In this crisis, discipline and integrity could win the day

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By Sarah Wood

Normally, a little turmoil is great news for hedge funds. After all, the industry enjoys an inherent flexibility not available to most other investors when it comes to profiting from market dislocations.

But the events that have been keeping many managers in sticky Midtown Manhattan on recent Fridays instead of taking early helicopter flights out to their breezy Hamptons retreats constitute more than a little turmoil. In recent days, one executive at a $20 billion-plus hedge fund that lived through 1998 put the odds of a similar market meltdown this year at an unnerving 50/50. Some