If you think that the past 12 months have had any impact on the "2/20" hedge fund pricing model, please say hi to the Easter Bunny for me.

According to Bloomberg News, reductions from the 2% fee based on assets under management and 20% of investment gains aren't coming anytime soon. Further, the hedge fund community will only trade money for other advantages -- such as longer lockup periods and high minimum commitments (e.g., of at least $100 million).

And, it's worse if the fund is a top performer. After all, why change if you're making money? It seems that there's nothing quite like results for shutting up limited partners.

A pair of hedge funds is pushing TD Ameritrade Holding Corp. (NASDAQ: AMTD) to merge with one of its peers. Their rationale? Cost savings and increased sales. The AP reports that Jana Partners and SAC Capital Advisors, who combined own 8.4% of AMTD, are seeking to substantially increase their position -- driving AMTD up 9% after hours.

I envy the hedge funds' ability to put their mouth where their money is. I have all sorts of ideas I would love to see companies follow but I don't have their power to make them happen. If Jana and SAC are right that mergers will improve industry profitability then shareholders will benefit because the current stock market has not attracted enough individual trading volume to support three independent online brokers.

Jana and SAC accuse AMTD parent and 40% owner, The Toronto-Dominion Bank (TSE: TD), of blocking a merger with E Trade Financial Corp. (NASDAQ: ETFC) but TD says it only controls five of AMTD's 12 board seats. Jana and SAC think a merger could yield as much as $500 million in annual cost savings, from moves such as combining assets on one platform, and more than $100 million in yearly revenue benefits.

If Jana and SAC are right, TD, EFTC and The Charles Schwab Corp. (NYSE: SCHW) could be in play.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned in this post.

Although short selling -- the practice of selling borrowed shares with the hope of repaying the loan by buying back the shares at a lower price -- goes against the American belief that stocks always go up, I have long been fascinated with it. Short Stories discusses what works, what doesn't, and what some of the leading lights in shorting stocks think about its opportunities and threats. I describe possible short trades and I seek your comments and questions for story ideas. I don't offer any investment advice and I don't trade on any of the posts I write.

I first suggested selling short Bally Total Fitness, Inc. (Pink Sheets: BFTH) last November at $2.59. Why? Bally owed $512 million this year, was spending $7 million more cash than it was taking in, and I doubted that banks would lend it enough money to stay afloat. Back then my biggest concern for the short position was that hedge fund billionaire Stevie Cohen had placed a big bullish bet on Bally -- his SAC Capital Advisors owned 6.9% of the company. I figured he must know something that I didn't.

But on Thursday, Cohen's bet went bust as Bally filed for bankruptcy. According to its filing, "Under the prepackaged restructuring plan, there will be a reduction in the principal outstanding on Bally's existing senior subordinated notes by $150 million by exchanging all existing senior subordinated notes for a new class of notes, common equity and the right to participate in a $77.5 million rights offering."

SAC's wipe out provides a useful insight for investors -- even the most talented players make mistakes. It's just that they make more good calls than bad ones. Meanwhile, those who followed my suggestion to short Bally could cover their position on Monday at $0.31 a share, pocketing a 736% return -- not bad for eight month's work.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Bally.

Investing seems to be more of an art than science. It's not necessarily about hiring smart people or having super computers. It's usually about one person who has that intangible X-factor.

For example, in 2006, Goldman Sachs' mega hedge fund, Global Alpha Fund, actually sustained a 6% loss. Yet if you look at some of the hedge funds led by legendary investors, things look much better. This is the conclusion of an excellent article in Bloomberg.com.

Take Steven Cohen, who manages SAC Capital Advisors. Last year, his fund returned a whopping 34%. Or look at Ken Griffin's Citadel Investment Group, which also returned more than 30%.

These investors show that success often means going against the conventional wisdom.

In the case of Cohen, he has become more of an activist. One of his plays was to join with Carl Icahn to make a move on Time-Warner. He has also intervened in the $25.5 billion deal between Phelps Dodge and Freeport-McMoRan.

As for Griffin, he made a bold bet buying-up the portfolio of Amaranth Advisors, which was a massive hedge fund blow-up.

Griffin's firm plans to go public soon.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.