlier in the evening), since no speeches
were allowed. So far, it had been a quiet event, interspersed by raucous
expressions of joy at the Brummer table - and my surprising dancing
stint.
This time, for the big one, for Futuris, I spread my arms like a condor and
flew in wide arcs around the tables on my way to the stage. I jumped
up on the stage, right in the middle, instead of solemnly taking the small
set of stairs by the side - flaunting my relative youth, rebelliousness and
naturally contrarian character.
I was 38 years old. I had worked at Futuris for a decade, and in the finance
industry for 16 years. I was partner, portfolio manager as well as managing
director of arguably the best performing hedge fund in Europe, during a
decade (2000-2009) that saw not
just one, but two stock market
crashes of historical proportions.
To really drive the message home,
I lifted my right heel from the
floor and grabbed my ankle
behind my back with one hand, in
a standing quad stretch position,
and pumped the knee back and
forth to the music, while jumping
on one leg, slowly spinning
around like a retarded hip hopper.
The Lord of The Treasury, Gyles
Brandreth, was a bit taken aback
but convinced me he appreciated
the diversion.
Congratulations! Who are you guys?!
26|
- various representatives of our stunned competition wondered after the

ceremony; We thought this was our night but you won it all!.
We soaked up the praise for a while and then decided to go to a nightclub.
What really happened is that we took our competitors best looking
female employee in our taxicab, sped away and went to a gentlemens
club without them. There were no gentlemen there. No ladies either.
the long-only herd MAde it possible

Okay, so that was the formal pinnacle of my career. To put it into
perspective, lets take a look at the years immediately before and after the
HFR decade win.
The year after, in 2011, Futuris once again won HFRs Best Directional
Over 10 Years award, truly cementing our reputation as Europes best
long/short equity hedge fund.
The decade award, however, was reserved for full calendar decades, as
well as only given to one single fund per decade - the one that had the
best performance and risk characteristics of all funds in all categories.The
10-year win in 2011 thus actually made the decade win the year before
seem even more impressive and important, by creating a reference point.
The year before the decade win, in
January 2009, Futuris took home
Eurohedges Best Long/Short Equity
Of The Year (over 500 mUSD) for
2008 - the year of the culmination
of the financial crisis.Well, there was
no crisis at Futuris, albeit perhaps
some hubris brewing...
When I received the latter prize
at Grosvenor House, The Great
Room, in front of 850 of my hedge
fund peers (including Cazenove
EEAR, Horseman ES, Odey and
Polar Capital Paragon) I had the
Mik ae l Syding
| 27
nerve to thank...:
the long only herd who made this possible - and markets for taking the first step
toward sanity. I hope markets take a second step this year. If so, well meet again
(*Applause and laughter* Did he actually say that?!)
In my view, thoughtless speculation, by long-only, buy-only, buy
and hold investors, had created a situation where Futuris could make
money shorting the stock market. Consequently, I thanked the useful
ignorants for the opportunity.
I bit off a bit more than I could chew with that one, didnt I, even if we
won the 10-year awards the following two consecutive years (including
the HFOTD).
Its all too easy to confuse genius and deep understanding with ignorance
and lack of perspective, when achieving success on the financial markets.
Guilty.
Grosvenor House, London: Eurohedge 2008 awards
At the time, I considered our strategy, its implementation and timing, not
to mention solid fundamental underpinnings, quite straightforward. Now,
after several years of fruitlessly trying to time the next big short, I know
I was ignorant and overconfident.
28|
What follows is my hedge funds (short for me, my partners, analysts,

traders and other important people at Futuris over the years) 63 big
moves over 15 years - annotated with 50 soundbyte sized important
lessons from our hits and misses.
Dont worry, I have summarized the most important lessons toward the
end.
Mik ae l Syding
| 29
INCEPTION
The hedge fund Futuris was incepted in October 1999, by the Norwegians
Arne Vaagen and Morten Groven. Due to certain legislative quirks
regarding money management in Norway at the time, as well as Mr.
Vaagens connection* with the Swedish financial giant Patrik Brummer,
the fund company was founded in Sweden.
* Arne was the managing director for the stock broker firm Alfred Berg in Norway.
During his five years at the helm in the second half of the 1990s, Alfred Berg
Norway was the most profitable broker in Scandinavia. It was Patrik Brummer
who hired Arne in the first place (Patrik was the driving force at the parent
company Alfred Berg Sweden for several decades, before founding Brummer &
Partners, the largest hedge fund group in northern Europe)
I owe all of my success in the hedge fund industry to Arne and Morten
who started the fund, raised the money, took the risk, and to my closest
colleague Mattias, for suggesting me as his stablemate at Futuris. Ill
nevertheless sometimes use the notion my fund for short, though it
obviously wasnt my fund; I just worked there and was the second biggest
active shareholder/partner (tied with Mattias).
This happened:
30|
FUTURIS 63 MOST IMPORTANT DECISIONS

Im sorry if this gets a bit technical, but we just have to get some financial
facts out of the way first. Bear with me for a minute, but if youre tempted
to skip a few pages, just take this with you on the way: Futuris was a
strange beast in hedge fund land - and simply spectacular.
The chart below depicts Futuris overall market exposure between its
inception in October 1999 and its closing 15 years later (or 180 months)
in September 2014.
The black line shows the funds net exposure (i.e., the net position = bought,
owned, long, holdings of stocks minus sold, negative, short positions) as a
percentage of total assets under management; AUM).
The blue dashed line shows the gross exposure (the absolute value of
longs plus shorts).The grey area is the 6-month moving average for the net
exposure (which makes it easier to spot general exposure trends such as
being short in 2008 and 2012). A positive reading for the net exposure
means the fund should on average gain from rising markets and lose from
falling markets.
There are 180 points of net exposure on the chart. Of these, 63 can be
considered major decision events - repositioning the fund significantly
longer or shorter than the previous month.
Mik ae l Syding
| 31
Futuris Stock Market Exposure 1999-2014
Condensing 180 months of portfolio exposure can give the illusion of

extremely frequent and rapid changes.
Most equity hedge funds make sure to keep their net exposure between
just 50-75 per cent net long at all times, and never change exposure
significantly from month to month. We were different.
As can be seen in the chart, Futuris range was an incredible -60 per cent
(net short) to 150 per cent net long (leveraged long). In addition we
changed position frequently and quickly.
Not only did we venture above 100% net long (i.e., leveraged long,
borrowing to buy more stocks than we had assets under management),
we had the audacity to go net short too - and not just by a little or for
short periods of time.We exhibited full-year stretches of being on average
more than 50% net short. For a long/short equity hedge fund, that was
tantamount to being just as retarded as I am now; it was almost as if we
wanted to go out of business, or as if we knew something others didnt.
We thus presented a serious challenge for any client who wanted to fit
Futuris into their investment matrix, since they couldnt decide what kind
32|
of hedge fund we were; A market neutral Long/Short equity? Swedish,

Scandinavian, European or global? Short biased? Levered long? All of the
above?
No matter how good we were or how many years we added to our track
record, Futuris continued to be a tough story to sell. Spectacular but
unwanted, why?
Proof is not
good enough
- you need a story
I eventually learned a very important lesson, not just about hedge funds
or clients or running a business, but about people and life in general:
storytelling matters.
In my attempts at persuading client prospects, I navely thought a good
track record of high returns and low volatility would be enough. That
however didnt cut it for serious institutional investors, with hundreds
of billions of dollars to invest; no-oh-oh, they demanded to see a tangible
investment model and evidence of rigorous risk management procedures. If
nothing else, just to have something to show their investment boards or
end clients.
Well, committees and strict procedures is what landed investors with
hundreds of billions of bad housing loans, not to mention fully loaded
stock portfolios right before some of the worst market crashes in history.
Still, we really could have used a good storyteller.
Lesson: Facts and proof never
sway people. Narratives do.
Humans are made for stories. Our brains
make up stories about the world, about past
and present events, to make sense of otherwise
chaotic and overwhelming stimuli. Just facts
are useless in most contexts - unless there is a
compelling narrative.
Mik ae l Syding
| 33
How To Miss A Billion

Hold on just a while longer, or skip a few pages if you must, but to get the
framework right, I want to go through a couple of observations regarding
the business of marketing the fund, in contrast to running it and doing
the actual investing.
Futuris could and should have reached 10x its peak size of 1bn EUR/1.3bn
USD, given the funds raw performance over more than a decade. That
would also have made me a 9 figure net worth in USD (just about a
billion SEK), rather than my current 8 figure.
The reason we didnt, is that we never quite did understand how to
market the fund. I am the one to blame the most here; Due to my slight
autism spectrum disorder (albeit not professionally diagnosed), I never
took marketing or reading people seriously, assuming our numbers would
speak for themselves. My bad, no billion for me - next question, please.
Poor marketing, poor schmarketing

That was fun, winning a prestigious award that is, but perhaps not what
we needed. Winning unfortunately closed my eyes to the bitter truth
about marketing, in particular when we finally started to attract clients
in droves.
Eventually, after the decade win, when Futuris was over ten years old,
money poured in, at least relative to our history. We even got within 3%
of voluntarily closing the fund for new money. At that time, I thought I
had finally struck exactly the right balance of eccentricity and cockyness,
combined with a convoluted black box investment model that allowed
for a certain pragmatic style drift, not to mention showing up in the 10+
years old funds category in ranking tables.
34|

Eccentric wasnt as good as I thought
Much later did I understand that our (admittedly belated) sales success
wasnt a result of my genius and unorthodox presentation and narrative it was all about performance after all.
We simply got so good they couldnt ignore us (Cal Newport), despite
all our flaws (eccentric, cocky, black box, style drift): Mastering one
bull market, several bear markets, as well as the 2009-10 BRIC/Fed
turnaround was just too much to pass on. We were the best, and when
you actually are the number one, your style doesnt matter. The problem
is you rarely stay at first place for very long...
Mik ae l Syding
| 35
After mid-2011, when we stumbled performance-wise, it was all too easy

to withdraw investments from the cocky, style-drifting, unpredictable
black box that we more or less had communicated we were.
Lesson: Face the facts
Analyze the facts; hthe actual adequate causality,
not just what fits your desire for greatness.
Dont get cocky. Analyse what actually went
right and wrong respectively, instead of just
assuming everything in a winning streak or
good trade is optimized or even right. Our
client inflow was despite my marketing style,
not thanks to it.The same lesson can be applied
to good or bad trades; make sure you know
what part is luck and what part was skill.
36|
Lesson: If you run a business, run it.

Take every aspect seriously. Marketing and
communicating is at least as important as
producing. Considering the undesigned look of
this book, you are free to wonder if I ever heed
my own lessons.
The client is right. Without clients you dont
even have a business. You must be able to
explain the product to the client - using their
language: Imagine what the client is perceiving.
Understand their perspective. In investing
you dont have to be the best, being a nice
complement is good enough, but you have to be
explicable and marketable. Being #1 is not a
long term strategy.
You should still do your thing, market your product, but be sure to tweak
the communication to fit the client.
In retrospect, I know many prospective clients really wanted to invest which I thought would be enough to close the deal, so I left it at that. If
only I had said the right words (such as elaborating on our formal stoploss procedure, formal investment committee, formal CIO, clear, concise
and consistent investment strategy, investment universe and investment
process).
Too cocky, too controversial and unorthodox

In sharp contrast to playing the part of partner and managing director of
a serious financial institution, I all but emphasized our ad-hoc investment
style, deliberate absence of committees and procedures, and generally
quite navely spoke directly from the heart about our unorthodox laissezfaire decision making. I even provocatively used to say things like:
Mik ae l Syding
| 37
Too weird to live, too rare to die
We are a black box.You deal with it.You cant know what positions we will take
or when. We are utterly free from biases and will go net short or leveraged long as
we see fit, at a moments notice if called for by circumstances
...while smiling in a manner I now guess wasnt very reassuring.
Apparently, I was retarded
even before I retired, and
the opposite of what Mark
McCormack called street
smart
Now, at least you know better
38|
WE WERE GODS... IN PAIN

We beat* industry giants such as Soros, Einhorn, Buffett, Benjamin Graham
and Peter Lynch, when it comes to average annual outperformance of the
stock market (see chart further down).
*Buffett, importantly, of course, kept on beating the market for several decades
more than we did. Still, we were gods, albeit only for 12 years.
Below are the numbers that made us the Hedge Fund Of The Decade.
Spectacular performance (but deep darkness lay below the surface).

Just two years after inception, Futuris had accumulated +100% net return
to its clients, while stock markets had gone exactly nowhere. Talk about
success*.

