Hey, Mobius, WTF?

Mark Mobius, the famed international man of mystery and money manager, is extolling the "explosion" of capital that will lift world markets, or so the headline reads.  But, when we read the article, the money quote:

While the “longer-term trend is up” for emerging-market stocks, they may suffer a “correction” of as much as 20 percent in part because some hedge funds are selling shares in a bet they will decline, Mobius said.

Thanks.  I'll sit in cash until we're down 19.5%.  Explosion, indeed.

Mutual fund rant

My job offers retirement funds through Fidelity.  Last Spring when I figured the market was due for a correction I re-jiggered my portfolio and included a new type fund called a 130/30 fund which is supposed to mitigate tumultuous markets by going both long and short.  Sounds like exactly what was needed in the market last year.  From Fidelity's site:

Strategy

  

Normally investing at least 80% of assets in common stocks of companies with large market capitalizations (companies with market capitalizations similar to companies in the Russell 1000 Index or the Standard & Poor's 500 Index. Normally establishing long and short positions in equity securities. Investing in either "growth" stocks or "value" stocks or both.

Objective

  

Seeks long-term growth of capital.

The graph is from Yahoo since the chart on Fidelity's site was conveniently "unavailable."

Here's the deal:  How the hell can a long/short fund underperform the market? Even if you had monkeys picking the stocks, the outcome should be at least less negative than the S&P 500.  And they charge 1.89% fee for this fund.  Unbelievable.

When this "economic crisis" resolves, do your think Joe Sixpack is coming back to this financial industry with his hard-earned capital? 

And you wonder why gold and Treasurys are up double digits last year.