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Mid-August Complete Hedge Fund Performance Update

Tyler Durden's picture




 

If your last name starts with 'Paul' and ends in 'son', we suggest you skip the post. For everyone else, we may as well call this latest HSBC hedge fund weekly update the schadenfreude yellow pages. Who would have thought that with all the traditional lowers, that Rentec's RIEF B would be taking names at up 20% YTD.

Full report:

HedgeWeekly2011_No34

 

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Tue, 08/23/2011 - 18:23 | 1592432 Pladizow
Pladizow's picture

Nothing super impressive on the top side.

Would hate to be paying 2% on the bottom side.

Portfolio of PM's would probably give the tops a run for their money and without the 2 and 20.

SLV = 38% YTD

GLD = 31% YTD

Buy physical and FUCK WALL STREERT, THE BANKS AND WASHINGTON.

Tue, 08/23/2011 - 18:57 | 1592525 Downtoolong
Downtoolong's picture

There is only one red flag warning against gold ownership today. No, it is not the fact that the price pulled back $25 oz.

Cramer is recommending it:

http://money.msn.com/top-stocks/post.aspx?post=8902e230-9317-4ec1-833b-ed35df98ca01

Tue, 08/23/2011 - 19:01 | 1592535 cynicalskeptic
cynicalskeptic's picture

A blind monkey throwing darts gets something right once in a while

Tue, 08/23/2011 - 19:10 | 1592560 Chip
Chip's picture

Cramer is recommending it:

 

++++++++++++++

Might be a contrarian indicator for gold etfs, mining stocks, etc but doesn't mean shit for physical buyers or contract traders (me). Only hundred share lot types listen to Jimbo. 

Tue, 08/23/2011 - 19:53 | 1592707 Spitzer
Spitzer's picture

Thats too simple and easy though man.

Tue, 08/23/2011 - 20:47 | 1592821 MFL8240
MFL8240's picture

After years of being fucked by those bastards, I did that in 1994, 100% Gold.

Wed, 08/24/2011 - 04:53 | 1594231 French Frog
French Frog's picture

Is it just me? .... When trying to download the document and loging through facebook (I don't have nor want a docstoc.com account), the only way i can do it is to allow docstoc.com to:

.have access to my basic info (ok)

.send me email (spam here we come?)

.post to my wall (no thank you)

.access my data at any time (you're kidding!)

If you click 'don't allow' you cannot proceed any further and download the document.

That sort of 'forced info request' strikes me as against ZH's principles. No?

Tue, 08/23/2011 - 18:27 | 1592454 kito
kito's picture

not sure if tyler covered this, but here is some just shake your head in amazement info on how banks are unloading their garbage...and who says we should rid ourselves of the environmental protection agency??--from automatic earth, who took it from the financial times:

 


Some of Britain’s biggest banks have begun quietly ridding themselves of billions of pounds of assets they have found difficult to sell following the financial crisis, moving them off their balance sheets and into staff pension funds. 

The moves – designed with the dual purpose of clearing unwanted assets from the banks’ own books while at the same time closing pension fund deficits – have been made as exceptional top-up payments into the pension schemes over recent months. 

HSBC made a £1.76bn exceptional payment into its pension scheme, comprising a portfolio of assets ranging from subordinated debt to asset-backed securities, last December. Lloyds also made a £1bn commitment to its pension fund as part of a £5bn transfer of assets into an intermediary funding vehicle. Lloyds did not respond to requests for information about the arrangement, but pensions experts said the measures were comparable with the HSBC plan. [..] 

Nobby Clark, who runs HSBC’s pensions solutions group, said the transfer of illiquid assets into pension schemes was a sensible way for banks to deal with funding deficits. "The pension scheme has the ability to take liquidity risk with assets that aren’t liquid temporarily," Mr Clark said. Pension funds’ liabilities are long-term, so short-term illiquidity is unimportant. 

Many big banks found themselves with vast portfolios of illiquid assets, such as asset-backed securities tied to the US mortgage market, following the 2008 financial crisis. Not only must banks mark the value of the assets, held in their trading books, to still-low market rates, but the majority also attract higher capital requirements under new regulations. The rules do not apply to assets in pension funds, however. 

Banks gain from capital and tax relief on the transfer transactions, while the pension fund typically secures contributions much sooner than if it were to wait for cash payments. Some pension fund trustees have expressed concern that they are receiving questionable assets in place of cash. "[Trustees] might say: ‘If I can have a crisp new white shirt why would I want one you wore yesterday?’" said Dawid Konotey-Ahulu, co-chief executive of consultancy Redington. 

But bank executives point out that transfers into bank pension funds have occurred at impaired book values. In addition, some assets have been given another valuation "haircut" of as much as 20 per cent, according to pensions experts – sufficient to placate pension fund trustees.


