Interview with SAC Capital’s Stevie Cohen – Best Quotes
-Mr. Cohen expressed the view that it was important to make concentrated bets and have conviction in your very best ideas, explaining that most SAC portfolio managers tend to run with their largest positions at 10 percent of their portfolio
-“Any time I get into a position, I’ll look at the chart first,” he said. “I always default to the chart. It is critical for entry points”
-But he says he still watches the screens all day and is always reacting, tending to make changes when things are moving against him. “I spend most the day watching my losers because if those are being managed correctly the winners take care of themselves”
-He manages risk a number of different ways, he said, including using Barra risk models and constantly monitoring his net exposures. He says he hedges with S&P futures “all day,” and although they are a positive driver of profits he makes most of his returns come from individual stock ideas
-“Leverage, concentration and illiquidity are the three things that can kill you,” he said. SAC’s big losses came from new areas that they had entered, like corporate debt. The firm got bigger for the sake of getting bigger, he lamented, and now realizes that they can’t do everything. Quoting his father, Mr. Cohen said, “A shoemaker makes shoes. You have to stick with what you’re good at”
-As for the current market he described it as “grinding every day.” But “underneath stocks are exploding, and everything I’m seeing today looks bullish,” he said. “I’m not going to get negative just for the sake of being negative”