Ospraie fund down 38% and closing up

[W4rl0ck]

How long does it take to liquidate a HF like Ospraie?

And how many more HF liquidations will it trigger?

 

[makloda]

Quote from Cutten:If he was running a truly hedged book, shouldn't his performance be independent of what happens to the energy or commodity sector?

A correlation of zero with a particular underlying market doesn't mean you're shielded from losses. Also, a correlation of zero does not equal negative correlation.

 

[JamesVU2000]

Quote from makloda:

This has no implications for the hedge funds industry whatsoever. There's smart people blowing up all the time. 1998, summer 2002, spring 2004, summer/fall 2006, Aug 2007, summer 2008.

This time is no different.

I disagree. At some point hf investors are going to demand lower fees to be compensated for this kind of crap.

 

[makloda]

And why didn't lower fees become a standard after the disastrous 1998 year? Why would it be different now?

Were shareholders fed up with CEOs all CEOs worldwide after Enron and Worldcom went bust and demanded lower executive compensations? Nothing changed.

 

[JamesVU2000]

There werent 10000 hfs. Its an oversaturated business

 

[makloda]

I've heard this "HF fees are too high and will come down soon" argument thousands of times, and a thousand times it never materialized. Why is this time different? Because there are 10,000 funds? What if 8,000 close tomorrow. You think the remaining 2,000 will drop their fees now that there's less competition?

The few hedge funds that (luck or not) are able to outperform the HF benchmarks will have no problem attracting new money and getting their 2/20 worth.

 

[JamesVU2000]

Yeah like andersons fund did until he blew it too bits. there is no way to know

 

[cuz69]

That fucker holds large positions in energy stocks I play. Man did I get smoked past 2 days.




Actually was down hard this am, but managed to squeak out a small profit. Man have these 2 past days been stressful.
Need to take a breather.

 

[Landis82]

Quote from Daal:

I'm willing to bet a fund diversified commodities equities and commodities etfs will beat 95%+ of commodity hedge funds for the next ten years. even pickens got caught levered at the top and shorting at the wrong time even though he's probably right in the long run

I'm wondering how the infamous Jim Rogers is doing during this collapse. Notice how he hasn't been on CNBC lately? Where are all of his cult-like followers here on ET?

 

[Landis82]

Quote from W4rl0ck:

How long does it take to liquidate a HF like Ospraie?

And how many more HF liquidations will it trigger?

Twenty some odd years ago I would have said that this would take atleast a full week or more, but given today's huge volume/liquidity and instantaneous market information, I would say that Ospraie would most likely be "out" of their positions within 3 days, at most.

Once done, the ENTIRE STREET will be aware of it and you will see investors come back in for some buying that will lead to a decent trading bounce should energy markets be stable.

Just "eye-balling" the price action in the oil service and nat-gas stocks over the last couple of weeks and days, I would say that today is Day #2 and there might be some clean-up tomorrow.

Problem is, how many OTHER funds are being forced to "lighten-up" given this latest downleg in the OIH and UNG. The data tells us that a tremendous amount of Pension Fund money came into this sector ( including futures ) over the past 2 quarters.

Nonetheless, this is a fantastic sector to trade. Nothing really beats it!