back to Oct 2007, "We have people who understand the grains market, the energy market, the metals market, the shipping markets, better than anyone out there,'' Ospraie President Eric Vincent, 42, says. "But it becomes very powerful when you can connect those reservoirs of information.'' ------------------------------- Well, whenever you think you are smarter than the market, it's time that either you get humble, or the market gets you humble, DAMN F*K TRUTH FOR TRADING!
I think anderson made a position size mistake there. They clearly understand those markets what happened was that the CRB went down 20% VERY quickly and they we're probably overlevered. I would not be surprised to see that their positions made money a few years from now
time for the famous phrase...... âThe market can stay irrational longer than you can stay solvent.â JMK
1) Their positions were too correlated/concentrated. 2) There are no blowups, only comebacks. 3) "Ospraie" is supposed to be spelled O-S-P-R-E-Y. That's the primary reason why they "failed".
The dilemma of the hedge funds. They like to pretend they are strong hands but they all need leverage [ie trading on margin] to generate above average returns, so that makes them a weak hand per se. Everyone who trades on margin learns this lesson at some stage.
Sure seems like the average hedgie mngr is nothing but an over-leveraged kowboy. They got lucky early on - or maybe they were even good at one time - then greed got them. Even super smart (supposedly) and well trained guys like Schindler get blown away on a regular basis. The solution: Just start a new fund. What the hell, it's mostly just OPM that got lost...
Too bad they couldn't get "2 and 20" in in their former "long only, buy-and-hold" mutual fund manager job...
I think you see 'reversion to mean' everywhere, not just hedge funds. You see it in sports, CEO/Fortune 500 company performance, national GDP growth % etc.