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Hedge fund managers are drawing the ire of investors this year, as many are failing to beat to...

Hedge fund managers are drawing the ire of investors this year, as many are failing to beat to beat the benchmark indices, despite hefty fees. Just 13% of the so-called smart money is outperforming the S&P 500, and a fifth of all hedge funds are actually in the red, according to Goldman Sachs. Even worse, hedge fund managers have all crowded into the same trades, with record low turnover. The problem, Goldman says, is a high correlation between asset classes, and memories of 2008 prompting most managers to hedge themselves against a massive market correction.
Comments (10)
  • deercreekvols
    , contributor
    Comments (5145) | Send Message
     
    "The problem, Goldman says..."

     

    What the hedge funds and Goldman (is this one person we are talking about?) will never say is:

     

    "We are not the smartest people in the room. Many of you investors could manage your own money if you did some research and spent time on your investments. We make up fancy names to grab more of your money. Global Funds, World Funds, Emerging Market Funds. Great names with terrible returns."

     

    The fact that 13% are outperforming the S&P is a joke. Why don't these people put their money into a mutual fund that mirrors the S&P? 87% of them would be in better shape than they are right now.

     

    Why didn't Market Currents ask Goldman why they/he rates NOK a sell, and they have increased their/his holding of NOK by tens of millions of shares? Just curious.

     

    Perhaps this is why these "experts" are losing client money. "Sell NOK, my dear investor. It is not a good investment." Meanwhile the company is buying like there is no tomorrow.
    24 Nov 2012, 09:17 AM Reply Like
  • heywally
    , contributor
    Comments (177) | Send Message
     
    Buy the dip, via indexes, in conservative quantities.

     

    Sell the rip.

     

    Management fee = 0. Performance = beat the S&p index, unless the market goes straight up for a long period.
    24 Nov 2012, 09:29 AM Reply Like
  • chopchop0
    , contributor
    Comments (3131) | Send Message
     
    Bingo.....this has been proven time and time again.......most fund managers can't beat an index
    25 Nov 2012, 09:31 AM Reply Like
  • wyostocks
    , contributor
    Comments (7620) | Send Message
     
    Most people seem to have forgotten that the purpose of a Hedge Fund is to make the managers of the fund rich, not the investors in the fund.
    24 Nov 2012, 09:51 AM Reply Like
  • eagle1003
    , contributor
    Comments (1485) | Send Message
     
    The "smart money crowd" is very definitely NOT the hedge fund managers. They never have been and never will be. They represent the masses, also know as the "dumb money".
    24 Nov 2012, 09:57 AM Reply Like
  • davidbdc
    , contributor
    Comments (3141) | Send Message
     
    The "problem" if there is one, is that these clowns aren't nearly as smart as they think they are!

     

    If anyone is dumb enough to give their money to someone at the terms of 2% management fees and 20% of any gain, then they deserve what they get.
    24 Nov 2012, 12:29 PM Reply Like
  • Venerability
    , contributor
    Comments (3048) | Send Message
     
    Hedgies' Short, Short, Short, Cover a Little, Short, Short, Short "strategy" only works when there a sufficient number of "Sheeple," "Muppets," and "BOO-ees" in the Market for them to ravish and loot.

     

    Arguably, there are virtually None left any longer. They were all scared into Treasuries or hiding their money in their mattresses quite awhile ago, leaving only those few Retail traders, independent money managers, and/or small institutions which are hardy, adaptable, and generally older, better educated, and more sophisticated than the 22-year-olds many "smart money" groups now populate their prop desks with.

     

    Of course, the "smart money" has also - since LTCM, in fact - been way too enamored of massive leverage based on mathematical models. One believes there is a teensy bit of skepticism growing around these kinds of models.
    24 Nov 2012, 01:04 PM Reply Like
  • eagle1003
    , contributor
    Comments (1485) | Send Message
     
    What does LTCM stand for and should I have already known that?
    24 Nov 2012, 11:09 PM Reply Like
  • miriam ledwith
    , contributor
    Comments (147) | Send Message
     
    To Deer Creek, I could not have said it any better. Mnl
    24 Nov 2012, 03:13 PM Reply Like
  • deercreekvols
    , contributor
    Comments (5145) | Send Message
     
    Mnl,

     

    Thank you. I appreciate it.

     

    deercreekvols
    24 Nov 2012, 04:03 PM Reply Like
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