Ebullio Capital Management Loses 95% In Two Months - Then Acts Like It's No Big Deal

Wow. We really don't know where to begin. TILB received an email from someone saying a manager lost 86.25% in the month of February. When TILB opened the attachment (see below), we noticed that, in fact, the manager had lost 95% in the first two months of 2010. For those of you familiar with the perils of negative compounding, the difference between losing 85% and losing 95% is an additional 67% of losses. So, we scrolled down and, wala, the manager - Lars Steffensen - actually lost 70% in January as well.

But that's not the worst of it.

His February monthly commentary basically brushes over the fact he's down 96%, as if it's just another couple of bad months! He’s literally insane. He talks about how helpful his hedges were, albeit a little too far out of the money, but that they were "money well spent," yada yada yada.

Dude! You just had a month of -70% followed by a month of -85%. In fact, in February, you actually lost more than 100% of the entire fund on metals positions alone.

He even goes on to give a fucking monthly commentary on the macro picture. Who cares what you think, dude? You’re not even talking about the fact you’ve lost 19 out of every 20 cents in 60 days. Look at this:

Since our getting long against conviction play early January 2010, we have been doing some thinking and come to the conclusion that the Japan scenario has at least been tried and tested in the real, civilized world, whereas the hyperinflation (discounting Weimar Germany and various kleptocratic African quasi States) has not.

Dude, you were down 95%. Why are you giving market commentary? What world do you live in?

After searching further back into my email box, I found this old hedge fund industry rag news snip-it on Ebullio from fall 2009:

Opalesque Exclusive: Ebullio plays hard in the commodity markets as it now owns most of the tin traded on LME - fund up 24% YTD
Thursday, October 15, 2009

By Benedicte Gravrand, Opalesque London:
We heard last week that an investor had been buying around 90% of the tin traded on the London Metal Exchange (LME), in the form of physical stocks and contracts.

Since early summer, the dominant position has caused the tin market on the LME to become "disorderly" and distorted prices, Reuters reported.

Rumors abounded but nobody knew for sure who the mystery buyer was. Then the revelation came: it was......................

TILB cannot believe they didn't lose every investor they had. Amazing. Let us know what you think.

Ebullio Capital Management February 2010 Monthly Update