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Hedge Fund Manager's Decision To Take Blame For Performance Is Slightly Alarming

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In a letter sent this week, hedge fund manager (and former co-head of proprietary currency trading at Goldman Sachs) Christian Siva-Jothy informed investors that he would be shutting down his firm, SemperMacro, due to poor performance (the fund is down 2.3 percent year to date, and lost 8.7 percent in 2010 and 27 percent in 2009). He also made some truly disturbing statements.

“In this business you are only as good as your last few trades,” Siva-Jothy wrote. “Mine have not been very good. Whether I have lost my edge or simply need a break after 23 years I am not sure, but I certainly hope it is the latter.”

What the...? But wait...doesn't he...doesn't he know? How you're supposed to do this? It's almost as though SJ missed the class in hedge fund school on what to write in down months and/or when informing investors of a shuttering. If he hadn't surely he would've known that deflection of responsibility + rationale for losses is essential. Whether you're down by nine percent or ninety-nine, you never, ever take blame for this kind of stuff. These are the people you're going to turn to when you restart your fund under a new name and you can't have them asking questions like "why should I give you my money when by your very own estimation you suck at this?" Rather, you tell them that the losses were no fault of your own but were due to, say, “the market’s ridiculous mispricing of equity” and not your analysis, which was solid. In fact, since we've been asked our opinion, we're just going to recommend right now that SJ send a follow up letter asking investors to disregard his previous missive and suggest by stating outright that he hasn't lost his edge- it's simply yet to reveal itself. And when it does- do yourselves a favor and buckle up.

Siva-Jothy Said to Shut SemperMacro Fund After Poor Performance [Bloomberg]


Area Hedge Fund Manager Takes President's Breath Away

From the front lines: From: Whitney Tilson Sent: Wednesday, April 11, 2012 11:20 AM Subject: My column: "A millionaire for higher taxes" In DC, just chatted with Obama and stood behind him at his press conference re the Buffett rule. Just published the column below on the Washington Post web site. As I shook his hand beforehand, I said, "Hi Mr. President, I'm Whitney Tilson of Democrats for Education Reform. We were early supporters of yours and I just wanted to thank you and Arne Duncan for the incredible work you're doing." His eyes lit up and he said, "I remember your early support. We're making progress but we still have a lot of work to do." I said, "We'll keep fighting for you" as he was hustled out of the room to start the press conference.