What has changed since 2008 that caused veteran hedge fund managers to underperform and close shop?

L

learner88

What happened to Whitney Tilson is interesting. For the first 11.5 years of his hedge fund career, his returns through the period was 184% versus only 3% in the broder U.S stock market. Wonderful outperformance indeed. For the next 7 years since 2010, he trailed S&P500 index. 2017 was truly terrible. 2017 was a bull market for stocks. I expected it to be an idiot market where even know-nothing throw-darts idiots can make lots of money but Tilson lost 9%. I can understand if he was a trend-following CTA who lost money in other non-equity asset classes in 2017 but not when he invested mainly in equities. What was ironic that it was a 9-year bull market that finally killed him over the years.

This is all very puzzling. After 11 years of experience, his performance should improve further. Yet, it declined. Worse still, performance declined in a bull market??!! Why didn't the tailwind provided by a bull market helped veteran hedge fund investors like him? He is not the only veteran hedge fund managers who fail. Tilson is joined by Eric Mindich, Neil Chriss, Hugh Hendry, John Griffin who failed along with him.

What has changed in the stock market that cause these veteran hedge fund managers to fail so miserably in a bull market full of tailwinds?

https://www.institutionalinvestor.c...he-last-days-of-whitney-tilson's-kase-capital
 
Dang that is very interesting. Is it just that everybody is trying to out-game everyone else, so when one guy picks up on something and it is working, soon enough others will pick up on it and arbitrage (maybe not the right word, but you get my drift) away any excess profit, and maybe take advantage of knowing the first guy's thinking, in essence taking his lunch money? Is it as simple as its a dog-eat-dog world out there, and you need to be constantly evolving, even moreso these days?
 
learner88 said:
What happened to Whitney Tilson is interesting. For the first 11.5 years of his hedge fund career, his returns through the period was 184% versus only 3% in the broder U.S stock market. Wonderful outperformance indeed. For the next 7 years since 2010, he trailed S&P500 index. 2017 was truly terrible. 2017 was a bull market for stocks. I expected it to be an idiot market where even know-nothing throw-darts idiots can make lots of money but Tilson lost 9%. I can understand if he was a trend-following CTA who lost money in other non-equity asset classes in 2017 but not when he invested mainly in equities. What was ironic that it was a 9-year bull market that finally killed him over the years.

This is all very puzzling. After 11 years of experience, his performance should improve further. Yet, it declined. Worse still, performance declined in a bull market??!! Why didn't the tailwind provided by a bull market helped veteran hedge fund investors like him? He is not the only veteran hedge fund managers who fail. Tilson is joined by Eric Mindich, Neil Chriss, Hugh Hendry, John Griffin who failed along with him.

What has changed in the stock market that cause these veteran hedge fund managers to fail so miserably in a bull market full of tailwinds?

https://www.institutionalinvestor.c...he-last-days-of-whitney-tilson's-kase-capital
More...
is he homeless? if not he is ahead of the game.
 
learner88 said:
What happened to Whitney Tilson is interesting. For the first 11.5 years of his hedge fund career, his returns through the period was 184% versus only 3% in the broder U.S stock market. Wonderful outperformance indeed. For the next 7 years since 2010, he trailed S&P500 index. 2017 was truly terrible. 2017 was a bull market for stocks. I expected it to be an idiot market where even know-nothing throw-darts idiots can make lots of money but Tilson lost 9%. I can understand if he was a trend-following CTA who lost money in other non-equity asset classes in 2017 but not when he invested mainly in equities. What was ironic that it was a 9-year bull market that finally killed him over the years.

This is all very puzzling. After 11 years of experience, his performance should improve further. Yet, it declined. Worse still, performance declined in a bull market??!! Why didn't the tailwind provided by a bull market helped veteran hedge fund investors like him? He is not the only veteran hedge fund managers who fail. Tilson is joined by Eric Mindich, Neil Chriss, Hugh Hendry, John Griffin who failed along with him.

What has changed in the stock market that cause these veteran hedge fund managers to fail so miserably in a bull market full of tailwinds?

https://www.institutionalinvestor.c...he-last-days-of-whitney-tilson's-kase-capital
More...

The boys club catches on to any profitable trading strategy.
 
Value investors also had crises in the '60s and '90s.

Buffett is saying the same things he did at his panic retreat before the dot com top despite admitting later he should have sold at such high valuations.
 
Saltynuts said:
Haha what I was trying so say but much, much more eloquent! :)
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It is just how the market moves.
Intellectual property isn’t safe when greed becomes the overpowering factor.
I can’t blame anyone trying to steal a strategy to get a leg up, that is capitalism.

Just ask the Chinese *wink wink*
 
it seems like people who knew how to trade in real markets have a really hard time making money since 2009. stupid central banks have injected more than the equivalent to twenty thousand million usd into "markets" since 2009. price levels kept getting bought every higher whenever there were any bad news for the global economy, also in response to any catastrophe for the global economy and lately whenever things weren't going so horrendously as well. 2016 and 2017 were years full of horrendous realities for the global economy but central banks injected more than the equivalent of five thousand million usd in 2017 alone, the highest ever, so, no wonder stupid financial indices kept stupidly inflating ever higher.

only people who believe in fantasies and fairy tales would have anticipated in any way the trajectory of the s&p 500 index from january 2017 to february 2018. same for any period from 2009 to date.
 
DeltaRisk said:
It is just how the market moves.
Intellectual property isn’t safe when greed becomes the overpowering factor.
I can’t blame anyone trying to steal a strategy to get a leg up, that is capitalism.

Just ask the Chinese *wink wink*
More...


So if someone has caught onto the methods this guy was using, can one think out further and try and get ahead of THEM? Maybe if like you look back at stuff that has worked over the last decade, and figure that tons of people are now trying that, its been had, and just DO THE OPPOSITE. Something like that. I have no idea.
 
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