Hedge funds were battered in the month of October even as the market as a whole saw tremendous gains. This was front page news to CNBC and others, who apparently don’t have much to write about or were truly shocked that highly volatile funds have down months every once in awhile. Maybe a combination of both. Regardless, what I find interesting is the psychology of a hedge fund manager who has to deal with bad press after a disappointing month. Do you say you’re staying the course? Do you double down on your riskiest bets in hopes of showing your investors that you are confident you made the right choice and you’re just waiting for the market to catch up? Do you hide under your desk, plug your ears and sing a song, hoping it all blows over? Greenlight Capital’s David Einhorn had a slightly more mature way of dealing with things, as he told investors he would “moderately increase” some of his long positions. While that’s not out and out saying his strategy sucked, it’s more of an admission of fault than most people are willing to give (though he did say SunEdison (NYSE: SUNE) is bound to come around.) The flip side of that coin is hedge fund manager Dan Loeb, who said in a letter to investors that he was going short the market even further. He’s basically saying that his strategy is right, we just have to wait for it to play out. While it’s unclear which strategy is better at mollifying current investors and attracting new ones, I’m of the belief that David Loeb has the right idea. If I'm going to be letting someone invest millions of my dollars, I want them to be confident and charismatic under all circumstances. If you don’t believe in your strategy enough to keep doing it after one bad month, then why were you doing it in the first place? I’d be very curious to see the inflows and outflows of money into funds based on the personality of their leaders. I would want someone who is willing to go for broke at all costs. At the very least it would earn the firm some press.