Jumping ahead, the remarkable progress continued for another ten years:
Between inception in October 1999 and the peak in April 2011, the fund
hardly missed a beat it seemed, returning a net of +601 per cent in 11.5
years, or 18.4 per cent annually compounded.
During the same time the MSCI Euro and MSCI World total return
indices returned 1 per cent annually, i.e., for all intents and purposes they
were completely flat. One euro invested in the MSCI indices returned
just 1.1-1.2 euros respectively, whereas one euro invested in Futuris grew
to more than 7 euros; a 6-7 fold outperformance.
* It may look like a walk in the park afterward, but in real-time my subjective
perception was radically different. Take for instance the year of 2000. If you look
carefully, youll notice that the funds performance index was trending lower for an
entire year. That means that nearly every day, actually almost every minute, or at
least every time you checked the stock market or portfolio, you were reminded of
how useless you were. To make matters worse, that was the first calendar year in
the funds history.
Futuris 17.5% annual outperformance during 11.5 years compares well
with the best investors of all time.You can find Futuris right below Kevin
Mik ae l Syding
| 39
Daly, above Peter Lynch and Charles Munger on the chart below. Only
Druckenmiller,Rogers,Tepper,Geurin,Daly and Greenblatt outperformed
the market by more than we did (Crucially, though, most of those
legendary investors were active for much longer than we were which
makes a world of difference).
Red marker: Futuris at its peak

Green marker: Futuris full history
Blue arrow: Walk of shame 2011-2014
40|
PEOPLE MATTER
Sharing offices with the grim reaper
As if running a fund and marketing it werent hard enough, there is a
whole other dimension of problems and risks to consider. Narrative and
performance are important factors, but to get there at all, you have to
have the people.
I am an unusually calm and composed person, almost detached some
would say (which definitely came in handy during my 15 years in the
hedge fund industry), but I still felt a sinking feeling in my stomach tens
of times per day, when the performance drifted lower. Deep darkness
indeed. In retrospect, the most surprising fact of all is that I didnt quit
much sooner than I did. I definitely thought about it every week during
the last ten years.
In the course of just one single month, we bought and sold several important
(and painstakingly researched) stock holdings, as well as significantly
changed around the overall net exposure (likewise thoroughly discussed,
scrutinized and agreed upon), to accommodate the perplexing puzzle of
changing market forecasts, macro beliefs, risks and client expectations.
That took a lot of very hard work and anguish. And, still, sometimes the
end result was a slowly growing loss, and the realisation that we might
not even get to celebrate the funds one year anniversary before it had to
be buried.The eerie silence when the fund lost another 25 bps ( %) was
the sound of our careers and wealth going down the drain. Dark.
By the end of year 2000, a black swan landed in the companys premises;
one of the two portfolio managers (and founders) decided to leave the
fund. He had better opportunities elsewhere, considering the funds recent
poor performance and subscale Assets Under Management (meaning
the fund management companys fixed costs surpassed the fixed fees on
AUM). Thus, Futuris was at the brink of ruin, despite returning over 50
per cent return after fees in 1999, and actually was up by 6 per cent in
2000.
Mik ae l Syding
| 41
Futuris was almost thrown out with the bathwater

What was about to become the hedge fund of the decade (2000-2009),
not to mention the star performer of 2001 (and 2002), was more or less
ready to throw in the towel in January of 2001, despite absolutely stellar
performance in 1999 and positive returns in 2000.
The market was about to crash and Futuris was set to crash upward, if
the founders could just make up their minds on whether to close down
business or not.
Lesson: Be prepared for unknown
unknowns, risks outside the box.
We thought we were battling the market, not
the level of AUMs or keeping the founders
onboard. However, we should have been
prepared. Losing one PM out of two, even if he
was a founder, shouldnt have been as surprising
and cataclysmic as it was. Funny thing: Morten
still feels like an important part of the fund,
even if he only stayed on for a tenth of the
funds existence.
Lesson: Mind the employees - the
people are the business.
As a business manager, take care of and manage
all levels of the staff. Be proactive.As an investor,
stay away from companies which signal poor
human resources management.
Marooned in realtime
In retrospect, Futuris performance looks steady and predictable. But in
the heat of the battle, in real time a day felt like a month, a week like a
year, and it was hard to fully understand that our clients only cared about
our monthly numbers, or the appearance of the performance chart over
a year - or even several years.
We were marooned in realtime, doomed to experience every minute of
42|
harsh reality - unable to fast forward to our glorious future.

Not even our golden years were a rose garden; we struggled through a
world of pain in 2000, 2003, 2004, 2005, 2006, 2007, 2009, 2010 and
2011, just to mention some of the tough years. Then followed the really
bad ones in 2012, 2013 and 2014.
Actually, only during three years out of fifteen, the fund was (mainly) a
workplace fit for humans: 2001, 2002 and 2008. Mostly, it felt like living
on the Vogon planet (in The Hitchhikers Guide To The Galaxy), where you
constantly get smacked in the face for thinking.
Did I mention that the senior partner, who eventually took over after the
founder Morten Groven left Futuris in the beginning of 2001, died of a
severe stroke in fall 2002 - at the office in between meetings? So, perhaps
those two years werent all good either, just relatively tolerable.
Oh, by the way, in 2008 we made our greatest investment blunder ever,
missing out on the trade we had prepared for over nearly a decade. So,
no good years at all then? So what, who needs good years, when you
can have splendid decades.
Lesson: Keep a long term perspective
One year is nothing in the investing world.
Anybody and everybody experience bad years.
One year might feel like an eternity, but feelings
are not a strategy.
The shortest route to losses is pursuing the
shortest route to riches
Lesson: Dont Panic.
Fear and greed should only happen to other
people.
Be calm and composed.Trust your method, trust
Mik ae l Syding
| 43
your judgement. Make a decision and stick to

it without second-guessing. Dont fret about
decisions in shorter time intervals than needed
or scheduled. If you let your amygdala take
over, you stop being rational and in the stock
market you have to be rational.
Now, finally, its time for my story about managing money at the
European hedge fund of the decade, not to mention more important life
and investment lessons than you can handle ; )
THE TOUGHEST STOCK MARKET IN A

CENTURY
The Swedish stock market 1999-2014
That seems like an easy enough stock market environment to work in,
right?
- Just a handful of distinct and pretty long moves upward, and about as
44|
many and distinct moves downward

In theory, you would have outperformed hugely by buying well after
identifying the troughs, and selling well after identifying the peaks, by just
using a simple X day moving average tool. Easy.
However,...
Nobody managed to do that. Not even close. No, not Futuris either,
despite beating everybody else. No spectacular trades or studied trend
catching was needed to win. All you really needed, to be the best, were to
avoid making major mistakes.
The IT bubble taught me valuation hardly matters

In practice, the year 2000 alone had more gruesome swings and
opportunities for error and regret, than might seem the entire 15-year
period, just judging from the chart above. Remember that the year 2000
was when the epic IT bubble burst, subsequently all but recovered the
initial steep losses, and finished the year with several wild swings up and
down.
In the chart above, that career-crushing year mainly looks like an
inconsequential blur in the top-left.
The previous year (1999) had seen an incredible appreciation of stock
prices, in particular IT stocks, with a near doubling of the general market
in just the final 3-4 months.
Hence, most people were primed to buy stocks when rare corrections
offered the opportunity. If you tried shorting stocks during the IT
mania of the late 1990s, you were carried out on a stretcher in 1999. If
you tried it again during the first half of 2000 you soon got kicked in the
face, when the market came roaring back after summer. Futuris managed
these swings unbelievably well, but there were still lessons to be learned.
Being optimistic and actually investing 100% of the money on the upside
in the final quarter of 1999 proved genius, no matter how much glue an
investor had to sniff to make sense of valuations. Not going all-in short
in 2000, or even 2001-2002, and definitely not 2003 was just as masterly,
Mik ae l Syding
| 45
despite the devastating crash for IT shares that began in March 2000.The
trick was to stay level-headed and not make mistakes, be patient and not
get carried away.
Lesson: Trends are self-fulfilling
Rising prices are taken as evidence, by most,
of everything being alright even if the proper
conclusion is one of danger (just not necessarily
imminent). Perhaps even more important, every
trend is littered with short term corrections;
dont let those fool you.
No matter how crazy the stock market is, it
can always take one step further into looney
town. Be prepared for being wrong on timing,
no matter how right you are in other respects.
Lesson: Valuation isnt everything
There are times when valuation is important,
but many more when it isnt. Ive had to learn
and re-learn that lesson over and over again,
since I first heard about equity valuation at
finance school (Stockholm School of Economics)
in 1990 and made my first real investments.
Valuation matters reliably only over 10-year
cycles or more.
On the stock market, a 100 dollars is very
seldom just that. A 100-dollar bill can be priced
at 10 or 1000 for so long, that anybody betting
on the real intrinsic value of 100 dollars will be
indistinguishable from being wrong
As an important side note, I was merely an analyst (one of two, the other one being
Mattias Nilsson) and internal speaking partner at the fund during 2000-2002.
The founder Arne Vaagen was the real decision maker and value driver, together
46|
with his partners (first Morten Groven, later followed by Michael Hasselquist).
THIS IS NOT A HUNDRED DOLLARS
(It might look like a 100-dollar bill, but its actually just a picture of one)
Lesson: Never go all-in
No matter how good the trade or investment
looks.
All-in is for gamblers, a.k.a. morons. Going short
in Q4 1999 would have been intellectually
correct, a no-brainer really. Just 15 months later
you would have been proven right. The snag is
that the market first appreciated by 80% in a
couple of months, wiping out anybody being short.
still leArning the vAluAtion lesson

In early 2012, I privately started shorting the Swedish stock market,
mirroring what we did in the fund. I kept selling more on bounces all
through the mini euro crisis of summer 2012 as well as gradually during
the ECB/Draghi surge in the second half of that year. Im still hanging
on to the trade, which currently is 1.5m USD under water. The only
reason I didnt lose much more is that I had learned to size investments
carefully. Thus, I didnt go all-in, and what I did invest I punted gradually
and was thus prepared for (albeit not predicting) large losses.
Mik ae l Syding
| 47
Lesson: Size your investments

deliberately and carefully.
Even when going all-in (which you should
never do), at least dont do it all on one single
day. In your heart you know you cant time
the market perfectly. Heed that intuition and
average into an investment over several days or
months (years, even).
The main lessons from the first years at Futuris all circle the same theme:
Dont make irreversible mistakes, trust nothing, never bet the farm.
Well, except for the very first few months when everything was bet on
black to get the show on the road at all.You really have to be schizophrenic
in this business.
48|
HOW TO MAKE AWARD WINNING

INVESTMENTS LIKE A BOSS
The worst conceivable time to start a new fund
Things were crazy in 1999. The market was crazy, roaring back after the
Asian currency crisis and the LTCM crash.Technology stocks were crazy.
I was crazy.
During fall and winter of 1999, before joining Futuris, I thought valuations
of internet companies were ridiculous. In addition, even as an IT analyst,
working 70 hours per week on average, I had trouble keeping up with all
the new notions, metrics and three-letter abbreviations.
Nevertheless, I privately invested in an ordinary information technology
consultancy firm, because I just had to get in on the action.Everybody
was doing it - much like today (2015).
The consultancys P/E valuation was on the high side, but the value
per employee was just 10-20 per cent of what some so called internet
consultancies were worth, despite providing higher quality services as
well as reporting sustainable profits. Just a few weeks after I invested,
the consultancy was acquired by one of the hottest internet companies
around (Framfab) and proceeded to increase by 500% in three months.
Nota Bene: My plucky trade was not unique or genius in any way.
Everybody was booking gains like that. In particular inexperienced
private individuals.
I sold my shares after exactly 3 months (the minimum holding period
allowed for a financial analyst). That very day, the stock closed at a new
all-time high, albeit still slightly lower than my selling price. Lucky indeed:
I sold above what became the recorded all-time high closing price for the
stock that came to personify the IT bubble in Sweden.Then again, it feels
my whole life has been like that.
I almost wonder why the SEC never came knocking
Three years later its stock price had fallen by 99 per cent. Another private
Mik ae l Syding
| 49
investment I made (Wkit/Effnet) increased by 5000%, but lost half of that

before I could sell, due to technical factors preventing me from selling
when I wanted. But still.
Its easy enough trading like a drunken sailor with your own money, in
particular when everything seems to be going one way - up. But how do
you start a new fund with other peoples money in that environment?
Party like its 1999
The Nasdaq composite index (peaking in March 2000) increased +1000%

between the end of 1992 and the beginning of 2000. The last doubling, i.e., the
last 500 %-points, took place in just the final 3 months of the rally. Crazy.
stArting A new fund At the peAk of An epic bubble

While I was busy writing positive research reports and issuing Buy
recommendations on (overvalued) internet consultancy firms (and taking
wild punts privately), my soon to be colleagues at Futuris were cooking
up their own variation of crazy.
In just two and a half months in the end of 1999, they managed to rack
up a 64 per cent return before fees (51 per cent net of fees) by going 100
per cent net long in some of the most explosive IT stocks* that traded
publicly - very close to what later would prove to be one of the greatest
stock market bubbles and worst crashes ever. Had the crash come sooner,
Futuris might have perished before turning 1 year old. Fortunately, the
crash came later and being subscale Arne Vaagen and Futuris needed
spectacular gains to make a viable business.
50|
Lesson: Sometimes a crazy risk

might be your best bet as a
business owner
The arguably zaniest and most risky investment
decisions during the funds existence are the
very reason Futuris ever became anything at all,
not least a place I could work at. Nota Bene:
Previous rules about sizing and not going allin still apply, since a crazy bet is still a crazy
bet. A serious investor should never make such
bets, even if it might be necessary for a manager
during the start-up phase. Thus, beware of who
you trust with your money.
Lesson: There
paradigms
are
no
new
Eventually the long overdue crash

