Loyal readers have read these words before and, unfortunately, I need to write them again: The demise of the hedge fund industry has been greatly overrated.
Mark my words, dear readers, the hedge fund industry is here to stay. No matter how hard the industry is thrashed by the popular press, by the nutty senator from
Massachusetts, by the President of the United States and even by Mr. Warren Buffett, the industry is going to survive and thrive for years to come. There is a real need for managers who can deliver alpha in a diversified portfolio. It is really simple — I don’t understand why people don’t understand it, but it is true — alpha is important. Remember, markets don’t always rise. I know that it is hard to think about but it is true: Alpha is important.
Right now things look pretty bad for the hedge fund industry. New fund starts are down, assets continue to be difficult to raise, fees are under pressure and some managers are having a hard time putting positive numbers on the board. Well, in this humble writer’s opinion there has never been a better time to get into the industry and do your job: Deliver alpha to investors. Period. End of story.
Nevertheless, if generating alpha is not something you can do as a manager (a.) or something you can find as an investor (b.), then I suggest you get out of the way (a.) or keep searching (b.). Managing money and sourcing managers are difficult tasks that should not be taken lightly. It is too easy to call yourself a hedge fund manager and it is even easier to be a lazy investor. To be good at either, it takes patience, experience, time, energy and constant attention. It is real money and needs to be taken seriously. So sit down, both of you, and do your job.
Things that drive me crazy
What’s the deal with all the hugging that is sweeping the nation? It seems every time I see someone, instead of shaking hands they want a hug. Well, I know that I am cuddly, but, really, this is just annoying and it has got to stop. People are going to say that I’m like Jerry in the “Kiss Hello” episode of Seinfeld. Well, if people are going to stop talking to me because I won’t hug them, so be it. This hug thing is almost as bad at the colored sock craze. Almost.