Any comments on this from you, Zeev, or anyone else? It's from a paid site....from a very successful trader....
"One topic many traders have been talking about for a while is the prevalence of "group think" in the hedge fund business. There has been an explosion in the number of hedge funds operating in recent years, and all of them are constantly searching for an edge.
How do you find an edge in this business? You have to do something that's different and unique, something that not everyone else is doing. Almost by definition that means you have to adopt a contrarian strategy. The only way to avoid being part of the crowd is to do the opposite of what the crowd is doing.
The net result is that we have hundreds, if not thousands, of hedge funds out there all trying to "outcontrary" each other. At times it seems as if the contrary trade is actually the crowded trade. That is the sense I have right now in the semiconductor group. Despite lots of comments that "everyone" is bearish on the group, I see almost no one claiming to actually be short the group.
I tend to think the game of trying to be more contrary than the next guy has grown to the point where trying to measure sentiment is almost an impossible task. With everyone trying to take the other side of the crowd, there ends up being no crowd.
It is an interesting development to consider. It probably causes greater randomness in the market overall and makes trading more difficult. Make sure you think about this when considering what the prevailing sentiment really is."
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