Did you ever hear of a fund manager like this?Sorry,I dont know which fund.
He writes:
The fourth quarter of 2007 continued what has been one of the strangest and most difficult years for me. In August of 2007 several banks indicated there were significant problems with sub-prime mortgages and other risky loans. Very often in years when there are earnings disappointments, companies will announce them in September and October... We prepared for these earnings disappointments and a bear market by going net short in September and October. However, September 2007 was a solid month up ... and October saw the prices finish near their highs. ... December was a tough month. There we managed to lose money on the long and short side. ... One consultant told me in November 2007 that I sounded frustrated the same way I did throughout 2002. He was right: 2007 felt a lot like 2002. ... I would say that volatility in 2007 felt even greater than it did in 2002 and that 2007 was the year of incredible reversals. ...
As I write now, the US stockmarket is in a bear market and the economy likely is heading into a recession. We have been in this situation in the past and we do have a clear game plan for what to do. Our average position is a bit smaller and we adhere to our stopping positions even more tightly. ...What we are attempting to do is a bit like sailing a boat in a hurricane... I am not pleased with the performance in 2007 (i.e. 7%). In the end, our percentage return beat external benchmarks, but came nowhere close to the internal benchmark I set. My contract with you says I am allowed to charge a 1% management fee on assets and a 20% incentive fee on profits, but I cannot in good conscience charge these fees for 2007. For 2007, I have charged a 1/2% management fee and no incentive fee.
AI
