Black Swan Manager Returning 23%

While majority of Investors lost huge sums in August, and some lost it all, there are the “free thinkers” out there producing extraordinary returns for their clients. Bloomberg reports on Taleb and his crew:

Mark Spitznagel pushes the throttles on his new twin-engine Chris-Craft Corsair 28, slicing through Grand Traverse Bay in northernMichigan on a warm day in late July. As the speedboat reaches more than 50 miles per hour, Spitznagel’s blond hair flying in the wind, he churns up a big wake.

Turbulence is where Spitznagel, the founder of hedge fund Universa Investments LP, thrives. On Aug. 4, while Spitznagel is still at his lake house, the Standard & Poor’s 500 Index begins to plunge as weak economic data prompt predictions of a double- dip recession. By noon, Spitznagel, a so-called black swan investor, has spoken with his Santa Monica, California-based firm 15 times by phone to capitalize on its positions to make money while other investors lose it, Bloomberg Markets magazine reports in its November issue.

At Universa’s office, between conversations with Spitznagel, two traders frantically buy and sell derivatives, including options on theS&P 500. The index’s 4.8 percent dive on that day is producing a windfall for Universa, says Brandon Yarckin, a Universa associate who handles investor relations. He points to a Japanese print on the wall — one of Spitznagel’s favorites — depicting a giant wave about to crash onto a group of hapless fishermen.

“Days like today are what we are here for,” he says.

Full article here.