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The First Results Are In... And Hedge Funds Appear To Have Missed The October Rally
Just two for now, but something tells us this is quite representative of the overall industry:
- Third Point Offshore Fund, Ltd.: October Net Return +0.8%
- Absolute Return Capital (ARC) – Bain Capital, LLC : October Net Return +0.7%
More as soon as we get the Month End HSBC report.
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How the hell do you only net less than 1% in October? What morons give these people their money?
Well, they are probably trying to make rational investments. Which doesn't get you anywhere anymore except fucked.
Ding, ding, ding.
For me a difficult lesson learned in the 1st Q of 2011.
Me three. Value investing got smacked down this year.
Flight to ponzi bitchez !!!
"Flight to ponzi bitchez"
That is freakin hilarious, coffee meet keyboard
Too many shorts on fundamentals alone instead of complementing it with basic intermarket and technical analysis for short covering rallies.
Also, size and liquidity is an isssue. Most of the money that has flowed into hedge funds post-2008 financial crisis and after thousands of hedge funds went bust has been institutional money. So, while many hedge funds went bust, the ones that survived got bigger and likely less nimble in being able to change strategy (due to cost aversion alone, for example).
Anyway, what will be interesting is what the leaders post: Bridgewater Associates, Brevan Howards, Blackrock, Highbridge, Man, Renaissance, Fortress/III, Cerberus, Appaloosa, Tudor et al. Also, Hugh Hendry's Eclectica would be nice. Some (many) of these are not in the HSBC list.
I actually try to hedge for myself, and I didn't do all that well either.
Some of the big dogs did better, but if they have their noses in to many peoples shit,they can only get some liquidity. This CDS shit for the pigmen, is a serious issue.
We need a CDS event so that CDS goes into the shitter where it belongs. This bullshit ponzi needs to get readjusted at the top.
Big dog market makers like this volitility. THe derivatives are insurance products. High vix makes them cost more, big dog makes coin, investors just try to protect and stay level. ONce bitten twice shy.
No 'Exp.' numbers? Would be interesting..
A good set of data to monitor for hedge fund performance is the HFRX stuff put out by Hedge Fund Research. A lot of their HFRX indices are updated daily, and they break down by fund types. I watch that daily and it's crystal clear that in general hedge funds, even the mouth-breathing long only ones, did not capitalize on the rally. It wasn't them doing the buying.
Link: https://www.hedgefundresearch.com/hfrx_reg/index.php
They also put out another set of indices called HFRI with a different methodology, but those come out monthly.
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DOH!
Well my question would be, who was doing the buying if these guys weren't?
Why does "1%" come to mind?...
THAT truly is the question. Who was buying to push the market up 20% in three weeks?
you've heard the terms, "overbought" and "oversold" ...well so have some speculators
Obviously they didn't listen to the Robo.. Geez. How stupid of these hedge funds to not capitalize on his uber-bullish and day-late predictions!
That 2 and 20 is worth the price.
Are these par performance values or ratios reflective of the fund value depressed by money walking out of the market?
FEMA Camp Lincoln -- run by FEMA for the people, comrades.
... you been warned.
Maybe they are following the original purpose of a hedge fund - protecting capital as much as possible from risk but thereby foregoing huge gains.
...hahaha yeah right
In other words, HF's did the right thing and protected capital from the casino.
Greenlight was up 7.8%!!!! BOOM
Operation Twist began first day of October. What a crazy mess the Fed has created.
yes if i was an artist i'd paint something very pear-shaped covered in shit riddled with maggots with a cheap plastic toy made in China of Benny plumped on top of it
...but that's Central (monopoly) Banking and their interventions in economics and the markets for you through history, Ho Hum!
Greenlight was up 7.8%!!!! BOOM
On gmcr short
Well its too late to get your money back now, let's see how the rest of the quarter goes. I would guess this means that they didn't buy the rally which means when the market goes its going to go hard since the hedge funds aren't supporting this valuation. Maybe Bernake can help
Double up to catch up bitchez
The HFTs bought last thursdays Bull Flags .
Poor hedgies. They will only get 1/12 of 2%, plus 20% of 0.8%. Makes you wonder:, in September did they get 20% of the losses? Do they roll forward? How many periods do they put together to calculate profits for their 20% take? Do they just call negative periods zero, and charge the full amount the next month / period? That would be quite a hosing!
Most of the ones I've seen have a fixed performance base that gets reset (and paid) at the end of the calendar year if the performance base is exceeded. So yeah, they would be "giving back" all or some of the YTD performance earned up to the end of August if September was a down month for the fund. Edit: Also, the giving back of performance earned will skew the return of the fund for that month and make the performance look slightly better for that month (so if every single fund is down 5%, the one fund that is giving back performance might end up being down 4% but it's not because they were better than everyone else for that month).
No problem if they missed the bull run - they can now ride down the coming crash.
Time to short hopium and go long reality.
I missed the rally too, but I don't regret. However I think Robo got her money back with the rally.
Bain ARC is up +17% this year to end Oct.... I'll take that any day. They were up almost 6% in Sept... Not too bad, so I wouldn't judge just based on the Oct result.
Hedge Fund managers tend to invest on what they think should happen, rather than what is happening (as the market currently dictates).
Having an $ XXX billion fund, that has specific investment metrics to adhere to must be a potential nightmare at times like this.
Let me defend BainCapital as a recent ex-employee. Left to do my own thing in June after 6 years at Brookside..
ARC is our 0 beta fund. It doesn't do stocks. It bets spreads in different commodities and currencies.
You need the numbers for Brookside. That's Bains long short equity fund.
I don't have the numbers yet. I will admit they have moderately underperformed in the last 2 years because they tend to run 65% net long and Alpha has been low recently. BUT if you look at the 10 year track record it's astounding.