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.”


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…

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 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…