Hedge Funds: the New Contrarian Indicators?

According to this Bloomberg article, hedge funds as a group got whipsawed the last few months and missed out on the almost 20% recent stock market rise. The thing is, their exposure to stocks is still at a near-record low, adding major potential rallying fuel to the market mix. Whether the following quote proves true or not will become clear in the next few days and weeks as more fourth quarter earnings are announced:

 “Hedge funds have made massive mistakes”,George Feiger, chief executive officer of Contango Capital Advisors Inc., the San Francisco-based wealth management arm of Zions Bancorporation, said in a telephone interview on Jan. 6. He manages $3.3 billion at Contango and Western National Trust Co. “We are less and less willing to invest with these people because at the point when you need them the most, they’re worth the least.”