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Wary of geopolitical tumult and eager for their first quiet August in years, some hedge-fund...

Wary of geopolitical tumult and eager for their first quiet August in years, some hedge-fund managers went into risk-off mode and scaled back the size and scope of their bets in recent weeks. That pullback has been reflected in muted monthly returns. Across the board, hedge funds were up 0.5% for August, and up just around 2.23% for the year. So, with end of the year results now relying heavily on what's left ... the closing quarter could shape up to be a doozy.
Comments (13)
  • TruffelPig
    , contributor
    Comments (4085) | Send Message
     
    2.23 percent only? Maybe because of all shorting and hedging forgot to buy stocks?
    4 Sep 2012, 07:43 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    Selective shorting/hedging is a counterbalance to selective long positions. Being able to read and play both sides gives meaning to ambidexterity. I will never be stuck in a long-only mindset, ever again. Not every hedger is underperforming.
    4 Sep 2012, 09:04 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4085) | Send Message
     
    Hedging is expensive. Even when you are 100 percent long and you are not on margin you probably do better by just waiting it out. Easy said, very difficult to do. Growing companies should outperform though.

     

    Having said that I wish you well. I just do not have the nerve to have long term hedges. It doesn't feel right to me.
    4 Sep 2012, 09:45 PM Reply Like
  • David Urban
    , contributor
    Comments (1036) | Send Message
     
    Nobody has been buying the summer rally. When you overlay the economic fundamentals there is no reason to be long stocks.
    4 Sep 2012, 08:03 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4085) | Send Message
     
    I have been buying the rally. I am outperforming by far all those whedge funds it seems.

     

    As long as the are enough bears we wil climb further. Thank you!
    4 Sep 2012, 08:18 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    What will you do if the markets turn as they have done periodically in the last year? Sit in your long positions? Don't eat too many truffles!!!
    4 Sep 2012, 09:07 PM Reply Like
  • Freedoms Truth
    , contributor
    Comments (853) | Send Message
     
    "Nobody has been buying the summer rally. "

     

    LOL. Sounds like a Yogi Berra quote.
    4 Sep 2012, 09:24 PM Reply Like
  • mitchad1
    , contributor
    Comments (247) | Send Message
     
    Same here.
    Note: Matched the return of S&P so far this year with currently about 10% cash and 5% deep in the money SPY puts I bought last week.
    4 Sep 2012, 10:32 PM Reply Like
  • anonymous#12
    , contributor
    Comments (552) | Send Message
     
    Hahahaaha......the doomers thought 2012 was going to be a repeat of 2011 and they missed the rally.

     

    Now they are desperate for any downturn, clinging to any news they can in their wish of seeing the US collapse. It isn't going to happen, sorry....
    4 Sep 2012, 08:46 PM Reply Like
  • WMARKW
    , contributor
    Comments (10383) | Send Message
     
    Hahahahaha.....I'm up 12% on my GPL (silver stock) I bought in the last 8 weeks. And in my Mother's account (dividend +) the number is about 6% in 5 months. Gloom and doom can be profitable. Depends on what you do.

     

    IMHO, the real question is how to limit downside risk.
    5 Sep 2012, 12:27 PM Reply Like
  • Continental Kid
    , contributor
    Comments (202) | Send Message
     
    I do believe this will be the case...IF the Fed and ECB act in a cordinated effort...this SP will blow up to 1460 to 1480 by Sept 30...then face a quick sell off on 1 Oct ...as Hedgies try to make the quarter look good..if the Fed and ECB bumble this the hedgies make the quarter shorting everything insight...in hopes of tripping stop orders to further the cascade down....I suggest wait till the news ...then act accordingly...otherwise your betting a coin flip...once we have a defined market direction money will be easily made...long or short
    4 Sep 2012, 10:19 PM Reply Like
  • mitchad1
    , contributor
    Comments (247) | Send Message
     
    I agree.
    4 Sep 2012, 10:32 PM Reply Like
  • David Urban
    , contributor
    Comments (1036) | Send Message
     
    I think we have priced in any QE. European bonds have been front run by traders with the stock markets jawboned higher.

     

    On the S&P you are paying 16 times earnings for no growth this quarter.
    5 Sep 2012, 12:43 PM Reply Like
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