240 hedge funds were liquidated in the first quarter of 2010

[meanreversion]

Cash is always King, just depends on which currencies...when that choice is over we are all well and truly fooked...

I started to wonder about the validity of cash in early 2009, and booked a ridiculously expensive holiday to the Caribbean with the family, flying business etc. I felt the need to spend before.. well, I don't know what.

If cash ceases to be a medium, we're doomed. It's only recently in Zimbabwe that the government has opened the door for their citizens to use USD or GBP in everyday transactions. The finance minister was giving a speech about the budget, and cracked up laughing when he had to say "fifteen quadrillion". It's no laughing matter, however, that country has been destroyed. It is critical to the functioning of society that we retain a belief in our non-backed currency system.

 

[wackypete2]

hedgefunds run by Lehman, GS, etc... does the fund manager have a significant personal investment? Certainly my statement doesn't apply to funds where the manager has a serious personal investment, hence my statement that this doesn't apply to ALL hfm's.

Furthermore, I would hasten to guess that the average HF punter knows a lot more about trading than the average t2w punter.

Agreed. I never said they don't know more, but knowledge doesn't equate to better trading. Hedgefunds blow up because they are overleveraged or underfunded or just plain reckless with their investment choices, usually trying for the homerun gain, which they sometimes do get. How else do you explain so many of them blowing up...as opposed to mutual funds which have a much lower rate of failure. These are apples and oranges, I know, but the failure comparison is significant.

Yes, they're in it to make as much money as possible, but the investors are partially culpable as they're the one putting the money in.

Absolutely, those who don't do their homework before investing with anything are likely to get what they deserve, unfortunately. However, there is some logic in using HF's as a small part of a diversified portfolio.

Finally, admittedly, I don't know everything about how hedgefunds are run, but I do know that I can see they are extremely unstable in terms of rate of return.

Peter

 

[montmorencyt2w]

I remember reading something a few years back about how pension funds had started to invest in hedge funds, that never sounded that sensible to me.

Mind you, what DOES one invest in these days? Government debt? Gold? BP shares (nice dividend and all)?

Mark Faber (thread elsewhere somewhere) will tell you to invest in Asia, as well as gold of course.

 

[montmorencyt2w]

Cash IS king in a deflationary economy. Trouble is we don't know yet which one we're in. Very confusing signals and one can easily make a good case for either inflation or deflation.

Forget exactly where I saw it, but "What you own is deflating; what you need is inflating".

 

[BSD]

Hedge fund liqudation (the closing of the fund) is usually a strategic business move, and a cynical one at that.

Basically the fund managers see how much they've lost (assume 30%). They now have to make back the 30% just to get paid (they do continue to receive a paulty 2% managment fee).

So they close the fund down and then lobby the present investors hard to reinvest in a newly developed fund. This will come with a spanking new name with new super strategies to trade with.

The advantage now is that any profits generated from the new fund will mean a 20% incentive fee for the fund managers. And all at the expense of the poor clients.

See what a racket the financial markets/industry is if you peek below the surface.....

Lol absolutely !

I don't wanna trash the entire the entire industry, there are a couple of good apples, some of which even post on here from time to time, and who have been making great money for clients very consistently, but apart from those few it really is a shark fest with a large majority of losers.

20 - 80 again eh, IF even that.

 

[meanreversion]

This book was written by Fred Schwed Jr? Isn't he the son of the guy who used to run RBS?

 

[MrGecko]

This book was written by Fred Schwed Jr? Isn't he the son of the guy who used to run RBS?

No mate, he was in a band.

Right Schwed Fred.

 

[anley]

No that book was published back in the 1920s or 30s.

Things never change