Wednesday, January 20, 2010

Poker's golden boy - The Age - 20th January 2010

THE Aussie Millions poker tournament brings many characters to Melbourne, but few would have thought Crown would become a centre for trading in gold and silver futures for two weeks.

Among the contenders for the Aussie Millions is Daniel Shak, who operates a New York-based hedge fund called SHK Asset Management that trades exclusively in futures contracts in precious metals.

Shak is one of the few men in the world to specialise in precious metals futures, and he trades with the biggest gold and metal producers. They hedge using contracts that are traded through the New York Mercantile Exchange, which is now owned by the Chicago Mercantile Exchange.

''The world's biggest gold and silver producers and users trade these contracts, and I am one of a select few market makers. I am one of the very few people willing to sit down and make a market in any spread transaction. It's a niche market, but it's my niche.''

Due to a quirk in international airline scheduling, Shak is in Melbourne for two weeks, to avoid being in the air and unable to trade while markets are open.

''The work hours in Melbourne for me are midnight until 6am, when the markets in New York are open,'' Shak says. ''I then sleep to midday, and play poker.''

Shak started SHK in 2002. ''I can say 2008 was a difficult year. We were down about 12 per cent but most of my investors stuck by me,'' he says. ''In 2009 I was up about 20 per cent, so that was a good year.''

So what does Shak think about the gold price? ''Never try to pick the price of gold,'' Shak says. ''History shows it takes a year to go up, and three days to go down. Same with silver. That said, right now I'm marginally long.'' (Credit: The Age)