Twittering A Hedge Fund Event

I went to an event yesterday that featured a number of people active in the hedge fund industry and the financial markets. Here is the series of twitters I sent during that event.

  Headed to the semi annual meeting of a hedge fund of funds. Expect to get some insights and will twitter them

  Observation: great hedge fund managers have come out of goldman, tiger, and michael price’s firm

  Has the financial system crisis run its course? Most likely yes if banks and the fed keep doing what they are doing

  Has housing in the US bottomed? Maybe not, but the bottom is nearing. Watch for change in expectations, not prices

  What about the US economy? A tale of two cities. Not like past recessions.

  Inflation? Watch out, its here and more is on its way driven by massive global liquidity of capital

  Regional banks: look for a wave of regional bank failures. Fed won’t bail them out

  To clarify that string of tweets and what follows: these are opinions I am hearing at a hedge fund event

Systemic risk is largely gone from the
markets but economy risk remains. Market knows how to price the latter
but not the former

  @tweetipFH oil (and food) prices are creating big problems in parts of the economy

Hedge fund manager singing the praises of
aapl. He’s right of course. But his framework is based on the world as
it exists right now

  Had to leave the hedge fund event. I hope you enjoyed the twitters


Comments (Archived):

  1. WayneMulligan

    The “Goldman” comment is interesting…Goldman produces great hedge fund managers and it was also one of the only firms that was short the sub-prime market. What is it about Goldman’s culture that causes them and their people to excel like this?It seems that, unlike much of Wall Street, Goldman’s people are rewarded for NOT running with the herd.I don’t know anybody high up enough over there to ask these kinds of questions, but if Fred or anybody else here has any insight, I’d love to hear it…it’s a question I’ve been thinking about for a while now.-Wayne

    1. fredwilson

      This was discussed at the event at some length.My takeaway from the discussion is that Goldman teaches their investors not only how to make money, but how not to lose it.There was a story about the risk arb group which as you surely know takes positions in public companies in the midst of mergers (like those who bought YHOO after MSFT made its offer).When a rumor was heard that was good new for the position, the top guys wouldn’t be interrupted.But when a rumor was heard that was bad news for the position, you’d get pulled out of anything.It seems that they instill a culture of risk management there that people take with them when they leaveFred

  2. kenberger

    Glad you blogged about it, because one thing twitter doesn’t do as well as a blog is allow a place to foster a real discussion.Wanted to say that I found this stream extremely useful. If someone’s a really good summary/highlight person, they could capture the essence of an event and convey it in a very efficient manner to those who can’t attend. And there are many who would never blog, but might get into the habit of whipping out their mobile and micro-blogging via Twitter. If they’re good enough, the snapshot coverage might even be better than if I attended the event, given the propensity to want to snooze through most of them.Also, I don’t care as much about the real-time aspect for something like this particular event (as opposed to w/ sports and natural disasters). I consume Twitter entirely by RSS. So I can now easily grok the content of a lot of events I’d never be invited to, very time-efficiently each night.

    1. ppearlman

      agreed… i re-tweeted one of ’em this morning because, while the majority of tweets going by in a flash are deservedly fleeting, some gain value from review and reflection….

  3. gregory

    and not a word about unsustainable system structure, so the house of cards theory due to unquantifiable debt structures is false? or the ponzi game continues? from over here in asia it looks slightly less rosy, but maybe the idea of value is different

  4. Zach

    Sorry to completely change the subject here but I find it very interesting that you chose Twitter as the venue for this. This is not a critique by the way, but rather an attempt to understand the reasoning. You’ve posted on several occasions regarding the value that comments add to your blog and I couldn’t agree more. I love coming here and reading your posts and I particularly enjoy reading through the fantastic conversations in the comments that follow.Twitter is the exact opposite of your blog in my opinion. Had you chosen a forum such as Jaiku or Pownce, a string of conversations could have ensued. Services such as these are very conducive to organized conversation. Unless someone is willing to swim through a sea of clutter to dig up @ replies, Twitter is just a firehose in this case.So is the appeal of Twitter that it’s popular? I’m not saying I don’t see value in Twitter – I’m saying for personal use I think other like services would have the potential to make ‘broadcasts’ like these more valuable to a community, and to the author.

    1. fredwilson

      I love getting the @replies on twitter and received plenty of them during the eventIt works great for me in that situationI think your point is that it’s hard to have a group discussion about an event like thatTwitter needs groups and events functionality for sureFred

      1. Zach

        Agreed re: groups / events. I guess my point was a service that provides organized in-line conversation has the potential to involve more of the community and it is also more easily followed by the community. What’s more, it allows you to easily discover new people and interact with them. I may follow you on Twitter but I probably missed most of the @replies you received because I don’t follow the people who posted them.If I want to participate in a conversation you start on Twitter the odds are pretty good that I can’t. You probably don’t follow me and most of your contacts probably don’t follow me so odds are good that no one will see my contribution. In-line discussion would mean that I could easily take part in the conversation and everyone would see my comment. If I add no value, I’ll be ignored. If I manage to contribute something of interest, people can respond and spark further discussion. What’s more, if I’ve intrigued some people they can then browse through my history or add me as a contact.

