The HeadRisk Horseman

I try to never forget that Risk is the markets first, middle and last names. And as we approach its most benevolent season, the risk of underperforming the indices becomes just another emotion that can either magnify the underlying bid - or remove it all together. Two examples of this extreme happens to be two of the market environments that the current tape has exhibited characteristics of throughout the year - namely, 1998 and 2008. In 1998, many hedge fund managers went from being down 15 to 20 percent going into October - to having one of their best years on record. In 2008, managers just wanted to survive the financial crisis after unknowingly finding themselves in mortal danger after the crash. Like any trader or fund that is competing against the benchmarks and each other, the dangerous specter of underperformance rides tall and headless in the fourth quarter.