We're starting to see the year-end results for hedge funds, and the results are good. While some were hoping for a 20 percent plus year, the final numbers may be just short of that. The Credit Suisse/Tremont Hedge Fund Index increased 18 percent last year after adding 0.39 percent in December. That's the best performance of the decade.

Funds did not appear to trounce long equities in 2009, after trouncing them in 2008, despite the financial carnage. The S&P 500 closed the year up 23 percent. The Dow Industrial average was up about 19 percent. Convertible Arbitrage was by far the best performing strategy, gaining more than 40 percent after losing 35 percent the previous year. 

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