Spruce Alpha Forgets To Hedge, Tanks 50% In August

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Spruce Alpha Forgets To Hedge, Tanks 50% In August

At the height of the 2008 financial crisis, investors would have had a gain of more than 600 percent. Sound amazing, right? Well those numbers are just backtested, but still sound really good right? Well… maybe something that sounds too good to be true…..

By the standards of most hedge fund investors, losing 5% in a month is pretty much of a disaster, and certainly reason to review your position in the fund. Every now and then you will even hear about a hedge fund that managed to lose 10% in a month, usually in the context of investors are fleeing the fund or the manager resigned as no one wants to be associated with those kind of losses.

 

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