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Seems like that's still a pretty good investment if the market as a whole is down 40%.

pg 18y ago
Stocks are down. Gold is up. Hedge funds don't just invest in stocks. They can bet on anything, including stocks going down. This is supposed to allow them to make money in down markets as well.
- senthil_rajasek 18y ago
  Gold is actually down, trading near its 52 week low http://www.marketwatch.com/quotes/gc08z?sid=1633395 http://www.marketwatch.com/quotes/gc08z?sid=1633395 I agree that hedge funds can invest in anything (unlike MFs, which are regulated) but if you look at the short term (4-week) T-bills their interest rates are down by as much as 62% since 2002, so the general consensus is that, that is where most money is getting drained. Why? They are the most conservative, safe investment choices available. If I may digress, this is not a good thing for the economy as we are not using that money to produce anything. Considering the Dow is down over 30% and counting for the year, 17.6% down seems impressive to me :-)
  - pg 18y ago
    Gold is actually down, trading near its 52 week low Oops, sorry, was relying on a news story I saw a couple weeks ago. It was doing better than the stock market a couple weeks ago, though, which was what I was getting at.
- halo 18y ago
  >Gold is up [Citation needed]. Everything I can find indicates that the price of gold is about the same as a year ago, while platinum has severely dropped due to lower demand from the car industry.
- andr 18y ago
  Hedge funds are really specialized. Usually, different people trade different things - one team on stocks (or even a narrow subset of stocks), another team on commodities, etc. It takes a lot of experience to get good at an instrument. And if your fund just doesn't have good commodity traders, you are not into gold or any other commodity. Hedge funds are like startups, really. All of them do the same thing on paper, but some do it better, so it's your responsibility (and a bit of luck, of course) to pick the good ones.
- supahfly_remix 18y ago
  In principle, you're right. However, hedge funds typically use a lot of leverage to make their returns, even as high as 20x. Given the credit contraction, I can see how this can kill their returns. I don't understand why someone would lend a hedge fund this money. On a related note, I saw that K-mart advertised their "layaway" program for xmas. I hadn't heard that since I was a kid.

pg 18y ago

Stocks are down. Gold is up. Hedge funds don't just invest in stocks. They can bet on anything, including stocks going down. This is supposed to allow them to make money in down markets as well.

senthil_rajasek 18y ago
Gold is actually down, trading near its 52 week low http://www.marketwatch.com/quotes/gc08z?sid=1633395 http://www.marketwatch.com/quotes/gc08z?sid=1633395 I agree that hedge funds can invest in anything (unlike MFs, which are regulated) but if you look at the short term (4-week) T-bills their interest rates are down by as much as 62% since 2002, so the general consensus is that, that is where most money is getting drained. Why? They are the most conservative, safe investment choices available. If I may digress, this is not a good thing for the economy as we are not using that money to produce anything. Considering the Dow is down over 30% and counting for the year, 17.6% down seems impressive to me :-)
- pg 18y ago
  Gold is actually down, trading near its 52 week low Oops, sorry, was relying on a news story I saw a couple weeks ago. It was doing better than the stock market a couple weeks ago, though, which was what I was getting at.
halo 18y ago
>Gold is up [Citation needed]. Everything I can find indicates that the price of gold is about the same as a year ago, while platinum has severely dropped due to lower demand from the car industry.
andr 18y ago
Hedge funds are really specialized. Usually, different people trade different things - one team on stocks (or even a narrow subset of stocks), another team on commodities, etc. It takes a lot of experience to get good at an instrument. And if your fund just doesn't have good commodity traders, you are not into gold or any other commodity. Hedge funds are like startups, really. All of them do the same thing on paper, but some do it better, so it's your responsibility (and a bit of luck, of course) to pick the good ones.
supahfly_remix 18y ago
In principle, you're right. However, hedge funds typically use a lot of leverage to make their returns, even as high as 20x. Given the credit contraction, I can see how this can kill their returns. I don't understand why someone would lend a hedge fund this money. On a related note, I saw that K-mart advertised their "layaway" program for xmas. I hadn't heard that since I was a kid.