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One of the problems with hedge funds is that they are changing so rapidly. If you have the balance sheet that closed business last night, by 11 A.M. this morning, that won't tell you very much about what they're doing.

Too many investors overvalue companies in the near term while undervaluing them in the long term.

Hedge funds, private equity and venture capital funds have played an important role in providing liquidity to our financial system and improving the efficiency of capital markets. But as their role has grown, so have the risks they pose.

Hedge funds try to produce above-average investment returns using tactics ranging from traditional stock-picking to complex derivative and arbitrage plays. High minimum investments, redemption restrictions and aggressive strategies make them suitable mainly for more sophisticated and well-heeled investors.

Despite all the media coverage, glitz and glam of hedge funds, they have not done well for their investors. They have high - some say excessively high - fees; their short- and long-term performance has been poor.

In 2008, people who invested in hedge funds needed capital badly, but many of the funds would not return their money. However, I gave money back to any investor who requested it. It was the bottom of the market and a pretty tough time.

The 1969 experience has been a rude awakening for many hedge-fund investors and has left some of them with strong reservations about the whole concept. For the first time in their relatively short history, the funds are not growing: in fact, some have suffered large withdrawals of capital, and a few have actually folded.

Successful hedge funds will be entrepreneurial; it is the essence of the craft.

You can do too much and oversell your market.

In general, the hedge funds were clobbered by the 1969 bear market, ending up in many cases with records that were worse than those put together by aggressive mutual funds denied the luxury of short sales.