Long Term Capital Management and Regulation

February 3, 1997 – New York, NY – Charles Gradante and Lee Henenssee, Co - Founders of Hennessee Group LLC, interview with Mark Haines on CNBC's "Squak Box".

Noteworthy highlights from this particular interview of the pair include Charles Gradanate and E. Lee Hennessee discussing the outlook for 1997. They note that managers don't always correctly spot trends with bond or stocks. They explain that managers increase their net long exposure as the market goes up. Being able to react to volatility in the market is the key to hedge fund performance. Hedge fund investors are sophisticated investors and don't chase trends. Short only strategies are discussed, along with the allocation by institutions like endowments of generally 25% of assets to hedge fund management. Gradante and Haines discussed the "new paradigm" that the Hennessee Group espoused in their 1996 - 1997 Annual Survey, that being increased productivity through technology and other factors will result in higher stock and bond markets for the long least until Baby Boomers begin to retire.



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