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Hedge Funds And The Buy Stuff That Has Gone Up A Lot And Cross Fingers Strategy

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by Felix Salmon
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Why The Safest Banks Saw the Biggest Losses   Extra Credit, Weekend Edition

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Nov 23 2007 12:00am EDT

Hedge Funds and the "Buy Stuff That Has Gone Up a Lot And Cross Fingers" Strategy

Did you really think I was going to leave you for the weekend to plough through a thousand words on LSS-backed ABCP backstops? I'm nicer than that. Instead, enjoy my man Baruch:

If scurrilous gossip is true, and it normally is, I do not think things have got much better for the Quants, some of whom apparently decided to replace their moribund mean reversion strategies after August with factor-based, directional strategies which relied excessively on momentum — this is technically known as the “Buy Stuff That Has Gone Up a Lot And Cross Fingers” Strategy.

There's more where that came from: go read the whole thing. And happy belated Thanksgiving.

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