Market Heads Into the Homestretch

Can the stock market hold it gains here, or even move higher?

That is the big question coming out of one of the biggest two day moves in recent history. There seems to be a great deal of skepticism over the move, but it did avert a meltdown that would have taken us to technical levels that were unthinkable a scant 5 months ago. Buy and hold won’t get you anywhere in this market, but traders who are willing to reposition and take advantage of the movement are having a field day.

We continue to work through are problems here in the good ‘ole USA, and shudder to think where we would be without our new friends in Dubai and Abu Dhabi. But is Wall Street being too myopic? A fresh round of layoffs and a punk bonus pool, outside of Goldman Sachs, has the big money’s glass half empty. No surprise there, given how many victims this market has claimed. The latest news out of Art Samberg’s Pequot Investments being the latest example:

There’s been talk lately of a shakeout in the HF industry of small hedge funds that don’t perform well, and it appears Pequot Capital Management is among the first of the high-profile HFs to shed those that have reached the point of low returns. Soon headed for HF heaven are the Strategic Equity Fund, Event Driven Fund and Dynamic Strategies Fund. The San Francisco-based trio of funds all launched in 2006 with big-name managers who hailed from Citadel Investment Group – Steven Pigott, Carson Levit and Peter Labon. According to Reuters, Pigott and Levit are leaving, while Labon will remain. . Institutional Investor

Reuters reports that performance data was available only for Event Driven, which had dipped –1.1% through Oct. 31. The three funds, says Reuters, managed to attract “only a few hundred million” in assets since their launch, and with Pequot founder Art Samberg famously impatient with poor performance, the move comes as no surprise.

This year’s market has made losers of some on the biggest names on Wall Street. Who would have thought that Bill Miller and Eddie Lampert would have generated such lousy performancne in 2007. The media loves to create legends out of mortals, and the current crop of media darlings could be next year’s losers.

A period of consolidation going into the year-end might not offer much in the way of alpha generating opportunities; making up ground over the next 5 weeks might prove to be a herculean task.

Pequot Shuts 3 Strategies
Institutional Investor
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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. No Position

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