(normalization) came. Tread very carefully
when valuations and business models need new
notions, new words, new key metrics etc. to be
explained.
During the IT mania years, just adding the word
WAP (simplified web pages for mobile phones)
or .com to a press release regularly made a stock
appreciate by 5-10 per cent in a single day.
Whenever you hear new paradigm arguments,
keep your wallet close and your mind clear.
After a few years of that madness, I almost
lost my own way and capacity for independent
reasoning. On the other hand, dont take
shorting in a mania lightly, since trends tend
to be self-fulfilling and bull markets full of bear
traps (short term corrections).
Mik ae l Syding
| 51
* I later invested privately in one of those stocks Futuris traded in in 1999, and
subsequently lost half of my investment by holding on to the story long after the
fund had sold.
Transition from a wild bull to a growling bear

Many had anticipated the turn (downward) of the market. Many way too
early -based on valuations, previous market peaks and other theoretical
work. Our approach was more pragmatic, gradual, balanced and refined.
Our way was award-winningly good.
During the four years of 2000-2003, we kept the funds net market
exposure between just -15% and +50%, and the gross exposure modestly
between 25% and 115%. In retrospect that was a stroke of pure genius,
and earned us several Morningstar awards, including Gold for 2001.
The low market exposure contributed to a low standard deviation (low
variability in returns, which helps increase the Sharpe ratio - a key
measurement of risk-adjusted return, that was even more important when
choosing Futuris for the hedge fund of the decade award). These measures
are just backward looking statistical mumbo jumbo that tell a prospective
client to what degree a funds monthly returns were positive and stable.
The fund was composed of long positions in unloved old
economy stocks in construction and forestry, and short positions in
incomprehensibly overvalued, but loved, IT companies. It took several
years to unwind the extreme IT stock valuations. Those years laid the
foundation for the funds reputation as a great market timing vehicle and with low risk to boot.
Futuris produced magically good numbers

During the cataclysmic end to the career-devouring epic IT bubble,
including the final 3-month surge in 1999, the intense gyrations in
2000 and the seemingly bottomless plunges of 2001 and 2002, Futuris
delivered a return series of +51%, +10%, +27% and +22% net of all fees.
In addition, it was done with an average net exposure of less than 20% net
long (i.e., a fifth of full market exposure, leaving 80% in cash idle in the
bank), and a standard deviation of just 0.055. Unparalleled. The markets
standard deviation was several multiples higher (4-6x) and with hugely
negative returns at that.
52|
The magic performance of 2000-2003 - Low Risk, High Return
Futuris low risk approach during 2000-2003; the green ring of High
Sharpe Ratio
As a side story, in 2002 the investment bank Merrill Lynch held a Casino Night
at Grand Hotel in Stockholm. All guests wore a tux and were given spoof money
to play with. I and my colleague had so much confidence from our winnings in the
market (and free booze) that we managed to break the bank at the roulette wheel
and the black jack that evening.Twice.We used our winnings to clean out the prize
table (the fake money could be used for buying ML merchandise, but they didnt
expect just two people to clean the table) and then ran around handing out hangers,
calculators and other stuff to the less fortunate.
success bred hubris (And A negAtive biAs)

Unfortunately, our confidence came to border on hubris (You dont say?
Was it the antics at MLs Casino Night that gave us away?). In addition,
winning big on the downside and racking up awards made us negatively
biased (albeit based on knowledge and deep understanding, but still
dangerously biased and overconfident).
Mik ae l Syding
| 53
when the bull returned we were wrong-footed

Hence, we all but missed the BRIC rally between 2003 and 2006, when
growth in the emerging economies of Brazil, Russia, India and China
fueled exports of capital goods in the rest of the world, and thus rapidly
growing GDP and corporate profits.
We also partly changed our investment style from controlled risk and a
balanced portfolio to a more erratic position taking, ventures into less
liquid stocks, and three times as large overall net and gross exposure to
compensate for (and take advantage of) low market volatility.
We simply tried everything we could come up with, to adapt to a new
and bewildering world of extremely low interest rates and the once-ina-century transformation of the developing world (foremost the BRICs:
Brazil, Russia, India, China).
when hubris struck, the griM reAper hung in the

shAdows
Same pose, different tools
54|
Now, lets finish the recount of the extreme year of 2002. Remember
that 2002 was the one year out of fifteen in Futuris history, where
performance was good, no big mistakes were made and life at the firm
was generally good.
With the worst timing possible (in hindsight), one of the two senior
portfolio managers died at the office, in the fall of 2002 (he had a severe
stroke in between two meetings), not long before the BRIC rally took
off and our performance waned.
To clients, our success in 2001-2002, and our troubles the following 5 years,
seemed closely linked to both our changes of style, as well as gaining and
losing a portfolio manager. Consequently, after Michaels passing in 2002,
the loss of this true nestor in Swedish industrial life caused withdrawals
to impact our assets under management, simultaneously with mediocre
performance.
Right at the peak of our game we were hit with that and then the hits
just kept on coming.
Mik ae l Syding
| 55
BULLIED BY THE FED - FUTURIS NEAR-DEATH

EXPERIENCE
Lament to Mammon: Oh why have you abandoned us?
During 2003-2006 we kept trying to short the market, to time the peak
we constantly expected to manifest itself just around the corner.
We mainly shorted index futures and capital goods companies, interspersed
by more or less forced long positions, to compensate for the accumulating
losses in indices and cap goods.We never held out for long on the upside,
always more vigilant regarding negative news and risks than opportunistic
on the upside.
We thought we knew what we were doing. I mean, we got both the
bull of 1999 and the bear of 2000-2002 right, so we must be right again
- it was our legacy, our birthright. We had a framework of thinking that
worked, right? We read more, we thought more, we worked harder and
smarter than everyone else. We were bound to succeed. We had fought
the Fed before - and won. Now we were at it again
Its just that it didnt work in the bull of 2003-2006. Realizing we were
wrong hurt, in particular psychologically.
Imagine feeling really stupid almost every day for 4 or 5 years in a row.
Not even being bullied through middle school felt that bad - back then I
at least knew I was smart, albeit unfairly treated.
We actually did deliver decent returns during 2003-2005, certainly for a
negatively biased fund and one that had more than protected its clients
wealth during the IT crash. However our performance was definitely in
the lower end of the range of what we aimed for. Decent just wasnt
enough in an indecent industry.
Id rather just forget about those years (2003-2005, not to mention
2006). They were filled with endless phone calls, infinite reiterations of
macroeconomic ruminations, countless painful stabs of successive little
losses - and too little time off the market. By January 2005 I despaired so
much I blogged I need a game plan to endure, seriously mulling leaving
the industry any day.
56|
At least those years drove home one of the most important lessons there
are: dont go all in, no matter how sure you are. By all means, make a
serious commitment, be invested - just not all in.
On the other hand, I was made partner in 2004 - and 2005 was when I
became Managing Director, albeit against my will while I was unconscious.
Yes, true story; nobody wanted to take the helm. We all just wanted to manage
money, not the firm. Hence, Mattias and Arne took a vote when I was in surgery
Such was the retarded process that made me managing director of The Hedge Fund
Of The Decade.
2006 - close to a breaking point
By mid-2006, in addition to the three previous years of mediocre

performance, we were down by 6 per cent that year (our worst first half
performance until then), thus losing money, eroding our reputation and
leaking clients at the same time.
Every little setback forced us to cut back on our positions, pause and
start over. Over and over again we took one step forward and two steps
backward, prudently stopping our losses and then had to start from
the beginning again, slowly accumulating losses and eating away at the
positive returns we did produce in our best holdings. The end appeared
nigh for Futuris. Again.
Whats worse, 2003-2006 were my first years as a partner, managing
director and portfolio manager with a relevant mandate. Mattias and I
(and Roland, who left the firm in 2005 and also died just a couple of
years later) had taken Michaels place after his untimely death, and this
was how we handled our giga responsibility As useful as a hole in the
wallet.
It actually felt as if the universe was out to get me.
And you have to understand it never is. The universe is just what it is. A
is A, and reality is reality, as Ray Dalio says.You have to deal with reality
instead of blaming it - or, even worse, attempting to school reality.
Mik ae l Syding
| 57
Lesson: Investigate reality

Dont try to lecture it. Dont get mad or try to
get even. Dont argue. Open your eyes.Take the
consequences of the facts. Analyze!
Lesson: Its never the markets
fault youre losing money
Its yours. Dont blame the world for not dancing
to your tune, blame yourself for not listening
and understanding.
Golden gods
I bet they felt like golden gods a minute ago

And what did I do personally? I bought this water scooter in the first half
of the year (2006), right in the face of our worst performance ever:
58|

Where are the customers yachts?
Well, mine (pictured) measured around 8 ft so dont get too excited
Mik ae l Syding
| 59
Hail Mary trades eventually saved us in 2006 - or

did they?
Thanks to a handful of the firms best trades ever - in shipping, Korean
shipyards and oil rigs - we survived the period 2003-2006, albeit just
barely (2003: +9.9%, 2004: +6.5%, 2005: +13.7%, 2006: +6.3%).
Investments in oil rig companies and Korean shipyards that increased 10fold in value (of which we pocketed half) covered losses on index shorts
and short positions in capital goods companies.
Capital goods stocks constantly looked expensive to our negatively biased
minds (conditioned by our spectacular performance during the IT crash
which taught us a little too well to be skeptical about high growth and
high valuations). At the time, we just couldnt comprehend the rise of the
BRICs, or understand just how long it would take before the US housing
bubble would burst.
In October 2006, we once again threw caution partly to the wind,
and finally accepted the market rally, as well as bet on the pattern of a
stock rally the last few months every year. In addition we saw a slight
opportunity to get back to a decent return for the year, despite having
been hit by the five worst trades during the firms existence, all within
the space of 6 months.
The Hail Mary gambit paid off; Not only did markets surge upward, some
of our disaster trades also roared back to life (as an added bonus we had
doubled up in a couple of those, where we were particularly convinced
the market would soon see the same value we did).This time it worked...
Dont let luck or hope be your strategy

A hidden danger with Hail Mary stuff, however, is that you can confuse
luck with skill, not to mention trying it again -as if luck were a strategy. In
addition, mitigating (or hiding) losses with other winnings, in particular
based on speculation and chance, can make you complacent and unwilling
to scrutinize and question whats going on in the losers corner of the
portfolio.
60|

Lesson: Leave room for a better
opportunity down the road
Doubling up in a halved stock or worse may
seem risky and reckless, but thorough analysis
and understanding of drivers and true value is
and should be the foundation of fundamental
value investing.
You never know when the market is going
to provide you with an even more incredible
opportunity so never go all in from the get go.
Actually, never go all in. Period. Always leave
room for being wrong, or for the market going
against you in the short term. Leave room for
doubling up.
My own personal breed of hubris involved buying this Hublot Big Bang
Rose Gold in February 2007, despite our near death experience in 2006
right after buying the water scooter:
Personal hubris on display
5 years earlier I could have sworn I would never ever be this stupid. It got stolen
in the fall of 2015 and I just couldnt care less.
Mik ae l Syding
| 61
Redemption - the bear returns

Its not that I am a permabear (always negative, always looking for shorts).
Im not eternally negative to stocks. None of us from Futuris are, or were.
Its just that during the entirety of Futuris existence, the economy was
fragile, built on air (debt upon debt, cheered on by the Fed) and stock
valuations were extremely lofty. Anything could and would topple the
house of cards given enough time. The question was just how much
time, and what would be the catalyst.
By the way, I could say exactly the same thing today, in March 2015. The
writing is on the wall - and its a carbon copy of 2001 and 2008.
Another nerve-wrecking year of extremes

2007 turned out to be a pivotal year for us, including our best first half
(in contrast to H1 2006 being our worst), our highest risk ever and alltime worst month. It also marked the market peak and the beginning of
the global financial crisis in the wake of the popped housing bubble in
the U.S.
In 2007 our risk taking increased even further, with wild swings between
0-150% net long; and gross exposure close to 250% (!). I guess we were
encouraged by our risky comeback in Q4 2006. The fund had never
before and would never after exceed the 2007 exposure and risk numbers.
During the first half of 2007, we managed to time both ups and downs
with uncanny precision, mainly buying and selling index futures for billions
of dollars. It worked like a charm and we were up by an unprecedented 25
per cent by mid-year, in a volatile but flat market. Ahhh, the sweet feeling
of success, of being smarter than everybody else, of showing we still had it.
But hubris soon got us again. Right at our all-time peak exposure
(+150% net exposure) stock markets plunged; August of 2007 turned out
to be one of the worst months on record for hedge funds - and the worst
month out of 180 for us specifically. We all but wrecked our reputation
for being contrarian, consistent and stable in that single month.
- Thats not particularly bad luck by the way. Its bound to happen if you
keep increasing your risk taking.
62|

