Wednesday, September 03, 2008

Here Today, Gone by Labor Day..

Via Bloomberg.....

"Ospraie Management LLC, the investment firm run by Dwight Anderson, will close its biggest hedge fund after slumping 38.6 percent this year because of bad bets on commodity stocks.

The New York-based Ospraie Fund fell 26.7 percent in August after a ``substantial sell-off'' in energy, mining and resource equity investments, Anderson said in a letter to investors yesterday."

The perils of hedge funds are many, but this fund was managed by someone with all of the right pedigree (experience at Tiger and Tudor) but perhaps a weak understanding of fundamentals in my opinion. To have fallen 27% in August alone the fund had to have been levered to the gills near the top in the commodities market in mid-July. Demand for commodities is strong as a result of emerging markets but the price of oil and other commodities in mid-July was unsustainable.

Sidenote - Never invest in a hedge fund with a cute, mispelled animal name.

1 comment:

JayS said...

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