Hide under the bed, build a safe room in your office, hire a couple ex-MI6 guys to work your security detail, though honestly, for most of you reading this, it's too late.
Third Point, founded by Dan Loeb, said hedge funds are in the first stage of a “washout” after “catastrophic” performance this year. “There is no doubt that we are in the first innings of a washout in hedge funds and certain strategies,” the New York-based firm said in a quarterly letter posted late Tuesday on its website...Most investors were “caught offsides at some or multiple points” since August, Third Point said, when China’s surprise currency devaluation roiled global markets. The firm said market participants were hurt by bets against the yuan in February and investments in Facebook Inc., Amazon.com Inc., Valeant Pharmaceuticals International Inc. and Pfizer Inc. “Further exacerbating the carnage was a huge asset rotation into market neutral strategies in late the fourth quarter,” Third Point said. “Unfortunately, many managers lost sight of the fact that low net does not mean low risk and so, when positioning reversed, market neutral became a hedge fund killing field.”
The few people safe from all of this carnage and bloodshed? Third Point investors, natch.
Third Point said volatility is bringing "excellent opportunities" for those who actively manage their portfolios. The firm said it likes Dow Chemical Co., which announced a tie-up with DuPont Co. in December. It’s also optimistic about Anheuser Busch InBev.