Minyanville meet up notes part 2

The following is a continuation of the list I posted.

• For the first time in history, there are more hedge funds than stocks.

• The growth in hedge funds is not without precedent. We’ve seen this movie before in the mutual fund arena.

• The result isn’t imminent doom, it’s more likely mediocrity.

• Over 60% of hedge funds are less than five years old. Less than 20% survive more than eight years.

• Where else are you going to put your money with real interest rates negative?

• We’ve seen an unprecedented string of double digit earnings growth and all-time high profit margins.

• There’s been a stunning large cap underperformance.

• Historic “tails” (distribution of returns) have thinned massively.

• Individual investors have reacted rationally. Corporate America, however, is hoarding cash.

• Themes: Volatility will rise, the dollar should rally, “big cap over small,” the US is the most attractive major market, valuation spreads between “good” and “bad” will rise, the catalyst (for a potential decline) might be a busted LBO.