Lesson: Avoid hubris at all cost
Remember that big wins always are part luck,
and big losses are due to part gambling, part
tough luck.
We mistook our winnings in 2001-2002
for work of pure genius. We also mistakenly
thought we understood the downside better
than everybody else. Our performance in 20012002 and the resultant hubris, and negative
bias, first caused us to miss the BRIC rally of
2004-2006...
Hubris (and greed) then, in 2007, made us
ignore the rule about sizing and avoiding
unnecessary risk. Success with excessive risk
taking in the first half of 2007 made us take
on even more risk.
We didnt have to bet the ranch, but we had
the buffer, we thought - and got impatient and
greedy for really spectacular returns. What if
we can turn these +25% into +40% by the
end of the year? That would show them...,
and make us rich.
To put the decision into perspective, consider that
I personally would have doubled my net worth
that year, if we had closed all our positions at
that point.
Lesson: Dont change a winning
recipe. Be patient
We changed our style and took on too much
unbalanced risk. That cost us both clients and
performance.
Mik ae l Syding
We should have kept our patience, as we did
in 2000-2002. Actually we manifested a
certain kind of patience in 2006 as well, when
we doubled up in certain losing positions. This
time, sadly we demonstrated a lack of learning
from our own hits and misses.
Lesson: Know yourself
Analyze yourself, your M.O., your successes
and your failures thoroughly. Be willing to
learn, to question.
We had a winning style in 2000-2003. We
should have seen and acknowledged that, rather
than try to fix unnecessary mistakes by taking
even more risk and changing investment styles.
Lesson: Manage your risk level
according to the opportunities.
Its not always a good time to go heavily long
or short; most often its a grey zone. Size your
risk accordingly.
Wait out good opportunities and dont take
unnecessary risks when in unchartered territory.
Reserve big bets for situations where you have
more control. Always keep some dry powder
and leave room for error.
Lesson: Reposition when risk/
reward calls for it,
Not because you feel lucky/unlucky.
Neither a winning streak nor a losing streak
is reason to increase risk or change style.
Future risk-adjusted return potential and client
mandate are.
| 63
64|
Lesson: Manage risks when you

can, not when you have to
Make sure you get to stay in the game for
the next round. Dont take risks that could
cause irrecoverable damage to your capital or
your clients money, or force stop losses causing
permanent loss of capital.This lesson applies to
all aspects of life - always do it while you can,
not when you have to. Hope is not a strategy.
Lesson: Never rush to get rich
You never have to bet or bet big. Go for controlled
risk and a long string of single digit percentage
points wins.
Occasionally (think in terms of once a decade) a
super opportunity arises for which you should be
ready through long-term thorough studies and
deep understanding. This is the magic formula
for long term stock market success:
Study
Wait
Pounce
We eventually clawed back a decent performance figure for 2007, and
somehow actually felt pretty good as New Years Eve of 2008 approached.
Mik ae l Syding
| 65
WE ALWAYS SAW A LIGHT AT THE END OF

THE TUNNEL
The long dark tea time of the soul (mobile pic from one of my afternoon podwalks
in Stockholm)
the coMebAck kids

In 2008, the stock markets crashed. The epic downturn, that has been
called the worst since the 30s depression market, commenced almost
instantly with the new year. In the coming 15 months, the US stock
market would go on to lose all its outperformance vs. government bonds
all the way back to 1995.
Thus, it turned out we were right all along; the bear did come growling
back - and with a vengeance. Nevertheless, we could easily have been
wiped out anytime during 2003-2007, not least in 2007 just on the cusp
of success, if we hadnt been as careful as we actually were.
The rest is history.
66|
We killed it the following year, in 2008, just as we had done in 20012002.When everybody else was struggling and suffering, we had the time
of our lives. Personally, I bought a yellow Lamborghini Gallardo Spyder
(convertible) in April 2008 on my way back to the office from lunch; the
hubris monkey was never far away...
Lesson: The situation is never as
bad as you think.
Pick yourself up, take a deep breath and deal
with one issue at a time.
Most important of all: dont panic. If you panic,
get back to ground zero, neutralize everything
and start calmly and methodically from the
beginning; theres never a hurry.
I thought we had reached the end of the line in
2006 but just 12 months later, I was beaming
with pride and newfound riches (virtual) as the
fund was up by around 25% intra month in
July or August, 2007.
Lesson: Easy come, easy go
As confident and happy as I was in July of 2007,
as miserable I was a few months later when we
had lost it all, touching break for the year intramonth after being up by 25% year to date.
Did I mention we booked our performance fees
annually?, meaning all the virtual dividend I
was counting on evaporated in the space of a few
months in the fall of 2007. In July, it amounted
to more than my entire net worth, and before the
autumn leaves hit the ground it was back to zero.
Right before our true claim to fame (in 2008) it
felt as if the end was nigh. For Futuris as well
as for me. Again.
Mik ae l Syding
| 67
And, yet I bought this conspicuous Lamborghini Gallardo Spyder in early

2008
Lamborghini convertible, Midas gialli
* Lesson repeated: The situation is

never as bad as you think.
The coming 9 months (January-September 2008) were to be our best
ever -a good fit to my newly acquired sports car.
Those 9 months all but secured our most significant trophies during our
15 years in operation: the Hedge Fund Of The Decade award and the 10year awards (Best Directional) as well as the 2008 Eurohedge win (L/S
Equity HF of the year).
They also laid the foundation for my own private wealth and eventual
retirement. For all intents and purposes, 2008 made The Retarded HF
Manager.
Remember that just one year earlier,all was lost and my entire net worth
had halved in a few months, compared to my expectations.
68|
how

A foot in the fAce cAn help regAin your bAlAnce
The big losses we incurred during the correction in August 2007 made
us reconsider the risk of a hard landing for the economy, rather than just
a benign mid-cycle slowdown scenario.
Wolf of Wall Street
In August, I wrote in our monthly investor letter that we had become

evenly divided between a crash and a slowdown. Apparently our worst
monthly losses ever had shaken us out of our (bullish) stupor.
Consequently we reduced our extremely positive net exposure. But
already in September, we increased our positive exposure again (despite
writing about housing and banking troubles and the risk of recession in the
monthly comment; we were trying to outsmart ourselves. It was a kind
of symptom of the curse of knowledge, trying to be contrarian rather than
actually being truly independent).
We sold all the way down to a slightly net short position the following
month, in October, (mostly selling beneficiaries of the BRIC rally: capital
goods, basic industries and oil related stocks) but bought again (!) in
November. By then we were back in the managed slowdown camp (i.e.,
slightly bullish and smack in the middle mainstream).
Mik ae l Syding
| 69
Those rapid portfolio turns took place several months after what would
prove to be a major peak, before a crash of historical proportions.
In addition, the writing really was already on the wall after HSBCs
subprime warning as early as in February 2007, not to mention the
sudden market correction in August - which showed just how uniformly
positive and unprepared all investors were for a downturn. We, however,
had finally all but given in to the relentless upward march of stock markets
in the five years since the trough late in 2002/early 2003.
Hence, just as in 1999, we were walking a fine line, betting hard on an
upside and a trend we had logically dismissed as irrational. And we did it
right at another generational peak in the stock market. Fortunately, the
foot in the face in August had stirred something deep within, awaken the
slumbering bear that knew that once the right dominos started falling,
everything was at risk.
And so came one of our handful of defining moments, when we in
December of 2007 sold shares within basic resources, oil and oil services,
shipping and financials, on concerns about a US recession and profit
forecast reductions that we assessed couldnt be mitigated by easier money.
Oh, so right we were, and oh so much money we made for our clients
and ourselves -and yet would be proven so wrong with the exact same
analysis a few years later on.
Lesson: a lesson isnt always the
lesson you think it is.
We could be forgiven for drawing the fatally
flawed conclusions that its risk free to fight the
Fed, or that logic and persistence work.
However, we should have realized that the
market had already shown its weak hand in
August 2007, and that was why it was possible
to make money in 2008 being short, despite a
very dovish Fed.
70|

The lesson from 2002 and 2008 was not to take
fighting the Fed lightly, or that fundamentals
ultimately triumph over trends and authorities,
but rather that it takes exceptional circumstances
and particular catalysts to go against the will of
central bankers.
In the beginning of 2008 we added index puts and sold futures, as well as
sold more financials and services stocks, to benefit from a possible market
correction, as we acknowledged an onslaught of negative data that had so
far failed to move markets. It soon would.
2008 The year of the rat

Thanks to our research, and lessons learned, during the previous 5 years,
on the US economy in general and its housing and banking issues in
particular, once we banked that first win, in the first quarter of 2008, we
regained our confidence. We then dared trust our own research, draw
logical conclusions of which domino would be next to fall and likewise
dared to actually invest (short) accordingly and hold on for longer than
most (just not all the way, it turns out...)
Or was it just luck? Again?! We were wrong again just a few years later,
so who can tell?
No matter future misgivings, with 2008 as icing on the Futuris performance
cake, we (albeit belatedly) got some well-earned recognition:
Mik ae l Syding
| 71
SECRETIVE MANAGERS - CRAZY GOOD

RETURNS
Swedens most respected business magazine: Low Key Managers

Whooping Stock Market Ass or Secretive Managers - Crazy Good
Returns.
72|

Lesson: Trust your analysis but
wait for the right timing.
We were eventually proven right, regarding our
view on housing bubbles, imbalanced economies,
excessive debt, leverage and risk.
Our sound, fundamental analysis, repetition
and refining over 5 years had prepared us for the
big event when it finally came. We dared time
it once catalysts were present. Unfortunately we
had to get hit hard first (in August 2007) to
realize what was going on.
Later, the years 2012-2015 have taught me
once again, that it takes something extraordinary
(like August 2007) to break the back of a strong
bull market before it has run out of money.
.
Lesson: Bet on black
Always bet on black, unless you have pretty
much all the reasons in the world to go short (as
I think you do now, in March 2015).
Futuris knew this instinctively in 1999-2003,
applied the lesson with discipline, and treaded
very carefully despite our strongly negative
views. Due to the steep market plunge of 20012002 we partly forgot the lesson and became
somewhat negatively biased. We relearned to
almost always bet on the upside during the
BRIC and Fed rally of 2003-2007.
In 2011, 2013 and 2014 we actually applied the lesson but got stopped
out, due to excessively high positive net exposure during the sudden
corrections (and recoveries) that typically occur during bull markets.
Its ironic that the demise of Futuris was due to being too bullish and too
Mik ae l Syding
| 73
highly exposed on the upside, when most outsiders think Futuris was a
permabear infested cave of eternal pessimists.
I think Ive got it now - always bet on black - (its just that I think I
currently in March 2015 have all the reasons to go short, so here I am
with my private investments - owning gold and being short the stock
market).
I still have more or less the same position in March 2016.
So, no, I still havent learned.
Dont short. Dont short.
Banging your head against a wall repeatedly is not good for you - not
repeatedly going short during bull markets either.
74|
FINISHING THE BANNER YEAR OF 2008 AS

TRUE PROFESSIONALS
Spooky precision in 2008
We even managed to use previous lessons learned (the market never
moves in a straight line) and with uncanny timing increased the portfolio
exposure from -50% to +50% in July 2008 and kept it there for just two
weeks, while the market bounced after a period of heavy selling pressure.
After the bounce we sold back down to -50% again in August.
Lesson repeated: Markets never
move in a straight line
In fact there usually are more 15%-bounces
during a bear market than there are 15%
streaks in a bull market
Bailing out of Lehman Brothers bankruptcy

We repeated that particular lesson a little too well; After Lehmans
bankruptcy we held our shorts for a week or two, but when markets
didnt keep falling we decided to reverse our shorts and go long - on
gut instinct (if stocks prices dont crash on this, they must be due for a
bounce). That was actually incredibly and uncharacteristically mature
and professional of us. Its just that...
We were wrong
Contrary to a relief rally or a dead cat bounce, the fourth quarter of 2008
saw the largest drop in the market during the entire grand 2007-2009
bear market -and we missed it!
It was the prudent thing to do, very professional, and in the end we hardly
actually lost anything more than a great opportunity and no hard cash,
but we still felt like the biggest doofus in the business:
We, Futuris, the fund that had stayed more or less bearish during the
entire BRIC rally (2003-2007).
We, who had discussed the risks of the US housing bubble for five long
years.
Mik ae l Syding
| 75
We, who had been net short the entire 2008 - on exactly the factors that
eventually took down a Wall Street behemoth and caused the big leg
down in Q4 2008...
We missed profiting from the biggest mammoth kill in a century, the
one kill we deserved together with a select few esteemed and likewise
foresighted business peers.
Biggest doofus in the market
Homicidal psycho on the left, doofus on the right

