Last week’s post brought a lot of sighs of relief from people in the hedge fund industry.
A number of readers, whom frankly I don’t really know, reached out saying that they, too, believe the industry is alive and well and beginning to kick again. A few folks that I do know well also said they were seeing what I was seeing. A couple of readers wrote in, once again complaining that I was simply promoting the hedge fund industry.
It is true that I am a shameless promoter of the hedge fund industry; after all, it has been part of my life for more then 20 years and I have spent thousands of hours writing about it and tens of thousands of hours observing and partaking in it. The reason is not just because I am able to earn a living from it, but, what is more important, I believe in what Jones created when he launched his fund in 1948. It just makes sense: Markets don’t always rise and so investors should have some sort of protection. A hedge fund is supposed to do just that.
Yes, it is true that Buffett and Munger have done incredibly well by simply following the Graham and Dodd theories on investing. There is no doubt in my mind that value investing works, and similarly I believe that index investing works, too. Still, it is also crystal clear to me that hedge fund investing works and, like all investments, you need to perform thorough, thoughtful and complete due diligence before making an allocation and you need to continue to stay on top of managers once you make and investment.
Picking funds is not easy when you are simply looking for a passive manager; it is much harder when you are looking for one that is active. It comes down to due diligence. There is always room for both active and passive managers – investors want and need both kinds, as long as they’re good.
Things that drive me crazy
Recently I sat down to watch television with my son and realized that,even with over 1500 channels, there is truly nothing to watch. The NBA finals are done. The Stanley Cup playoffs are over. Football doesn’t start for a few more months and, besides reruns of The Big Bang Theory, Chopped and MASH, the channels are littered with programs that are just not worth anybody’s time. I could watch Red Sox baseball,of course, but it seems that that package costs extra and, well, it is not in my budget this year. It is just a shame that television has come so far with programming so weak.
On another note
This week marks one year since the death of my friend Peter Testaverde. Peter was a great man who truly gave more then he got to everybody he knew him. My life was better with him in it. I miss him. He left us too soon.