It sure hasn’t been easy to be a hedge fund lately (ignoring the yachts and private jets and what not). Hedge Funds only made 9.73% last year while stocks made 32.31%, and managed futures, 2008’s all star, has struggled since, with many managed futures programs flat to down over the past five years. There aren’t a lot of investors excited about investing in something which hasn’t made any real money the past five years…

Which leads us to the simple question of whether you would find the track record of the following “hedge fund” appetizing?  Would it warrant an investment from you? What’s your first gut instinct on it?  Most likely a pass…

(Disclaimer: Past performance is not necessarily indicative of future results)
Data Courtesy: Yahoo Finance

Now, it’s the day after Apple earnings, when all anyone can talk about is Apple, Apple, Apple, 24/7. And for good reason, their numbers are astoundingly big (although they pale in comparison to how much bigger the biggest hedge funds are versus the average one) , so we couldn’t help but have a little Apple fun ourselves by seeing what their “track record” would look like if presented in the standard hedge fund format. That’s right, that ‘hedge fund’ performance above is none other than Apple’s stock price performance over its first four years of existence (it IPO’d in 1980).

The stock price is only up 1,874% since then…

Which leads us back to the old conversation about getting in at the highs and out at the lows. How many investors do you think got out at some point in those first five years, saying the environment was wrong for the company, it’s underperformned x, y, or z asset class, and thousands of other reasons.  More than a few, to be sure. And which investors stayed in?  Those who had a long term view. Those who believed more in the vision of the man at the helm (Steve Jobs) than the stock performance. Those who believed in the strategy of not being mass market.

What investments are out there right now sitting at a similar spot? There’s surely some unloved stocks which might fit the bill (although those seem harder and harder to find of late), and there’s more than a few alternative investments. Commodities anyone? Managed futures… your global macro hedge fund?  There’s more than a few individual investments, and a whole asset class (managed futures) which have had nothing the past five years.  Where’s the Steve Jobs equivalent of those underperformers? Where’s the innovation and research focus that you believe will be a long term success?  There’s an Apple out there somewhere – go find it!