Cubist down 20% exposes the scam of Hedge Funds - They are all beta
Bloomberg article on it: https://www.bloomberg.com/news/articles/2020-03-1…
The reality?
Most of these funds are not properly hedged, never were, and were all levered up. THE WHOLE POINT of a hedge fund is to HEDGE against market drops. Literally this Covid 19 crash shows exactly how much of a scam these funds are. Forget the complaints about them being unable to beat ETF benchmarks, look at this disaster.
I'll leave you with the classic quote:
"Where are the customers yachts...."
In 100 years this industry will be remembered as legalized theft.
“Hedge fund” is a term that may have originated as the idea of pairing equity long and shorts, but the term now applies to a wide range of funds. And within this there is absolute return vs relative return, etc.
There are definitely a large amount of funds that are mostly beta and levered up. But pointing to this one example is misleading, if you look across many top funds (citadel, Millenium, brevan Howard, etc) performed well and did limit losses or actually made money.
Funds that invest across asset classes and the world aren’t benchmarked to equity markets or the US equity market, so it isn’t a good comparison. At the end of the day hedge funds actively manage positions and apply risk controls to be able to achieve a certain risk adjusted return and protect against losses. It is interesting that you don’t mention the p72 is actually only down 4%, so it is working as expected (roughly working as expected, guessing they really want to be up..), you are just pointing to one particular subset of their overall firm portfolio.
As I said, not all funds can justify their fees, but I think you are cherry picking data to have this conversation.
You cracked it man, we have all been so foolish.
Mike, looking at your posts they seem to all be of the variety, "finance is the worst, it's all a scam."
Why bother? True or false you're going to persuade exactly 0 people on this message board.
If you're jealous of people in the industry, let it go; you're doing yourself no favors.
If you're happy you found something better, no one here is going to be impressed by your gloating. The jobs in the investment industry are every bit as lucrative and fun as one might hope; in generally, people aren't unhappy to be doing it.
as others have mentioned, cubist is and has been very dysfunctional since inception. They have been a laggard in terms of performance and part of the reason is that their platform is not as sophisticated compared to Citadel or Millennium. There will always be charlatans and blow ups but the ones that weather the storm will grow and attract capital. Financial markets are very Darwinian and pointing to one failure is not a convincing argument.
as a matter of fact they didn’t have a beta draw. it’s possible to have crazy dd while being hedged to mkt.
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