Tue, 08/23/2011 - 19:25 | 1592596 zenbones
zenbones's picture

"Nobby Clark" LOL

Tue, 08/23/2011 - 19:36 | 1592633 Seasmoke
Seasmoke's picture

so when they go up and become liquid (yeah right) they will take them back

Tue, 08/23/2011 - 18:52 | 1592457 Cvillian
Cvillian's picture

Nice job so far this year team Thaler. PTJ still gets my money.

Tue, 08/23/2011 - 18:41 | 1592487 DormRoom
DormRoom's picture

Isn't the purpose of a hedge fund to make money no matter the market?  So how do 'hedge funds' post losses of more than 10%.  It's like they are mutual funds, branded as hedge funds, to reap the huge management fees.

Tue, 08/23/2011 - 18:49 | 1592508 Richard Chesler
Richard Chesler's picture

Didn't you hear?

"Momo chasing" IS a sophisticated hedging strategy. 

lol

 

 

Tue, 08/23/2011 - 18:56 | 1592523 chump666
chump666's picture

Leveraged bets that go haywire.  Hedge Funds basic stategy is go long and short on high leverged bets. eg  say some nut shorted gold at 50:1 and went long BoA at 100:1 = FUBAR neg returns. 

 

Wed, 08/24/2011 - 08:19 | 1594465 snowball777
snowball777's picture

Ask LTCM.

Tue, 08/23/2011 - 18:48 | 1592504 aramsogo
aramsogo's picture

BREVAN Howard is either

a.) The best of the best, making money in every market.

b.) Giant Ponzi ala Madoff.

My bet is on A. 

Tue, 08/23/2011 - 18:52 | 1592515 Downtoolong
Downtoolong's picture

What a circle jerk waste of time and many people’s retirement savings. Everyone rotated out of gold and bonds back into equities and oil today. The elimination game continues. So, who got left out without a chair when the music stopped this time?

Tue, 08/23/2011 - 19:06 | 1592549 cynicalskeptic
cynicalskeptic's picture

Predictable takedown in gold.  COMEX close coming up, major meeting at Jackson Hole.  Have to make things look good.  MOPE (management of perspective economics) at work.

Now repeat after me:  

"Commodities and hard assets are bad, T-Bills and equities are good... all is well... do not worry.    Ben Bernanke loves me and protects me."  

 

Now go take your SOMA.

 

 

 

Tue, 08/23/2011 - 22:20 | 1593157 Overweight Lover
Overweight Lover's picture

+1 for the MOPEs. I hear the SOMA is spectacular this time of year.

Wed, 08/24/2011 - 01:05 | 1593872 aminorex
aminorex's picture

Surreptitious Open Market Actions for the oxymoronic win

Tue, 08/23/2011 - 19:18 | 1592582 daxtonbrown
daxtonbrown's picture

It sure does look like my conservative 85 year old mother is doing better than the hedge funds. I may have to set up a fund with mom.

Tue, 08/23/2011 - 20:26 | 1592783 Kat
Kat's picture

Is your grandmother a star in the investment or trading world?  'Coz the Hedge Fund business model is to gather as many assets as you possibly can and slap the capital with tons of fees.  That 2% is just a starter.

The bigger you are, the more investors like you.  It's size, not performance that matters to them - or even that the fund manager has a clue in hell about why his strategy should theoretically even make money.

Well, at least that's the business model of any hedge fund still accepting new investors.

 

 

Tue, 08/23/2011 - 19:31 | 1592612 ??
??'s picture

Where's Pentwater? He's 3x off the bottom bad quarter though.

Tue, 08/23/2011 - 20:12 | 1592763 --Freedom--
--Freedom--'s picture

No offense to the top performers, but I've made 26% in 3 months, only trading FAZ and PHYS and some UGL, turning all profits into physical gold and silver, as well as a few thousand pounds of beans and lentils and such. And I started trading 3 months ago. I'm sure I'm benefiting unduly from these strange and volatile times, but for fucks sake, what a bunch of idiots. In the same time span, my dad lost 20% of a much larger portfolio, after ignoring my warnings in June.
Once you wake up, you can play these things conservatively, and still make a killing if you time things right and don't get greedy and hold too long.
These fucking idiots. May they all go under soon.

Tue, 08/23/2011 - 20:32 | 1592799 Kat
Kat's picture

In fairness...it's easier to make a high return on a small capital base and it's easy to cherry pick the last three months.  How long can you maintain such high returns on a large capital base?

Also, if you note the names of some of the worst performance, they specialize in a specific market and don't have the option to do other things as they are boxed in by the operating agreement.  Many investors want exposure to various things without having to do the asset picking themselves.

