Here are some recent questions we’ve received from investors who want to invest in the 10,000 Days Fund LP. If you have any questions that you don’t see on here or just want to start a dialogue with Cody about the hedge fund, please email email@example.com.
Q. Regarding the hedge fund, are you most likely going to start off purchasing some of the current investments you hold in your personal portfolio?
A. Yes, I’ll likely start off purchasing some new picks as well as some of the core holdings in my personal portfolio.
Q. Are you keeping your personal portfolio and continuing to buy/sell within that? If so, will we receive trade alerts as well?
A. Yes, I’m keeping my personal portfolio but I won’t be buying new positions or adding more cash to it any time soon. I expect there will be only trims and/or closing of existing positions in my personal portfolio after the hedge fund launches.
Q. Will there be another round, say in a few years, to be an investor of your hedge fund?
A. The General Partner may admit Limited Partners, or, accept additional capital contributions from existing Limited Partners or the General Partner (collectively, the “Parties”), on the first Business Day (as defined below) of each month and at such other times as the General Partner may, in its sole discretion, permit.
Q. “I’ll be providing TradingWithCody.com subscribers all of the same analysis, latest positions and Trade Alerts every time I buy or sell anything in the hedge fund.” Could you clarify “before” or “after” you buy or sell [or short] anything in the hedge fund?
A. I’ll send out the Trade Alerts as or immediately after I buy or sell anything in the hedge fund. Same way I’ve always done it with my personal portfolio since I launched TradingWithCody.com long ago.
Q. What is the benefit of being in the 10,000 Day Hedge Fund and paying the extra fees versus being a Trading with Cody Subscriber?
A. There are several. First of all, instead of having to invest in all of the picks I make and then having to trim, nibble and/or close those positions over time, you’ll be assured that I’m actively making any new moves that will help maximize gains while minimizing risks. I’ll also be investing and trading some cryptocurrencies and crowdfunding assets that will require accounts at various platforms and having an intense focus on understanding each market where cryptocurrencies and tokens trade. For example, many of my TradingWithCody.com subscribers would have loved to have joined me in buying Bitcoin when it was at $100 back in 2013 but it was too hard for most of them to figure out how to, so few were able actually do so. I do expect to earn those fees with hard work, objective analysis and active management of the portfolio across equities with a some cryptocurrencies/tokens and some crowdfunding assets. The 10,000 Days Fund LP much more than just a long/short equity portfolio.
Q. Is it possible to put the 10,000 Days Fund inside an IRA?
A. Yes, it is possible to put the 10,000 Days Fund LP inside an IRA.
Q. Assuming the 10,000 Days Fund will use leverage as part of its investment strategy, would this complicate or make it impossible to hold it inside an IRA?
A. No, we won’t be using any leverage (and yes, it would complicate it, but not make it impossible to put the 10,000 Days Fund LP into an IRA.
Q. Is it possible to lose more money than is invested in the 10,000 Days Fund?
A. No, it’s not possible to lose more money than is invested in the 10,000 Days Fund LP.
Q. What are the tax implications of the 10,000 Days Fund?
A. Pretty standard tax implications like any other investment you might have.
Q. Are profits distributed on a regular basis or is each partner responsible for deciding when to take withdrawals after the 3 year lockup?
A. Each partner will be responsible for deciding when to take withdrawals (if any) after the initial three year lockup. That said, I expect that most of our partners will never take any withdrawals for many years.
Q. What kind of tax reports are submitted to partners? (I have always done my on income taxes, except for the trust I inherited).
A. Standard S-1 tax reports are submitted to partners in a timely fashion after each year.
Q. Can lockups be re-instituted after the 3 year lockup as in the movie The Big Short?
A. No, we won’t be re-instituting any additional lockups.
Q. Is there a “highwater” mark?
A. Yes. At the end of each fiscal year, 20% of the net profits (including net unrealized gains) allocated to the capital account of each Limited Partner will be reallocated to the capital account of the General Partner (the “Incentive Allocation”), subject to a loss carryforward provision (sometimes referred to as a “highwater mark”).
The General Partner will be allocated the Incentive Allocation as of the end of each fiscal year. In the event that a Limited Partner makes a complete withdrawal or is required to make a complete withdrawal at any time other than the end of a fiscal year, the General Partner will allocate the Incentive Allocation with respect to the withdrawn amount, on the applicable withdrawal date as if it were the end of the fiscal year.
Under the loss carryforward provision contained in the Partnership Agreement, no Incentive Allocation will be made with respect to a particular Limited Partner’s capital account for a fiscal year until any net loss previously allocated to such capital account has been offset by subsequent net profits. The loss carryforward attributable to a particular Limited Partner’s capital account will be reduced for withdrawals on a pro rata basis.