Both August and September were cruel months for hedge funds, but October may be one of the worst the industry has experienced. By late October, the New York Post reported that the average hedge fund was down 8.4 percent for the month--putting the industry on track to record the worst monthly performance for hedge funds ever by Hedge Fund Research. Investment Dealers' Digest reported similarly bleak numbers: In October, inflows into hedge funds dropped to a mere $28 billion globally in the first half of this year, compared with $117 billion in the same period last year, according to Hedge Fund Research.

Right now the pervading mood is one of chaos and confusion. Not only are more hedge funds failing, some speculate regulation is looming on the horizon. The only good news in the hedge fund arena this month, is the information that can't be considered bad news. Hedge funds are taking a more proactive role in defining themselves through PR, a new strategy is emerging where hedge funds target competitors that may be facing a surge in redemptions, and hedge funds are taking a scientific look at timing the markets. Does this really put hedge funds on the right track? Only time will tell. These approaches could just as easily land in the category of "bad news for hedge funds" in November, but at least some attempts are being made to turn this industry around.