Another interesting graph from Mike Panzner:
click for larger chart
Hedge fund assets, as a percentage of total assets under professional management, have nearly tripled:
"While many have commented on the explosive growth of hedge fund investing, the attached graph offers a bit more perspective on the numbers.
Since December 31, 1998, based on data from Hennessee Group LLC and the Investment Company Institute, hedge fund assets under management have risen from 2.36% to 6.45% of worldwide mutual fund net assets (as of the end of 2004).
That an increase of over 170% (and that’s not taking into account the leverage that many hedge funds have access to). Any way you cut it, that is a number not to be taken lightly."
While its never "different this time," some of the cards in the deck have been reshuffled, and it would be foolish to ignore that. This is definitely one of the factors impacting the new shuffle. If you are looking for a another reason to explain the market’s bipolar behavior — up, down, up, down — this is as good as any.
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.