Hedge Funds: When to Bail Out

Now this is what is known as a sell signal:

We are actively working to adjust our process to minimize the negative impact

of future market dislocations and position the fund for positive returns going


Now there’s an idea! Why didn’t they think of that before?

And who came up with this piece of genius? It’s actually from the letter

sent out by Goldman Sachs hedge fund managers Mark Carhart and Ray Iwanowski

to investors in their Global Alpha fund. And that’s not the only laugh-out-loud

moment, either. A bit further down, they come out with this gem:

Our intent under these circumstances is to more aggressively limit the size

of our fund to reflect this new environment and to increase our agility in

times of market stress.

Hm. Aggressively limiting the size of a fund which is down 35% year-to-date.

Shouldn’t be too hard, I don’t think.

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