Charting The High-Beta Horror Of Hedge Funds

Tyler Durden's picture


Two weeks ago we highlighted the dismal performance (and massively over-crowded momentum factor tilt) of the 2-and-20 crowd relative to a passive equity ETF investment over the past few years. The reality is, in a Central Bank systemically-driven, high correlation, low dispersion world, the herding of hedge fund cats (with expert networks now dead) leaves them massively over-exposed and chasing the same relative returns as their mutual fund index-tracking peers - for fear of the career-limiting (Tilson-esque) miss of the great bull market's next leg. Apropos of this, Goldman's index of the most-widely-held stocks by hedge-funds is back to levels not seen since March 2009 and down a whopping 7.2% in Q2 of this year as all that momentum fades. Interestingly JNJ is the most widely held (by $ amount) short among hedge funds and of course Apple is the most widely held long.


Most widely held longs...


Most widely held shorts...


Source: Goldman Sachs

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Wed, 07/25/2012 - 14:53 | 2650264 Meesohaawnee
Meesohaawnee's picture

High beta horror? not sure about that. We  got an Iramp job. No horror when ben has your back.

Wed, 07/25/2012 - 14:55 | 2650272 Concentrated po...
Concentrated power has always been the enemy of liberty.'s picture

0.2 & 2.0 bitches!

Wed, 07/25/2012 - 14:58 | 2650291 Lost Wages
Lost Wages's picture

Hedge funds are a bunch of high beta whores, am i right guize?

Wed, 07/25/2012 - 15:24 | 2650429 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

One might say they're Master Betas.

Wed, 07/25/2012 - 15:26 | 2650441 Strut
Strut's picture

One might say they're iMaster Betas.


There fixed it for you

Wed, 07/25/2012 - 15:00 | 2650298 HD
HD's picture

Now that all the easy QE is gone - I wonder if the Street will slowly but surely rebel against the Fed. Keeping the S&P at 1400 is meaningless if it doesn't stop client outflows or stop job losses on wall street.

Wed, 07/25/2012 - 15:01 | 2650300 firstdivision
firstdivision's picture

WTI shooting for the moon on the anticipation that next week the build in inventories will be even greater.

Wed, 07/25/2012 - 15:03 | 2650308 Duke of Con Dao
Duke of Con Dao's picture

I really should stay on message here and roll out yet again the Goldman Bloody Skull Hood Ornament scene but I think you all want something different:

YouTube - MIDGET v. GIANT: You Didn't Build That, James Dean! says President Obama

here our President questions Jet (James Dean) on the very creation of JETEXAS OIL...   


Wed, 07/25/2012 - 15:44 | 2650495 Ura Bonehead
Ura Bonehead's picture

You know, I guess I really should feel concerned that I am long many more of the Hedgie's top 30 shorts than I am their top 30 longs.  But you know what?  I don't.  In fact, I feel pretty comforted.

Wed, 07/25/2012 - 16:06 | 2650582 Eastwood
Eastwood's picture

The most widely held shorts are the biggest of the mega / large caps. Of course these are going to show large dollar-wise amounts because 1% of $ 398 BB US is still almost $4 BB US. Who cares.

Wed, 07/25/2012 - 16:55 | 2650610 magpie
magpie's picture

and still the S&P decides to close @ 1337

so its going to be down to Rothschild vs. Lukashenko lol

oh and i was never under the illusion that it could be stopped, but this way others will be able to utilize the 'creative chaos' as well.

& Kudos for 'The Bankstor Self-Defence League' lol

achtung musik

Wed, 07/25/2012 - 16:32 | 2650690 Eastwood
Eastwood's picture

Isn't ZH talking smack directly at over half its members with this post?

Wed, 07/25/2012 - 16:41 | 2650714 doc_in_the_house
doc_in_the_house's picture

how many hedge funds (gambling funds)

are LONG...flopbook (FB)? LOL !!!

I bought mine at 26 and change and dumped them all @ $30 = small profit....watched them go to $32, $33...= me did NOTHING....BUT NOW....AH, they are down from $29 to $26 and change !!! LOL!!! down AH bc zynga missed earnings...LOL !!!

i'll gladly buy flopbook @ LOW 20s for a FLOP (flip) to $25. LOL !!! @ the stupid performance chasers who bought in the low 30s...AND those that bought @ $40s when IPO...LOL !!!!!

Wed, 07/25/2012 - 16:51 | 2650765 I should be working
I should be working's picture

I don't understand most of the shorts.  KO, JNJ, CVX?  I guess the idea is dividend stocks are overbought, but why does anyone think this is on the cusp of changing?  I doubt they have the inside scoop that Bernanke will raise interest rates.

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