Tudor is apparently a high-flier:
Tudor Investment Corporation, the general partner of several hedge funds, saw its equity assets jump 99.5% or $553 million to $ 1.1 billion.* Much of this was due to the decision to allocate more assets to equities. Essex Investment Management, manager of the Essex Performance Fund, L.P, saw its equity assets jump 51.2%, or $1.2 billion, from the prior quarter.* (THIS WAS IN 1997)
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NEW YORK--(BUSINESS WIRE)--April 24, 1998--
$10 Million Proceeds Will Be Used To Support WinStar New Media's
Expansion
WINSTAR COMMUNICATIONS, INC. (NASDAQ-WCII) today announced that it has sold a 10% equity stake in WinStar New Media, its convergence-driven media and information services subsidiary, to a group of institutional investors led by Tudor Investment Corporation for $10 million. WinStar New Media will use the capital to finance the continuing expansion of its businesses through internal growth and acquisitions.
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Washington, D.C.
LITIGATION RELEASE NO. 15038 / September 12, 1996
SECURITIES AND EXCHANGE COMMISSION v. TUDOR INVESTMENT
CORPORATION, (United States District Court for the District of
Columbia) (D.D.C. 96 CV 02119)
The Securities and Exchange Commission today announced the
filing of a Complaint in the United States District Court for the
District of Columbia against Tudor Investment Corporation
("Tudor"). The Commission's Complaint alleges that Tudor
violated the short sale rule, which permits short sales only
under certain circumstances. Simultaneously with the filing of
the action, Tudor consented, without admitting or denying the
allegations of the Complaint, to the entry of a final judgment.
The proposed Final Judgment requires that Tudor pay $800,000 to
the United States as a civil penalty under the Securities
Enforcement Remedies and Penny Stock Reform Act of 1990. As part
of the settlement of this matter, Tudor simultaneously consented
to the issuance by the Commission of an Order requiring Tudor to
cease and desist from violations of the short sale rule. In the
Matter of Tudor Investment Corporation, Administrative Proceeding
File No. 3-9077, (September 12, 1996).
The Commission's Complaint alleges that Tudor is the trading
advisor for a number of investment funds. The Complaint further
alleges that on March 15 and 16, 1994, Tudor sold short over
1,743,500 shares of 27 of the 30 stocks listed on the New York
Stock Exchange which comprised the Dow Jones Industrial Average
(the "Dow Stocks") in violation of the short sale rule, Section
10(a) of the Exchange Act and Rule 10a-1 thereunder. Rule 10a-1
(the "short sale rule") provides that short sales (i.e., sales of
a security that the seller does not own) of exchange-listed
securities may be effected only at a price above the price at
which the immediately preceding sale was effected ("plus tick"),
or at a price equal to the last sale if the last preceding
transaction at a different price was a lower price ("zero-plus
tick"), when compared to the reported last sale price. The
holder of a particular security must aggregate its long and short
positions together pursuant to Exchange Act Rule 3b-3 to
determine whether it has a net short position in a particular
security and therefore is obligated to comply with the short sale
rule.
The Complaint alleges that on March 15 and 16, 1994, Tudor
failed to aggregate its long and short positions in the 27 Dow
stocks when such aggregation would have shown that it had a net
short position in these stocks, and directed the sales of such
securities without regard to compliance with the short sale rule.
==========================================START OF PAGE 2======
As a result, 174 short sale transactions by Tudor on March 15 and
16, 1994 in the 27 Dow stocks with a market value of over $98
million were not effectuated on either a plus tick or a zero-plus
tick. These sales were a significant factor in a 16 point drop
in the DJIA, which produced an approximate $1.5 million gain for
Tudor in its short position. Tudor did not attempt to realize
such gain and closed out its short position over a period of
several months beginning in May of 1994, ultimately incurring a
loss of approximately $3,300,000. I DON'T KNOW HOW THIS TURNED OUT, THEY MAY HAVE BEEN AS PURE AS THE DRIVEN SNOW.
