Leverage is out, hedging is in.
Virtually every world financial market suffered either a violent crack or a prolonged decline. The most visible, of course, was the technology-laden Nasdaq, which rose 22 percent in the first two and a half months of the year, only to end the year off nearly 40 percent. No sector of Nasdaq was more volatile than dot-coms. So unpredictable were the markets that even such legendary investors as Julian Robertson and George Soros lost their way. Robertson closed his hedge fund, and Soros reorganized his.