Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Hedge Fund Momentum Trade Blows Up - Worst Losses Since '09

edited April 2016 in Off-Topic
Not sure I understand just exactly what these guys were trying to do. It's something I'll re-read and ponder over the weekend. But a couple quick thoughts come to mind.

"Too clever by half" & "The best laid plans of mice and men often go awry."

Don't like seeing anybody lose money. My sympathies are with these investors.
http://www.bloomberg.com/news/articles/2016-04-01/hedge-fund-momentum-trade-blows-up-with-losses-worst-since-2009

Comments

  • It appears to me they use a strategy of "buy high and sell (short) low". My asset allocation strategy uses "buy low and sell high". I don't feel too sorry to them; their losses are the cost of education.
  • edited April 2016
    Thanks hawleyI. I think you nailed it.

    Perhaps under the guise of being market neutral, these guys set their computers to buy stocks that had been rising and sell short the ones that had been falling.

    I can see now how that could run into problems down the road.:)
Sign In or Register to comment.