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Hedge Funds Not Doing Well this Year
Posted by: | CommentsAn interesting analysis from Berry Ritholz’s The Big Picture:
Ritholz's Book
At Hedge Funds, Breakeven is the New Black
The article highlights how many hedge funds have under-performed the market in 2011.
From personal experience managing funds, I can concur with the tribulations of many hedge fund managers regarding 2011. The one strategy that seemed to work very well this year – buying on new lows – would be something very few investors would do. Typically, that strategy destroys a portfolio and therefore few would do it.
However, one wonders if people had advanced knowledge of European headlines because after July, headlines from Europe have driven the market for the most part. How anyone would know to buy and be redeemed by a subsequent positive headline is beyond me. I do have to give kudos to short term and options traders who follow sentiment and short term extremes in psychological and technical ratios. They appear to have worked well for many of those guys. However for some value managers, some momentum managers and some breakout managers, this year has been rough.
Druckenmiller
As an addendum, I point to this story from last August about Stanley Druckenmiller, former George Soros trader and super successful hedge fund manager in his own right quitting after saying he couldn’t reproduce his past returns in the current market climate:
So You Think You Made Money in Stocks? Think Again
Posted by: | CommentsFrom Dailywealth:
You’re probably pretty happy that your stocks went up over the last 2 months. However, looking at the following chart:
Gasoline Prices Compared to the Stock Market
Should make you realize that you really haven’t made ANYTHING over the past 8 months due to Uncle Ben Bernanke. You see, with his proposal for “quantitative easing” (or “money printing” -see awesome cartoon explanation of QE here), Ben has basically smacked down the value of the US dollar and therefore, any gains you’ve made have been offset by the drop in purchasing power of the dollar.
What is Dailywealth saying here?
Right now, you’re breaking even. If the market drops and we still have price increases, you will get poorer. What’s your plan to preserve your purchasing power and quality of life? You better have a plan.
Hope this gives you something to think about and thanks for stopping by.
If you’re looking for a plan to protect yourself from a drop in the value of the dollar, consider a conversation with me. Learn more about me including links to my professional sites here: About Chris Grande
Bill Gross Says Bond Bull Market is Over
Posted by: | CommentsFrom Financial Advisor Online:
“Gross, a founder and co-chief investment officer of PIMCO, said in March that bonds may have seen their best days while making an argument for investors to own fewer. He reduced holdings of government-related debt in the Total Return Fund for the third straight month in September, after the securities accounted for 63% of assets in June, the highest since it held an equal amount in October 2009.”
Bill Gross is the manager of the largest fund in the world, the Pimco Total Return Fund. He has benefited from a 30 year bull market in bonds. Interest rates have fallen since 1980. Look at the chart here: Read More→
Friday Lunchtime Market Update from Northern California
Posted by: Chris Grande | Comments (0)Sitting in my mobile office (anyplace with nice seating and wifi – today it’s Starbucks north of San Francisco) I have been doing some work and keeping an occasional eye on the market.
So far today, the market is blah, with that lukewarm tea flavor (the kind you spit out). There are individual cases of strength (Rock Ten (RKT) – which I Read More→