Thursday, March 25, 2010
- The Moore Capital FSA Probe
Since I’ve gotten a ton of email from friends on this story, I feel obliged to comment on it, if for no other reason that to save myself some time.
As I have mentioned in the past I worked for Louis Bacon at Moore Capital in NY for several years. And since that time I’ve consistently maintained that in my opinion, Louis M. Bacon is the single best Macro-economic market analyst alive. What's more, it's my opinion that the margin between him and the number 2 man on that metric is so large that it barely warrants comment. My job there wasn't everything I was hoping for, and truth be told I don't know that they were terribly thrilled with my confrontational style either. But the fact is, the place runs better than any firm I've ever even heard of.
Working at Moore capital was probably the most demanding environment I’ve ever been in. As a mid-level worker bee in research, I could get more accomplished in an hour at Moore Capital than I could in a month at some of the other places I’ve worked. And as I specifically said to one of one of my best friends when he was considering an offer from Moore as a senior staffer... "If what you want to do is make money honestly, Moore Capital is as perfect an environment as you will ever find."
All the petty fiefdoms and pointless meetings and turf wars that dominate many other firms operations, would not only be frowned on at Moore, but would probably establish the person who organized them as ‘being expendable’. Those things don't make money, and that's ALWAYS job one at Moore. Politicians may run other firms, but my experience was that they don’t last long at Moore Capital.
I don’t know any of the details of this investigation in the UK. I’ve never met the guy involved, and as I understand it, he went to work at Moore long after I had left. It’s just my opinion, but based on my past experience, I’d bet my life’s savings that if this allegation did actually occur, then it occurred without the knowledge of management and contrary to their specific instructions.
Many hedge funds like to think of themselves as the very best of the best, but in my experience more often than not, it's not actually the case. Many end up looking like a 1991 all star team would if they were playing in 2008. They end up fat, rich and lazy - where all they manage is to sell volatility for a living and are astounded when they are run over by the steamroller. I've seen this with my own eyes more times than I can count.
But unless Louis Bacon has changed completely since I worked for him, (and I have it on excellent authority that he hasn't) then that's not how Moore Capital works. They don't have to cheat at Moore... they never did. The truth is, I can’t think of a place where something like this is less likely to happen than Moore Capital. But I suppose that this side of the next life, no place however well run, is utterly free from sinners.