Pondering Hedge Funds In The New Market Zeitgeist
Will the Long/Short crowd dump more stocks and exacerbate the ongoing market turmoil/chop? Yes! No! I don't know, maybe!
We've reached that manic stage where every other article in the mainstream financial press revolves around trying to find out who was selling or who might be inclined to sell next. "We have found a witch, may we burn her?!"
The latest example of this is a Bloomberg piece out Sunday evening and "updated" on Monday (although I'm not even sure what that means in thi
The “hedge” in hedge funds was really a joke. For many it didn’t pay to hedge. For many the firm was gone so it became a moot point. What was left was a lot of long growth/momo funds. And we saw what happened, being offsides when reality hit. Hopefully we get back to true hedge funds. The carnage has left some opportunities. Who knows where the bottom is but if one buys something for less than it is worth and shorts the stories and dreams and the inputs are reasonable and the investor base has a reasonable time horizon the returns in a non QE environment will look really good.
I for one have waited for this change, I think rationality is finally back.
These articles are written as if they are going to find their way into a mystery novel. Hedge Funds in aggregate have too many assets, the factors that make it an alpha winning gambit has almost disappeared and now there are redemptions galore. The smart money has simply stepped aside to buy the stocks that must be sold at lower prices and when the calendar shifts much of the liquidation will be complete. It is as simple as that!!!!