Some Hedgies Just Outsmart Themselves


Jim Cramer

 | Jul 02, 2014 | 3:23 PM EDT
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When the number came out, you could imagine a collective cringe among all the hedge-fund geniuses out there. I'm talking about the Morningstar number that hit the tape yesterday, the one that showed $6.9 billion in outflows from domestic equity funds in May.

Why is this number so important? Because hedge funds typically aren't long-only. They almost always have shorts on, to be able to deal with the inevitable investors who come to these funds to make money in good times and bad. You don't get the extra 20% by just running around 100% long, especially when hedge-fund titan David Tepper, with $20 billion in assets, is telling another group of hedge-fund managers, "Don't be too freaking long right now," a mid-May utterance since retracted when the facts around the world changed to a more positive tilt....628 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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