Thursday, February 26, 2009

From Rumor Bag: Average Equity Hedge Fund Is 70% In Cash At End Of Each Trading Day

Explains why the market performs like a schizophrenic day trader, as investors try to game the greater fool in unison, running the market up and down especially in market leading sectors such as financials. As long as a fund is not the last man in, the first 50% in any wave are set to make profits. While this has long been the modus operandi for SAC and some other notable algo trading outfits (who love throwing around unmerited lawsuits for libel so we will just keep our mouth shut), the fact that it is spreading to most hedgies is shocking, as Buffett's mantra of buy and hold is officially now dead. Sphere: Related Content
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Anonymous said...

so basically what you said before about buying the days when the market pukes...

Anonymous said...

makes anecdotal sense given the volumes in the 2x/3x ETFs.

Anonymous said...

It's a reflection of extreme fear and only little greed. Cash is king until either a real bottom is reached (S&P in the 500) or the stream of bad news goes to a trickle.

The former will beat the latter I think.

Anonymous said...

Tyler Durden

Continued excellent work --- I check in often -- you have been a "best of" on my blog once and could easily have won multiple times already. You are truly MUST READING for everyone.

Julius Caesar stopped by my blog again--so far so good

Hope you and your readers are doing well.