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Not All That Rosy

Piece from the NYTon how hedge funds are not doing all that well. There is a mythology around hedge funds that they are all seeing, all knowing and always profitable when this is very far from the truth. There are obviously giant profitable funds that are run by sane sensible individuals using robust logical models and then there are the rest which are run by emotionally unstable peanuts who pull trades out of their arse. The latter are very good at letters to their investors and telling them stories about why their performance was so appalling.

“If you were long Greece, your investors are going to ask, how could you be long? Why didn’t you see all the difficulties? And if you’re short, people will blame you for being a speculator and for all of the problems the country has,” Mr. De Vrij said.

Asking a fund manager why they were long Greece is a remarkably pertinent question and one that fund managers should have to answer. I would much rather be short and thought of a speculator than long and thought of as a dickhead.

Greece has been a basket case for a long time so what has occurred is no real surprise. However, I do have a new theory courtesy of a driver I had the other night who brought me home from the airport. His theory was that what had happened to Greece was actually a German plot hatched in the last days of WW 2. He is of the opinion that the Germans realised that they were losing the war and would never own Greece (WTF you would want to is beyond me) and so they hatched this plot to bankrupt Greece 66 years after the war ended.  He didn’t seem all that impressed when I told I thought it was because tax evasion was the national sport.


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