Made 1000% now quit his job

[tripods68]

betting against subprime in 2007. With that return I probably would too


Hedge Fund Manager: Goodbye ... And Think Pot - General * US * News * Story - CNBC.com

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Haha, oh yeah, I remember reading that article. Boy, he wasn't pulling back any punches. In general though, now is the time for hedge funds to cash out and walk out. Like this guy here. But for the rest of us, that presents an interesting issue with how much the flight of hedge funds will impact the stock market.

Elsewhere, people are speculating that we have yet to see a true flight from the market yet, at least no until hedge funds exit in en masse. I think I've hinted that elsewhere in my previous posts here, but the fact that it has yet to do so hints that perhaps we haven't seen the bottom, and capitulation has yet to set in. So, depending on how much of an impact this factor has, we should brace ourselves for a lower Dow in the near future.

[tripods68]

BA you sound like my coworker who insist DOW will go down to ZERO. LOL!

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HEHEHE. Nah! I'm bullish on the market, you know that. But to me, reality is what it is, and we can either accept it (and find a way to make money around it), or... not. I just think it's going to get worse before it gets better that's all. But it will get better in time.

And anyway, a lot of hedge funds make their money by shorting the heck out of the market (or at least parts of it, such as financials). That's part of the reason why they've been doing so well. But the fact that they feel the need to get out now is kind of a positive sign for the rest of us. The market is getting dangerous for shorters to stay because there's a good chance that longs could crash their party at any minute.

Some are greedy, and they're staying a bit longer, but believe me when I say that this is a bullish sign. Just not in the short-term.

[tripods68]

True True

I've read that hedge fund now have to evaluate their business model since their model is about "leverage" and other complex derivatives. Well...deleveraging is what's been happening in the market. Who knows what their model end up and how will they will make money again. How about just to back basic fundamental analysis instead. Boring. But go figure!! LOL!

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Yeah, I've read similar euphemisms, that they basically have yet to unravel, and they collectively command tens of billions of dollars in market capital.

Hindsight being 20/20, we are now seeing that these complex hedge funds really haven't been doing much better than more conventional investments.

I honestly do believe that you don't need complex instruments to make money.... For the longest time, I heard that Warren Buffett did nothing more than simple buy-and-hold (with the occasional sell). More and more, he's starting to exercise options, but overall, he Keeps It Simple.

I have yet to do anything complicated myself, even if I have been tempted to short. But, despite going long in this market, I'm still way up in gains. Of course, I've also been extremely lucky so far, but the point is, you don't need complex instruments (or even leveraging) to chase after large gains.