Hedge Funds: How the Smart Money Looked Dumb

The ups and downs of the Dow are making Wall Street's so-called smart money look dopey. Hedge funds lost nearly $300 billion due to bad investments in the first nine months of the year, according to an analysis of return data by TIME.com. If the losses stand, it would be by far the worst year for these funds — which are unregulated and open only to high-net-worth investors — since their returns began being tracked in the mid-1970s. "It's not going to be a good year," says Peter Laurelli, vice president at HedgeFund.net. "We can be pretty sure of that."