The "Black Swan" Hedge Fund Returns Aren't So Hot en-us Wed, 31 Dec 1969 19:00:00 -0500 Thu, 25 Dec 2014 06:30:12 -0500 Joe Weisenthal Jim Thu, 18 Jun 2009 12:35:12 -0400 GreenAB, They gave a much bigger portion of their 2000 returns than what you see above. I don't have the statements but know someone who was invested and the returns in 2004-early 05 were material in both years. Investors basicially redeemed it down to nothing. Firms that are struggling tend to first stop marketing and sometimes also stop reporting their numbers. The "survivorship bias" Taleb himself talks about. You make a good point that in the long run this seems to work, but in the long run you can buy deep out of money puts on markets. It's just buying lottery tickets and you don't need to pay management fees and incentive fees to have that in your portfolio. GreenAB Thu, 18 Jun 2009 04:53:51 -0400 sorry guys, but your criticism is not justified imo. first: it looks like they managed to participate in THE black swan UP. second: they gave only a portion of their gains back. annualized 10% from 2000- 02/2003 ist way above the performance of the S&P over this time span. third: show me ANYBODY (no permabears, not madoff or medaillon) who managed to limit the largest drawdown to 26% from 2000-02/2003 AND participated in the mother of all rallyes before. risk/reward looks fine to me, if you have a long term horizon. and as long as we´re living in the world of free market capitalism booms and busts will occur once or twice a decade and make this strategy a success. i wouldn´t invest my entire wealth with them. but a small part could make sense as a kind of portfolio insurance like gold. Jim Wed, 17 Jun 2009 21:08:00 -0400 The whole idea is to not provide steady returns but to produce giant returns occasionally? Gee...sounds like just buying put options in case the market pulls back, which it does a couple times every decade. Hardly a defensible hedge fund strategy. A well trained household pet could do that. These guys have been the greatest story ever sold for a long long long time. They make a lot of returns in a crash (because gee, they're supposed to if they own puts), and then bleed the other 8 years in a decade away a lot of those returns. In the long run you break even...maybe. Otherwise it would not be an efficient options market. In the early part of this decade they had managed accounts with some large institutions and did ok in 2001-02. Then the market went up and volatility went down and they got killed and killed and killed until they wound it up in 2005 I think. Taking some time off from the business, no further questions please. Pathetic. gmoney Wed, 17 Jun 2009 16:44:36 -0400 Don't forget, 2000 was not really a fund at the time. Rather, that was a seperate account. dave Wed, 17 Jun 2009 15:21:34 -0400 another peter schiff scrilla_gorilla Wed, 17 Jun 2009 13:40:45 -0400 The whole theory behind the black swan hedge fund does not provide for steady returns... Taleb would probably be the first to say that you wouldn't expect the black swan hedge fund to produce great returns in any single short-term period. The fund is structured so that it will produce giant returns only occasionally. Joe Wed, 17 Jun 2009 12:35:56 -0400 We'll da, the Plunge Protection Team is manipulating the stock market, bond market (what they can and the Forex market which is around 4.5 Trillion USD. It wont take long before the before inflation current at around 9 % goes to 13 % like in 2008 and heads even higher will all the ***** stay in the manipulated stock,bond forex markets and get royally ****** as the insiders (FED=JPM,GS,C,BAC,MS,MER,HSBC,UBS, exc...) sell what they can and completly place there position to benefit from the major downturn to come. Just like the early 1930's huge bear rally, but this is manipulated by the PPT.