What happened to Hugh Hendry when he made right bullish call and yet lost so much money?

H

helpme_please

Since Hugh Hendry's success in 2008, he became a perma-bear until 2013 when he turned bullish. It was the right macro call, yet he lost so much investors' money over the years and ended up closing his fund in 2017.

How can a hedge fund manager lose so much money despite being right? I am really curious what went wrong.

By the way, I am not a fan of Mr Hugh. I got disgusted after watching how rude he was to Joseph Stigliz who is a celebrated Nobel Prize winner and old enough to be his father.

http://www.businessinsider.com/hugh-hendry-turns-bullish-2013-11/?IR=T
https://www.bloomberg.com/news/arti...ectica-fund-closes-after-15-years-amid-losses
 
helpme_please said:
Since Hugh Hendry's success in 2008, he became a perma-bear until 2013 when he turned bullish. It was the right macro call, yet he lost so much investors' money over the years and ended up closing his fund in 2017.

How can a hedge fund manager lose so much money despite being right? I am really curious what went wrong.

By the way, I am not a fan of Mr Hugh. I got disgusted after watching how rude he was to Joseph Stigliz who is a celebrated Nobel Prize winner and old enough to be his father.

http://www.businessinsider.com/hugh-hendry-turns-bullish-2013-11/?IR=T
https://www.bloomberg.com/news/arti...ectica-fund-closes-after-15-years-amid-losses
More...

Not sure where you are getting this "he has lost so much money from". He HAS underperformed though.

https://www2.trustnet.com/managers/factsheet/hugh-hendry/utoeic/u/00000017po/
 
helpme_please said:
I looked at the factsheet closer. He did lose some money. -4.4% this year when global markets are booming. -6.4% over 5 year period. I would expect better performance since he got his macro-call right since 2013. His under-performance is a mystery.
More...

Most global macro fund managers don't buy stocks. There are 10k mutual funds that do that. No one is going to pay 2/20 to a global macro guy to do DCF (discount cash flow analysis). You allocate money to these guys to look for trouble around the world. The last 3 years have been a poor environment for guys looking for trouble because central banks have not taken their foot off the pedal yet. The great moderation trade has persisted a lot longer then people expected. Yes, he did feel stocks would stay bid but he thought they could stay bid while other things develop in emerging markets. The global macro benchmark index has been in low single digits for a very long time.
 
truetype said:
'Global macro' is largely closet trendfollowing. Run the long-term correlations and it becomes clear.
More...

The correlation comes from the fact that most CTA trendfollowers only perform well in high volatility which "usually" comes from trouble. So yes, this tracks the same path as global macro guys but their volatility is much different. I follow all the big trend followers and even the best of them suffer 30% to 40% drawdowns with some over 50%. Most global macro guys try to keep their drawdowns in single digits. Of course the upside is also bigger for many trend followers. I will say that over long periods of time, good global macro guys appear to be more stable then the CTA trend followers.
 
helpme_please said:
Since Hugh Hendry's success in 2008, he became a perma-bear until 2013 when he turned bullish. It was the right macro call, yet he lost so much investors' money over the years and ended up closing his fund in 2017.

How can a hedge fund manager lose so much money despite being right? I am really curious what went wrong.

By the way, I am not a fan of Mr Hugh. I got disgusted after watching how rude he was to Joseph Stigliz who is a celebrated Nobel Prize winner and old enough to be his father.

http://www.businessinsider.com/hugh-hendry-turns-bullish-2013-11/?IR=T
https://www.bloomberg.com/news/arti...ectica-fund-closes-after-15-years-amid-losses
More...

Obviously, the marker was wrong!


Hugh Hendry Blames Broken Macro Model as He Shuts Hedge Fund
September 15
https://www.bloomberg.com/news/arti...ectica-fund-closes-after-15-years-amid-losses
More...
 
You must log in or register to reply here.
Back
Top