Hedge Fund Woes
Pirate Capital LLC, an activist hedge fund manager said Thursday that its investment staff will be cut in half and its fund will be closed to new investors. Another hedge fund manager, Amaranth Advisors LLC loss a whopping US$6 Billion betting on the wrong side of the market. Add to this several other hedge funds which has either closed down or stopped accepting new investors due to poor returns. The bull market in commodities created a slew of hedge funds banking on investors wanting to get into the game. A lot of Income Trust and REITs were also established to capitalize on the real estate boom as well as the oil boom. Most of these funds have a track record of less than 5 years. Yet investors are willing to invest in these funds just because they are the darling of the fund rating companies or they achieved spectacular returns in their first few years, some making over 105% in one year. It seems to me that people never learn. Don't they remember the recent crash of the stock mar