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I disagree. A lot of hedge funds 'learned' that they had to be in the S&P500 in order not to be fired, everytime they sold stocks in the sell-offs, they would watch markets come back and they underperform. As a result, most market participants had to 'get up and dance' due benchmark risk. I...

The hedges are cash (hated by most), OTM puts (which consistently lost money for buyers for years, see Hussman's performance), and being underweight stocks (which might have gotten you fired in the previous years due lack of performance) and being in the right point in the yield curve with...

That is a scenario that I believe almost no one is hedging against

Here is a crazy random thought, a stock bear market induced by rising rates (that is, in conjuction with a bear market in bonds) will blow more hedge funds out of business that people imagine. Most people use bonds to protect a stock portfolio, if you lose money in both, clients will run As I...

What is the coupon rate of the CTD bond?

The low being 25bps shows that the Fed has complete control over interest rates. but dont expect ZH to admit that

"Daily Fed Funds Effective Rate: 0.37 percent (Low 0.250%, High 0.590%) with 5 basis points of standard deviation"

Witch hunt, they had this case for 4 years. Now all of the sudden they come out with arrest warrants? Dude hit a nerve and prosecutors want to make their career taking him down

The problem with shorting Brazilian stocks is that they are at 11x PE and 5% div yield after 2 years of recession. Those are cyclically depressed earnings and yields. When they return to normal (as a market economy always does) they will rise. So effectively, they are at something like 7-8 PE's...

What the Fed is doing here is very dangerous, they 'dots' (fed funds forecasts) didn't come down very much. Yet the market is discounting a interest rate curve that is not in line with their forecasts. The problem is that the market is bipolar, at some point people might freak out and think...

I think he is a great picker and his record shows that. I've come to accept that I just don't like being long stocks, I'm forced to rely on tricks to in order to increase my staying power and not sell when things go bad. Using a manager that has a good record (whether is Ackman or Buffett with...

Well, this 'solution' of yours would involve a lot more time and monitoring than mine. Its not white and black like that, there are solutions in the middle like mine

Fed hikes and ZQ (fed futures) for January settlement drops 2 bps (it would have rallied 20bps had they not hiked). very surprising. Market is pricing in a 34bps effective fed funds. When I was betting against a hike in september I thought it would be 38-40bps. Had I known the market would be...

MDLZ, MCD, Burger King, those are Ackman sort of plays. VRX is more of a high risk high reward bet. It demands a smaller position

Problem is that he diverged from the strategy. putting 20-25% of the fund in a company levered 5-1 is just nuts and he acknowledged the mistake in the investor call last month. Right now, hes got 15%, thats more resonable but still too much for my risk apetite. VRX is either a $200 or a $0...

I bought more PSH (now 10% of my assets) and shorted an amount of VRX to get the PSH VRX size down to 5% of the fund (from 15%). I will be more comfortable with it that way

I find this part of the letter quite telling "Despite the substantial decline in the funds’ performance from August to the present, our net redemptions were nominal at $39 million or 0.2% of capital for the third quarter, and $13 million or 0.1% in the fourth quarter. As a result, we have not...

And with PSH (Ackman's stock fund), I increased my position yesterday (to 5%) but I'm considering increasing it even more (all the way up to 15-20%). He posted his letter yesterday http://assets.pershingsquareholdings.com/2014/09/Pershing-Square-Holdings-Ltd.-Q3-Investor-Letter1.pdf My logic is...

Its probably better to use UNG instead of DGAZ to bottom pick this. Yes DGAZ will go to $0 one day, the question is, will it make you insolvent before it does? With UNG, your risk is limited to the downside. In fact, unless the world will stop using natural gas entirely, the risk is limited...

I plan to short BRKB puts through 2016 and collect some low risk income. If there is a bear market, I will probably be assigned but that's fine. If there isn't, I will make 1-2% in additional returns, with little risk