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Hedge Fund Manager Loses 99.8% In 9 Months, Tells Investors He Is "Sorry" For "Overzealousness"
Takes my breath away. He's been living on a diet of Stupid Pills or some such???????
If you make huge leveraged bets, probably not that difficult. The losses that some FX traders had from the Swiss franc de-peg were probably nauseating.
A reminder that anything can happen. In an attempt to "hedge" against the much feared (but rarely realized) 50% losses equity indexes can unleash, some managers and their clients resort to exotic approaches that occasionally blow up In their faces. Greed also plays a role.
This instance involved a hedge fund for which SEC standards are more lenient than for open-end mutual funds. However, some mutual funds also try to "hedge" risk with non-mainstream approaches like market timing along with the use of derivatives, leverage, short sales, unrated debt, etc. Few, if any, of these "hedge-like" mutual funds have admirable long term records. Here's a glance at how two of them have fared year to date. Members are already aware af their longer term records, as they have been heavily discussed in the past:
John Hussman's Strategic Growth Fund (HSGFX) is up by 3.34% YTD. His first "Commentary" of the year was part "mea culpa" and part sales-pitch for the new, redesigned approach he has implemented at HSGFX. As usual, he was short on details as to what, if anything, has changed in his oft-maligned investment approach. Hmm ... Not sure I want my $$ being used by a fund manager for what amounts to "on the job" training.
Marketfield Mainstay Fund (MFLDX) is down 1.8% YTD. If you track that fund daily as I do you may have noticed that its moves in recent days appear closely correlated to the oil/energy sectors. I'll hazard a guess they have recently acquired (or reacquired) significant exposure to those sectors in an attempt to make up for the losses the fund experienced last year. (There's a period of time before such new investments are required to be divulged publically.)
Comments
This instance involved a hedge fund for which SEC standards are more lenient than for open-end mutual funds. However, some mutual funds also try to "hedge" risk with non-mainstream approaches like market timing along with the use of derivatives, leverage, short sales, unrated debt, etc. Few, if any, of these "hedge-like" mutual funds have admirable long term records. Here's a glance at how two of them have fared year to date. Members are already aware af their longer term records, as they have been heavily discussed in the past:
John Hussman's Strategic Growth Fund (HSGFX) is up by 3.34% YTD. His first "Commentary" of the year was part "mea culpa" and part sales-pitch for the new, redesigned approach he has implemented at HSGFX. As usual, he was short on details as to what, if anything, has changed in his oft-maligned investment approach. Hmm ... Not sure I want my $$ being used by a fund manager for what amounts to "on the job" training.
Marketfield Mainstay Fund (MFLDX) is down 1.8% YTD. If you track that fund daily as I do you may have noticed that its moves in recent days appear closely correlated to the oil/energy sectors. I'll hazard a guess they have recently acquired (or reacquired) significant exposure to those sectors in an attempt to make up for the losses the fund experienced last year. (There's a period of time before such new investments are required to be divulged publically.)
FWIW