I started talking about this investment theme in November, and I’d be remise to stop talking about it now. I’ve upset plenty of my former colleagues – but that’s ok - I was right. The rationalization of oversupply in the US Hedge Fund Industry is finally in motion.

The good news is that journalists are finally biting on this story and tracking down some pretty horrendous 2008 performance numbers. This makes me less of the “negative guy”, and more like the “right guy”. “Hedgies” really like guys who are right – that’s why we get paid the big bucks, remember?

There is an article by Julie Scuderi at Hedgeco.Net today that walks through the travails of “New York’s top 100 Hedge Funds”. It’s an inside joke amongst sober analysts in the hedge fund community that there is a proverbial “NY Hedge Fund Mafia”, and now you see the liabilities associated with some of their group think. I’ll let you read the article and see how bad some of these performance numbers are. Levering up long is not a hedge fund. Real hedge funds hedge!

This oversupplied industry picture is allowing the strong like Phil Falcone at Harbinger (hockey player from Minnesota’s Iron Range) get stronger. Great job to Mr. Falcone and his team.
  • "Cashmere Mafia"?
Picture: http://www.criticsrant.com/Images/criticsrant_com/TV_Cashmere%20Mafia/hn-cashmere-small.jpg