Greenlight Cites Sheen, Neologism To Explain Bad Q1

May 2 2011 | 1:18pm ET

Distraction can be useful when you've got bad news to report. So quickly after telling investors that its hedge funds had lost between 2.5% and 3.2% in the first quarter, Greenlight Capital turned its attention to Charlie Sheen.

"Much like" the former television star, "who seems to believe that all publicity is good publicity, recent market behavior suggests that we are in the part of the cycle where 'all news is good news,'" the hedge fund wrote to investors in a letter obtained by Dealbreaker.com.

"'All news is good news' was also true for individual stocks, including a number of our shorts," which tanked to the tune of 9.2% on the quarter. "We expect to take some lumps when our shorts release strong earnings and their stock prices rise accordingly. Yet, this quarter we were repeatedly confuzzled [sic] when we read company news announcements that we expected to cause falling stock prices, only to see them rise instead—and sometimes sharply at that."

The quarter has Greenlight all but throwing up its hands.

"We believe that this environment is cyclical, and that it will continue this way… until it doesn't," the firm said. And, "since we don't expect to be able to call the turn, we believe our best course is to concentrate on generating better alpha."


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.