Hedge Fund Confusion

From a Reuters story the other day comes this opening line excerpt from reporter Svea Herbst-Bayliss:

Hedge funds are posting their worst returns in about two decades…

Interesting statement. Trend followers (many of which are hedge funds) are up big over the first 7 months of 2008 – very big. So does this statement just apply to the wildly leveraged long only equity only hedge funds? If so, why not say that? The term and concept hedge fund is confusing enough for most people, but to classify all hedge funds as essentially the same strategy is brain dead (and lazy).

3 thoughts on “Hedge Fund Confusion

  1. What do you expect? Most of what sells itself as ‘financial news’ these days is sugar coating at best and pure lies at worst end of the spectrum. If you would have followed the advice of those Max Headrooms on CNBC or those shmucks in the pertinent print media you’d probably be wiped out by now.

  2. It is trend followers that had a time the last few weeks. Lots of mean reversion going on short term. Financials bouncing, commodity stocks falling. Yes, mainly affects market neutral equity hedge funds, and yes, they are still up big time year to date, and mean reversion is is only a short term effect (if it goes on long enough it becomes a trend!) but still, a bad few weeks for a lot of trend followers..

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