In the end we managed to avoid losses (oh, the irony) for that quarter
(by selling again toward the end of the year). But, in all fairness, we really
should have made 15 percentage points more return that year. On the
other hand, we had almost compensated for the dick move in Q4 with
our perfectly timed quick in-and-out in July-August.
We still won the Eurohedge award for the best large (500+ mUSD)
Long/Short Equity fund in 2008, as well as laid the foundation for the
Hedge Fund Of The Decade award a year later, which speaks volumes
about what a difficult year it had been for all investors.
We completely botched* the one trade we should have gotten right, and
still was the best hedge fund in Europe in 2008 (as well as for the entire
decade 2000-2009).
76|

The Lehman collapse
A career-ending year if there ever were one

*We were perfectly positioned ahead of the event, Lehman did fail, and we
covered (or should I say cowered) our shorts, just because stocks paused during a
couple of weeks.
Lesson: Follow your strategy, not
a sudden gut feeling, when so
many variables are in your favor.
We should have been able to smell the fear on
everybody else. On the other hand, its always
better to err on the side of caution than the other
way around.
I think we once again became victims of the Curse Of Knowledge; we
thought everybody else had already finished selling, that other, irrational,
investors would buy aggressively when markets didnt keep falling after
Lehmans demise. Or, just maybe, we actually didnt understand or dared
believe just how cataclysmic an event it was.
The end result was the same, we played the irrational part and bought
stocks like drunken sailors just before the collapse that (quite predictably)
ensued.
| 77
Mik ae l Syding
THE BIG BOUNCE AND THE ERA OF CENTRAL

BANKERS 2009-2015
MArch 2009 -
we got A MulligAn...
In March 2009, we positioned the fund net long mere hours before the
market turned sharply upward. Once again, with at least as otherworldly
timing as our selling 9 months before.
The Lehman panic lasted less than 6 months
The market was plunging in panic after Lehmans recent bankruptcy, the
world economy stood still in the first quarter of 2009, but we caught the
falling knife perfectly.
Everybody and their computers were selling with both hands; The
consensus was that it was the worst time to hold stocks since the 1930s,
but at Futuris, we turned around the entire portfolio on a dime and
bought stocks, futures and options for a hundred per cent of our assets
under management on a single day, based on the same kind of hunch as
in July 2008 (never a straight line).
We got it right again, and one day later many others had to play catch-up
and were buying like crazy! When markets roared ahead the following
few days, we felt were invincible.
Decision paralysis?
However, we were still in

the bear camp and went
short just a month later,
this time selling 100% of
AUM in a few days.
As per the last day of
February, March and April
2009, our net exposure
was -30%, +50% and -50%
respectively.
Some clients used to ask if
78|
being three PMs made it difficult to take decisive action

-In your face!
Unfortunately the decision to sell again in April 2009 turned out to be
utterly wrong. Markets have never looked back since then, more than
tripling in a straight line, between the first quarter of 2009 and the first
quarter of 2015.
It may have been the theoretically correct thing to do, in the aftermath
of Lehman Brothers bankruptcy, but in hindsight, it was one of the worst
moves we have ever done. By then, the extreme stimulus programmes in
the US and China had just started to impact the world economy as well
as the stock market.
Perhaps, we should have understood that this was not the time to fight the
Fed (The Federal Reserve, the U.S. central bank). Once a large enough
market bounce had been orchestrated, investors risk aversion just melted
away and the abundance of cash that was sloshing around was seen as an
inferior asset, due to extremely loose monetary policy and short term
interest rates near zero.
Stocks crashed upward while we were more than 60% net short (-60.1%
officially reported by the end of June 2009).
Scarred and wisened by the 2003-2007 experience, we reasonably
quickly changed our minds, and repositioned the fund to neutral (-9%)
on a correction in July 2009 and then boosted the net exposure to +80%
net long in August. In contrast to the short-term opportunistic move in
March 2009, we were now building a strategic investment portfolio for
the long term. That was the plan anyway...
Lesson: Actually use the lessons
learned
Write them down and use them as a check list
now and then.
Mik ae l Syding
Lesson: Dont fight the Fed.
Investors usually learn this rule first of all.
We however had experienced two 50% stock
market plunges while the US Fed was pushing
the interest policy gas pedal to the floor. That
taught us that it can be very profitable to fight
the Fed (under the right circumstances -perhaps
like the remainder of 2015...).
The recent 6 years, since the bounce in early
March 2009, have shown that central bankers
only have one tool - a hammer - and they are
going to pound things with it until they get
their way.
It doesnt mean their method works. Quite the
opposite actually, but they can temporarily sway
short term investors to shun cash and chase
yield, irrespective of compensation for true risk.
| 79
80|

Dare tot ride a bear? Dare ght the Fed?
Lesson: Markets can suddenly

turn decisively and commence a
trend that lasts many years, no
matter what valuations are
Just as John Hussman has written time and
again: after a very large downturn, improving
market internals are enough to propel the market
upward and even start a new mania, even if
stocks are not outright cheap (they actually were
cheap when we first bought in March 2009,
but soon rocketed into neutral territory.
Since slightly cheap or neutral isnt
characteristic of post-bubble behaviour [usually
touches very cheap] it took some time for us
to come around).
Mik ae l Syding
| 81
Well see in 2015 who has learned the inversion of the following market
internals lesson:
John Hussman, Dec 22, 2014: Market history, including the
series of bubbles and crashes over the past 15 years, does not teach
that valuation is irrelevant, but instead that a key distinction
affects whether stability or instability is likely to prevail. When
rich valuations are coupled with tame credit spreads and uniform
strength across a broad range of market internals and security
types, one can infer that investors remain tolerant toward risk.
In that environment, risk premiums may be low, but theres no
particular pressure for them to normalize, even if the speculation
is driven by mindless yield-seeking.
Trend uniformity and well-behaved credit spreads are an indication
of risk tolerance, which allows overvalued markets to remain
overvalued without immediate consequence. In stark contrast,
increasing dispersion across securities and sectors, deteriorating
market internals, and widening credit spreads are all subtle but
observable indications of growing risk aversion icebergs that can
easily rupture the Titanic of severe overvaluation. Monetary easing
then no longer supports risky assets, because risk-free liquidity is no
longer seen as an inferior asset. This risk-aversion creates upward
pressure on low risk premiums, which normalize not smoothly but
in spikes, resulting in air-pockets, free-falls and crashes.
Despite our belated bullishness, starting in August 2009, the sum of
all our efforts during January 2000 to December 2009 was enough to
earn us the award for European Hedge Fund Of The Decade, which
I proudly accepted at the gala in London. Its probably a good thing no
speeches were allowed, considering how euphoric as well as vengeful
I was feeling (due to the humbling experience of 2003-2007. There is
probably a lesson to draw from my hatred toward that period, not least
since I had to partly relive the experience during 2010-2015):
Anger, resentment, hate and fear are closely related and lead only to
suffering (and the dark side). Ask instead what you did wrong, and how
you can change to keep a cool head and win - never against the market,
always with the market.
82|
Lesson repeated: Stop hating, start learning
Vader, schmader; Bah! - Yoda should have seen the BRIC rally of 20032007
Mik ae l Syding
| 83
Not long after the prize ceremony, our long term bullishness wavered
already by April 2010 (-37% net short at the end of that month), and we
stayed skeptical until a year later (March 2011), with zero average net
exposure for the period.
Worth noting, however, is that I did write a letter to my two PM
colleagues and partners, from the beach of Vietnam in fall of 2010, calling
that specific market correction an all-in opportunity to buy.
That letter, which was based on my taking advantage of being in a
completely different environment and rethinking the big picture, as well
as being physically removed from my two colleagues, at least contributed
to reducing the selling Futuris was just commencing in Stockholm. The
markets soon after surged strongly upward in a move that could have
been very costly for us.
If I hadnt had the calm and solitude to rethink our position, to start
from scratch, to polish my arguments in a written statement, and the
guts to phrase my contrarian bullishness so strongly (all in), I probably
would neither have come to the conclusion to buy, nor have been able to
convince the others to hold off from going neutral or net short.
Lesson: Move
Take a walk, change environment, reset, start
from scratch, rethink everything.
Its easier to think outside the box, if you are
outside the box.
Never mistake sitting still for hours in front
of your spreadsheets and notes for productive
work. The brain is made for moving. The
thinking part is just an unintended consequence
of analyzing movement.
84|

Lesson: Allow for divergent ideas
Structure your workplace and its forums to create
unbiased discussion and take advantage of the
fact that different people think and communicate
differently. Manage your own brainstorming
too, in case you are your own committee.
Lesson: Hold your own
Stand up to yourself and your ideas, nobody else
will. But make sure you have good arguments,
and are willing to succumb to factual evidence.
Note that these are life lessons not just market lessons.
The final hoorah

As it were, we wavered back and forth, alternating between net long and
net short for about a year (most of it during 2010), without making any
money.
At the end of February 2011, we were net short again, this time cautiously
so (-16%). Our main downside protection consisted of index put options,
just as in the beginning of 2008. Index puts are a nice way of inching
into a position you are not entirely certain of. The worst thing that can
happen is that the market doesnt move at all for a couple of months and
your options expire worthless.
A tsunami of money
In March 2011, after 12 months walking in the desert performance-wise
(client-wise we were more than fine, actually preparing to close the fund
for new subscriptions after a 100m USD subscription by a single client),
we were rewarded by a triple whammy in the stock market:
Bond yields in southern Europe rose ominously, ahead of the upcoming
bank stress tests, the spring revolution in northern Africa escalated with a
no fly zone over Libya causing increasing oil prices. On top of it all, Japan
was hit by its own catastrophe-triplet: an earthquake/tsunami/nuclear
meltdown.
Mik ae l Syding
| 85
During the week following the tsunami, we first booked profits by selling
the puts and buying back previously sold futures - right at the height of the
Fukushima crisis. We subsequently sold net short again with perfect timing,
just a few days later when the stock markets had recovered almost all of their
losses. But it was hard to be happy, or show happiness during such a tragedy.
Mixed emotions
It was like watching my worst enemy crashing my Lamborghini

Finally, with just as uncanny timing as in June 2008 and March 2009,
we bought even more (eventually going to 115% net long) during the
second Fukushima market meltdown. In the space of around ten days
we had started out with the perfect put/short position and made three
equally perfect trades (Buy, Sell, Buy).
We gained 9% in March 2011 alone on an average exposure close to zero.
Try to beat that Sharpe ratio!
(We were so good it was scary - for most other investors, March 2011
was one of their worst ever, rivaling August 2007, while it was our best
month since 1999)
Thanks to the one single large client that had recently invested and thus was
in the money, for March 2011 we booked our last performance fees of any
significance - and my dividend for that year became my last big payday (even
if 500k/year after that in annual compensation is nothing to sneeze at)
86|
One single large client, a tsunami and three perfect trades during the
space of two weeks was enough to earn me my fourth biggest dividend
ever - my last hoorah (fourth biggest by the way in all fairness it was
rather tied second).
So good we were scary
Futuris portfolio managers straight out of the Japanese uncanny valley?
the peAk wAs glorious - the deMise unnecessAry

