Hedge Fund Performance Update
Is equity long/short back? The stategy is back in the game after a tough back nine in 2008 -with October being the stuff of nightmares.
In any case, hold your head up, Hedgistan. Bad decisions can be overcome, and at least (for the most part) you don’t lie cheat and steal, like those fuckers on the SellSide
Yeah, I am talking about you, Lucas.
Ken Heinz from HFR runs down the periodic table of hedge fund returns.
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The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.
Rough Sledding for Clarium, Dreman
On Wall Street It has long been accepted practice for hedge fund managers to make fun of their dim witted cousins on the long-only side of the family tree. Of course that is not entirely fair, but makes for good laughs from time to time.
But this market has made a mockery of the best and brightest, along with the titans of the long-only vanilla world. Assets are evaporating, and track records and careers are going up in smoke.
Peter Thiel’s Clarium Capital was on top of the world a year ago - exiting energy leading up to the blow off peak and watching the assets tumble in as their track record won them new fans with deep pockets. But that was then and this is now - Clarium was down 5.9% in March and is down 2% YTD after a dreadful second half of 2008. They blew the moves in the currency markets last month and got nailed in U.S equities as well - somewhat baffling to me, a piker with a blog who got on the right side of those moves.
Will they finally get it in gear? Clarium’s website claims they are hiring, but you have to be a graduate of a top 20 school, whatever that means. No University of Phoenix grads I guess, but maybe they need to consider recruiting there just to shake things up a little. Diversity is good, no?
And long time value manager David Dreman, who runs money when he is not busy gallivanting with Barbie Benton in Aspen, is hurting as well. In fact he just got fired from a sub-advisory relationship after blowing it in financial stocks....
David Dreman was fired as manager of a Deutsche Asset Management mutual fund he has run for 20 years after a bet on financial stocks contributed to a 47 percent loss in the past year.
The trustees of the $2.2 billion DWS Dreman High Return Equity Fund voted to remove Dreman Value Management LLC on June 1, according to a filing last week with the U.S. Securities and Exchange Commission. The fund’s loss in the past year placed it in the bottom 3 percent of its peers, according to data compiled by Bloomberg.
Dreman, 72, who likes to buy out-of-favor companies that he deems financially sound, put 27 percent of the fund in financial-services stocks as of Aug. 30. Companies such as Citigroup Inc., Bank of America Corp. and Washington Mutual Inc. had declined earlier in 2008 before plunging further in September, triggering a federal bank bailout. The fund trailed the Standard & Poor’s 500 Index in one- and three-year periods. Bloomberg
Dreman is comparing himself to Bill Miller, which is a questionable strategy given Bill’ travails, but has not lost the touch for marketing, claiming “This is probably the kind of market we will bounce back in.”
Sure, David, whatever you say. But at your age I would be turning over the reins and enjoying myself a bit more. And Mr.Thiel needs to get it in gear - with AUM approximately 30% of last April’s he will be sledding uphill for a while.
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Dreman Fired as Manager of a Deutsche Fund After 20-Year Reign
Bloomberg
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The content contained in this blog represents the opinions of underthecounter. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.
Ex-Vitol Oil Trader to Launch Hedge Fund As SemGroup Investigation Wraps Up
The death of the "commodity supercycle" has one of the bigger stories of the last year - speculative trading, compounded by frenetic activity in the derivatives markets overwhelmed the physical markets, leading to the biggest booms and busts we have ever witnessed in a wide range of commodities.
The CFTC oversees it all, but was hopelessly outmatched as hot money poured into commodities - just as it was crowned the latest, and greatest "asset class". Hedge funds were buying grain elevators and Goldman and Morgan Stanley elbowed their way into the bull market in a big way. Indeed, it would appear regulators were overwhelmed as they attempted to keep tabs on it all:
August 21, 2008
Regulators had long classified a private Swiss energy conglomerate called Vitol as a trader that primarily helped industrial firms that needed oil to run their businesses.
But when the Commodity Futures Trading Commission examined Vitol's books last month, it found that the firm was in fact more of a speculator, holding oil contracts as a profit-making investment rather than a means of lining up the actual delivery of fuel. Even more surprising to the commodities markets was the massive size of Vitol's portfolio -- at one point in July, the firm held 11 percent of all the oil contracts on the regulated New York Mercantile Exchange. Washington Post
G20 Summit Our Last Chance, says Soros
George Soros is famous for lower back pain...and while his son like to tease him about it, his back seem to be a better trading tool than anything developed by rocket scientists on Wall Street. And he is finally explaining why his back tends to ache at inflection points in the market:
...he has psycho-somatic illnesses – backaches and pains – that tip him off to changes in the market. “It’s as if you’re a jungle animal, and you see another animal facing you. You have to make a decision: fight or flight? Your hair stands up and you growl and you decide, ‘Am I going to attack because I’m stronger or am I going to run away because otherwise he’s going to eat me?’ You are very tense. And that’s the tension that gives you the backache.” Times Online
George thinks next week's G20 summit in London is the last chance for policy makers to pull a rabbit our of their hat and pull us out of this spiral...but he is not holding his breath:
“The odds would favour that it fails because there are such differences of opinion. It’s difficult enough to get it right in your own country let alone with 20 governments coming together, but if it’s a failure I think then the global financial and trading system falls apart.”
If the G20 is nothing but a talking shop then he thinks we are heading for meltdown. “That could push the world into depression. It’s really a make-or-break occasion. That’s why it’s so important.” The chances of a depression are, he says, “quite high” – even if that is averted, the recession will last a long time. “Look, we are not going back to where we came from. In that sense it’s going to last for ever.”
Food for thought for those you you who have been chasing stocks - a big crowd, given that we just posted a two week stretch that was the fiercest rally in 78 years, at least in the U.S.
George Soros, the man who broke the Bank, sees a global meltdown
TimeOnline
Clarium’s Wolff a Bear
Patrick Wolff of Clarium Capital once defeated Garry Kasparov in chess. Is he any good? I guess that is impressive - but checkers was my game. I was good. Damn good.
But I don’t like to brag.
Mr. Wolff is firmly in the bear camp, pissing on stocks. Which is fine and good, but a little strange considering he went all in long last September, and quickly reversed course, essentially blowing a once promising year (+50%-ish by June) on the back nine in 2008.
Clarium Capital shook it off, and has one of the more marketable track records in Global Macro. Wolff is making his first media appearance that I am aware of. He gives his take on the recent policy actions in the video a below - essentially a long winded pan of Washington, although I agree with many of his positions. Size him up.
It is a rare peek at Peter Thiel’s top lieutenant. I am guessing they nailed it this month - we will soon know. And if they end up shuttering, you can find them on a Seastead. The way things are going I might want to join them.
Washington will be the death of us all, although truth be told we handed them a loaded gun. Delevering to continue, until further notice.
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The content contained represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.
