Loeb said in a quarterly letter that most money managers were “caught offsides at some or multiple points” since August. That month, China’s surprise currency devaluation sent shock waves across markets.
Cohen said most people at his Stamford, Connecticut-based firm are not very good at timing when to invest or exit markets, though they are adept at picking stocks. He said external hires account for 20 percent of headcount at Point72, which prefers to groom analysts and money managers internally.
The Point72 founder said there are parts of the world where there are opportunities to generate more alpha, which are profits above a benchmark index, than in the U.S. His firm has offices in cities including Hong Kong and London.
Cohen, who under a settlement with regulators could manage outside capital again as soon as 2018, said he didn’t see the crowding problem in the hedge fund business easing any time soon.
“This industry has been around in a real way for 25, 30 years and excess profits get competed away in one way or another,” he said. “More people are going to enter the business and drive it down. It’s starting to happen now and will probably continue to happen. That’s a normal industry cycle.”