At the end of April 2011 Futuris reached what would become its recorded
all time high with a +601% net return after all fees and costs, while our
most relevant stock market benchmark (MSCI Europe total return) was
flat over the same time period.
Fueled by hubris after the Fukushima trades we had taken the portfolio
to its second highest net exposure ever and kept it there month after
month. By then, we behaved as if we understood exactly how the world
and the stock market operated. We thought we had learned so much
during earlier crashes and recoveries and now it was our time to really
shine on the upside, proving we were not negatively biased - just smarter
and more nimble than everybody else.
Four months later, the euro crisis was about to return with a vengeance.
Mik ae l Syding
| 87
One crisis meeting in Europe after another, credit downgrades of Spain

and Greece, the threat of intensified austerity, a warning for the U.S.
(regarding its credit rating) and a string of negative surprises in macro
numbers,including U.S. GDP, as well as prices of oil, gold and VIX
exploding upward - nothing deterred us from staying long. Its all in the
price already, was our standard dismissal of negative news (and separation
from our younger, more bearish, selves?).
We hesitated selling to the very last moment, since we had just begun
getting comfortable and cocky in our newly acquired positive views.
Nailing the Fukushima event so perfectly; buying while staring a nuclear
meltdown right in the eyes had us convinced other investors were still
in fear mode, thus discounting too much negativity. However, the deluge
of negative data eventually, reluctantly, pushed us into selling futures and
buying puts as a precaution.
The timing was once again right on the money. Actually, we were a bit
late to the bear party, but not least the put options saved the day by
reducing our net positive exposure with every new down day, eventually
even making us net short. Without the puts, we might have racked up a
new record monthly loss, perhaps in the double digit range. Many other
hedge funds did. The near death experience on the downside, just days
after being over 100% long, kicked us back into bear mode, just as August
2007 had done 4 years earlier.
88|
Zombies, robots and Futuris managers almost look like normal people,
but there is just something slightly, and very disturbingly, wrong
On the 9th of November 2011 we sold heavily and repositioned the fund
from significantly net long to significantly net short.
Our bearishness was supported by extreme market volatility, growth and
credit downgrades for southern Europe, rising bond yields and CDS
spreads for the PIGS.
As late as by November 25, 2011 our positioning (still) looked genius,
until unexpected and coordinated emergency measures by several central
banks triggered an intense stock market rally.
Stock markets rose by 10% in just three days in the end of November
2011, turning an unusually good month into a really bad one for us, and
an ordinary year into a flat one - obliterating the magical performance
from March that same year (Fukushima).
We still didnt budge. On the contrary we kept selling more toward the
end of 2011, and then further into the beginning of 2012; eventually
going 50-60% net short.We figured central banks had more or less already
gone full retard without any tangible effects on the economy. Banks and
governments in the PIGS countries (Portugal, Italy, Ireland, Greece and
Spain) were still not solvent, and rising bond yields made matters more
urgent by the day.
Close but no cigar
Mik ae l Syding
| 89
So close - looking like a perfect kill just 3 days out - before the end of
November 2011...
To us this looked like a perfect repeat to 2008; the writing was already on
the wall, optimism was equally rampant and unwarranted. We positioned
the fund accordingly (as we perhaps should have done during the
Lehman meltdown in Q4 2008, i.e., kept our short positions) and actually
mirrored the street-smart tactic from January 2008 by buying put options
rather than selling index futures outright. Again, using puts introduces an
element of automatic risk reduction in case markets rise instead of fall.
We had learned we actually might be wrong, and thus used put options
to reduce our risk of big losses. However, our greed and hubris eventually
made us go aggressively short (-50%) in addition to buying the put
options. In the instances of 2000 and 2008 we were positioned more or
less neutral vs. the market - with the puts only more as an insurance, on
a slightly net positive portfolio, rather than a punt. This time our gambit
resembled something more akin to all in!
Death by
central banker
So, Futuris was around -50% net short for the first half of 2012.
Around mid-June of 2012, Futuris appeared to be on the right track. We
were up on the year, were heavily negatively exposed at around -60%
net short, which was a new record net short position for the fund, and
negative data poured in from all over the globe. It seemed all but certain
that the U.S. would slip into recession (if it hadnt already but just didnt
show up in the statistics yet) and the eurozone would break up, wreaking
all sorts of havoc.
90|

A sliver of hope still lingered in 2012
Another somber Stockholm picture from one of my afternoon podwalks
is thAt A beAr i heAr?

Finally, we thought, after 3 years of torture, pain and mocking of the
Nordic permabears (a misnomer regarding Futuris, considering our
performance in 1999, our well-timed buying in July 2008, March 2009
and not least after Fukushima when we took the net exposure to 115%
with a long-term intention).
Finally, we would be redeemed and avenged for missing the market
plunge in the fourth quarter of 2008, after Lehman Brothers, and for the
artificial run-up since March 2009.
This time we would stay short over the breaking up of the Eurozone! The
power and reign of the central banks were over, it seemed. Growth came
crashing down, government debt burdens exploded upward and bond
yields surged. The confidence in the monetary magic, or rather madness,
of the Italian (Draghi) at the ECB and Bernanke at the Federal Reserve
eroded quickly.
Mik ae l Syding
| 91
We had waited, we had endured, we had spent endless days on research

and navigating central bank infested markets. It had been over 12 months,
250 trading days, without a new high for the fund.The psychological and
mental toll on all employees and not least the three partners and portfolio
managers was immense; inconceivable for an outsider, for anyone not
living through what had been one minute in hell after the other.
Light at the end of the tunnel

In June of 2012 we saw the light at the end of the tunnel of torment and
dared hope for greatness once again. We were up on the year, and close
enough to the funds high watermark to start hoping for performance
fees and dividends...
It had been the worst of times. We anticipated the best of times
92|
whAtever it tAkes
The light happened to be an oncoming train. This is the sound it made:
We will do whatever it
takes to save the euro,
and believe me: it will be
enough
Those words have haunted me for two and a half years and will probably
linger in my mind for decades more. Mario Draghis promise to go full
retard, to literally do whatever he could possibly get away with, to make
sure the euro didnt break up, turned markets around. The yields of PIGS
bonds fell on the promise of central bank buying and stocks rose in relief
of an end to bank panics.
In the real world, artificially low interest rates and subsidies to banks and
bankrupt countries would be seen as band aid on broken bones. In the
world of confidence, stocks and money, however, it was seen as genius.
Mario Draghi
No holds barred for Super Mario
Mik ae l Syding
| 93
OK, now Im hating again. (I guess the Greek are too, who have paid
a dear price for staying in the Euro, and now look set to finally leave it)
Draghis effects on PIGS yields were astounding
The Spanish 10 year bond yield - the gift that keeps on giving
It took six months of heavy losses, and our worst year ever (-7.8 per cent
return), to force us to buy into the rally.
When we finally did, we were hit by a market correction (sic) ,but
nevertheless had the mental strength to keep buying; by January 2013
the portfolio was 18% net long.Whats worse is that right before Draghis
Whatever It Takes-speech in June 2012, we were planning to go long
tactically, and perhaps even strategically, exactly on the grounds of
94|
potential ECB money printing. So close. Woulda Coulda Shoulda But

no cigar.
Despite worsening fundamentals including Europe officially being in a
recession and the US on the brink of following suit, we kept buying and
by the end of May 2013 we were 69% net long (half way into June we
had kept buying on downticks and reached 90% net long).
Quite reminiscent of the dreadful summer of 2011, in June 2013 we were
buying heavily while the world was falling apart. Its already discounted,
we said. Its just like last summer, and ECB and Draghi will come to the rescue;
they really are that desperate and stupid, we hoped.
We were right, the central bankers really were that desperate. They did
eventually come to the rescue, its just that in the really short term...
...the stock markets plunged by 20% in China and 10% in Europe.
Talk of a reduction of money printing in the US and its effects on Asia
had triggered a currency crisis and a wave of selling.
Rising tensions in Syria and renewed debt ceiling issues in the US,
contributed to the perfect storm.
We were intent on staying long, but on midsummers day the pressure
passed a definitive threshold and we were forced to stop our losses, selling
at the worst possible opportunity, right before the bounce, thus de facto
locking in our losses and tying our hands behind our backs going forward.
After that exposition of perfectly poor timing, we had used up all our
confidence and mandate to take risk.
Nota bene, we once again were punished hard for being too bullish (just
as in 2011, not to mention August 2007 and the first half of 2006).
Lesson: The market doesnt
punish you
Only losers think that way.
Mik ae l Syding
| 95
The Universe (or the stock market) doesnt care

about you the least bit.
It was our timing and sizing that was off, not
the universe or the market.
Lesson repeated: Stop hating. Learn!
We had wanted to be long, albeit perhaps somewhat against our true long
term beliefs, and it had been right (since stocks soon roared back to life
and new highs), but we were forced out on timing and having a weak
hand from previous losses, as well as being dependent on one very large
client.
We lost some 10 percentage points of performance due to the stop loss
and its immediate ramifications, thus delivering zero return for 2013,
instead of a quite good +10%.
Striking out after rightfully (stocks roaring back, remember?) betting on
the other side (somewhat contrarian to our true beliefs) was particularly
painful.
If it hadnt been for (the most dangerous words in investing) the ill-timed
stop loss (due to fear of losing concerned clients) we would have ridden
the ensuing rally being 100% long instead of 6% short. Apart from much
better performance, we also would have had more confidence, not to
mention mandate, to maneuver in the markets.
If it werent for that stop loss in summer 2013 Futuris would probably still
be around, and prosperous at that. Maybe I would still be working there
too - not being retarded.
We spent the following 9 months slowly rebuilding our long positions,
gradually buying on almost every dip (not least in January and March
2014), as well as our mental health and confidence. At the turn of the
year the fund was 59% net long. By May 2014 we reached 117% net long
and 175% gross exposure, actually rivalling the highs of 2007 and 2010.
96|
During this build-up, the US government shut down due to debt ceiling
negotiations and Russia had invaded Crimea. In addition the US Fed
seemed set on slowly exiting its quantitative easing program, despite
temporarily negative macroeconomic data due to poor weather. Futuris
PMs, however, much like in the aftermath of the Fukushima crisis,
discounted a gradual dissipation of these worries and stayed fully long.
Our major investment themes were focused on a (south) European
recovery, shipping and clean energy (mostly solar energy related stocks).
Just as in 2011 and 2013 we were buying right into the face of danger.
Quite correctly so, albeit with a little too much bravado. Any little
correction could do us in, no matter how right we eventually turned out
to be.
We were playing with fire.Well, to be perfectly clear, I wasnt playing with
anything at all but myself; I resigned as portfolio manager in February
2014 and only stayed on as Managing Director to make the transition
smooth for our clients.
Smaug the mighty client
The extreme net exposure was automatically reduced to only 90% long
in June 2014, when the call options expired. Not long after, a correction
Mik ae l Syding
| 97
in August, that troughed on August 8, took a heavy toll on performance,

as well as on our nerves. However, we held steady and participated fully
in the recovery that soon followed.
-Right again.
And avoided being stopped out..., but perhaps we had awaken Smaug
testing his patience.
Nevertheless, or possibly triggered by our being back above flat for the year,
three weeks later on August 27, our largest client (Smaug) announced it
was withdrawing its entire investment.Without Smaugs treasures (and likely
other coming outflows, triggered by Smaugs withdrawal) Futuris would
become subscale. Hence, Arne and Mattias decided to close down the fund.
We waited until the end of the month (end of August 2014), in order to
be able to sell in secret, and then started to divest the portfolio. Over 5-6
trading days we sold all our holdings and then on September 9 announced
we would be shutting down by the end of September 2014.
Soon after a serious market correction commenced:
Market correction 2014
s&p 500 index
Chart from MarketWatch
98|
Over September and October 2014, market corrections of 10-15% in

the US and Europe, respectively, were followed by a rapid V-shaped
bounce to new all time highs. We will never know how Futuris would
have reacted during those intense months - with perfect timing or the
opposite (forced stop loss again?), since by September 9th we had closed
up shop after 180 months in operation.
RIP Futuris
October 1999 September 2014
Lesson: Dare to be wrong
Dare to think differently, be contrarian.
(just remember it inevitably means you will be
wrong every now and then), so choose the size
and timing of your biggest bets very carefully.
Dont expect trying to be contrarian will
create positive returns, but if you actually
think differently, dare to act on your inherent
independent thinking.
Lesson: Mind your surroundings.
Other factors than your core value drivers are
sometimes more important than your actual
business.
Our risk level wasnt crazy, and as it turned out
we were right in our market call. However, we
were in a weakened state, due to having been
underwater for a long time, a recent and very
costly stop loss, and most importantly we were
dependent on one large client.
Mik ae l Syding
Lesson: There is never a need to
rush to be rich
Be persistent and patient. There really is no
need to rush to be rich or to take extreme risks
once you are up and going. Pace yourself.
Futuris demise was due to taking too much
risk at the wrong time, rather than waiting
for the right opportunity. On the other hand,
Futuris fantastic history only ever happened,
thanks to the outsize risks its founders took on
the outset - both in changing careers and the
actual investment decisions during the first few
months in 1999.
Lesson: Question yourself
Challenge your beliefs, look for evidence to the
contrary of your current convictions.
You inevitably will be wrong often, internalize
that fact and actively look for weak points in
your research and arguments
| 99
100|
THE GREEK DISCONNECT - THE ALPHA AND

OMEGA OF MANAGING MONEY
95% of the work I performed at Futuris was focused on researching
individual companies, a.k.a. creating alpha (return independent of the
market; beta), i.e., reading company earnings reports, visiting management
and conferences, talking to analysts, modelling cash flow in Excel etc.
The objective was to acquire a deep understanding of business models,
underlying value drivers, risks and opportunities and based on that
calculate a warranted long term value as well as a mid-term likely value.
The latter was based on the general market sentiment, current valuation
environment as well as price trends.
Every day was jam packed with meetings, reading and modelling in Excel,
as well as constant discussions on tactics and single stock investments,
around the table where the entire staff was seated. In addition every
morning before European stock markets opened, an hour or two into the
day, we gathered in a separate conference room to take stock of overnight
developments and discuss the more long term strategy of the fund.
Just 5% was spent on overall market exposure, so called beta considerations,
but that measly 1/20th defined Futuris externally - and in retrospect is
the only thing visible in the 180-month chart of market exposure.
I spent so much time fielding client questions about beta in meetings,
explaining in my monthly written comments how market gyrations had
affected our performance, and so much mental energy on an average day,
fretting about previous and upcoming beta decisions, even though 95%
of the work was supposed to be - and actually was - focused on single
stock considerations; alpha.
That disconnect only grew with time, and toward the end I was deeply
conflicted regarding what I was doing - as a portfolio manager, as
managing director, as partner/owner and as an analyst.
Mik ae l Syding
| 101
Lesson: Stay true to yourself

