If you’re a trader and your marriage is breaking down, you may want to step back from the markets. On the other hand, maybe your marriage is breaking down because you’re a trader.
eFinancialCareers reports that Paul Tudor Jones, founder of Tudor Investment Corporation, said last week that when a hedge fund manager is going through divorce, you can immediately deduct 10-20% from his returns as a result of 'emotional distraction'.
This was seconded by Taylor O’Malley, chief risk officer at Balyasny Asset Management, who told attendees at the Eurohedge Summit in Paris that he sometimes cuts portfolio managers’ capital in half if they’re having marital problems, on the grounds that the emotional distraction leads to a lack of focus.
'Divorce makes people trade their P&L', said Kessler. 'Instead of saying I’ll buy that security at 99 and hold it until it reaches 101, they buy it at 99 and decide to hold it until they’ve made $100k. They trade their P&L figure rather than their position and stop making rational decisions.
'I suspect this is because they know they’re in danger of losing half their net wealth and are trying to recoup that', he added.
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