This Hedge Fund Strategy Ain’t Overcrowded

Everyone wants to be a contrarian.  Here is an interesting suggestion that a hedge fund can be contrary by selling stocks short.  The evidence here is not very convincing, since even those hedge funds that are not labeled as "short only" maintain substantial short positions and use leverage.

But first, take a look at the article.

Link: This Hedge Fund Strategy Ain’t Overcrowded.

We’ve been silently skeptical of claims that hedge funds will run out of ideas. The reason is that a hedge fund can technically do anything it wants. It doesn’t have to do traditonal long-short arbitrage, or whatever is considered standard….

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Incomes and Spending Healthy, Another Measure of Inflation Decelerates, Leading Indicators Point to Further Strength

Here is a nice summary of current economic data and a thoughtful conclusion:

Link: Incomes and Spending Healthy, Another Measure of Inflation Decelerates, Leading Indicators Point to Further Strength.

– Personal Income for November rose .3% versus estimates of a .3% increase and a .5% gain in October. – Personal Spending for November rose .3% versus estimates of a .4% increase and a .2% gain in October. – The PCE Core for November rose .1% versus …

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We’re Just Wild about Barry

The end of the calendar year provides a time for reflection, assessment, and a look ahead.  As I sort through my notes and ideas, I am acting early on the resolution to post more of them in (semi-) real time for our group.  We will still collect the various threads and provide more comprehensive analyses and reports as we have done in the past.

In looking over my agenda, I see that I have several themes that will reference Barry RItholtz, and that probably deserves some explanation.

In our office, we like Barry.  We enjoy reading his work on RealMoney, one of the Cramer sites.  We enjoy seeing him on TV.  We enjoy reading his blog, The Big Picture.  We think that he is intelligent and articulate, stating his case in a most effective fashion.  We also admire the willingness to blog, since the Cramer site philosophy ended the reader comments.  (Digression:  I like the Cramer site concept, so I hope that Cramer’s staff reconsiders the feedback issue.  They are out of step with the modern trends in encouraging comments).

It just happens that, at least for the moment, we completely disagree with most of Barry’s conclusions.  Now I could try to craft a "straw-man" argument for everything I am trying to explain, but why bother when Barry is there with a strong argument for a different viewpoint.  What we say will not make any difference to him, and it will help me explain to my band of followers why we are looking for a big rally while the expert on their TV says "Dow 7000!"

Since Barry’s views change — he’s no perma-bear — and so do mine, as those who cashed in during the 2000-2001 period remember, I’m sure we’ll line up on the same side one of these days.  At the moment, however, it will take some doing.