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WALL STREET'S HOTTEST ROD
"Now we enter the Boolean time-series conditions here," says Dave Hirschfeld, tapping at his keyboard. A three-dimensional shape appears on the screen, blue foothills and valleys mapped against a black-and-white grid, with a sizable crater in the middle. "That's the '87 crash," says Hirschfeld, who is head of research for Tudor Investments and president of Tudor Software for the legendary futures trader Paul Tudor Jones. "We can zoom in on that tick by tick if you want," Hirschfeld says as another shape appears. "Here's London"--click--"Tokyo"--click--"Frankfurt."
This is Wall Street's hottest piece of technology. Rivals refer to it as "Tudor in a box"--the brain of Paul Tudor Jones shooting off sparks in a vat. In fact, the system, in development since February 1990, is a highly sophisticated analytical tool that combines approximately 50 data streams, embracing markets from currency to cotton, every 15 minutes, every trading day, back to 1982 and before. "In 20 seconds you can use this to dismiss statements that have a lot of logic to them but no reality," says Rich Jaycobs, former head of technology for Tudor Investments, as he presses a button and instantly disproves the conventional wisdom that the currency market is unusually volatile this year.
Even more dazzling are the analytics that can say in seconds how to pursue a given strategy with the least risk and the greatest chance of profit. "We all have our views of the world," Jaycobs says. "This tells you what is the cost of your view."
One Tudor employee--who declined to be named--describes the system. "The idea was to model an expert system based on Paul's knowledge and his trades in the market," he says. "The genesis came from the chess program developed at Carnegie Mellon, Deep Thought, which beat chess champion Gary Kasparov. We recruited several Carnegie people. We went to Paul: We reviewed his past trades. And then we'd say, 'Okay, here's a market, what would you do?' We'd then take what he did and see if it applied to other markets, and so on."
All futures trading is based on the belief that past performance is predictive--that if 20 times over the past 20 years a Fed rate increase coupled with a rising dollar pushed up the price of coal in Germany, which in turn pushed down the price of German utility stocks, then the same variables, behaving in the same way, will produce the same result. One might, then, short German utilities.
This illustrates the potential advantage of computerized trading systems over their human counterparts: the ability to instantaneously calculate the effect, on a historical basis, of the innumerable variables--political, environmental, economic, psychological, etc.--that affect the odds of a given trade or investment paying off.
Not everyone agrees with this. As the late Fischer Black, a partner at Goldman, Sachs and one of the fathers of modern options trading, told The Economist, "There are things that machines are good at, but trading does not appear to be one of them.... The list of factors that matter are changing all the time."
To a limited extent, Peter Borish, who developed the system at Tudor before leaving to found Computer Trading Corp., would agree. "Paul Tudor Jones, Louis Bacon, and the other hedge-fund heads take a big speculative position, but they're actually not risking very much," he says, because they have an extraordinary ability instantly to intuit the likely impact of a given piece of news, or a market move, on the minds of several thousands of their trading peers. This is something that may never be matched by a machine.
Risk and leverage, on the other hand, can be usefully modeled, and applied by the push of a button. "Someone like Paul doesn't make one trade always based on the same things," Borish says. "So we tried to break it into subsets, to model different ideas. And if that was successful, you could put different ideas into a portfolio and devise an allocating scheme to weight which idea is a little bit better at which time."
After that, you have to trust your program's calculations. "If someone told me--and believe me, I've heard everything--that the phases of the moon affected the soybean market, I can run a historical data series of new-moon and full-moon soybean prices," says Borish. "If there's any statistical significance to that, and if the risk-reward is there, I'd probably trade off it." --David Samuels
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Copyright 1995 Capital Publishing Limited Partnership.
All rights reserved
By Red Herring Online Staff
Red Herring Online
April 27, 1998
Avici Systems Inc., a maker of high-speed networking gear, has closed a second round of financing worth $55.3 million.
Participating in the round were original investors Accel Partners, Brentwood Associates, Comdisco Ventures, Oak Investment Partners and Polaris Venture Partners, as well as company employees and corporate partner Northern Telecom, whose recently announced 20 percent equity stake in Avici is part of this round. The employees' stake is worth $500,000.
Investing for the first time are Amerindo Investment Advisors and Tudor Investments, the Anschutz Family Investment Company and Bayview. |
