Doomsday Scenario: Rotten Apple, hedge fund lies, bad case of natural gas

Too bad this means less than nothing. Here's why. All hedge fund return statistics are self-reported. So perhaps the really poorly performing ones might not choose to report. You think? Then when a fund blows up, it no longer counts its returns. This is even though it lost all of its customers' money and effectively is running at a rate of zero returns. Nope, if a fund blows up mid-Feb, then those negative numbers aren't factored in.

Lastly, these reports do not cover all hedge funds by any stretch. None of this is to say that hedge funds can't outperform and do great things. Some do. But in general, hedge funds have long trumpeted their worth as a higher-returning asset class.

Considering the profession is loaded with quants, they should appreciate how specious the ridiculous survivor bias and selective reporting of the sector makes those claims of outperformance look. Step up to the plate, hedgies, and let it all hang out or shut up with those empty claims, eh?

Lastly, here are the dangers of allowing consumers to hedge futures by locking in gas prices. If Southwest Airlines, the master hedger, can run into problems with this, how can we expect Ma and Pa Kettle to smartly hedge?

Thousands of Americans locked in cyclically high natural gas prices last year during the Great Oil and Gas Bubble. Now with natural gas prices down 70% they are stuck with a nightmarish financial hangover that's adding to recessionary woes. The situation gives new and grim meaning to the term blown up.

Alex Salkever is Director of Research at Piqqem.com, a stock investing community that leverages the Wisdom of Crowds for accurate market predictions.