me: >> The author (Mick Brooks) should make it clearer that "Hedge Funds" are >> not really in the business of "hedging" (where the latter refers to >> the way a farmer tries to avoid the downside risk that the crop will >> be worth less in the fall). Instead, "Hedge Funds" are speculating
Doug: > More important than the naming issue is this claim: "The attraction for rich > people in 'investing' in hedge funds is that they promise, and deliver, > returns of 30% a year." Sometimes they do; most of the time they don't... absolutely right! the key for a hedge fund is to get a return of 30% per year when times are good but when times are bad (and excessive leveraging leads to punishing negative returns) to get the government to socialize the loss. >> JOHN M. GRIFFIN & JIN XU's Abstract concludes that "... our study raises >> serious questions about the proficiency of hedge fund managers." Perhaps that's the wrong question. They might want to look at the political connections and/or government subsidies that characterize hedge funds. These would compensate for any inadequacy of competence compared to mutual funds. One kind of subsidy that I know is that hedge funds don't have to reveal anything to the SEC. Are there others? -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
