Dangerous Fund I

by Johnny Debacle

Tinderbox Capital LLC, an incendiary investment management firm and subsidiary of Long or Short Capital LLC, announces its first fund, Dangerous Fund I.

Dangerous Fund I will specialize in positions that lack defensible absolute return theses. Assets will be allocated so as to leverage Tinderbox Capital’s expertise in trades of which they have little understanding, so-called “dangerous” trades. These trades will include vega convergence bets, investments in opaque levered pass-through instruments, naked red/black hedge trades, and proprietary coin-in straddles. Their due diligence process will include a rigorous “bottoms up” analysis that is comparable to the processes of Fairfield Greenwich Group and other top investment management firms.

Tinderbox Spokesman Johnny Debacle:

“We see a clear need for an investment vehicle for people who want to lose all their money. Competitors out there have lost on average 30-40% in this cycle. We think we can lose more, especially with our so-called ‘dangerous’ trades. Our trades are dangerous because we don’t fully understand them. Frankly, we may not understand them at all. Take a vega convergence bet wherein we form a pair trade with options with two assets with similar, but not the same, underlying. We make that trade and we’re pretty sure something happens, we just don’t know what that is. Does anyone? I may not have the details of that trade correct either. That is a core strength of our investment process.

Scores and Scores of bottoms up due diligence will strengthen everything we do. We aren’t content to just sit on our haunches, while someone else just dances about doing work on our junk [bond portfolio]. No, we plan to do that and more, which is what makes our “bottoms up” approach so powerful. We will spend money and get the most bangs for your buck. We will get our hands dirty and our pinkies stinky if that’s what it takes to better understand the trades we make and ascertain their appropriateness.

We know that young risk-seeking investors demand places to put their money to work, places where they can allocate $10,000 and potentially lose it all. This is the niche that Dangerous Fund I will fill. We give you all the risk you will ever need and guarantee that we will potentially lose it all. Additionally, Dangerous Fund I will be appropriate for investors whose portfolios are overweight return and underweight risk and are thus seeking proper balance.

We just need your money to fuel our fire.”

Tinderbox Capital LLC is an investment firm that offers a focused set of investment products to a global institutional and high net worth client base. Tinderbox Capital LLC is currently structured to directly manage strategies in so-called “dangerous” trades. Despite this structure Tinderbox Capital is uniquely unqualified to manage your money well and uniquely qualified to manage your money poorly. You would do well to simply light your money on fire instead because at least then you get the benefit of the heat it generates. Or you could just wait for Dangerous Fund II which Tinderbox Capital LLC is in the process of registering. It will seek to disintermediate the middleman from the process of lighting money on fire by physically igniting investors’ dollars for them. It will charge a traditional 2 and 20 fee structure.

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  1. HF
    June 23rd, 2009 | 11:14 am

    Does the fund send out letters to investors? And what about alocation limits? Can the fund lose all the money in a single investment or it must diversify its losing investments?

  2. June 23rd, 2009 | 11:43 am

    These questions are all answered in the prospectus. But yes diversification is key.

  3. Bean Counter
    June 23rd, 2009 | 12:28 pm

    You mention “naked red/black hedge trades” as part of the investment “strategery.” Will other trading moves include “rolling the dice,” and/or “standing on 17 and above”?

  4. June 23rd, 2009 | 1:30 pm

    @ Bean Counter

    From my knowledge of the prospectus, “dice rolling” may be part of the strategery, however, nowhere does it say anything about sticking on 17.

  5. June 23rd, 2009 | 1:43 pm

    Bean Counter-

    Although it’s proprietary so we can’t get into get into the technical details, we will still admit that our coin-in straddle trades are put on to diversify away from table games.

  6. Allon Redorblack
    June 23rd, 2009 | 2:12 pm

    I’m in! where do I wire funds?

  7. Patrick
    June 23rd, 2009 | 6:08 pm

    Finally, a hedge to Hold Your Breath Funds.

  8. MGW
    June 23rd, 2009 | 10:02 pm

    I would like to invest, but I need to pay with a cashier’s check from my Nigerian bank. The check is for $100k, but I only want to invest $50k, so please wire me the difference.

    Thank you for your help.

  9. June 24th, 2009 | 8:49 pm

    Reminds me of SKF and/or any of Proshares’ levered ETF funds.