What have been your best and worst trades this year?

So, I’m new to the hedge fund space (just started my summer internship last summer), and what I meant to say is that my fund is long-short equity (rather than market neutral). However, my understanding is that “market neutral” and “exposure”, while related, are not necessarily one in the same. I understand that semantically, market neutral implies that net exposure is very close to zero, but how often is that actually the case? Aren’t there funds where the net exposure to equity market risk can vary from say -30% to +30%, and isn’t this also a function of how the markets move? Or does that just make them really long-short equity instead?

By “last summer” I meant “last month” i.e. June

True market neutral funds are not supposed to market time (though some PMs sneak a little bit into it), therefore taking on market exposure between -30% and +30% really makes them L/S funds. If a manager can convince an investor that they have some talent doing it, then there is no reason that they can’t have that flexibility for +/- 30% beta exposure written into the investors’ policy statement. However, for marketing reasons, a manager will usually separate the market timing element from the market neutral element into separate products that can be combined at the investors’ option, because this will open the door to a larger range of potential investors. Many investors looking for market neutral do not want market timing involved in that portfolio, either because they don’t believe it can be done, or because they want to make a separate decision about who will manage that particular risk.

Nice explanation. Thanks for clarifying.

best: long small cap materials stocks worst: still long a portion of those same small cap materials stocks

Trades? None really, as t/o is very low. But I did get taken out of my Beckman Coulter position at a nice premium. Worst? Bot some CSCO at ave cost of 16 and change. Still patient, though. Hope clients are also.

Any ideas on why CSCO is so sluggish? Seriuosly considering going in.

Palantir Wrote: ------------------------------------------------------- > Any ideas on why CSCO is so sluggish? Seriuosly > considering going in. Aimless pursuit of growth (home routers and consumer video - FLIP? More like WTF). A lot of folks jumped off when they saw this. Serial disappointers also get no love. Competition appears to be getting a bit tougher. But $1.50 in FCF (normalized) and almost $5 per share in cash for a dominant player in networking selling under $15 sounds good to me. I have gone in twice - once at $17.50 and doubled up at $15.03 - so I am full. But I still like it at current price. Not a trader like many here, so I will hold it for a long time. New dividend doesn’t hurt things.

Seriously, it is trading at less than 15x FCF, and that’s disregarding the $5/share (net of debt) cash position already. So the business is really trading at 7x FCFE. Oh…how I wish I knew more about servers so I could evaluate this better…

Nice, numi the trader. Read this bud: http://www.scribd.com/doc/59047304/GMO-a-Value-Investor-s-Perspective-on-Tail-Risk-Protection If you are interested in using VIX to hedge part of your portfolio. It’s an interesting perspective. I work in futures/commodities. The explanation the author uses is the same idea of how decay starts to catch up to options on futures rather quickly and ultimately wrecks your bigger trade if you don’t get out of it and keep bleeding decay.