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Two Ways To Play: Investors Flee Hedge Funds


Strengthen your portfolio in good times and bad.


From Bloomberg: According to TrimTabs Investment Research, investors pulled a record $43 billion from hedge funds last month. It was the most since the firm started tracking the industry in 2000.

Approximately $14.4 billion came from funds focused on troubled securities, while another $8.4 billion came from equity long-short funds.

Hedge fund performance fell 4.7% in September, the woest monthly performance since Long Term Capital Management collapsed in 1998. But TrimTabs CEO Charles Biderman did give offer ray of hope: The forced selling is likely over, as most hedge funds have probably sold enough assets to cover redemptions.

See related Professor Adam Katz's related column, Golden Opportunity for Tech Investors.

From the Bull Pen: Professor Katz mentioned a few names on his list of favorites. Among them are IBM (IBM) and Cisco (CSCO). Bulls can consider these plays for the intermediate- to-longer-term.

From the Bear Cave: What may have trouble outperforming are specialty tech stocks like Garmin (GRMN). Although upside risks are currently greater due to stocks being so oversold, bears can consider entering a downside position on a major rally toward the $30-33 range.

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No positions in stocks mentioned.

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