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Quote of the Day – Hedge Funds
By JLP | January 24, 2012
This quote comes from a book titled The Hedge Fund Mirage: The Illusion of Big Money and Why It’s Too Good to Be True
“If all the money that’s ever been invested in hedge funds had been put in Treasury bills instead, the results would have been twice as good.”
I have often suspected the same thing. I think hedge funds are really only good for the hedge fund managers. If a hedge fund manager is making outsized returns, he’s probably taking lots of risk.
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Topics: Books | 2 Comments »
January 24th, 2012 at 1:00 pm
Great quote. I always felt sophisticated investments had everything to do with making money for the financial firms selling them and jobs for the geeks creating them having anything whatsoever to do with the investors.
January 25th, 2012 at 12:03 pm
Let the hedge-funds take all the risks they want, as long as the investors are FULLY informed of the risks.
At the same time, there should be absolutely no bailouts when the hedge-fund’s computer trading goes haywire and dumps all the stock holdings for 1 cent a share.
BTW: this is exactly what happened during the so-called ‘flash-crash’ — and the hedge funds WERE bailed out by the exchanges by reversing the trades. The people who were screwed by this were the investors who purchase the shares for 1 cent, and went on to make other trades.