Steven Cohen

Steven Cohen grew up in Great Neck, NY, in the family clothing manufacturer and a teacher of piano playing. The family was large and noisy. Cohen believes that this is where he learned to concentrate on the essentials. And in the cards, and Cohen succeeded in school. “Every morning on his desk often pile of hundred-ruble notes,” – recalls Donald, 47-year-old accountant from Florida. “With poker, I have learned to take risks” – says Cohen. At the University of Pennsylvania, he studied economics, played poker and became interested in the stock market. He opened his account in the brokerage Gruntal and put back $ 7000, for fees. In the near to the hostel brokerage office, he watched the market and due to several transactions earned enough to pay all the bills. In 1978, Cohen took a job at Gruntal, where the first day the company earned $ 8 000. Ultimately, Cohen made approximately 100 000 $ per day for the company, by 1984 he managed a portfolio of $ 75 million and a group of six traders. He has been a transaction that helped Gruntal cover losses incurred due to the operations of other traders.

In 1992, having left Gruntal, Cohen opened a hedge fund, investing back $ 20 million of equity (the firm now manages more than $ 12 billion $). While the hedge fund industry was still relatively small, and the “bull” market of 1990 was just warming up. Many were taken aback by the high charges for services which he demanded from investors, so the new fund has managed to attract only $ 13 million from outside investors. Dozens of traders and portfolio managers, are located in a small office on Wall Street, managed for the year to double the company’s assets and earn approximately 17.5% per annum. By 1995, SAC’s assets have quadrupled. Cohen moved the headquarters to Stamford and began to open branches. He developed a special computer program that allows you to track undervalued or overvalued stock market.

Although SAC now employs more than 600 people, Steven Cohen, is still himself commits the transaction. From 8 am till the evening, he does not break away from their monitors, and the share performance of the operations account for about 15% of company profits. To all traders were able to see what he does and what he says, has always focused on Cohen’s video camera and microphone. Many simply copy his actions, and frequent sarcastic remarks Cohen received the name “stivizmy.

In the trading hall of American SAC Capital Advisors covering nearly 2000 square meters. m very quiet and cool. Steven Cohen, sitting in the center of the table with eight computer monitors, like this situation. Phones are flashing, but do not call. Computers are located on another floor, to keep silence their fans. The ranks of traders are nervously watching Cohen, awaiting orders of King of hedge funds industry.

On this day the market was falling fast, but Cohen has not started to sell shares, fixing up trading losses of $ 150 million – 1,5% of the total assets managed by his company. While in past years in a falling market Cohen could sell large blocks of shares at very high speeds. His fame in the world of hedge funds outshone even such influential managers as George Soros and Julian Robertson, Jr.. Cohen learned how to earn huge profits for market fluctuations, and its success inspired many on Wall Street to open their own hedge funds.

“I was playing for quick operation is finished,” – says Cohen. About 7,000 hedge funds now compete for investment ideas, and thus to earn significantly decreased. “It is very hard to find ideas that someone has not used, it is hard to obtain large profits and different from others – complained about Cohen. – Will the new times. ” Changing and the situation on the stock market: no longer lower interest rates and low inflation.

Stephen Cohen, recently noted a 50-year anniversary, said that his strategy is changing – he would buy a larger package of shares and hold them longer. Ruck set up rival hedge funds, in his opinion, threatens the market collapse. Cohen fears that competitors are buying the same stocks that his fund. If at the same time all the hedge funds start to sell them on the market will begin a sudden and very rapid decline. “There will be a really strong decline in the market, which will lead to the extinction of many hedge funds”, – predicts one of the best traders in the world. “Hedge funds have become larger volumes of their products greatly increased. But if we can get out of stocks when everything will start to sell? “- Worries Cohen.

Assets of hedge funds over the past five years more than doubled to about $ 1.2 trillion, and large profits were very rare. In 2005, hedge-funds have earned an average of 9.3% per annum, which is below average profitability over the past decade – 11,4% according to Chicago-based Hedge Fund Research. For comparison: the yield of the S & P 500 in 2005 amounted to 7,7%. Last year, hedge funds have set a kind of anti-record – 848 funds have closed because of poor performance.

The work of Stephen Cohen uses the style of investment, absolutely the opposite style of Warren Buffett, who buys a long time. Cohen believes that, watching closely the developments of quotations during the day, we can predict how stocks will behave in the coming hours and days. For many years he bought and sold shares of companies, sometimes without knowing their financial performance, nor even the sphere of activity. Classic investors like Buffett are convinced that this investor does not matter what they do and think other traders. Stephen Cohen – the complete opposite. In black jeans and a shabby sweater, often with dark circles under his eyes, he spent whole days sitting in the office to monitor and watching the market and make transactions – sometimes 300 a day. Traders supplying him tons of information about what is happening in the market, and he is able to absorb it all.

