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The Invisible Hands: Top Hedge Fund Traders on Bubbles, Crashes, and Real Money, Revised and Updated by Jared Diamond, Nouriel Roubini, Steven Drobny

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Chapter 9

The Commodity Hedger

“The Commodity Hedger” has had a long and varied career in both commodities and broader financial markets, having traded most products available to investors today. From feed lots to grain elevators to barges on the Mississippi to trading desks in the Midwestern United States, Asia, Switzerland, and New York, she places good risk/reward bets in energy, metals, and agricultural commodities, as well as currencies, interest rates, and equities.

She is the Commodity Hedger because of her ruthless attention to risk management, which she implements through the consistent use of risk collars on all large trades, a practice that would have saved real money players a considerable amount of money in 2008. She thinks she might be well-suited to run a real money fund because of her natural long-term investment horizon, and she says real money players should pay much more attention to cutting off their downside tail risk.

Her hardscrabble Midwestern American roots have given the Commodity Hedger as much general business acumen as trading skill, enabling her to launch her own proprietary trading group inside of Cargill, one of the most powerful players in global commodity markets, and more recently her own hedge fund. She has had about 20 different addresses in the last 30 years, and her extreme versatility and flexibility are partly what allow her to express trades in a multitude of ways. She runs her current hedge fund out of a loft in downtown Manhattan, the ...

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