Notorious Short-Seller, Bill Fleckenstein, To Close Short Fund
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Notorious short-seller, Bill Fleckenstein, announced he is closing his short fund that he established in 1996. He has been one of the most-outspoken short sellers and could him closing his Fleckenstein Capital be another sign of a potential bottom?
Fleckenstein said his original reason for starting the fund in the late 1990s was because of past flawed policies of Federal Reserve Chairman Alan Greenspan. Fleck's comments appeared on the calculated risk blog where he said, "I felt that Greenspan was fomenting an environment that would lead to disaster, as consultants, financial advisors, and the public at large were losing all respect for risk."
Fleckenstein noted that he tried to return back to the long side when he felt investors were becoming more rational regarding risk and stocks offered a better risk/reward proposition. He said, "I considered this option very briefly in 2002 after the stock bubble imploded, but the cleansing process was postponed due to the burgeoning real-estate bubble."
Regarding if this is a bottom yet, he said, "...I think that the stock market still has unfinished business on the downside, I believe that 2009 is the year to prepare for a return to managing money in a more balanced fashion, with longs (and some shorts), as there are currently plenty of interesting ideas that appear to offer a margin of safety. On the flipside, compelling opportunities on the short side are not as abundant as they were just a few months ago (though there still are plenty.)"
Fleckenstein said he'll return to a more balanced investing approach, in a vehicle that will not be a hedge fund, but hopefully available to everyone. He feels that many in the hedge fund community have behaved in a disgraceful manner by taking huge fees and then either running at the first sign of trouble or locking investors up and not returning back any of their money.
Check out StreetInsider.com's entity page on Fleckenstein in order to get all the market moving news related to the fund manager in real-time.
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