According to a piece in the Wall Street Journal [a paid publication], a variety of top-flight hedge fund managers have been going aggressively to cash. Some of the names include Paul Tudor Jones, Israel Englander, John Paulson, David Slager and Steven Cohen. In fact, it looks like Cohen is 50% cash and Paulson is about 75% cash.
These actions may reflect some technical factors. After all, hedge funds are likely to receive an avalanche of redemptions. Something else: the recent changes in short-selling rules have made things much more complicated (hey, when might the SEC decide again to ban the practice?)
Yet, these hedge fund managers have stellar long-term track records and have weathered the recent declines fairly well.
Besides, we have seen a recurring theme of a plunge/surge cycle-which is far from normal. If anything, it's a sign of irrationality. And if this is the case, how can you really make solid investment decisions?
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
10-14-2008 @ 1:18PM
Blabrmouthdotcom said...
Through all the hearings and floor fights, the one thing I haven't heard about is tighter controls on hedge funds. These friggin' guys run amok throughout the financial system reeking havoc and all they can do is bitch because they can't short a stock? Seems to me the titans of industry forgot how to trade but learned well how to whisper down the lane.
10-15-2008 @ 12:59PM
keith wunsch said...
next problem.....hedge funds must be regulated immediately.......the next shoe to drop..............hank