Balyasny predicts the end of stock-picking era

Thu Oct 30, 2008

Dmitry Balyasny knows he lives in a glass house and says he doesn't like to throw stones. But he has no problem tossing a few boulders. "We definitely don't need 8,000 hedge funds," Balyasny said in his third-quarter investor call, adding that 50% to 75% of all hedge funds will disappear. "There is going to be a giant washout of funds that don't bring anything to the table."

Dmitry Balyasny

"When I started trading back in the early 1990s, we were taught from day one that a trader's ability to make money in equities - or whatever the instruments you focus on - was driven by stock selection, timing and money management," said Balyasny, managing partner and chief investment officer of $2.2 billion Balyasny Asset Management. "Of these three, stock selection was the least important element. If your timing was wrong, what difference would it make what stocks you bought?"



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