Take a good hard look at yourself and own what
you see, instead of pretending to be something
else.
Analyze yourself, tweak what you dont
like, then market that which you are and do.
Integrity and consistency are important. You
will only last so long if constantly dissonant.
Lesson: Be aware of different
vantage points, different
perspectives.
There are definitely more than just yours or
your current one.
Actively seek different perspectives and sense of
time. Perspective of details and big picture, top
down and bottom up is important but difficult,
when caught up in the torrent of events in real
time.
Group think and myopia -partly forced from
the outside- led to loss of way, loss of perspective,
loss of confidence, loss of mandate in a self
reinforcing feedback loop.
Lessons for the current market environment: check the big picture and
the underlying drivers.What is your perspective vs. others (scope in time,
geography and asset classes e.g.) and what are you willing to risk? A good
rule of thumb for any investment is if you can gain 25% you can lose 25%.
Below, Ill summarize and conclude this book by reminiscing some of
our high and low points during 180 intense months in arguably the worst
stock market in a century:
102|
SUMMARY: FUTURIS BEST AND WORST

MOMENTS
Single best trades ever
During 2004-2006 our handful of holdings in Korean and Chinese
shipyards increased 5-fold in value, during the time we held on to them
(10-fold in total, i.e. +1000%). At the peak we had 25 per cent of the
portfolio in Asia, confusing our clients even more than usual.
Through successive buying and profit taking as well as a more
than quadrupling of the stock price, our investment in Transocean
simultaneously grew to 18 per cent of the portfolio and our nonEuropean part of the portfolio to almost 50% of AUM.
Oops! Our statutes said we were a European fund with Scandinavian focus and
complementary positions in the rest of the world.The lawyers gave us a green light
though.
There is no telling what would have happened to Futuris, hadnt it been
for those trades of genius (Arne). We might have been wiped out (client
withdrawals due to poor performance) by negative performance, or on
the contrary, been quicker to change our negative bias (unlikely, but
possible) and been better off for it.
On the other hand, if shipyards and rig companies would have suddenly
collapsed, when we were at peak exposure, its all but certain clients would
have lost their confidence in us.
Doubling up on the big losers Premiere and Tallink in summer 2006,
after their stock prices had halved in value, turned out very well. We
earned back all our losses and then some.
The Fukushima 3-in-1 shuffle: selling our put options and buying futures
at the market bottom after the Fukushima crisis in 2011. Not to mention
having the put options in the first place, when a tsunami caused a nuclear
meltdown in Japan. Selling the futures after the powerful bounce, then
buying again at the second Fukushima bottom.
In 2012 and 2013 we made huge gains on an uncharacteristically large
Mik ae l Syding
| 103
holding in a single OTC listed shipping company, Frontline 2012. That

single position mitigated losses stemming from our index and stock shorts.
As it were, that single trade saved us from complete failure - and gave us a
fighting chance, despite the forced stop-loss in June 2013 that sealed our
death sentence. On the other hand, if we had experienced larger losses,
we might have proceeded more carefully and thus not been caught almost
100% net long during the 2013 summer correction.
Lesson: Be schizophrenic.
You have to be both short term and long term.
You have to forget the past and only consider
the future, at the same time as you draw lessons
from a century of market data.
You have to focus on both micro and macro
- understanding both the particulars of single
company data as well as the big picture; how
micro and macro interact and when they
decouple.
Try to understand everything, but never believe
you actually do. Investing is an art. Be Van
Gogh (brilliant and retarded).
Largest gains on least risk

Our balanced L/S portfolio of 2001-2002, making big gains on repeatedly
going short term short IT stocks mainly around their reporting dates or
after bounces, while keeping a slightly net long portfolio thanks to long
positions on old economy stocks (construction, forestry, real estate).
Best but least appreciated
work
Grinding it out 2003-2007, despite a negative view, thus managing to stay

in the game for the next round.
The gains from outsized bets on shipbuilding and deep sea oil rigs, as
104|
well as our comeback in the second half of 2006 were astonishing. Or,
should have been - but from the outside those accomplishments simply
disappeared among our losses on sold futures and on shorts on capital
goods companies.
Single worst trades

Increasing the (until then winning) short position on financials after the
market trough around mid summer 2013 and keeping it for the entire
second half of the year (my bad).
2006: Four worst trades ever within a few months: iSoft, Bull, Tallink,
Premiere: unusually large positions, unusually illiquid, unusually prone to
political risk and single large clients.
Mik ae l Syding
| 105
DEFINING MOMENTS
Long technology in fall of 1999, capturing the final euphoric moments
of the IT boom, right before the epic crash; Futuris biggest gain.
Going 150% net long at the peak of the market in August 2007 when
the writing was already on the wall, after the subprime warning shots in
February - thus going full retard long, when the housing bubble we had
discussed since 2003 finally had matured enough.
Revisiting our views in December 2007-January 2008, of an imminent
Minsky moment, after 5 years of being mocked as perma bears. We
almost missed the crash we had been waiting for, due to almost 5 years of
end-of-year rallies and a constant BRIC pull upward. We almost missed
becoming the Hedge Fund Of The Decade.
Worst consequence: Hanging on to over 50% net short in mid 2012 after
Draghis Whatever It Takes-speech, which triggered an epic stock rally
(ongoing three years later). We averaged -50% net short for 2012 - our
worst year ever, the only one with more than 1% negative net return
during our 15 years.
Single worst decision ever: Going from 90% long to slightly negative on
a forced stop loss procedure at the bottom of a mini-crash June 2013.
The stock market soon rebounded, leaving us behind. The risk taken in a
weakened state almost paid off but ultimately became our downfall due
to the ill-timed stop loss in June.
Going 100%+ long in 2014 after 5+ years bull market and several years
without even a single proper correction of 10% in the S&P index. It was
the right move, but clients finally lost confidence in us.
106|
THE GIGA LESSON: THE CYCLE OF

FORGOTTEN LESSONS:
In 1999 Arne Vaagen and Morten Groven, the founders of what
was to become the European Hedge Fund of the Decade (20002009), Futuris, masterly demonstrated their insights into how far
a stock market mania can progress. Lesson: start shorting much
later than what appears sane. The problem is that as soon as you
start contemplating shorting, you are not part of the mania and
thus probably way ahead of everybody else.
1999 also taught us that a crazy risk (large long positions in lossmaking innovation companies with stratospheric valuations)
might be necessary (from a business standpoint) from the onset to
get going at all.
In 2000 we learned that high valuations eventually come down,
albeit we learned it a little too well. First impressions last longer
than warranted. Key word is eventually, which often means
much later.
In 2001-2003 we learned the value of being contrarian, of trusting
our own valuation work and the magic of a balanced Long/Short
portfolio and bursts of guerilla warfare shorting that combined
strong returns with very low risk (laying the groundwork for our
low long term Sharpe ratio, that probably just about inched us
ahead of Nektar in the competition for European Hedge Fund
Of The Decade).
However, during the violent downturn of 2001-2002, and our
huge returns those years, we forgot the lesson from 1999, of how
far markets go before they peak.
In 2004-2006 we did not heed the lessons from 1999; of markets
staying irrational and surging far higher and longer than the arms
of a strait jacket. We had to pay dearly in stress and money to
relearn that lesson.
In the meantime we learned valuable lessons about (not) taking
excessively large positions in single stocks, in particular midcaps with low liquidity and high risk (one-product companies,
Mik ae l Syding
| 107
one-decision companies, one-client companies, companies with

political risk). We felt in a hurry, forced to chase yield - like many
do today in March 2015
Those lessons were simultaneously neutralized and forgotten, due
to excessive gains on extreme positions in Korean shipyards and
US/Norwegian oil rig companies that more than made up for
the losses on the illiquid midcaps iSoft, Bull,Tallink and Premiere.
In 2007-2008 our bearish lessons from 2001-2003 were
reinforced, but due to our success we forgot about keeping a
balanced portfolio at all times, instead creating the illusion of
balance through unrealistically well timed hedging, i.e. luck.
In 2009-2011 we focused too much on our bear lessons from
2002 and 2008, instead of seeing the opportunity for a longer term
advance like the one 2003-2007. Our arguments for ignoring the
BRIC wisdom were sound; the BRICs cant rise again, interest
rates are already at zero and China looks unbalanced (stimulus,
investments, real estate bubble, (bad) debts, shadow banking etc).
We failed to take into account just how badly the authorities
needed markets to rise, rather than the actual economy.
During the Fukushima crisis in 2011 we practiced our insights
about buying on dips, revelling in being contrarian bullish for once
(March 2009 and July 2007 being the other notable exceptions).
The hubris that instilled in us, made us forget to be wary of the
extremely poor macro and sentiment and almost made us perish
in the August crisis of 2011 (we were 115% long right before
stocks fell through the floor - bet decided to hedge with puts
rather than buy opportunistically on dips, thus profitably ignoring
the lessons from just a few months back in the Fukushima crisis).
The renewed lesson about sudden corrections, air pockets, from
almost going under in August 2011, resonated with the lessons
from 2001, 2008 and August 2007.
However, we also forgot how dangerous hubris is. Timing
Fukushima and just barely escaping the August crash of 2011
made us feel invincible as well as deeply convinced bears again.
During the first half of 2012, our bearishness and general
confidence were reinforced and made us completely forget
108|

previous important lessons about central banks and politicians
willing to do exactly whatever possible, as well as the markets
willingness to play along. We thus failed to see the importance
of Mario Draghis Whatever it takes speech and failed to heed
the lessons of March 2009 (when we turned round the portfolio
from heavily net short to just as long in a single day, in the midst
of crashing stock markets).
Actually, we came very close to time the market equally well
in June 2012 as back in March 2009, but Mario Draghi beat
us to it by a few days - and we werent quite prepared to
imagine a third repeat of the rallies of 2003-2007 and Q1
2009 - Q1 2012. We had the templates, we had lived through
them, but hubris, the habit of perfect timing and winning,
and anger over missing out on a perfect trade made us slow to
make amends - albeit faster than at previous occasions
Actually, we did see the potential (risk) of a prolonged rally

(lessons learned in 1999 and 2004-2006), and we were just about
to buy when Draghi interfered.After that, it simply took some time
to get used to the idea of a continuation, not to mention buying
this late to the game. In January 2013, we finally demonstrated
the ability to act according to lessons learned - perhaps due to the
fact that we had had too much risk on and lost more money in a
year (2012) than ever before.We all but had to try something new.
However, we had already forgotten lessons about excessive
risk (large single stock positions in 2006, August 2007, August
2011, the whole of 2012), the importance of keeping a balanced
portfolio and taking into account our clients perception of our
operations and risk taking.
By gradually approaching almost 100% long in 2013, while
the funds performance was still far under the high water mark
set in April 2011, any little setback would cause significant
losses and rattle important clients. Hence, a few intense weeks,
around midsummers day of 2013, was all it took to seal our
fate. Our fully invested portfolio and large mid month losses
attracted attention and forced us to stop our losses just hours
before markets commenced a rapid recovery.
Once again our performance, confidence and mandate had
Mik ae l Syding
| 109
all been crushed in one single blow, a blow we had asked for,
by going too long in the face of danger (worried clients, our
own underperformance and an erratic market that was due a
decent correction)

In March 2014 we lived through and withstood a similar

correction, thanks to a much lower market exposure. However,
we used that correction to increase our exposure and then
increased it further during the market plunge in early August
2014 - flagrantly exposing our disregard for the lessons learned
in summer of 2013 (the importance of risk management and
appearances). Three weeks later our largest client withdrew its
money and that was the end of Futuris.
Lesson: Losses arent all bad
Losses point out where you are wrong and
reinforce that lesson. Losses can make you
change bad behaviour earlier, thus saving you
from losses of more significant consequences.
Its not what happens to you, but how you
react to it that matters
110|

2014, The stock market in which Futuris was felled
Picture from ZeroHedge
finAl thoughts on reseArch And investing

Macro is not a science, thats why there is no Nobel Prize for economics,
just the Swedish central banks prize in memory of Alfred Nobel. Macro
is art and psychology.
Pricing stocks is even less of a science and mostly just guesswork.
We were in business for 180 months and made 63 major changes, i.e.,
on average just one every quarter. Several clients still wondered how we
could claim to be fundamentally driven and yet execute so many large
and frequent portfolio changes.
In real-time, however, to us it felt as if we worked toward and prepared
for a major move every day.
Mik ae l Syding
Lesson: Know your clients - be
mindful of different perceptions
We should have seen and acknowledged both
our de facto modus operandi earlier (quarterly
moves rather than daily), and taken into account
that our clients, even by that low frequency, were
surprised by our (too) frequent trading.
Lesson: trading often is a losers
game.
High Frequency Trading may be a winners
game, to the very fastest microsecond trading
(front running) machines for now, but anything
between a millisecond and a months turnaround
time is for losers.
With my own money I would aim for a major
repositioning around every three years and
minor changes once every three months.
Lesson relearned: A is A
Ray Dalio talks about facing reality for what it
is. I think we repeatedly failed to do so, even if
we got it more right than everybody else.
Sometimes we took an almost moralistic
standpoint regarding, e.g., money printing. At
other times we called ourselves long term and
fundamental but traded all over the place.
To our credit, we openly admitted to these
errors, even calling ourselves chicken little (an
erratic little creature), but still sometimes failed
to correct them.
| 111
112|

