Debate: Volatility bad for hedge funds?

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Portfolio magazine raises an interesting question: Is volatility good or bad for hedge funds? The conventional marketing wisdom, of course, is that volatility is what makes hedge funds so attractive; they are supposed to thrive on it. The theme during the great bull market, when some hedge funds had trouble keeping up with the main indices, was "just wait until the market turns, then you'll be glad you went with us." But it doesn't seem to be panning out that way. Or perhaps this is an aberration.  

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