Quote:
Originally Posted by joshuanip
A few misconceptions, what is a hedge fund? It’s a fund that hedges, so when your in an era where people have no clue how options work are gambling on zero dated options, but all they know is “stock go up”, a “hedged” fund will underperform an overheating FOMO market. Hedge funds make their hay in volatile markets, because it creates value dislocations on the long side and the shorts are (finally) working again. So you have an uncorrelated return stream that has lower volatility from the hedge. And through a market cycle (we haven’t had one for a while), hedge funds would generated superior risk adjusted returns to an index. Problem is many retail investors don’t know the difference between absolute and risk adjusted.
Rolling out of the money written calls works best in a market that goes up linearly…they don’t.
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it works better than if market goes down and also if market goes up but not parabolic up for many years in a row. but still profit.... there are many articles stating how the SP outperforms money managers. and hedge funds...only 4 did better than SP in 2024, i know its linkedin but i too lazy to look up all the them...there are a ton of articles on it
https://www.linkedin.com/posts/dante...33892608-gcGA/
https://www.aei.org/carpe-diem/the-s...nt-even-close/