What do I do to make you want me
What have I got to do to be heard
What do I say when it's all over
And sorry seems to be the hardest word
-- Elton John and Bernie Taupin
Hedge fund investors are getting a taste of just how hard it is to say sorry this week. According to The Wall Street Journal, hedge funds are sending letters to their shareholders with explanations for the huge draw-downs: other hedge funds (crowded trades), computer models, once-in-a-blue-moon aberrations, etc.
Be sure to read the piece in The Journal for some wonderful examples of slippery wordsmithing. Yes, their job was to make money for investors, and they expect to be rewarded handsomely if they succeed. But if they lose money? Why, don't blame them! This appears to be a case of "Heads I win, tails is bad luck" in action.
Suppose the not-my-fault hedge fund managers are right. Maybe it isn't their fault. But if they aren't responsible for bad times, do they really deserve the huge performance fees they earn when it goes well?
