Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (11581)	1/10/2003 9:43:23 PM
From: stockman_scott	Respond to of 89467

Hedge funds swamped with losses in 2002, study says By Svea Herbst-Bayliss BOSTON, Jan 10 (Reuters) - Hedge funds are now in the same boat as mutual funds. After years of being heralded as the only way to make money in down markets, these loosely regulated funds took a bath last year. Many are now treating their investors to the kinds of losses mutual fund managers have seen for more than three years. "I can't put 2002 behind me fast enough. Calling it a dog of a year for the industry would be the polite way to express myself now," said a New York-based hedge fund manager, whose firm suffered heavy losses and who asked not to be identified. First indications on how the industry fared last year came on Friday, when data from the Hennessee Group showed the average hedge fund lost 3.43 percent last year. This is the only time that hedge funds, which together manage roughly $600 billion, have had a down year since the Hennessee Group began keeping records in 1987. Last year, they were up about 4 percent. The average annual return between 1987 and 2001 was 16.45 percent. The Standard & Poor's 500 index returned an average 13.64 percent during the same time. The Hennessee Group is traditionally the first consulting firm to release monthly data. More numbers will follow from CSFB/Tremont in a few days. While performance slumped among hedge funds, things were far worse in the $6 trillion mutual fund industry. The average U.S. diversified equity fund lost 22.41 percent, according to fund tracker Lipper Inc. as the stock market posted losses for a third straight year. Only bond mutual funds had another winning year, posting an average 4.80 percent return last year. RED FACES BEHIND THE HEDGES Still embarrassment is running high in the secretive and exclusive industry that lured decorated mutual fund managers like John Muresianu away from industry giants like Fidelity Investments and long boasted a knack of making money in bad times. Hedge funds, unlike mutual funds, can go long and short and, consequently, make money even if stocks are falling. But now bad times have hit the industry and roughly 800 funds out of roughly 6,000 were said to have shut last year, according to industry consultants Tremont Advisors. Many went quietly. But others like Kenneth Lipper, a prominent manager with ties to Hollywood, Beacon Hill Asset Management and now Gotham Partners Management grabbed headlines when regulators began investigating their funds' demise. The sums of money they lost for their clients are still being tabulated. Hedge funds were once reserved for rich clients who could afford the multimillion-dollar minimums, but recently they have moved down market, now targeting Main Street investors by cutting the minimums to a few thousand, not million, dollars. As mutual funds wound their way through another dismal year in 2002, demand for hedge funds remained strong. Data from Tremont Advisors shows that investors poured roughly $35 billion into hedge funds in the first nine months of last year. This is about 40 percent less than the roughly $60 billion they put in during the entire year in 2001, which was a record year for hedge funds. The market's spasmodic decline last year sent a lot of hedge funds reeling and those that did best followed a short-biased strategy, betting exclusively that stocks will fall, the Hennessee data showed. Short-biased funds rose 15.84 percent. Meanwhile funds that invested in growth stocks lost 11.39 percent and funds that concentrated on health-care and biotech companies slumped 17.09 percent, the data showed. Looking ahead, industry sources say many teams of fund managers have no choice but to close down, especially if they failed to make their targets and earn the lucrative performance fee that often attracts managers to the business. But the industry is also resilient, said Ron Geffner, a partner at Sadis & Goldberg, a law firm that sets up hedge funds. He said there are plenty of fund managers who are ready to try their luck again and hope to raise more capital this year.

To: American Spirit who wrote (11581)	1/11/2003 12:18:02 AM
From: stockman_scott	Read Replies (2) \| Respond to of 89467

A 'very grim analysis' George S. Hishmeh, Jordan Times, Jan 10, 2003 The Bush administration was caught flat-footed in the first days of the New Year, as it plodded along unevenly on its foreign policy quagmire. A miscalculation here or there may prove disastrous; hence, fears among many Americans that the future does not bode well. ... A common feature of the American policy is the absence of steadiness, a factor that has repeatedly prompted accusations that it is not fair-minded or evenhanded. In fact, a double standard is evident in its pronunciations. ... While the Bush administration continues to commit more firepower and men to the Middle East (although there are some who still belief this is only American hot air), it has seemingly backed away from a direct confrontation with North Korea which, unlike Iraq, is believed to possess a few nuclear bombs. ... ... But in the opinion of Zbigniew Brzezinski, the national security adviser to President Jimmy Carter, “the lesson of North Korea for the Third World dictators is to go nuclear as rapidly as possible, and as secretly as possible, and then act crazy so as to deter us”. ... The CNN interviewer, Judy Woodruff, nodded: “Very grim analysis.” jordantimes.com