Over the last few weeks there has been considerable discussion in the news about a number of large institutional investors redeeming their allocations in hedge funds.Their decision most likely wasn’t easy. Admitting you are wrong with your own money is one thing; admitting you were wrong with someone else’s pension fund/livelihood is sure to keep anybody, especially the powers-that-be, up at night. I applaud the decision: If the returns aren’t there, fire the managers. It’s simple – deliver or get out.That’s what makes investing with both traditional and alternative managers great – the performance says it all. You make money, we love you. You lose money, pack your bags. Those who don’t get that should get out of the way and out of the business. Investing is about keeping score – period end of story.
Still, the problem is that some people just don’t seem to get it. Over the last four days or so, I have received a number of email rants and raves about why the decision to redeem is a bad one and why the decision not to allocate to hedge funds is even worse.These messages are all absurd. It is also a bit embarrassing for the industry. Just because someone has taken their ball and gone home does not mean you have to cry about it. If the managers had delivered, the ball would still be in play. The industry has nobody to blame but itself.
THINGS THAT DRIVE ME CRAZY
American Airlines has without a doubt the craziest, wackiest way to board planes. Recently on trip to Charlotte, I was waiting patiently to board as part of Group Two. The gate agent called out the first to board: first-class passengers; next, business-class passengers; then passengers who need help; followed by passengers with two legs; then passengers with a cup of coffee, etc., etc., etc. for five more groups before they got to Group One and Group Two. I am not sure if there IS a Group Three or Four or… OK, so a couple of those characteristic groups are embellishments, but the gate agents at American call out more types of people then I have ever heard of. It’s really silly. They should find a better way of doing it.