I think you could have suspected that to say the least :) It's very hard to be as realistic as possible. People have all kind of delusions (not only religion). We have a world we create in our head and live according to laws of that world and not of reality.
When big chunk of market is consisting of hedge funds then it's very difficult for hedge funds as a class to outperform the market. On top of that it's not that easy anymore as algorithmic trading made markets more efficient as computers can watch thousands of various parameters and thousands of products simultaneously and probably those hedge fund guys were not actually as smart as they thought they were. More likely some of them just got lucky in a less efficient market by finding their niche and style that worked.