Hedge Fund Managers, Nothing more than Major Index Huggers?

An interesting article was just released showing that in 2009 on average hedge funds returned 24.6% where the S&P 500 returned 26.5% in 2009. Now the thing to keep in mind is these are the Hedge Funds in the Hennessee Hedge Fund Index. the index is made up of about 1,000 funds calculated on an equal weighting, so by no means does this mean that all hedge funds were directly correlated with the S&P 500 in 2009.

I NEVER agree with just comparing anything to a single major broad market, as I feel risk mitigation is also essential in designing a portfolio. If you were in only the S&P 500 in 2008, you would have lost nearly twice as much as the Hennessee Hedge fund Index.

So if you had 100,00 to start 2008 an "Investor A" put it into the S&P 500 it would have lost 38.5% in 2008 then gained 26.5% for and ending value of about $77,797.50. "Investor B" put their money into the Hennessee Hedge Fund Index which lost 19.83% in 2008 then gained 24.6% in 2009 for an ending value of $99,921.72. Point being, limiting your downside risk is important as well, I would never recommend just putting all your money into any single index.

Just some interesting food for thought.

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Checking Account has better returns than Gold?

Not to keep harping on Gold, but this is an interesting article on Bloomberg: Gold Can’t Beat Checking Accounts 30 Years After Peak

Just some food for thought, next time you are thinking about purchasing some Gold.

Commodities 2009 Numbers - Gold isn't that amazing.

The following is a graph of major commodities' 2009 numbers.




Of note: copper is up 126%...while Gold (which has been the headliner) is only up 29.62%. Gold is always over-hyped and this proves it again. There was an interesting article (wish I remember where I read it), about the fact that when Dubai came forward with all their problems, the flight was actually to the US Dollar as opposed to gold. Interesting, given the plight of the dollar recently and the intense selling pressure it has had as opposed to the traditional "safe-haven" of gold.

Consumer Spending

This is an interesting chart on historical consumer spending.



Source: Flowing Data

Goldman Sachs' Estimates on Gold and more

Today, Goldman Sachs released their price forecasts on commodities, energy, and what everyone was really waiting for GOLD. Below are their forecasts.

There is No Housing Bubble

The beauty of the internet is that we can go back and research all the bad calls people have made, and that's exactly what this guy did. It is a compilation of Bernanke speaking on the economy and the housing market. what is that quote about, "An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today."

Nouriel Roubini is a fraud

When you are an eternal bear (or bull) you are bound to be right at some point, and people will claim you to be a guru, but this is just ridiculous. How can we ever take what he says seriously anymore with this kind of record now.

This is why being a "guru" only now means that he markets himself better than any other bear. The part I find most incredible is the guy doesn't even run a fund or anything, so he doesn't put his money where his mouth is...Nouriel Roubini is a fraud. Just like all other constant bears or bulls.





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