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Dennis Trading Group Pulls the Plug on Fund

October 04, 2000|Bloomberg News

How tough is it trading commodities these days? Tough enough to knock a master out of the business.

Richard Dennis, a futures trader who used a method of technical analysis to attract as much as $350 million to his commodity fund, is closing the fund after losing money most of this year.

Dennis Trading Group Inc. will liquidate customer accounts this month and stop trading for outside investors, the company said in a statement. Dennis, 51, hasn't decided whether he'll trade his own money in the future, spokesman Burt Kozloff said.

Dennis parlayed a few hundred dollars in the 1970s into a fortune on the Chicago Board of Trade and the Chicago Mercantile Exchange that was estimated at $200 million when he retired in 1988. Dozens of traders used his method of tracking historical price patterns to make money in commodities.

"His methodology did an enormous amount to make commodity futures an acceptable way to get well-funded investors involved in markets that had been considered highly speculative," said Jacob Morowitz, head of USA Trading in Chicago.

In a statement, Dennis said his fund's performance in the last year has been "disappointing." So far this year the fund is down 37%. Since May 1995 it has had compound annual growth of 27%.

The fund's assets under management peaked in June 1999 at $350 million, Kozloff said. As of last Friday, the fund had $79 million.

Dennis, who started as a CBOT runner in the 1970s, had amassed a personal fortune by the 1980s in markets where many traders struggled to eke out a living.

Dennis retired from trading in 1988 amid reports that funds he managed lost as much as $20 million after the stock market crashed in 1987. In 1990 he admitted no wrongdoing in a settlement with investors. He returned to the money management business in 1991.

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