Nearly every investor is hurting right now—even PayPal co-founder Peter Thiel, who manages the $5.2 billion Clarium Capital Management hedge fund. The fund has had a good record over the years, with a 27 percent annual return since it started in 2000. And up until June, Thiel managed to produce a 58 percent return for the year. But in the second half of the year, his bets turned sour, and in October alone his fund took an 18 percent hit, wiping out all the gains for the year. The fund is now at a 3 percent loss overall.

That’s still better than the S&P 500. But a hedge fund is supposed to hedge against risks. Thiel, like many other hedge funds, leveraged his investments 4.4 to 1 with borrowed money, which compounded his losses. What did him in was a bet on the difference in interest rates between different types of bonds. As Bloomberg explains:

Clarium had 81 percent of its money in positions used by investors when they expect a widening spread, or gap, between bond yields, such as for 10-year Treasury notes and 30-year bonds. Instead, yield spreads narrowed in October

When an investor like Thiel can’t make any money in this market, what chance do the rest of us have?

(You can watch Thiel being interviewed onstage by Michael Arrington at TechCrunch 50 earlier this year).