Jean Mrha Beach is not your normal emerging commodity trading advisor (CTA). Although her proprietary trading record only goes back to April 2010 and CTA Tlaloc Capital only became registered in June, Beach has spent the last two decades trading and hedging in commodity markets. She was head trader of Enron’s daily swap and options book for natural gas in the late 1990s before heading up Enron’s broadband and upstream products units. Most recently Beach ran trading and risk management in grains, meats and energy for Tyson Foods.
"I like the fact that I am setting up my own firm with my own culture and can have more control over my own destiny," she says.
While going from heading up a trading unit for one of the largest meat producers to running a two-person emerging CTA seems like a huge transition, Beach says there are a lot of similarities.
"What I always have done in my career is build businesses. At Enron I built the gas daily swap and options book [and] led the infrastructure efforts around Enron broadband services. At Tyson there was no trading or risk management department [before I arrived]," she says. "I always have been attracted to those challenges that give me an opportunity to build something out of nothing."
The Tlaloc program takes a short-term fundamental approach to trading that focuses on information flows. The discretionary program trades corn, but Beach plans on expanding to soybeans and wheat. The program earned 34.83% in 2010 trading proprietary capital and an allocation from her father-in-law, and is up 13.68% in 2011 through August in what has been a volatile corn market.
The program is fundamental and discretionary but looks at technicals and money flows. "You have to be cognizant of the money flows because they can create distortions or opportunities in the market. Also, if you have a position on opposite of what the money flows are going to do, you are going to get run over," she says.
Beach’s experience at Enron and Tyson helped her understand factors affecting the market. "Being inside a significant protein processor like Tyson Foods, you get a perspective of how commercial end-users think," she says. "At Enron, what you did, you [did] to make money and what it taught you is how to get information out of the market and how to trade off of that information into hopefully a profitable position."