Hedge fund irresponsibility

Yesterday I ran across an article THE ST LOUIS POST DISPATCH reprinted from THE WALL STREET JOURNAL by Gregory Zuckerman headlined:

"Who's sorry now?

Well, it's not hedge funds"

And it's about how many hedge funds have lost large chunks ("up to one-third") of their customers' money during the recent subprime stock market sell-off and decline.

And they refuse to take any responsibility for it.

According to Zuckerman, they "point fingers at other funds, once-in-a-lifetime events and their own computer programs."

Black Mesa Capital blamed "unprecedented market events."

Those words should put a chill in the hearts of anyone considering handing your money over to a hedge fund.

Yes, the past two months in the stock market are "unprecedented."

Gosh, gee willikers, darn it all to heck, Mr. Wilson!

I've got news for these hedge fund managers who're making millions of dollars -- history is being made every single day!

The future is going to be full of "unprecedented market events"!

Guess what? -- for the millions of dollars those investors are stupid enough to pay you, you're supposed to be prepared.

You're supposed to know how to deal with risk.

It's not like risk is anything new.

It's not like "unprecedented market events" are unprecedented.

The 1929 market crash was unprecedented. The oil embargo of 1973 along with the social dislocation caused by the Vietnam War and the Watergate investigations were all unprecedented to the stock market, which helped it decline dramatically 1973-74. The 520 point 22% crash of October 1987 was unprecedented. The high tech dot com boom of 1995-2000 was unprecedented and so was the Nasdaq tech wreck of March-April 2000.

I'm going out on a limb here, to make a tremendous prediction:

There're going to be a lot more "unprecedented market events" before we all die.

The world's not going to stop changing just because you don't hedge your hedge funds!

hedge fund irresponsibility
hedge fund irresponsibility