The depth of understanding on this board is outstanding. Hedge funds are NOT an investment, they are investment vehicles. Define the trade and take the other side of it if your convictions lay there. Explain to me how you plan to profit taking the other side of the pension fund's reallocation from a pure LONG strategy to hybrid strategies across many different asset classes.
It's done with mirrors. You know it, I know it, the regs know it. But the money is so stupid, everybody gets paid to look the other way. In a crowded environment, the only edge is what they did in the Hibernia situation, or the CDO situation, or the Heller Situation. Leverage, break the rules, use insider information. The fact that Texas is coming in is sad, because we all know that, even if returns are piled up, eventually the live round reaches the chamber, and we know the pensioners and administrators don't realize that. Given the chance to sit and explain this to 1000 people whose retirement would be affected, most all would take the lower return. That's what these type people do. I know, I was in education many years ago. They arent getting to make the choice, because that magical one percent is dangled out there; the politicians see it as 1% they don't have to kick in to the plan. There may be very sophisticated ways to take the other side of the trade, but all you have to do is trade the SHO list. It is one very transparent way to take the other side of the trade, and if you do it well, you have the edge - but only because it is this late in the game. It's a time for losing, America. Sorry, it just is.
This is how they will feel after getting blowned out in bear market. <img src=http://www.threetwoone.org/diagrams/wallstreetscandals.gif> http://www.youtube.com/watch?v=otYuX814B-Q OR <-----------------------------
ENFINITY------>You're correct in stating that hedge funds are a vehicle, not an investment. The desire to "fade" pension fund participation has to do with these investors being the buyers-of-last-resort at a market peak. They require more time to muster the confidence to do riskier things with their money, generally coinciding with peaks in the stock and real estate markets.
You are absolutely correct as it pertains to specific investments. But how do you define the peak at this point? If there is a peak there is a way to trade against it.
How do I define the peak at this point?.............Bigger players initiate "bold things" after a trend has run its course, not in the middle nor the beginning of the trend.