People will be talking about Amaranth Advisors amazing losses in the billions for weeks to come, but simply put, the Connecticut-based hedge fund manager apparently shot itself in the foot by sticking to its guns when it came to hedging its bets. While Amaranth and some of its big-name investors are big losers, there are others that, according to The New York Times, took a smarter approach and came out winners. Among them is Andrew Weissman of Washington, D.C.-based Energy Catalyst Fund, who The Times reports realized early on that natural gas prices were running too high, and were bound to fall, nor was he alone in that thinking. “Many, many people saw that coming,” Weissman said in a Times interview, including banks and even some oil companies, such as BP. He finds it “almost amazing” that Amaranth, through its start trader Brian Hunter, didn’t catch on, and that disaster that followed was “completely avoidable.” Weissman says his hedge fund has made money (though he didn’t disclose how much or exactly how) by shorting from spring to summer, waiting for the gas glut to occur. “A lot of hedge funds have made lot of money in the last few weeks,” he told The Times. On the other hand, with the more than 525 energy-hedge funds in the market, it is likely there will be a lot more Amaranths and MotherRocks reporting losses as time goes by and gas prices don’t fly high. At least one firm that’s been running alternative investments for a half century appears has stayed from natural gas altogether. “The fundamental we see are showing us that natural gas is going to be weak,” Van Eck Global Absolute Return Advisers senior analyst Charl Malan said in The Globe and Mail. Hence, the New York-based firm naturally will avoid natural-gas positions at least until the end of the year.
Meanwhile, in the latest on the Amaranth saga, the Connecticut-based hedge fund manager reportedly has sold its entire energy-trading portfolio to JPMorgan Chase and Citadel Investment Group. In addition, according to Bloomberg News, losses have now mounted to more than $6 billion – a drop of 65% -- as Amaranth had to sell off assets to avoid closing down. Finally, The Globe and Mail reports that only weeks earlier, firm founder Nicak Maounis sent investors a letter last month suggesting he was planning to launch yet another energy fund.