The Success of Hedge Funds

It seems to me that many average hedge funds have found much interest for their products because investors focus more on reducing volatility, rather than generating returns. No doubt a consequence of losing money in 2000/02 and 2007/08. However, I could go long Apple and short the S&P 500, and over the last year I would have had less volatility than the S&P 500. However, would I have beat the S&P 500? For us, our view on investing is different. We would rather make a manageable number of investments (30 - 40 securities) and deploy capital when we think we have found the right company at the right price, rather than lose any potential alpha and time from finding good ideas by offsetting our good ideas in case they become bad (i.e. volatile) in the short term. We are willing to accept above average volatility to attempt to make above average returns because we do not associate risk with volatility. For us risk is the probability of losing our money.