What Are Some of the Hedge Guys Doing Now?

After the downdrafts, you would assume that people would be jumping into market to bottom feed. However, a number of the smartest guys have massive cash positions. Clearly, they are waiting for the other shoe to drop. From a recent Whitney Tilson piece:
"These are smart guys, but I think they're wrong here -- and think that this is extremely bullish:

Some hedge-fund titans have yanked most of their money out of the stock market, a bearish sign amid Monday's euphoria and an indication of how the hedge-fund business is changing amid chaos.

In recent days, Steven Cohen, the hedge-fund manager who runs the $14 billion SAC Capital Advisors, moved about half his funds, or about $7 billion, into money-market and other short-term securities, eliminating much of his fund's exposure to the stock market, says a person close to the fund. Mr. Cohen plans on sitting on the sidelines for the rest of the year -- trading a small portfolio himself but keeping shuttered most of the stock portfolios of his other managers.

Israel Englander, who runs the $14 billion Millennium Partners fund, has shifted about $6 billion from the stock market into cash, a person close to the fund says.

Meanwhile, John Paulson, manager of $35 billion Paulson & Co. -- who made a spectacularly successful bet against the housing market last year -- has much of his fund in cash equivalents.

The retrenchment by Wall Street's "smart money" crowd is part of a larger effort by hedge funds that have put a total of as much as $400 billion into cash equivalents recently, according to David Kostin, an analyst at Goldman Sachs Group Inc.

Of course, much of the smart money has been wrong in the credit crisis. Many hedge funds have lost big money in the past year. That said, Messrs. Paulson, Cohen and Englander have fared better than most: Mr. Paulson's main fund is up about 20% this year; Mr. Englander's main fund is down 0.5%; and Mr. Cohen's main fund is down more than 9% through September. This compares with a 29% loss in the Dow Jones Industrial Average, year to date."