Once upon a time, Hugh Hendry was my favorite celebrity hedge fund manager. It wasn’t his prowess in the markets that attracted me to his verbose manner in communicating simple analysis — but his extreme underlying rage that lurked under a nervous smile.
An interesting side note with Hugh, he crushed the market during the crisis and it resulted in massive redemptions — because his investors were scared of the beta. This is a very important lesson to be taught for you young gunslingers out there. Big investors never want to see a fund +30% in a month. They’ll take the money, run, and count their blessings for having the occasion.
At one point in iBC history, whenever I bought TLT, I referred to it as ‘Doing the Hugh‘ — because Hugh had an affinity for deflation and always thought we’d end up inside of its vortex.
In his letter to investors today, Hugh, melancholically, said “It wasn’t supposed to be like this” — describing a market environment that had been untradeable for him. Every market is tradeable; Hugh was just using the wrong methods. Nonetheless, as a man who quit professional money management nearly 2 years ago, I understand what Hugh is feeling now and it kind of sucks. On one hand, I had this wonderful distraction of running a first class blog, always busy inside Exodus, and fomenting massive strife across the globe — but on the other a void, subtle, but a void nonetheless.
What does Hugh have, a few pencils and a book?
I used to watch CNBC Europe religiously back in the day and saw this one live. It was really tense and I thought Hugh and the other bloke were going to start punching each other on live teevee. Incidentally, as I understand it from a former anchor at CNBC Europe, Hugh had been banned from the show after years of causing chaos and pulling stunts like this — which is why he hadn’t been on in years.
Hugh vs Stiglitz
Lastly, a year or so ago, Hugh said he gave up on shorting stocks and went long — saying he ‘felt like the sun only rose to humiliate him.’
Investing it a tough racket and yesterday’s victories, sometimes, cannot be repeated. Cheers to you Hugh and best to luck in your future endeavors.
-Fly
If you enjoy the content at iBankCoin, please follow us on Twitter
Damn, crazy to see the ticker read S&P Futures 713+2
Full
Spectrum
Dominance
The stock market Wasn’t going to be included?
He’ll be back.
This is good news. For the market to tank, everybody must be on the same side of the boat, especially bears like Hendry. If there are only bulls and no bears, that’s when it all turns down. We must be close now. I cant wait for this joke of a market melt into a pile of steaming shit.
He’s been bullish for the last few years, just poorly positioned like so many other macro guys. But don’t let that stop you from creating a good narrative.
Exactly. He was straddling the fence. He was not a bull with conviction. Now he is. We’re getting there. Nothing lasts forever and this FED induced bull market is giving everybody the impression of eternity, along with QE infinity.
Meh…people said the same thing when he first announced he was bullish years ago.
He was poorly positioned cuz he was mandated to be uncorrelated, not because he was straddling the fence.
Why would you want that? You don’t like to have a lot of extra money? Perhaps your ideologies are getting in the way of that.
I’ll have a lot of extra money (sound money, btw) when all of you bulls lose yours.
His problem was switching bullish and actually trying to be correct. If he stayed loudly bearish people would continue giving him money as a hedge due to his 2008 performance. He’d probably still be in business.
Oddly enough in asset management, pigeon holing yourself and being wrong is more profitable than being flexible and attempting to be right.
Rename it asset gathering instead of asset management.
Correct on all fronts. All he had to do was hold on a little longer.
You could say the same for Corzine @ MF Global, his concentrated bet on Italian debt would have been a peach, but he got a liquidity tap that brought the house down. If HF world the liquidity tap is redemptions and gates can only keep the wolves away for a few quarters. Tough game with that small an AUM, hopefully most was his and his staff …. what will the family office be called? JCG
It goes without saying, but I’ll say it. That guy is a fucking genius.
I’m curious to have your take on why so many HF are down the toilet lately. What’s killing the business? ETF?
“What’s killing the business?” Low-volatility market-drift upwards.
This is especially painful for hedge funds when people (such as Buffet) compare them to index funds. Index fund performance is driven by High-PE stocks. If two stocks have the same earnings but one has double the PE, then it will twice the weight in cap-weighted indices such as the S&P 500. In other words, while most investing books tell you to diversify and balance out your investments, this is not what index funds themselves do. The more expensive a stock gets, the higher proportion of your money is in that stock. Unfortunately for index investors, this amplifies losses in a bear market.