Serious question: what HedgeFund firms make money in market meltdown?

Discussion in 'Wall St. News' started by kitty1996, Dec 2, 2008.

  1. Please don't bash me, I am really curious: Hedge Funds short stocks, right? If so, shouldn't they make tons of profit when market fall 50%?
    I don't get it, where the hell all the money goes too? Some firms out there must make a lot of money. Why everyone is losing money, including shorting experts-Hedge Funds. Why Hedge Fund blew up & deleveraging? Shouldn't they make billions shorting the market? Why they face margin calls & forced liquidations? Where all the loss of 3 trillions goes to? Someone lost then some must make tons too for every trade, right? Why I can't even find one news about any Hedge Fund firms making billions shorting market? What is going on here?

    (Yes, I do know not every Hedge Fund is the same). Please don't tell me only daytraders in this forum make all the money
  2. Most hedge funds came around 2004 onwards, and are largely run by individuals from a mutual fund background who tend to think of the market in terms of a single dynamic or industry and often with a perma bullish outlook. Wearing a £3000 Saville Row suit and having offices in Mayfair does not make you a spectacular trader/investor. In any case its was a big bubble (just look at the parabolic worldwide growth of AUM) which was funded by cheap money, secular bear market rally (2003-2007) and the pure madness of people. You would be surprised as to how few of them managed to short any of the themes we had this year ( Vietnam,DryBulk,Commodities,HKEx:2689,MENA e.t.c) Try and get hold of client holdings reports from any Prime Broker and you will see the reality of the hedgies. Another problem is most of them put too much faith in their models which are based as always on historical relationships, however markets can and do evolve rapidly and fiercely without warning and little regard for "edges".Its like with anything else, 90% have to move on with their lives.

    P.S. I am proud to be a PERMABEAR, the SKY is FALLING and yes l was sacked in 2004 :D
  3. ^^ thx for the infos.

    but i wanna know where the loss of trillions in the market goes to? some firms must make a lot of money shorting the market, why don't we hear about it? why every news is about hedge funds deleveraging & blew up? mutual funds are not doing well either. buffett also lost big. WHERE is the money going to? someone must gain while soneone lost. Where the hell is the lost money? even big shorts lost money? who the hell makes money in this market??????? it's impossible everyone is losing & no one makes anything. there is two sides on every trade. if longs lost then shorts must win. if so, why hedge funds blow up & deleveraging? shouldn't they be richer in down market since their expertise is in shorting? the laws of physic doesnot add up.
  4. dont


    Nah money is just burnt, why do you think we are facing deflation and not inflation when the central banks have printed 9 trillion dollars, because $9 trillion has just been burnt.
  5. TraDaToR


    What were Renaissance's results in the crisis?
  6. moonmist


    The highest return in the Bloomberg ranking was scored by the Medallion Fund, run by Jim Simons’s Renaissance Technologies LLC. The fund, which has an estimated $8 billion in assets, according to Bloomberg, racked up a gain in excess of 58 percent. That translates into firm profits of $1.43 billion for the quantitative juggernaut.

    Even two of Simons’s Medallion siblings took hits. Renaissance Institutional Equities Fund and Renaissance Institutional Futures Fund were down 14.8 percent and 15.6 percent for the year as of Oct. 31, according to investors.
  7. TraDaToR


    Thanks a lot. Incredible as usual for Medallion.

    What do you think about Paulson? To me, he seems to be some sort of a sector permabear turned hero by recent turmoil. I read that in 2007, he was holding really large losing position on real estate before July and the first crisis.
  8. Banjo


  9. I am still trying to learn, but it look like any fund that bet against ABX index is winning.
  10. Visit
    #10     Dec 2, 2008