If Mitt Romney has taught us anything, it’s that no one likes a flip-flopper. Romney, a favorite of hedge fund managers and the erstwhile front--runner for the Republican presidential candidacy, went into primary season looking as if he had his party’s nomination in the bag. But in February the ultraconservative Rick Santorum emerged at the front of the pack. It hasn’t helped Romney that he has changed his stance on some of the most hot-button issues of this campaign. Modifying one’s views to fit the fashion of the day is nothing new for politicians. If Romney were a hedge fund manager, he might be more inclined to make bold moves and let the chips fall where they may. But this approach has pitfalls, as two famous hedge fund managers illustrate. Take Eddie Lampert. Five years ago the ESL Investments founder’s huge bet on retailer Sears attracted attention from investors keen to follow the hotshot investor’s every move. Today the stock is one that analysts love to hate, but, as our story on page 40 explains, Lampert is nowhere near cashing in.

Then there’s Phil Falcone. The Harbinger Capital Partners founder placed an outsize wager on the would-be wireless broadband network provider LightSquared, only to have the Federal Communications Commission squash the company’s ambitious network plans because they interfered with GPS devices. Falcone has vowed to fight back, telling investors he is considering a range of options, including an appeal. Unfortunately for him, one of his investors filed a lawsuit in February alleging that Falcone and Harbinger made “deceptive and misleading” statements about the firm’s investments.

Regardless of where you fall on the political spectrum, being conservative with your investments is rarely a bad idea. GoldenTree Asset Management, the subject of this month’s cover story, has seen some wild swings in its portfolio in recent years but has lately shown it’s getting better at preserving capital in tough times. Though it has been said that fortune favors the bold, those who want to keep their fortunes are better off being prudent.