[jabberwcky]

It should also be noted Melvin would not have achieved these results without leverage, which is precisely why a single holding almost destroyed the fund. Comparing unlevered benchmark index return to ultra-levered fund return simply doesn't work. The S&P most certainly outperformed Melvin on a risk-adjusted basis due to this single drawdown alone.

[dcolkitt]

> The S&P most certainly outperformed Melvin on a risk-adjusted basis due to this single drawdown alone.

The S&P had a 54% drawdown in 2008.

[jabberwcky]

Which could have been anywhere between an 81% to 810% drawdown in a typical leveraged strategy. Very few levered positions would have survived it without stopping out or completely blowing up, but an unlevered position absolutely could have -- and most (long term buy and hold) did

[dcolkitt]

I'm not sure what you're talking about. Most hedge funds did significantly better than the S&P in 2008. They were down, but nowhere to the same degree.