Fool Me Once, Shame on You. Fool Me Twice, Shame on Me

Only a little less than ten years after his first hedge fund blew up and threatened the stability of the financial system, John Meriwether has announced that his current fund, JWM Partners, will wind down operations after a loss of 44% from September 2007 through February 2009. At the start of 2008, the fund had assets of over $1 billion.

Back in 1998, when Meriwether's first fund (Long-Term Capital Management) got into trouble, the Fed had to arrange a $3.6 billion bailout in order to 'save the financial system.' Today, Fed bailouts to save the financial system cost trillions. Talk about inflation!

Following the closure of his current fund, Bloomberg reported that, "For many investors, John Meriwether is by now just another hedge-fund manager.” Just another hedge-fund manager? How many other hedge fund managers do you know with a resume that includes a US Treasury trading scandal, Long-Term Capital, and now this?

Comments

[Vienna:]

A loss of 44%, lucky clients. Considering what the markets gained the last few years, it might be a plus-minus game for many investors.
If you look at it from the point of theoretical gains, it might not look so well.

Jul 08 11:29 AM

[ThinkRight:]

Clients just have to make 78% plus to make up their losses. Without expenses.

Jul 08 01:15 PM

[BPYHO:]

I believe the term is," fool me once, shame on you, fool me twice, won't get fooled again."

Jul 10 12:18 AM

[Dubious Bro...:]

Dan Zwirn and John Meriwether should get together to start a fund - The Special Opportunities For Dan and John Fund. Three year front end lock up, five years notice to withdraw, no statements necessary since you won't know what your return (loss) is until they liquidate the fund, no tax liability since there are no gains and the partners can rest assured that the fund "managers" are able to maintain that Manhattan and Cayman Island life style with private jets, etc. Win/win for Dan and John and the partners get what they deserve.

Jul 10 12:31 PM