Attack of the Gamma Stonkers

The How, Why, and What’s Next Behind Last Week’s Millennial Revolt Against the Boomer Financial Elite

O, K-SHAPED RECOVERY BOOMER

Last year was a good year for hedge funds. Their luxurious sedan chairs, powered by the twin porters of loose monetary policy and fiscal stimulus, sprinted them comfortably up the arm of the K recovery. D1 Capital Partners, a privately owned investment management firm, performed particularly well. They are reported to have enjoyed a 60% gain during the plague year. Pandemic earnings from other outfits, meanwhile, were similarly fruitful. Steven A. Cohen’s Point72 Asset Management earned its founder $1.4 billion. That was enough to cover roughly half of his tab for the New York Mets which he purchased in November. In all, as the coronavirus ripped through poor communities and ravaged economies, long-short strategy hedge funds such as D1 Capital and Point72 reaped double-digit returns. Perched atop the winner’s platform of the K serif the view must have been breathtakingly beautiful.

Then, last week, they got gut punched with the ferocity of a blow delivered by Mike in his prime, suffering massive losses in a week of generational market turmoil.

It wasn’t pretty.