Andy Kessler, one of my fave ex hedge funders has a piece up on WSJ (I live and breathe to click around their paywall – drop link in google search), says hedge funders are nuts as well. I live and love this part:
The trick to running a hedge fund is to drink from the fire hose of information, take it all in, figure out what everyone else knows and then position your portfolio to benefit when everyone else is inevitably wrong. This is no simple feat. Sleepless nights, second guessing, minds racing, almost a split personality working out both sides of all arguments
I am not a trader anymore, was never a good one, but now that I have the Stocktwits stream and confidence in my style, I feel I have an edge when I do make a trade.
Andy goes on to say that Icahn and other hedge funders are going back to some safe old tactics to squeeze some big profits because of the current market environment…namely:
…in every market cycle there are moments when hedgies run out of ideas. We’re in just such a time. Zero interest rates make it hard to read others’ sentiment, commodities have rolled over, bonds are backing up, and the Federal Reserve may or may not be tapering. No longer trusting their Costanza mindset, or maybe because of a loss of patience, they grab onto handholds—trying to tether themselves to more sure things.
I say, with big money comes big problems and most of us don’t need to worry about these problems. I say the key to what Icahn is doing is more about the ‘Whisper Bullhorn‘ he and his cronies have discovered in social media. They are going to be like kids in the candy store for a few years probing, testing, getting wrist slapped and beaten in the media (they could care less) while they figure out how to amplify their old tactics.
The markets have a big new toy…those who know me, have known this for a while and to us it’s no toy.
Note – I am working hard on Andy Kessler to discuss this topic in person and many others at Stocktoberfest…The lineup of speakers from the investing world is off the charts either way so sign up