Friday, 31 October 2014
Last updated 14 hours ago
Jul 6 2012 | 1:16pm ET
As good as last year was for JAT Capital, 2012 has been as bad—or worse.
The New York-based hedge fund is down nearly 20% this year, The New York Times reports. The fund, which was down 17% through April, returned 17% last year.
JAT founder John Thaler blamed the losses on his bets—both long and short—on the consumer sector, which has accounted for 81% of the hedge fund's losses. "While I am a firm believer in evaluating everything we do based on the process rather than the outcome, it is difficult for me to ignore the loss we have taken in this sector, the volatility it has added to the funds and the fact that this loss and volatility has forced us to play defense in other sectors of the book," Thaler wrote to investors in May.
Indeed, it isn't only this year that JAT has suffered: The $2.3 billion fund was up 30% through the first half of last year before giving back a sizeable portion of those gains.
"The performance of the funds over the last seven months has been a great disappointment to the team and to me personally," Thaler wrote. "After any period like this, we are left to examine the drawdown and review if a change should be made."
The team this year, anyway, is weaker by one: A top analyst, Jonathan Lennon, left the firm in January to start his own hedge fund, Pleasant Lake Partners.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Traders form habits quickly. Understanding these and their effects can better equip us to decipher actual market moves.