The Problem With ‘Simple’ Markets
“The only people who don’t think this market is simple are hedge funds and perma-bears who try to make it complex. Yet even as they are continually wrong, they are right.”
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‘Swashbuckling’ Pirate: It’s Your Fault That Macro Fund Managers Suck At Their Jobs
“More generally, however, many macro funds aren’t structured to make money by “trading macro.” Investor pressure to deliver steady returns has taken macro traders away from making big-picture bets on economic and policy developments.”
If Buffett Were Trading Macro, He Would Have Been Fired, ‘Swashbuckler’ Says
“What if Warren Buffett’s Berkshire Hathaway had a 12% annual stop loss, after which it would quit trading until the new calendar year?It turns out that Buffett would have been stopped out in 18 of the 30 years.”
Hedge Fund Long Stock Exposure Tags Record At $1.36 Trillion
“Based on the quarterly 13F filings and estimated short positions of the equity holdings of 952 funds, we estimate that hedge funds’ net stock exposure increased to $792bn notional from $730bn QoQ, surpassing the Q2 2015 peak to a record high. HF long positions stood at $1.36trillion notional at the start of Q2 2017, tied with the Q2 2015 high.”
Chart Of The Week: Some Folks Are Trying To Pick Stocks Again
Right, so the thing about “alpha” is that it’s really fucking hard to generate when benchmarks only go up. Throw in the rampant proliferation of retail-friendly vehicles that track those benchmarks at a cost of just a few basis points in fees and you’ve got a veritable nightmare scenario for coke-sniffing, Perrier-Jouët-chugging, “2 and 20”-charging, Hamptons…
Mutual Funds Versus Hedge Funds: Where They Agree And Disagree
Recently, I wrote some stuff about hedge funds and mutual funds. If that’s the kind of thing you’re into (or if you want to read about hookers, groupies, Xanax, cocaine, and Maseratis) you should check out these two posts: Hedge Funds Are Still Trailing The S&P And Cocaine Ain’t Gettin’ Any Cheaper 2/3 Of Growth…
Hedge Funds Are Still Trailing The S&P And Cocaine Ain’t Gettin’ Any Cheaper
Regular readers know we think it’s a cryin’ fuckin’ shame that low-cost, passive investment vehicles that track benchmarks inflated by the post-crisis central bank liquidity tsunami have all but relegated active management to the dustbin of history. As we wrote in “One Manager Warns: ‘Today’s Weapon Of Mass Destruction Is A 3-Letter Word: ETF,‘” it’s almost as…
One Manager Warns: “Today’s Weapon Of Mass Destruction Is A 3-Letter Word: ETF”
“The weapons of mass destruction during the Great Financial Crisis were three-letter words: CDS (credit default swap), CDO (collateralized debt obligation), etc. The current weapon of mass destruction is also a three-letter word: ETF (exchange-traded fund). When the world decides that there is no need for fundamental research and investors can just blindly purchase index funds and ETFs without any regard to valuation, we say the time to be fearful is now.”
Hedge Fund Performance Is (Still) Improving! Everyone (Still) Doesn’t Care.
Earlier this month, we brought you “It’s Probably Too Late: Hedge Fund Performance ‘Improves,’ But Market’s Patience Is Gone.” In it, we highlighted the fact that hedge funds’ risk-adjusted performance is actually improving. But we also noted that at this point, it probably doesn’t matter. The passive/active ship has sailed. That horse has left the…
Exposing The Real Reason Active Managers Can’t Perform: “It’s Not You, It’s Me”
“In the meantime, active managers might need a bit of therapy to restore their relationship with the market.”
“These Strategies Just Aren’t Working Anymore” – A Simple Explanation For Underperformance
“Much like their equity counterparts, macro traders are struggling because some of their favored strategies just aren’t working any more.”
Hedge Funds Suffered Worst Short-Squeeze Since 2009 In Q4 Amid “Trump Rally”
So the thing about “hedge” funds is that generally speaking, they’re supposed to provide a hedge. That is, you don’t really want to be paying exorbitant fees to coke-sniffing, Hamptons-dwelling, Maserati-driving, “rockstar” managers if they can’t provide better risk-adjusted returns than the market. Well, we all know that in the post-crisis, central bank-driven environment where…
It’s Probably Too Late: Hedge Fund Performance “Improves,” But Market’s Patience Is Gone
As we and plenty of others have documented extensively, the allure of “rockstar,” coke-sniffing, Hamptons-dwelling, hedge fund managers is disappearing rapidly in a world where trying to beat benchmarks means trying to figure out how to outperform a broad market that’s backed by $400 billion in quarterly central bank liquidity flow. Simply put: the “2…
This Is Why The “Pros” Are Short Small Caps But Long The S&P
Over the weekend, I said the following about the most recent CFTC data which showed specs going net short Russell 2000 minis versus increasing long S&P futs to the highest level since September: I’ve noticed over the past couple of days that some commentators are cherry-picking the latest CFTC data which, as Bloomberg notes, shows…
“There’s No Diversification”: When This Ship Sinks, We’re All Going Down With It
” However, the correlation with S&P 500 varies substantially among different HF strategies. Short Bias is the only strategy that offers negative correlation or most diversification effects.”
