Market Folly: Jay Attributes “Desire” as Key Ingredient for Success

Jay, or better known as “Market Folly” in the investment industry is what I consider the “Hedge Fund Guru”.  Since starting his blog, Market Folly, in  July 2008, Jay quickly filled a void and became the prominent source of hedge funds in the community.  With over 2,000 Twitter followers, 5,000+ RSS subscribers, tens of thousands of visitors a month, and holding a Seeking Alpha Certification, Market Folly is your trusted source for hedge funds and much more.

In this interview, he shares some of his personal investment strategies which incorporate the best of macro, fundamental, and technical analysis.  He also attributes “desire” as the one ingredient for success.  This is another great interview so hope you enjoy.

“So Jay, can you start out by telling us a bit more about your background? You have a degree in communication and economics.  That’s a pretty interesting combination.  Did you have a specific career map in mind?  Also how has that evolved throughout the years to arrive at where you are today?”

Right, I initially started obtaining a degree in Economics but then also found that I was close enough to receiving one in Communications as well so I figured “why not both?” It ended up working out well now that I have the blog, but I had wanted to pursue a career in financial markets practically my whole life.  I actually spent a lot of time in college investing and trading in order to have a viable track record to showcase to potential employers.  And that is actually how I landed my first job at a long/short equity hedge fund.  I was naturally drawn to hedge funds in particular because I would read about various fund managers and realized they were some of the smartest in the game.  So, I set out to learn from them in whatever way I could and that’s a large part of why I created MarketFolly.com, which centers around our hedge fund tracking series.

“You currently manage a very popular blog with thousands of visitors a day while maintaining a full-time day job.  Knowing from my personal experience, that is no easy task.  What drives you?”

Yea you’re right about that, it’s like having a second full-time job.  More than anything, I’m just passionate about the subject and am always looking to learn and gain whatever insight I can.  Financial markets are by far some of the most complex things out there because no two days are exactly the same and no two investments or trades are exactly the same.  It challenges you constantly and so I’m driven by my desire to learn and become a better investor and trader.  MarketFolly plays right into this as I have been tracking various hedge funds for quite some time now and finally decided to start posting it up publicly.  I’ve gotten so many compliments about the resource I’ve provided and it just keeps me motivated to fill a specific niche in the financial blogosphere.

“What do you enjoy doing in your free-time?”

Well when I’m not analyzing financial markets, I’m tracking hedge funds on MarketFolly as that’s a full-time hobby in and of itself haha.  But no I’m a big believer in taking time away from the markets on the weekends and separating yourself to re-charge.  I’m a big traveler and love to head all over the world when I find the time to try all types of different food and to sample various cultures.  Oh, and I’m also a massive supporter of Manchester United Football Club and have been for 15 years.  Football (a.k.a. soccer) is another one of my big passions.

“Market Folly is now housing 5,000 subscribers with nearly 1,000 posts posted adding value to all of us every day.  You are also recognized as a Seeking Alpha certified contributor.  While it’s an astonishing accomplishment, it’s a daunting challenge many will not dare to seek.  What has been your journey like?  Challenges? Rewards? Learning?”

It really is amazing when I sit back and look at it.  I started actively posting to the blog in July 2008 or so with zero readers and zero subscribers.  The evolution has been amazing and I have all the readers to thank for that.  I think the biggest challenge was just getting noticed to begin with.  There are so many great financial blogs out there already and it’s definitely tough to start from scratch.  I’m a big believer in the notion that good content will spread itself around.  I think I had an advantage in that I came in with a specific niche that was really untouched in the space.  Don’t get me wrong though, you definitely have to work hard to succeed, just like any other venture.  One of the biggest rewards has just been the massive amount of people I’ve been able to meet and interact with.  It has been a true pleasure and an invaluable resource.

“As a ‘hedge fund guru’, what does your portfolio look like? Which hedge funds are you paying more attention to lately?

Well since I actively track hedge funds I’ve actually created a specific Market Folly portfolio that is based on the stock holdings of various hedge funds I track.  I created the portfolio with Alphaclone and am seeing over 20% annualized returns since around 2000 or so.  It takes various holdings of 3 prominent hedge funds and combines them with a 50% market hedge to generate some solid returns over the long-term.  I’ve been really pleased with the performance thus far.

In terms of specific hedge funds, I’m actually adding to my focus a bit by also researching smaller, newer funds with less than $1 billion under management. The funds we track now are pretty prominent and there have been studies in the past that show smaller funds actually outperform, mainly because they can be more nimble and are eager to prove themselves by establishing a solid track record.  Specifically, I’m looking at managers who have previously worked at the prominent funds and have now started their own funds.

“For your personal investing, what investment strategies do you employ?”

Well as mentioned above I like to use the MarketFolly portfolio as it mimics the long portfolios of some of the most prominent hedge funds in the game.  In terms of investment strategy, I definitely prefer a hybrid approach.  Firstly, I like to look for macro themes to play.  Once identified, I’ll drill down the fundamentals on a sector in order to find the best long and short candidates.  Lastly, I’ll use technical analysis in order to help determine logical areas where buyers or sellers are coming in.  This hybrid approach has served me well as I like to use various tools in the investment toolbox.

“If you must choose one ingredient that is vital to successful investing, what would it be?”

I’d say desire.  Anyone can just go out and invest, but to be successful you need to be driven and passionate about it.  Firstly though, you have to find what works for you.  Some people have plenty of time to devote to researching while others don’t.  Some like value investing with long timeframes while others focus on shorter term plays.  You have to identify what you’re comfortable with as well as your risk tolerance and go from there.  But in the end it’s all about desire and effort.

Jay, thanks for the participation.  Keep up the great work at Market Folly, and we hope you keep on pumping out good contents for many more years to come.