Lesson: everything can be wrong
...and everything can be right in the markets,
depending on timing, sentiment, environment
and other people; extrapolating trends, going
with the crowd, contrarian, focus on micro, focus
on macro, long term, short term, concentrating
your risk/portfolio, diversifying etc.
There are no absolutes or hard truths in
investing.
Lesson: Investing is a holistic art,
not a science
Its at least as much about psychology (herd
behaviour, e.g.) and guessing trends, as it
is understanding value drivers, businesses,
economics and accounting.
You cant know it all, cant take everything into
account, and the market doesnt either - so dont
even try. But dont go all Dirk Gently either:
Mik ae l Syding
| 113
Holistic research
Dirk Gently postulated that everything in the universe was related one
way or another.This holistic approach allowed him to do exactly anything
in order to solve a case.
Lesson: Work smarter not harder
(a classic Dilbert management clich), but there
is some truth to it:
There is too much information to handle
anyway. There is no way to deal with it by
applying brute force, doing more.
Instead, walk, move, enter investigation and
learning mode. Sitting still and working
harder is counterproductive. Walking frees the
mind, whereas sitting inside all but guarantees
stolidness, group think and poor creativity.
114|
THE TOP 10 LIST OF MY LESSONS FROM

FUTURIS 2000-2015
The best way to become poor quickly is to try to get rich quickly Mark Spitznagel
Be patient
There is never any rush to invest: Study/Wait/Pounce
The best way to become poor quickly is to try to get rich
quickly
Markets dont move in straight lines; there are always
corrections and cycles
A is A
Dont assume, investigate! Trust no one.
Learn from losses; dont hate. The universe is not out to get
you
Walk outside the box - one less hour by the desk never hurt
anyone
Always bet on black
The markets memory is extremely short, and losses quickly
forgotten
But hedge or downsize when called for
Unless extremely good reasons to be short (5-10% of the time)
Never go all in, always prepare for being wrong
Mind surroundings, clients, black swans, corrections;keep dry
powder
There are no absolute truths, so you never know enough for
all-in
Dont panic, everything moves in cycles - embrace and use that
knowledge
Its never as bad as you think
Never so bad you should throw caution to the wind and go
all in
Opportunities will cycle back, if you sized your risk correctly
Never be cocky - youre never as good as you think (dont
confuse luck for genius)
Mik ae l Syding
| 115
Valuation and fundamentals are but a small part of investing,

and need a trigger
Trade, when you can - not when you have to; manage your
risks. Dont be greedy.
Dont repeat the same mistakes over and over again. See
example below of how we tricked ourselves in going round and
round in the described cycle of hard work, performance, hubris,
losses, and starting over
a) hard thorough work, and b) grinding in a little well earned
performance, c) some luck, d) some wins, e) consequent
hubris, f) thus too much risk, g) inevitable losses, h) missed
opportunities due to risk management, i) misfortune, j)
despondence, k) slow recovery and l) regained confidence,
and back again to m) hard work gradually paying off.
Be independent - Dare to be contrarian, but also dare to run
with the crowd - just make sure you know which is which
But remember to almost always bet on rising markets, with or
against the crowd
And dont fight the Fed; Authorities will do whatever it takes
to protect their jobs, in particular the worse it looks and if
there are systemic risks (building even bigger risks is of no
concern to them - if the crash can be put off to the next term)
116|
EPILOGUE
Was it difficult? Could anyone have done it, given enough effort? How
long is a piece of string? Who is John Galt?
Make no mistake, it was difficult, it was hard work, there were no fixed
methods or office hours, no guaranteed income (and very high alternative
costs, considering other career alternatives). And, no, I definitely dont
think just anyone could have succeeded the way we did.
It took a lot of luck as well, but then again, serendipity is there for
whoever gives it a chance (through ambitious and intelligent effort and
preparations).
Futuris downfall, 9 months after I decided to resign, I personally think
was taking too much risk the wrong way at the wrong time, rather than
relying on gradual changes and surroundings-aware risk management.
Market-wise the decisions were right, but unfortunately that is not all
that matters in the short run.
The most important aspect of investing and trading is always keeping dry
powder for the next round not to mention minding auxiliary factors;
Live to fight another day even if you are wrong (or your partner or
important clients abandon you).
Nota bene: You can always be wrong, no matter how well-informed
you are, so never, ever go all-in. Even if you are right, others ignorance
can make you temporarily wrong for so long that your right doesnt
materialize before you are down and out permanently.
/Karl-Mikael Syding, The Retarded Hedge Fund Manager SpreZZaturian
PS: I used to say that staying ahead of the market was too difficult, too much
work. I opted for staying one step behind instead. If decisions were just between
up or down anyway, I should be correct just as often with that strategy of being
retarded.
Mik ae l Syding
| 117
Are you A subscriber?

If I can ask you just one thing its that you recommend this e-book and
my website mikaelsyding.com to just one other person (or your entire
social network).
I also hope you have subscribed for future off-site material, that Im sure
will be more refined and valuable (after Ive had the chance to hone my
writing skills.
Subscribe
If you happened upon this book by other means than me e-mailing the
link to you, please visit my website mikaelsyding.com
MikAelsyding.coM
Subscribe to future off-site material, by supplying your email address

there.
118|

Karl-Mikael Syding
Former Partner, Portfolio Manager and Managing Director of Futuris

Asset Management AB, in the Brummer & Partners Group of hedge
funds (2000-2015)
Futuris was awarded European Hedge Fund Of The Decade (2000-2009)
by Hedge Funds Review
Mik ae l Syding
| 119
AWARDS AND NOMINATIONS FOR

FUTURIS
Utmrkelser
Futuris har vid ett flertal tillfllen nominerats till och vunnit olika utmrkelser.
Nominering Eurohedge Awards 2011
European Equity
Vinnare Hedge Funds Review Awards 2011
Best Directional Hedge Fund over 10 years
Nominering Hedge Fund Review Awards 2011
Hedge Fund of the Decade
Vinnare Lipper Awards 2009
European Equity L/S
Vinnare Eurohedge Awards 2008
European Equity L/S
(Silver) Dagens Industri och Morningstar 2008
Arets stjrnfrvaltare (hedgefonder)
Nominering HFM Awards 2008
L/S equity
(Brons) Dagens Industri och Morningstar 2002
(Guld) Dagens Industri och Morningstar 2001
Nominering = Nomination/Short Listed

Vinnare = Winner
Brons = Bronze/Third place
Guld = Gold/Winner
120|
Obviously no consequences ahead
A final word: I would have loved trying to time the coming crash at
Futuris (see chart above, and draw your own conclusions), but Im still
glad I decided to leave the industry. Heres why:
Every year of my 43 years (in January 2015) has been better than the last.
Every new year has turned out to be my best so far.
However, I think I had to leave finance, in order to guarantee that 2015
had a fighting chance to surpass 2014 - the year I started blogging, got a
dog, quit finance, snowboarded naked and sold my last sports car (yellow
Lamborghini convertible) among other things.
Thank you for reading. Now share this e-book and my website
mikaelsyding.com with your social network
/Karl-Mikael Syding, a.k.a. Sprezzaturian
Mik ae l Syding
| 121
READING TIPS:
The best book ever written about the economy: How An Economy
Grows And Why It Crashes by Peter Schiff
The best sci-fi book series ever: Post-Human by David Simpson
My Newsletter ; )
CONTACT INFORMATION
Facebook: Karl-Mikael Syding
Instagram: Sprezzaturian
Twitter: @TureMasing (Sprezzaturian)
Pinterest: Sprezzaturian (Karl-Mikael Syding)
Google+: Karl-Mikael Syding
Spotify: Karl-Mikael Syding
Linked In: Karl-Mikael Syding/Sprezzaturian
e-mail address: mikael.syding@gmail.com
122|

The Last Party as a hedge fund manager
Brummer & Partners Christmas Party at Grand Hotel, Stockholm,

December 2014
THE END

Wayward Hedgefund v7

Transféré par

Informations du document

Description originale:

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Wayward Hedgefund v7

Transféré par

Droits d'auteur :

Formats disponibles

The Retarded

March 11, 2015

EXECUTIVE SUMMARY - NEVER RUSH YOUR

THE RETARDED HEDGE FUND MANAGER

You say retired, I say retarded

Retarded for a living

My office at the hedge fund (Futuris)xiii

The Retarded Hedge Fund Managerxiv

The Swedish Parliament and my dog Ronjaxv

Im not interested in conspicuous consumption (anymore)

My path to managing a hedge fund

Flying start for Futuris16

Sprezzaturian - the early years

The ignorant majority21

Becoming a hedge fund manager

THE RETARDED HEDGE FUND MANAGER

The Hedge Fund Manager Of The Decade

The Grand Connaught Rooms, London24

The long-only herd made it possible

Grosvenor House, London: Eurohedge 2008 awards 27

Proof is not good enough - you need a story

Too cocky, too controversial and unorthodox

Eccentric wasnt as good as I thought34

Too weird to live, too rare to die37

We were gods... in pain

100% outperformance in 2 years

Sharing offices with the grim reaper

The Toughest Stock Market In A Century

The Swedish stock market 1999-201443

The IT bubble taught me valuation hardly matters

The worst conceivable time to start a new fund

Starting a new fund at the peak of an epic bubble

Success bred hubris (and a negative bias)

How to Make Award Winning Investments Like A Boss48

The magic performance of 2000-2003 - Low Risk, High Return52

Same pose, different tools53

Bullied by the Fed - Futuris near-death experience

Lament to Mammon: Oh why have you abandoned us?

Hail Mary trades eventually saved us in 2006 - or did they?

We always saw a light at the end of the tunnel

The comeback kids

How a foot in the face can help regain your balance

Lamborghini convertible, Midas gialli67

Wolf of Wall Street68

2008 The year of the rat

Secretive Managers - Crazy Good Returns

Dont short. Dont short.73

Finishing the banner year of 2008 as true professionals74

Biggest doofus in the market75

The big bounce and the era of central bankers 2009-2015

The final hoorah

The peak was glorious - the demise unnecessary

Death by central banker

Is that a bear I hear?

S&P 500 Index

It had been the worst of times.We anticipated the best of times91

The Greek disconnect - The Alpha & Omega of managing

THE RETARDED HEDGE FUND MANAGER

Summary: Futuris best and worst moments

2014,The stock market in which Futuris was felled110

Final thoughts on research and investing

Top 10 List Of My Lessons From Futuris 2000-2015 114

Awards and Nominations for Futuris

You say retired, I say retarded

Retarded for a living

My office at the hedge fund (Futuris)xiii

The Retarded Hedge Fund Managerxiv

The Swedish Parliament and my dog Ronjaxv

Im not interested in conspicuous consumption (anymore)

My path to managing a hedge fund

Flying start for Futuris16

Sprezzaturian - the early years

The ignorant majority21

Becoming a hedge fund manager

The Hedge Fund Manager Of The Decade

The Grand Connaught Rooms, London24

The long-only herd made it possible

Grosvenor House, London: Eurohedge 2008 awards 27

Proof is not good enough - you need a story

Too cocky, too controversial and unorthodox

Eccentric wasnt as good as I thought34

Too weird to live, too rare to die37

We were gods... in pain

100% outperformance in 2 years

Sharing offices with the grim reaper

The Toughest Stock Market In A Century

The Swedish stock market 1999-201443

The IT bubble taught me valuation hardly matters

The worst conceivable time to start a new fund

Starting a new fund at the peak of an epic bubble

Success bred hubris (and a negative bias)

How to Make Award Winning Investments Like A Boss48

The magic performance of 2000-2003 - Low Risk, High Return52

Same pose, different tools53

Bullied by the Fed - Futuris near-death experience

Lament to Mammon: Oh why have you abandoned us?

Hail Mary trades eventually saved us in 2006 - or did they?

We always saw a light at the end of the tunnel

The comeback kids

How a foot in the face can help regain your balance

Lamborghini convertible, Midas gialli67

Wolf of Wall Street68

2008 The year of the rat

Secretive Managers - Crazy Good Returns

Dont short. Dont short.73

Finishing the banner year of 2008 as true professionals74

Biggest doofus in the market75

The final hoorah

The peak was glorious - the demise unnecessary

Death by central banker

Is that a bear I hear?

S&P 500 Index

It had been the worst of times.We anticipated the best of times91

Summary: Futuris best and worst moments

2014,The stock market in which Futuris was felled110

Final thoughts on research and investing

Top 10 List Of My Lessons From Futuris 2000-2015 114

Awards and Nominations for Futuris

Obviously no consequences ahead120

The Last Party as a hedge fund manager122