海角大神

I think the performance of so-called hedge funds as a group wouldn't be so roundly mocked and scrutinized if:

a) there weren't so many of them and...

b) their compensation wasn't so incredibly disconnected from what they've been able to deliver and...

c) they actually lived up to their nomenclature and actually hedged

But there are like 8000 of them and they charge more than double what traditional asset managers are able to and not only do they not hedge - it turns out that a great many hedge funds are really leveraged, highly concentrated vehicles that put on big positions and lever up to magnify them in the quest for a grand slam.聽 There's nothing wrong with a fund's portfolio being constructed that way if that is the manager's strategy - but let's please stop referring to that as "hedge funds" lest Alfred Winslow Jones continue rolling in his grave until he bores his way to China.

Here's a stat you may not have seen in your post-holiday comings and goings, but it is one that should never be forgotten...

From FT Alphaville:

To recap, years like 2011 are the exception not the rule - high volatility and a year of massive swings is an almost impossible climate for a traditional asset manager to navigate more than in a middling fashion.聽 Guys like me with clients planning for retirement are tasked with a mission of getting out alive and in one piece.聽 But hedge funds were supposed to have been able to thrive in a year like 2011.聽 That is how they typically present themselves and the exploitation of volatility along with non-correlated returns is the assumption for most hedge fund investors.

When looked at in this context, it is impossible to escape the conclusion that hedge funds as an asset class have just failed their final exam.

Here at TRB we root for everybody to find their way into successful investments and investment vehicles, no hating is the primary rule.聽 But I mean, come on!