Are Hedge Funds Still for Suckers?

[marmar]

(Bloomberg) Every time the market plunges, I smell cigar smoke. It filled the halls where I once worked as an analyst for a hedge fund. The fund next door was primarily a short fund, betting heavily that certain stocks would go down. The further the market fell, the thicker the smoke.

A similar scenario has played out over the past month, when markets stopped what had become a vertiginous ascent, driven largely by a bubble of low interest rates, and started behaving erratically. Concerns about interest rates rising became more acute, and currency markets spiraled downward. Then China suddenly devalued the yuan, triggering a huge selloff. Panic was in the air. It was time for hedge funds to shine.

Based on the information available so far, though, that’s not exactly what happened. As I suggested here, maybe hedge funds are for suckers.

A number of the industry’s biggest names had a difficult, some might say brutal, time in August. It’s not surprising, considering that several days brought enormous swings in the market that caused even the most long-term-minded investors whiplash. ..........................(more)

http://www.bloomberg.com/news/articles/2015-09-10/are-hedge-funds-still-for-suckers-