Sorry we've been away for a little while. This round of investments has taken up lots of time (and lots of computing power). We are already planning for a technology upgrade at some point. The analytics we are running are maxing out our systems already, so look for more powerful computers soon. But so far so good, we are up again this month.
Not so for 3/4 of hedge funds in January, according to comments made by Barclay yesterday. According to Barclay, over 900 hedge fund managers out of the 1241 in its database lost money in January. So much for the hedge fund being perceived as a vehicle that can change directions quickly, I guess. January was a tough month for sure, but it's hard to believe that so many funds lost money. Many of those that should have never been created have forgotten their mandate, or never knew it to begin with. You have to try to make money all the time, every month. No one can do that forever, certainly not us. There will be months where your best efforts don't work out. But the loss has to be minimal, like 1 or 1.5% down. Some of these funds were down 8%, 12%, or even more during January. That's not hedging, that's gambling. Or it's maintaining conviction in the face of negative information. Either way, it's wrong.
We will never be up 100% for the year, not in this fund anyway. It's not built to hit a grand slam. But it is designed for singles and doubles and the occasional triple. It's all about on-base percentage and executing good fundamentals. Enough of the baseball analogy.
Let's hope that some of these funds regain their senses and remember why they are really in business. It's not to take big bets and get paid off huge if you are correct. It's about being wrong a very small percentage of the time by hedging every move you make.
Tuesday, February 12, 2008
Tuesday, February 5, 2008
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