Thomas Claugus had everything in mind, financial security was very important, he would get a degree in practical science and an MBA, a set of credentials that he believed would guarantee a successful career, and that is just what he did.
After obtaining a degree in chemical engineering, Claugus spent two years working in his chosen field and then interrupted his professional career to attend the Harvard Business School, after receiving his MBA, Claugus returned to his former company, Rohm & Haas, and he ascended the corporate ladder, after 15 years, he was manager of his European operations and he thought he would be in line to eventually become the CEO of the firm, he had financial security, his career was on an upward trajectory, he loved his job and the people he worked with, everything went exactly according to plan, except that Claugus had another passion.
He was also an avid stock investor who was attracted to the stock market as a child, Claugus adhered to a discipline of living with only a third of his income and invested the rest in the stock market, through a combination of good performance and the additional investment of your annual savings, your stock account grew steadily over the years.
Eventually, Claugus discovered that he was making more money from his stock portfolio than from his executive position in the chemical industry, he decided to abandon his successful career to become a portfolio manager, which was the hardest decision he ever made, his thoughts On this decision and the vacillations that followed it led him to great personal anguish. Claugus has obtained an annual net return of 17% over a period of 19 years, his personal audited account was even better, with a gross interest of 33% during the seven years prior to the fund’s launch.
During the combined record of 26 years, Claugus had five years of losses, two of them were very modest 3% or less, the only significant negative years were in 1991, when his account fell by 12%, 2008 when the fund lost a 25 % and 2011 when the fund fell almost 9%, in each case, the profit of the following year more than doubled the loss (excluding 2011, for example, after the dismal performance of 2008, the fund increased 56% in 2009, the best year in its history.
Claugus is opposed by nature, often lags behind when others earn easy money and triggers when others panic, this investment experience in mirror image was clearly evident in the last year of the technology bubble (1999) and its consequences. Claugus actually made a small loss in 1999 when the S & P 500 went up 21%, but then made big gains during the big bear market from 2000 to 2002, the only obvious exception to avoid underperformance in a bear market was the financial crisis of 2008 when Claugus lost money like most others.
Even when Claugus is doing well during the strong stock market years, the source of earnings may be contradictory. For example, Claugus achieved an annual composite return of 18% during the 1990s (its fund was launched in 1993). ), not because of the constant rise in share prices, but because of a net gap during the entire period. The highly differentiated exposure levels of Claugus (as opposed to most hedge funds) have been one of the characteristics, in addition to the solid long-term yields, that have attracted investors, particularly those who manage Multi-fund portfolios, the Claugus hedge fund company, GMT, currently manages $ 5.0 billion in its Bays onshore and offshore funds.
Claugus is based in Atlanta, where I met him a decade earlier when he gave a talk to a group of regional hedge funds, the Claugus interview was conducted when he came to New York City to attend a conference.
Originally posted 2019-06-24 22:58:27.