For many traders and money managers, the past month of market volatility and panic has been a flashback to the most hectic times of their careers — the 2008 financial crisis.
But for Marwan Younes, the founder of $233 million macro fund Massar Capital, he's using his experience growing up in a war zone to keep calm during the stormy markets.
"Growing up in Beirut during the Lebanese civil war in the 1980s meant regular disruptions to daily life, with running water and electricity an unpredictable luxury, while lockdowns and school cancellations were frequent at times of intense bombing. As it happens, that skepticism in orderly behavior was further reinforced early in my professional trading career as a portfolio manager, allowing me to successfully navigate through the 2008 financial crisis," Younes wrote in a note to investors on Tuesday.
"This background naturally shapes one's outlook to be highly defensive, based first on maximizing the odds of survivability, instead of the natural impulse to maximize profits."
It's paid off, as Massar is up more than 14% as of the end of the day Monday, and finished last year up more than 23%. The firm focuses on commodities, an area where some hedge funds have done well through this market turmoil.
Still, the average hedge fund has fallen more than 5% for the year, and big quants like Schonfeld and Bridgewater are feeling pain reminiscent of the 2007 "quant quake".
Younes gave investors updates on how the firm was thinking about investing and continuing to operate throughout the pandemic caused by the novel coronavirus. On the operations side the firm has invested in cloud-based infrastructure to make sure it can continue working during government-mandated shutdowns.
On the investing side, he wrote that the firm has maintained its "net bearish stance" on oil. He expects "lower energy prices to infect high yield, further pressuring equity markets in a negative feedback loop."
"We are in unprecedented times, and the conventional tools to quell the market's volatility are showing their limits. We expect this trading environment to continue," he wrote.