Hedge Funds Weathering Market Storm with Aplomb
New results suggest the wild swings in the market that are making you sick – are making the smart money rich.
Take a look at the latest numbers from AddVision, which you can see in the chart below. Going by their results, some of the biggest hedge funds are weathering the market storm pretty well. In fact you might say they're singin' in the rain.
And OptionMonster Jon Najarian says these results just re-confirm why hedge funds have earned the nickname smart money.
”These kinds of returns are why people invest with these folks – they have the the fortitude and insights to pick winners in a volatile market," he says.
Jon’s brother Pete Najarian thinks there’s a lesson here. “Buffett buys when things are distressed,” he reminds. It may pay to follow Warren Buffett’s investment philosophy – “be greedy when others are fearful.”
On a somewhat related note, we're thinking at least some of those hedge fund gains are tethered to the moves in precious metals.
According to a New York Times article published on CNBC, hedge funds have started to take profits - substantial profits - in gold. Get all the details. Click here to go to A Gold Rush Wanes as Hedge Funds Sell.
IS THE BANKING SYSTEM BROKEN?
More than a few investors are wondering why the banks just can’t seem to get it together.
According to widely followed analyst Dick Bove of Rochdale, reserves are surging to historic highs, yet loans are falling off.
“Reserves at the Federal Reserve Bank have risen by $1,613 billion from January 2008 to the present,” says Bove.
”Yet loans at large banks have fallen by $84 billion in that same period. In essence, the mechanism for converting money into loans is broken.”
Trader Brian Kelly agrees with Bove and doesn't see the problem changing anytime soon. "Why would banks lend to people as a 30 year mortgage at 5% when the environment suggests rates will go higher and probably a lot higher over that same period."
TRADING THE RISK-OFF TREND IN CURRENCIES
With so many rapid changes gripping the stock market, you might have forgotten about the currency markets. But we didn't.
Check out our latest Money in Motion currency trade from Willie Williams of Societe Generale. Watch the video now!
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CNBC.com with wires.