Every day, the share of SAC for about 2% of transactions on the stock market. On average, SAC pays brokers a commission of one cent per share, so that by year-end commission amount exceeds $ 400 million fund is the oldest Cohen, launched in 1992, – SAC Capital Management LP gives investors an average of 43.5% even after how Cohen partners withdraw their unusually high for this business share. Traditionally, managers receive 20% of the profits, as well as an annuity equal to 2% of assets, but Cohen gets 50% of the profits and 3% annuity. Condition of one of the best traders in the world is estimated at about $ 3 billion, and he did not refute this assessment.

In 1998, Stephen Cohen and his second wife, Alex (s 42) bought for $ 14.8 million mansion in Greenwich, Connecticut. There is a garden, where grow organic vegetables, basketball court, golf course, a regular garden, indoor pool, outdoor skating rink, a home theater with 20 seats. The lobby is decorated with theater star chart as it was 16 years ago in their wedding night. About $ 700 million spent on the Coen art. Before entering the house, they placed the sculpture Kate Herring – three dancing figures made of aluminum. In the library hangs a painting by Jackson Pollock for $ 52 million, in the living room – the work of Van Gogh and Gauguin, bought recently for $ 100 million, in the foyer – Andy Warhol and Roy Lichtenstein.

Cohen calls himself a cynic, and loves to laugh at themselves. He said that he actually just a simple guy. He likes to eat at a local diner Top Dog and watch reality shows on TV. “I’m not a recluse, but not party-goer. I have seven children, and they need to devote time – he says. – I’m not an introvert, but a little afraid of the press, which can easily make something very beautiful in a completely horrible.

“I do not need such a big house – says Alex. – But you know, and why not? What is wrong that children have a place to play? “The house has a cook, housekeeper, personal secretary to the family, nanny, personal trainer Cohen and his driver, who works part-time bodyguard. The driver is also looks after the four dogs.

Cohen said that his working day begins on Sunday evening, when he was on the phone discussing with management strategy for the coming week. In the morning, a black Chevrolet Suburban, he gets from Greenwich to Stamford, the headquarters of SAC – a modern building of steel and concrete with a glass facade facing the Gulf of Long Island. There are also objects of art such as sculpture, “I myself” – a human head, carved from a piece of frozen blood of artist Marc Quinn. ET in the Japanese school uniform with a briefcase, the creation of Takashi Murakami, is located next to the table by Cohen. “I like funny things, – he explains. – I like to look at the reaction of visitors. Art is best a distraction from the figures.

Star Time SAC came in 1998 when a big hedge fund Long-Term Capital Management went bankrupt, and stock prices began to fall. From late August to mid-October, Stephen Cohen constantly worked in the office, making bets on the rise around the clock through the trading system, Globex. As a result of SAC in 1998 earned 49.2%, while the average hedge fund had 2.6% per annum. “In the end, the people realized that the SAC is something special,” – says George Fox, who invested in the SAC for 10 years. In 1999, the SAC’s assets increased to $ 1 billion, Cohen has increased staff and expanded the theme of their investments, taking up, in particular currencies. He hired a psychologist Ari Kiev, so that helped traders overcome the fear of risk. “Many, trading stocks, worry too much because of possible loss,” – said Kiev. Those who could not cope with this feeling, quickly lost their jobs.

In 1999 and 2000. SAC has earned investors 68.1% and 73.4% respectively. And then the company has been confronted with the emergence of hedge funds, just replicate its business model. Another problem is the suspicion that one of the best traders in the world receives information before others and manages to make a deal ahead of the market. According to critics, the huge turnovers SAC led to that fund was among the darlings of Wall Street and therefore the first to receive the necessary information. One manager of the Swiss bank UBS, during a visit to the office of SAC Cohen said: “We know that you have a type.” According to Cohen, he put him out the door and never worked with UBS for several months.

As the star of Steven Cohen sunrise, star Soros and Robertson rolling. In 2000, Robertson returned money to investors of his fund Tiger Management, and Soros reduced involvement in the Quantum Fund. “We are trading more than investing, and people did not like it, – said Cohen. – But then they saw that I earn money and started to copy me. ” Nevertheless, he manages to earn more competitors. For example, in August this year, SAC has a yield of 18%, while the average for hedge funds amounted to just over 7%. Last year, the SAC has collected $ 2 billion in new fund, with many wishing to invest in it had to refuse. Steven Cohen said that because of the need to make more big deals he had to hold the shares longer. Investors SAC, he promises from 10% to 15% per annum.

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