{"id":170432,"date":"2010-01-12T10:12:00","date_gmt":"2010-01-12T15:12:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/hedge-funds-worst-short-bets-of-2009-2010-1"},"modified":"2010-01-12T10:12:00","modified_gmt":"2010-01-12T15:12:00","slug":"hedge-funds-worst-short-bets-of-2009","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/170432","title":{"rendered":"Hedge Funds’ Worst Short Bets Of 2009"},"content":{"rendered":"

Upon reading various hedge fund investor letters and conversing with colleagues in the industry, one thing has become quite clear: hedge funds got their asses kicked on the short side of the portfolio in 2009. This is by no means a shocking revelation given that the stock market itself has risen over 70% from the lows back in March 2009. After all, a rising tide seems to lift all boats. While the negative performance of short positions over the past year is a common trend, we want to focus on a theme found in many of their portfolios.<\/p>\n

Here’s the common link: many hedge funds have shorted businesses with high operating leverage. Amidst the crisis of the past two years, operating and financial leverage became quite a detriment to various companies. Hedge funds quickly recognized this and shorted shares of companies who would struggle with this burden in an uncertain economic climate. At the time, it was a poignant move. However, markets are often driven by perception (versus reality).<\/p>\n


Read the whole story at Market Folly — ><\/a><\/strong><\/h3>\n

Join the conversation about this story »<\/a><\/p>\n

See Also:<\/b><\/p>\n