        1. mccv

          this is actually something we’ve started a project around. I think there’s a fundamental difference between systems like twitter that are centered on the individual’s point of view (and by extension *their* friends, *their* network), and systems that are centered on on the point of view of an “event”.Take the Web 2.0 Expo. I’m not friends with even 1% of the people there, nor do I want to be. But for the duration of that event I’m interested in hearing what they have to say, finding out what they’re up to, and maybe hanging out after hours.You could add this to twitter, but honestly I think it takes away from the simplicity of that medium. It also presumes a single medium to get data into this event stream… whereas doing it as an external aggregator allows you to pull in data from Jaiku, RSS, Twitter, Jott, or whatever.

        2. fredwilson

          Zach,it sounds like what you want is what friendfeed offers.all of my hedge fund tweets were there yesterday (at friendfeed) waiting for a conversation to happen around them but not one of them got a single comment on friendfeed.and i got 24 @replies on twitterso it’s not clear to me that the friendfeed solution, as much as it sounds better, is betteri think it comes down to the community that uses the service. there are a lot of hedge fund types on twitter and they were the ones replying to me like all social software, its first and foremost about the community of users, and second is the features.fred

        3. Zach

          Couldn’t agree more Fred, it is all about the community. I believe that to be Friendfeed’s core flaw actually – it is a service built around other communities. People don’t generate content there, they aggregate content there. Essentially it seems to be trying to build value by leeching value from the communities where content is created. I don’t like that model, although I do see its use.Twitter clearly has the biggest and most diverse community of its kind and therein lies the answer to my original question I suppose. The people you want to interact with are on Twitter. I just wish that Twitter made it easier to interact with the community. If I find someone interesting on Twitter somehow, I follow him/her. (s)he then gets an email notification and can look into me or just forget about me – either way (s)he has to travel outside of the community (email) to even know I exist.With some similar services when I find someone who looks interesting, I interact with him/her. If I continue to have interest after our interaction I can add him/her and if I don’t, I won’t. Everything happens within the community and people can interact without becoming formally connected. I like that. As you say though, it’s all contingent upon the people who make up the community…

          1. fredwilson

            These are very good observationsI will pass them on to the twitter teamThanks!fred

          2. tweetip

            Zach ~ A feature in our twitter client is named “New Followers”. This event displays in realtime nine future tweets from each new follower, giving us a glimpse into who they are. If we need more info, we click a button to view their homepage and google background. We can follow back, not follow, or block. (this feature eliminates email notifications)Next? Other event filters (Web20, SxSW…) might tag what a follower/notfollowing is adding to the convo. If we see something interesting from a follower/notfollowing, the window for friendship opens again. The only action that closes the window is “block”.We believe it’s a positive (if not imperative) to slowly build one’s social network versus the shotgun approach. hth :))

          3. Zach

            Sounds interesting, I’ll have to take a look although it looks like you are in private beta right now.Admittedly though, most of what little twittering I do right now is done on my mobile…

  5. Doug Kersten

    Liked it..can you explain the tale of two cities tweet a little more?

    1. fredwilson

      Some sectors and regions are getting creamed from oil prices (airlines) and food prices and real estate meltdowns and other factorsOther sectors and regions are doing great like nothing at all is wrongAnd of course, we have the rich getting richer and the rest getting poorer and that seems to be getting worsefred

      1. sweller

        Hi Fred — a great post.”Other sectors and regions are doing great like nothing at all is wrong”Did they give any direct examples? It seems that even traditionally recession-proof sectors are taking a hit.

        1. ppearlman

          agriculture, materials and energy are killing it

  6. george

    hi fred, big fan, great post!

  7. curmudgeonly troll

    All that for only 1 and 10?Thanks for reminding me why I don’t invest in funds of funds.

    1. fredwilson

      Say what you will. I’ve been in this fund of funds since the early part ofthis decade and have never gotten less than 10% per annum and never morethan 16% per annum. The goal of the fund is preservation of capital withdecent returns. It’s a balanced fund that has delivered on that promise forme. Year to date, this fund is up slightly with all the major US averagesdown 3-8% year to date.It works for me. Of course, this isn’t the only place I invest capitaloutside of the VC business, but I think its a very prudent investment.Fred

      1. cowardly h8er

        The threat of bankruptcy doesn’t loom over certain institutions because the government promised to back them up. That alone should scare the bejeesus out of everyone. I bet somewhere a dinosaur said “glad that’s over” shortly after the asteroid hit. Somewhere in Hiroshima someone said, good thing it’s just one plane.…20% of mutual fund managers know what they’re doing, and aren’t closet indexers or high-expense boondoggles. Unfortunately same applies to hedge fund managers. And to FoF managers. Only problem is the HF manager takes 20% of the profits, and FoF takes another 10%, and over 10 years even with no profits they take 30% of your money at 2% and 1% a year apiece.If you’re in that top 20% of FoFs that has ability to identify great investors and get access early, fine. There’s no better investment, both in terms of performance and correlation with your other asset classes, even though the liquidity and apparent risk are illusory. The good FoF managers I know are hedge fund rejects who can sniff out the BS artists, and spout enough drivel to make people think they add some value. Which is what most investor meetings try to do. The book by Swensen the Yale guy is pretty clear about why most people should steer clear of FoFs (among others), even though he pioneered alternative assets with incredible long-term success.I read more insightful stuff here everyday, and from bloggers like Tanta.Anonymous h8er

  8. Antman

    I follow you on Twitter, this barrage of Twits was undoubtedly the best round of Twits I’ve gotten to date. Well done, thanks! Peace!

    1. fredwilson

      Thanks antman!