The film noir movie Gaslight is worth watching. It is shown regularly on TCM or perhaps on Netflicks, if you are so inclined.
I don't want to appear as defending the hedge fund industry. However, if I was forced to rank investments in the current environment it would look something like this: 1) cash, 2) short term credit, 3) managed futures, 4) precious metals, 5) hedge funds, 6) intermediate bonds, 7) emerging market bonds, 8) emerging market stocks, 9) international credit, 10) international developed market, 11) large cap domestic, 12) mid-cap domestic, and 13) small-cap domestic.
Although I haven't done the research, I would assume assets ranked above performed in a similar fashion in the period following market tops in 2000 and 2007.
Lastly, I have seen data over longer period showing the positive risk adjusted return by having alternative investments including hedge funds as part of the portfolio allocation. Furthermore, making a judgement at a market top can lead to a host of false assumptions.