I saw this today in the "WSJ" Spectacularly Rapid Demise Strikes Tokyo Hedge Fund Eifuku Fund Collapses in 7 Days As Expensive Bets Turn Sour Even by hedge-fund standards, this was a spectacularly rapid demise. A $300 million hedge fund in Japan is being wound down after losing virtually all its capital in just seven trading days in early January ... let this be a warning to all of us to manage risk !:eek:
Wow, and you would think that someone running a hedge fund would know what risk is about. Isn't hedging about making your investments less risky?
There was a rumour mentioned today on realmoney.com that they had the whole wad in directional bets in three stocks that all went wrong.
p.s. Gotham Partners went under this month also. $568 million fund (at its peak). http://www.nytimes.com/2003/01/19/business/yourmoney/19GOTH.html?pagewanted=1
people think a "hedge fund" is some kind of easy way to riches. in truth you are still giving your money to somebody who could be an idiot to trade for you.
Are you not supposed to be an idiot to be able to trade? Was not the whole bogus thread about Ph.D.s and guts to prove that Ph.D.s are too intellectual to be able to trade or something? I would say rather something. Wow, so it turns out that idiots can be bad at trading too. My, my... so who is left?
As you may see, even those managing large amounts of money make dumb/accidental decisions. It is hard to stick to a well balanced, sound plan especially when you have this kind of money to play with, one would start to feel light headed. Well, I'm sure the master trader has a hell of a head ache now. Hedge funds are not always hedged: a misconception that can cost you big money. Trade properly guys, stick to the plan, directional bets on high unsystematic risk can and will go against you.
What a classic name for a fund that blows up in seven days..... Ei-fuk-u lol,lol, I love it! I have suggestion for the name of their next fund, they should call it ..... We-fuk-u out of all you money that is! :eek: MACD