20150813_Short for Three and a Half Years and Outperforming 98% of Traders, This Hedge Fund Did It

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Short For Three And A Half Years And Outperforming 98% Of Traders: This Hedge Fund Did It

By Tyler Durden Created 08/13/2015 - 09:34

[1] Submitted by Tyler Durden [1] on 08/13/2015 09:34 -0400

One of the most flagrant conventional wisdom market lies is that if one is positioned net short, one is doomed to be crucified, margined out and left penniless, broke and homeless in this quote unquote market, which has been micromanaged by all central banks since 2009 as a confidence-boosting policy vehicle whose only purpose is to levitate higher while creating the wealth effect, ignoring reality, and failing at what used to be a markets primary function: discounting the future.

So what is the truth?

As it turns out one of the best performing hedge funds in the past 4 years is neither a net-long, nor a market neutral, but Horseman Capital, which as of July is -54.2 net short, and has been short since the start of 2012.

[5]

Here are the Horsemans stunning returns by years:

2012: 16.27%

2013: 19.15%

2014: 12.63%

YTD: 7.63%

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[6]

This means that Horsemans cumulative return in the past 3+ years has outperformed 98% of all hedge funds, and certainly most of the net-long biased ones.

How did he do it? By using a long bond position as a natural hedge. In fact, Horsemans net equity short is more than offset by a 60% net long in bonds.

This means that, big picture, while stocks have levitated higher, bonds have levitated higher-er.

So the next time you hear every single pundit on propaganda TV or in Wall Street research desperate to sell you stocks (which they currently hold), or to force you to sell your bond holdings (to them), think why for a few seconds.

Source URL: http://www.zerohedge.com/news/2015-08-13/short-three-and-half-years-and-outperforming-98-traders-hedge-fund-did-it

Links:

[1] http://www.zerohedge.com/users/tyler-durden

[2] http://www.zerohedge.com/taxonomy_vtn/term/10414



[5] http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/08/horseman%20p%26l%20expanded.jpg

[6] http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/08/horseman%20stats.jpg

20150813_Short for Three and a Half Years and Outperforming 98% of Traders, This Hedge Fund Did It

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