“I liked the whole fear factor,” he said cheerily when explaining what had attracted him to the Hirst shark which he bought for $8 million four years ago.
The fear factor is something Mr Cohen, and around 100 other hedge fund managers, are experiencing, like never before, as SAC Capital and others collectively lost a staggering £24 billion with a doomed gamble on Volkswagen shares, according to the Wall Street Journal.
The biters have been well and truly bitten, and in a week full of ironies it was Porsche, manufacturer of the hedge fund managers’ transport of choice, which was to blame.
While “hedgies” bet on VW shares falling because of the global economic downturn, regarded by some as “the safest play in town”, Porsche had been secretly building up a 74.1 per cent stake in VW through intermediaries.
When Porsche showed its hand, it sent the VW share price rocketing and exposed the hedge funds to breathtaking losses.
“I have had hedge fund managers literally in tears on the phone,” said one London-based analyst yesterday. Others likened the Porsche disclosure to a “nuclear bomb going off in our faces”, describing the resulting losses as “a bloodbath”.
heh!
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