Hedge funds face triple conundrum

Picture this: Your hedge fund had a pretty good 2008. By slashing net exposure, it ended up roughly flat. Towards the end of the year, those funds that blinked and went long-biased got whacked, but not yours. You hung tough and maintained low net exposure in 2009. Conundrum number one: It is not easy to make that decision to switch bias, and yet every day that the rallied markets don't reverse direction makes it less probable that they ever will flop. In the meantime, the portfolio m…