Pack mentality grips hedge funds

Wall Street Journal
Jan 14, 2011

Hedge funds are crowding into more of the same trades these days, amplifying market swings during crises and unnerving investors. The pack behavior undermines the image of hedge-fund chiefs as savvy money managers who sniff out investment opportunities that others don’t see—thereby justifying the hefty fees they charge clients. It also suggests that hedge funds are having a harder time coming up with money-making ideas in rocky markets. NICOLAS BOLLEN, E. Bronson Ingram Research Professor of Finance, is quoted.