Show and guests
Bloomberg Podcasts’ Odd Lots aired this episode (recorded on 10 November). Guests were Bloomberg chief hedge fund correspondent Nishant Kumar and Bloomberg macro strategist Michael Ball; the hosts were Tracy Alloway and Joe Weisenthal. Original English title: The Perfect Storm That Clobbered Hedge Funds | Odd Lots.
Key takeaways
- Millennium fell 2.3% in October (about 14% annualized based on its volatility); Vara lost 33% in one month (but remained positive for the year); Whale Rock fell 12%; Caxton fell 6.4% (its biggest monthly loss since inception); and Luokes was down nearly 5%. Only a few, including Citadel and D.E. Shaw, posted positive returns. 4:59
- A Pivotal Path report shows that the top ten firms used about 303 billion dollars of capital to build 2.2 trillion dollars in positions, including borrowed money. Crowded trades were the culprit. 7:00
- Multi-strategy funds were supposed to be “hedge fund supermarkets,” with hundreds of independent pods. In reality, everyone was long AI in different guises: buying chips or shorting U.S. Treasuries on the bet that AI capital spending would push up inflation were all the same trade. 8:28
- The risk machine is ruthlessly unforgiving: a 5% loss cuts capital in half, and another 2.5% means liquidation and exit. With only 40 days left in November, dozens of portfolio managers had already been laid off or left. 10:58
- How last Thursday’s “sell everything” day worked: negative gamma (dealers sold put options and, while hedging, sold more as prices fell), leveraged ETFs, volatility-control funds forced to de-risk, and trend-following CTA selling. 28:24
- The October narrative shifted: capital spending went from a growth engine to a financing and free-cash-flow problem; NIMBY opposition and power constraints were in focus, while the Nasdaq was already in correction territory. 34:58
Background and notes
Bloomberg’s Odd Lots podcast discusses the October hedge fund rout and last Thursday’s “sell everything” day, with guests Nishant Kumar, Bloomberg’s chief hedge fund correspondent, and Michael Ball, Bloomberg’s macro strategist. Subtitle coverage: The video has 1050 timestamped subtitle segments, covering 0:00–52:37 (total duration 52:37), covering the full video. The views and timestamps in this article are paraphrased from the original subtitles; each timestamp marks the start of the corresponding spoken segment. Publication time: approximately 19:10 Hong Kong time on 2026-11-11, calculated from the relative time displayed by YouTube when captured, accurate to the hour.