Quick thoughts on this week’s Barron’s…
Bubble in Treasuries? Yeah, probably…Read the cover article, called Get Out Now by Andrew Bary and you decide.
Kopin Tan does the obligatory “cash on the sidelines about to come into the market” story in The Trader column. I’ll admit, the figures are huge, but they’ve always seemed huge, and we’ve been hearing about trillions on the sidelines since as far back as I can remember, especially throughout 2008, so…whatever.
The Hedge Funds Meet Their Match feature by Lawrence C. Strauss is probably the most interesting this week. The case is made that even though many hedge funds finished the year with around half the loss of the overall market, for an asset class that charges enormous fees, that just won’t be good enough to justify the existence of many of these.
Was blown away by how poorly convertible arbitrage did last year, basically cut in half.
Long-only mutual funds have their excuses for being shredded, there was literally nowhere to hide and how much cash can you really hold and still be considered an equity vehicle. What’s the excuse if you’re a short-selling-capable hedge fund to have not feasted in ’08? You could literally have been short almost anything at anytime, as only 29 out of 500 S&P stocks went up last year. The article asks whether or not the masters of the universe can save themselves. Sure they can, because next time there will simply be new masters, like in every other cycle.