Pundits are dancing all over the grave of Ron Insana’s “Legends” hedge fund, which passed away two weeks ago. “Running a hedge fund is harder than it looks on TV,” ribbed a New York Times columnist this week.

meanstreetOf course, it is easy to target Insana’s failed venture with cries of “I told you so.” A financial journalist for more than 20 years, what could Insana bring to Wall Street’s table so late in the hedge-fund boom?

Whatever it was, apparently it wasn’t enough. Still, Insana’s fate is an instructive one, full of lessons for us all.

Lesson No. 1: You gotta be in it to win it

Give Insana some credit. Who wants to go through life nagged by questions of what one “could have” or “should have” done? Taking calculated risk is essential to a prosperous and happy life. Insana took a risk and failed. So what.

He credentialed himself as more than just another Wall Street commentator. He learned a thing or two about how Wall Street actually works. He probably isn’t out of pocket all that much money. And he landed on his feet at SAC Capital.

That’s not bad for a losing day at the Wall Street casino.

Lesson No. 2: Timing isn’t everything, but it sure is important

When it comes to Wall Street, the trend is your friend. But only if you can figure out where you are in the cycle. Those investors who recently piled into commodity stocks are learning just how painful the trend’s tail end can be.

Just like Insana. He is a smart guy. He covered the internet frenzy. He saw the M.B.A.s streaming into hedge funds. He must have had an inkling that starting a hedge fund in 2006 was akin to joining a technology start-up company in 2000.

But nobody can say for sure when a trend is peaking. Not even Insana. Fifteen years at CNBC. A bit itchy to move on. Insana probably figured he might not get many more bites at the shiny Wall Street apple, even if the apple had already turned.

Unfortunately, Insana barely got a nibble. He aimed to raise $1 billion, but came up with only a 10th of that. His only regret may be that he didn’t start the fund in 2003.

Lesson No. 3: For investors, it all comes down to performance
Insana’s hedge fund was a “fund of funds.” These funds pool investor capital and redistribute it across multiple individual funds. Their fee structure is mind-bogglingly expensive.

In Insana’s case, an investor paid 1.5% of assets plus 20% of any profit for access to funds that typically charged another 2% and 20% on top. In all, an investor in Insana’s fund could easily be paying more than 5% of assets in fees on their money. By comparison an index fund charges one-twentieth of that.

Apparently, Insana posted a loss of 5% for the 14 months his fund was invested. Not bad compared with the double-digit decline in the S&P 500 over the same period, but not enough to generate enough fees for Insana and his staff or enough investor enthusiasm to put in more capital.

Which is why Insana’s fund died. It also is why the hedge-fund industry shake-out will continue. For investors, it all comes down to performance. And the law of averages means only half of the hedge funds can outperform.

Lesson No. 4: It ain’t easy to report on Wall Street and make your fortune on Wall Street

As a one-time investment banker turned columnist, I can tell you it is a tough balancing act for a journalist to cover Wall Street and its armies of financiers. How does a journalist juggle the need for sources with the need for unvarnished reporting? What should the relationship be between a journalist and his sources?

The case of Ron Insana and his hedge fund highlights how permeable the boundary can be between the worlds of journalism and Wall Street.

Insana reported on Wall Street and hedge funds for years. He then leveraged his Rolodex to start a fund of funds whose primary selling point was his access to those hedge funds. While raising and investing the capital, Insana continued to appear on CNBC—identified as a senior analyst. When his hedge fund didn’t pan out, he ended up at Stevie Cohen’s shop at SAC.

I don’t begrudge Insana his jump to the hedge-fund world. Like everyone else, he is just trying to make a buck–and finding out just how tough that can be.