Editor's Note: Our Founder & CEO Keith McCullough's memoir Diary Of A Hedge Fund Manager written in 2009 chronicles the life and insights McCullough learned on his way "from the top, to the bottom, and back again."
Below is a free excerpt.
The worst thing about crashes is more often than not the well-intended solutions wind up begetting worse crashes down the line.
It’s akin to infusing a marathon Monopoly game on the verge of conclusion with a fat sack of new funny money, thus allowing otherwise wiped-out players to stay in longer.
So we had a crash that played over years, then months, and then weeks. Market conditions had grown worse and worse until the facts could no longer be shouted down or hoped away. I continued to chirp, and to do research and to ask questions, of myself, of the industry.
To hedge funds that made money being short at the right time, I said “Bravo” – and they didn’t cause the crash. Short sellers were some of the only bright lights we had in the dark.
To the levered long crowd, on Wall Street and at hedge funds, to all those in a position of authority in our financial system who dared to use the phrase “no one saw this coming,” I had to ask one thing:
As a fiduciary to your shareholders and investors alike, what is it, exactly, that you do?