13/03/2014
Hedge fund managers face Truman Show markets
P { margin-bottom: 0.08in; } In the film “The Truman Show,” the eponymous hero lives in a world which appears charming, but slowly he notices that something is fishy. He is in fact trapped inside a film controlled by hidden directors, and discovers with horror that he is the star of a reality TV spectacle. The question that several large hedge funds are beginning to ask themselves is whether investors will also wake up and realize that they are living in a Truman Show market, where the highly accommodating monetary policy of central bankers has created a false reality that will come to an end, the Financial Times observes. Seth Klarman, manager of the hedge fund Baupost Group, says investors have developed a false sense of security which creates even greater risk of sudden correction.
