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Florida Money
Manager Whiz Kid
When Andrew Nissenbaum was a mere lad of 21, a junior at the University, of Pennsylvania's Wharton School of Finance, he took a $2,400 advance on his credit card and began trading futures contracts on stock indexes. Within three months, he had turned that stake into $240,000 - enough to buy a BMW, finance his senior year and lease a seat on the Chicago Mercantile Exchange to pursue his education in the mysteries of speculating on the rise and fall of the S&P 500. Today, at the ripe old age of 24, Nissenbaum is a seasoned trader and president of Hypothesis Capital Management, which manages the Hypothesis Macro Fund Ltd., a $3 million, Bahamas-based hedge fund launched last july. He works out of his St. Petersburg home and hasn't lost his touch. In the past five months, the money that he manages for 10 individual and institutional investors has grown by 130%. Between his undergraduate coup and his decision to go solo, Nissenbaum spent 10 months as a proprietary currency trader at the New York City Office of Union Bank of Switzerland and a few months as chief macro assistant to an executive of Soros Fund Management. Those experiences convinced him that buying and selling foreign currencies offers the most exciting opportunities for profit. The lion's share of his transactions for Hypothesis are in foreign exchange. "The volume of trading on the U.S. stock market is about $800 billion a year," he says. "The volume on the foreign exchange market is about $1.2 trillion a day. It is by far the most liquid market in the world. There are so many combinations of trades, so many different ways to correct errors. For example, you can be long dollars and short German marks and if conditions go against you, you can sell dollars and buy Swiss francs. Then you have a German marks and Swiss francs position and you can try to process that position to cover your loss in the earlier trade." Best of all he adds, "when you're right, you can make a fortune." The financial turmoil in Asia has made currency trading an around the clock game lately, and Nissenbaum says he spends 20 hours a day following the ups and downs, taking two-hour naps to refresh himself. "I'm always thinking about how to make money," he says. "Some of my trades are for weeks, some are for minutes, some are for seconds." Nissenbaum insists that currency trading is not as risky as the stock market, "The volatility of the S&P 500 is about 25%, and most stocks, about 40%," he says. "The volatility of the foreign currency market is probably 6% to 13%.. And it's also much bigger which makes it less risky." To reduce his risks even more, Nissenbaum currently steers clear of futures contracts and employs stop-loss orders and other forms of risk management. The minimum investment in Macro Fund is $100,000 and is only open to non-U.S. investors. Under U.S. rules, an investor must have a net worth of at least $2 million and an annual income of at least $200,000. |
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