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NOT SO HEDGED

26 March 2009 by Cullen Roche 3 Comments

A lot of hedge funds failed to implement the hedging portion of their investment strategy in 2008.  Of course every hedge fund uses different strategies and it’s not unusual for many of them to be completely unhedged (such as Eddie Lampert’s ESL which is entirely invested in Sears and a few other small investments).  Nonetheless, many of them lost substantial money last year:

The investors include billionaire oilman T. Boone Pickens, who lost $450 million as his fund, BP Capital MGMT, dropped 60% and investors pulled about two-thirds of their assets; and billionaire investor Carl Icahn, who lost $400 million as his firm, Icahn Enterprises LP, lost 35%, mostly from its holdings of Yahoo Inc. and Motorola Inc.

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Comments
  • Chris Hansen

    Thanks so much for your posts. I found you about a month or so back and have been reading you daily since. Very helpful.
    Thankfully I caught and read your posting of Dailio's "A Template for Understanding What's Going On" before it was delated. (I assume someone requested you delete it.) It was one of the best descriptions of what is happening I have read. I would like to be able to send it to some other people and have not been able to find it on the web. Since you had to take it down I doubt you will be able to provide me a link. But in the off chance: any suggestions or directions?

    03/27/2009 at 3:27 AM
    • Cullen Roche TPC

      Chris, I don't have a copy of it, but I'll see if I can scrounge one up for you. Glad you're enjoying the site.

      03/27/2009 at 5:25 AM
  • Chris Rossi

    I was trying to find that same paper that was up here to reread it. Any chance you could forward a copy if you still have it?

    I really enjoyed Dalio’s 2008 investor letter as well – tremendous insight.

    Keep up the outstanding work at the site, great stuff.

    06/19/2009 at 1:12 PM