Goldman Sachs' Global Alpha fund said to end a dismal 2007 down 39%

"Goldman Sachs leads hedge fund stragglers

William Hutchings
07 Jan 2008

Goldman Sachs’ flagship Global Alpha fund recorded the biggest loss of almost any hedge fund last year as the industry struggled to match the double-digit returns of 2006.

The Global Alpha fund, which started last year with $10bn (€6.8bn), made an estimated loss of 39%, according to an investor in hedge funds, who has seen its initial results for December."

Continued...

Another Bear Stearns Hedge Fund goes up in smoke...

Jan. 9 (Bloomberg) -- Bear Stearns Cos., the fifth-largest U.S. securities firm, is closing a hedge fund that invested in asset-backed securities, abandoning a salvage plan after the fund plummeted at least 39 percent last year.

Eerie, the exact same loss like Goldman Sach's Hedge Fund...

Difference is, GS keep theirs up and running, Bear Stearns close theirs down (How many have they been forced to close down by now, is this the fourth or what, one does lose track in the face of stellar track records) ;-)

Anyway, that's why the most important question to ask whenever someone promises you they'll grow your money if you're only of a mind to hand some over is:



But don't worry, even if you can't afford your own yacht because you erronoeusly believed that they are in the business of making you money, you can always go cap in hand to a fund manager and nicely ask if you can charter their yacht for a couple of days or so.

;-)


Where are the customers' yachts?'
Can't buy? Charter a fund manager's for only $750,000 a week!

ARROYO GRANDE, Calif. (MarketWatch) -- Some things never change. This script was written long ago, in Fred Schwed's humorous 1940 classic about Wall Street's insatiable greed. The message rings as true today as back then, when America was still smarting from Wall Street's disastrous 1929 crash. Schwed explains the origin of his title, in an "Ancient Story:"

"Once in the dear dead days beyond recall, an out-of-town visitor was being shown the wonders of the New York financial district. When the party arrived at the Battery, one of his guides indicated some handsome ships riding at anchor. "Look, those are the bankers' and brokers' yachts. 'Where are all the customers' yachts?' asked the naïve visitor."

So now, my dear friends, you know how Schwed got the title for his enduring classic: "Where Are the Customers' Yachts?" I was reminded of Schwed's intriguing question by a recent photo in Fortune magazine of "Utopia," the aptly named new megayacht owned by legendary fund manager Bill Miller.

Likewise, "naïve" is an apt term for investors: It was apt in 1929, apt in 1940 and is still apt today. Actually more so: Despite the flood of high-tech data sources now available to America's 95 million investors, they're becoming more vulnerable, gullible and naïve by the day."

Continued...

Lesson 1: Banks and 99% of Funds are just as clueless as most Joes & Janes on the street most of the time.

Lesson 2: The few times they actually have a clue, their objective is not to make you money, it's to make themselves money.

Actually lesson 2 is fair enough if you spend some time to think about it, life isn't a soup kitchen after all.

Must read if despite all the latest evidence to the contrary you still think banks or funds etc have even half a clue what they're on about:

Liar's Poker: Rising Through the Wreckage on Wall Street

Actually, thinking about all these gloomy performance figures - and it doesn't matter if they emanate from employed or self-employed traders - begs the question of why...

Why is underperformance so endemic to far too many human endeavours (leaving aside for a moment the obvious fact that not every player can keep ending the year up a gazllion percent for logical reasons, at least per Universe)...

Main reason for far too many failed opportunities I can come up with is EGO...

People, no matter if they are working for themselves or somebody else, FAR prefer BEING RIGHT...

to MAKING MONEY.

The Bramble has come up with another very good explanation for lacklustre performance I believe:

Four Types of Officer

The wrong people in the wrong place, people doing a job they are not equipped for.

If you're employed, it's employers not knowing what to look for in employees.

If you're working for yourself, it's self delusion or that lovely state of affairs called denial.