Tue 21 Aug 2007
Just like the Mortgage Fund Implode-O-Meter (which we previously mentioned), we now have the Hedge Fund Implode-O-Meter to keep us abreast of all that is going wrong in the world of finance.
Today’s # of failed mortgage funds: 129
Today’s # of failed hedge funds: 13
August 27th, 2007 at 2:57 am
What exactly constitutes an ailing fund or trading strategy? It seems that this site considers a 10% loss in a month to be a sign of endless doom for a fund. Is 10% really the end of the world? What would you consider to be a drawdown that was worthy of calling “too big”?
August 27th, 2007 at 8:36 am
I don’t consider a 10% drawdown to be an ailing strategy, but it depends on how you set expectations with your investors.
If you have to halt redemptions, I’d consider you ailing, because that’s when you know that your drawdown does not meet the expectations of your investors and you fear a rush for the exit door.