The Go-Go Years
“Gramco stock, which had once sold at 38, was then available for 1½.
In June 1972, a block of preferred shares of Bernie Cornfeld’s (more properly, formerly Bernie Cornfeld’s) Investors Overseas Services changed hands in Geneva at one cent a share.
Between the end of 1968 and October 1, 1970, the assets of the twenty-eight largest hedge funds declined by 70 percent, or about $750 million. (Theoretically, hedge funds alone among financial institutions were ideally structured to survive a market c...rash or even to profit from one. But only theoretically. Structure is not genius; even for the exclusive hedge funds, genius turned out to have been a rising market. In practice, their managers, as carried away by the go-go spirit as anyone else, had simply forgotten to hedge in time. One of the most heralded of them had had the spectacular bad luck—or bad judgment—to begin large-scale short selling on May 27, 1970, the very day the market turned around and made a record gain.) Among the heavy losers in one such fund, which closed down in 1971, were Laurence Tisch, head of Loews Corporation; Leon Levy, partner in Oppenheimer and Company; Eliot Hyman, former boss of Warner Brothers Seven Arts; and Dan Lufkin, co-founder of Donaldson, Lufkin and Jenrette.MoreLess
In June 1972, a block of preferred shares of Bernie Cornfeld’s (more properly, formerly Bernie Cornfeld’s) Investors Overseas Services changed hands in Geneva at one cent a share.
Between the end of 1968 and October 1, 1970, the assets of the twenty-eight largest hedge funds declined by 70 percent, or about $750 million. (Theoretically, hedge funds alone among financial institutions were ideally structured to survive a market c...rash or even to profit from one. But only theoretically. Structure is not genius; even for the exclusive hedge funds, genius turned out to have been a rising market. In practice, their managers, as carried away by the go-go spirit as anyone else, had simply forgotten to hedge in time. One of the most heralded of them had had the spectacular bad luck—or bad judgment—to begin large-scale short selling on May 27, 1970, the very day the market turned around and made a record gain.) Among the heavy losers in one such fund, which closed down in 1971, were Laurence Tisch, head of Loews Corporation; Leon Levy, partner in Oppenheimer and Company; Eliot Hyman, former boss of Warner Brothers Seven Arts; and Dan Lufkin, co-founder of Donaldson, Lufkin and Jenrette.MoreLess
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