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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: kris b who wrote (76059)	12/19/2006 11:01:35 AM
From: John Vosilla	Respond to of 110194

'Greatest Pump and Dump In Financial History' No comparison of Best Buy or any other stock these days versus tech stocks in early 2000.

To: kris b who wrote (76059)	12/19/2006 11:05:20 AM
From: russwinter	Read Replies (4) \| Respond to of 110194

Other than some weak retail, market has completely recovered once again. Trained monkeys think they can trade this obviously. When does the trap get sprung? Contrary Investor thinks it's hedge funds trying to goose performance before they lose their jobs from the lock out periods early next year. Look like trap material to me. There's another issue that also may weigh on just how fast the equity horses bolt from the starting gate in 2007. And that's hedge fund lock up periods. Although we have absolutely no way of quantifying magnitude here, we first need to recognize that hedge fund performance in aggregate over the past few years has not exactly been stellar. Lack of volatility is a tough pill to swallow for many a hedge concern. We're not talking about all hedge strategies, just the headline hedge fund index return numbers themselves. As you know, many singular strategies have done very well. Here's what we mean. As of the end of October of this year, the Greenwich-Van Hedge Fund index showed an 8.4% YTD return. That compares to an S&P total return at the time of 12.1%. If you are a 2% (of assets fee) and 20% (of profits fee) hedge concern with these types of numbers, let's just say client meetings may be a tad difficult. The numbers over the last three years show the Greenwich-Van Hedge index at a 9.3% compound annual return and the S&P at 11.4%. You get the picture. In aggregate, the "gotta be there" hedge industry has not exactly led institutional investors to the promised land so many believed would be the case in prior years, and at much greater fee expense than would have been a brain dead index fund. Here's the tough part, as you and we know, many a hedge concern entered the game with multi-year lock up periods. Not only institutionally, but also those fund of fund strategies peddled to retail investors by the brokerage firms. So here's the question of the moment. Just how many hedge lock up's expire in 2007 and how much of this is destined for redemptions unless performance picks up noticeably and fast?