Not defending the Hedge Fund model (which I don't like), just sayin'.

Also, congratulations on your recent gains and I hope you can keep it up.

 

 

Tue, 08/23/2011 - 22:13 | 1593134 --Freedom--
--Freedom--'s picture

That's a good point about being limited in specific markets. I can see how that would really limit your returns. I have a question though. I don't understand why a larger capital base would make it harder to have high returns. I've heard this before but don't get it. Is it because, when your dealing in billions of dollars, you can't go all in on a few cherry picked stocks you are very confident in because it will move the price too much.
Thanks for the feedback, by the way.

Wed, 08/24/2011 - 02:27 | 1594050 James_Cole
James_Cole's picture

Yeah, you'll be chasing the price up. There's a tonne of reasons why returning on small capital is easier though. Those guys do have gld / silver positions generally. 

Tue, 08/23/2011 - 21:29 | 1592901 anony
anony's picture

Beginners luck.  Ever hear of it?

Talk to us again in a year or two if you don't quit while you're ahead.

Got "Gas-X"?? 

Tue, 08/23/2011 - 22:18 | 1593148 --Freedom--
--Freedom--'s picture

Anony,
Don't know what gas x is, but you're probably right about the beginners luck part.
Planning to keep at it and we will see if I end up getting burned. Hopefully not, but you never know.

Wed, 08/24/2011 - 01:22 | 1593905 aminorex
aminorex's picture

Everything is luck in an evolutionary system.  Some folks have good instincts and will experience better luck than folks with bad instincts.  Personally, I started with bad instincts, and gradually refined them until they became pretty darn good.  I'm up 34% for the month, but now I'm mostly in cash,waiting for stronger alpha signals (except for long EWY/RSX/FSLR short TLT on a very short-term basis, all in negligible amounts via positions proxied by legging into diagonal spreads).  If you are fortunate enough to start with good instincts, you will generally do well except when market dynamics run counter to those instincts.  My intentions turn on a dime in response to developing facts on the ground, but presently I intend to close or roll all of my remaining current positions before 8/26 (except that I remain net short of TLT through 2013), and (again) go long SLV after the next turn, albeit in a modest fashion. Although I do  well, the cash thrown off is mostly removed, not compounded, due to the present needs of my dependents.

Wed, 08/24/2011 - 10:10 | 1594866 anony
anony's picture

Most don't realize how much luck is involved in just being born, (365,000,000 to 1 that you are even conceived), or surviving a drive to the mall without an auto accident.

I've never read it put quite that way, in terms of evolution, but it makes initial sense to me.

Wed, 08/24/2011 - 10:07 | 1594852 anony
anony's picture

With all those beans and lentils, mon frere, you are going to do more damage than cows do with the release of methane into the atmosphere.

Gas-X is a food additive to minimize it.

(I don't like the word that is usually attached to intestinal fartitude).

Wed, 08/24/2011 - 08:52 | 1594563 chindit13
chindit13's picture

Way back a thousand years ago my first twenty trades were winners.  It taught me......nothing.

Eventually the market discredits everyone who overstays his welcome.  Fact is, you don't know shit.  You're just lucky.

Before you get all hot and bothered, let me tell you I headed a TBTF prop desk and later became a HF trader, all of which enabled me to retire in my thirties with enough money for a hundred lifetimes.  And I'll be the first to admit I don't know shit.  I'm the guy who stood up with the other hundred thousand fans at the Rose Bowl flipping coins, but I just happened to be the one that flipped fifteen straight heads.

Tue, 08/23/2011 - 22:33 | 1593230 rosiescenario
rosiescenario's picture

"Tulip Trend Fund, Ltd.".............well, at least one fund on the list has an honest name....

Tue, 08/23/2011 - 22:56 | 1593349 WiretapWilly
WiretapWilly's picture

A lot of 'A's and 'B's on that report.  In the 2-and-20 management fee structure, I guess it pays to put half the money in a super-bull strategy and half in a super-bear strategy for a guaranteed 2+20%*max variance%.

Wed, 08/24/2011 - 05:31 | 1594261 writingsonthewall
writingsonthewall's picture

One of those funds (and I am legally obliged not to say which one) has actually lost 74% of it's starting value.

Now that's what I call an 'investment'!

 

I might also speculate that the fund I cannot mention is rather prone to Euro turmoil.

 

...so nothing to worry about investors, your money is 'safe'!!

 

This was not placed here by a hedge fund trying to influence prices.

Mon, 09/05/2011 - 07:46 | 1633709 flp
flp's picture

Does any one have an end of the month update for hedge fund performance?

Mon, 11/28/2011 - 05:09 | 1920299 kevin22
kevin22's picture

This is a great blog posting and very useful. I really appreciate the research you put into it.

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