Discussion
  • Read More
    fsbHamilton Nolan
    9/16/14 11:07am

    As both a long time Gawker reader and financial scholar, I am very disturbed by the authors uninformed, inchoate logic. The work they cite as evidence that hedge funds are not worth the money is considered by those who actually have knowledge of this industry as drastically misleading, false, and one-sided. Either interview those with actual insights or please refrain from such articles, Gawker.

    Reply
    <
    • Read More
      Hamilton Nolanfsb
      9/16/14 11:09am

      I have my doubts that any financial scholars are also longtime readers of Gawker. That said, please offer specific counterpoints and not vague objections.

      Reply
      <
    • Read More
      toothpetardHamilton Nolan
      9/16/14 11:13am

      If there's one field that is heavily evidence-based, testable, and known for generating concrete predictable results while being based on past performance: it's the field of financial scholarship. I await confirmation from those with knowledge in the 'industry'.

      Reply
      <
  • Read More
    fudgesicleuighyrHamilton Nolan
    9/16/14 11:02am

    How is taking CALPERS money "soaking the rich?"

    Reply
    <
    • Read More
      Hamilton Nolanfudgesicleuighyr
      9/16/14 11:08am

      Taking Calpers' money is actually soaking the non-rich, which is much worse. I think over time big institutional investors (at least the smart ones) will follow their lead and pull back from hedge funds, and the hedge funds that remain will be boutique operations that soak the rich exclusively. Which is better than soaking the non-rich, but still, in essence, a scam.

      Reply
      <
  • Read More
    wellheytherepartnerHamilton Nolan
    9/16/14 11:05am

    Just seeking clarification. All hedge funds are ripoff? Or just most hedge funds?

    Reply
    <
    • Read More
      Hamilton Nolanwellheytherepartner
      9/16/14 11:11am

      Hedge funds *as an asset class* are a ripoff, because it is unlikely that any given investor will select a hedge fund in the small minority of hedge funds that do spectacularly well.

      The odds are not as extreme as the lottery obviously, but it's similar to saying "Playing the lottery is not a ripoff as long as you only buy the winning tickets, and not the losing ones."

      Reply
      <
    • Read More
      wellheytherepartnerHamilton Nolan
      9/16/14 11:23am

      That may be true for institutional investors, but for an individual investor, hedge funds can't possibly constitute an "asset class" because there are too few hedge funds available, especially those that are open to new investors. But if I was an accredited investor and I had the opportunity to get into Soros or Appaloosa, funds with a long track record of beating the market, I'd jump at that opportunity.

      Reply
      <
  • Read More
    dothedewHamilton Nolan
    9/16/14 11:03am

    Hedge funds may have made sense as an investment for rich people when they were used to hedge certain other investments. Some still operate like that. But now that they are used mainly as unregulated investment pools, they are a fool's game. And there have been attempts recently to get around the accredited investor requirements and offer hedge fund investments to Normals. Obviously a bad idea. Calpers is as savvy as they come.

    Reply
    <
    • Read More
      8 Ball FactsHamilton Nolan
      9/16/14 11:11am

      90% of hedge fund managers can't beat the S&P 500 over a 10 year period. CALPERS can simply buy an index fund in the S&P 500 and pay no more than .05% a year in fees.

      Reply
      <
      • Read More
        burnerforreasons8 Ball Facts
        9/16/14 11:50am

        The purpose of a hedge fund is not to beat the S&P. It is meant for a high net worth investor (or institution) to allocate capital to a non correlated asset (thus diversifying the risk of the portfolio and lowering the standard deviation) Hamiltons archaic and honestly incorrect comprehension of the basic role of a hedge fund in terms of a broad portfolio is what makes this article pure clickbait.

        Ive said this before. The 2% management fee that hedge funds charge (on average some are lower) is around the same fee you pay to a mutual fund manager (who by the way normally doesnt beat the index that he is paid to beat). The 20% of returns are high but to SOME investors that is worth it to lower the overall risk on their portfolio.

        What the author doesnt understand is that Hedge Funds are not for the average investor and thats ok. BUT for SOME investors it is a very wise investment decision.

        Reply
        <
      • Read More
        dothedewburnerforreasons
        9/16/14 1:30pm

        Please. The purpose of a hedge fund is not to beat the S&P over the long term? Every small hedge fund manager I know compares themselves to the S&P. Yes, there are some who offer hedging strategies, and maybe beating the S&P wasn't the original stated purpose of the industry, but it is certainly how many, many of them operate today.

        Reply
        <
    • Read More
      fsbHamilton Nolan
      9/16/14 11:07am

      As both a long time Gawker reader and financial scholar, I am very disturbed by the author's uninformed, inchoate logic. The work cited as evidence that hedge funds are not worth the money is considered by those who actually have knowledge of this industry as drastically misleading, false, and one-sided. Either interview those with actual insights or please refrain from such articles, Gawker.

      Reply
      <
      • Read More
        dothedewfsb
        9/16/14 11:13am

        I call bs. What evidence is false and misleading? That net of fees, most hedge funds don't do any better than an index fund? Have you ever read John Bogle? Who are "those who actually have knowledge of this industry"? Hedge fund managers?

        Reply
        <
    • Read More
      toothpetardHamilton Nolan
      9/16/14 11:00am

      Those who can't do, manage.

      Reply
      <
      • Read More
        Siphantoothpetard
        9/16/14 11:10am

        The owner needs you, every worker is entitled to the product of his labor.

        Reply
        <
      • Read More
        sunstrokedtoothpetard
        9/16/14 11:21am

        Correction: Those who are tired of doing, manage.

        Reply
        <
    • Read More
      PsonicPsunspotHamilton Nolan
      9/16/14 11:01am

      There are nearly 80 hedge funds in the town I live in, and I can happily report that hedge fund managers are not hurting in this economic downturn.

      Reply
      <
      • Read More
        vinspePsonicPsunspot
        9/16/14 11:48am

        Greenwich?

        Reply
        <
      • Read More
        PsonicPsunspotvinspe
        9/16/14 11:55am

        Westport, if you can believe it.

        Reply
        <
    • Read More
      chickhaydenHamilton Nolan
      9/16/14 11:45am

      This is one of the few good things to happen to state pension-holders in a while. But how terrifying is it that funds with assets the size of mega-cap corporations are being managed by state comptrollers and state legislatures constantly being lobbied for "alternative investment" access?

      Reply
      <
      • Read More
        Indiana van der RoheHamilton Nolan
        9/16/14 12:07pm

        This is where you need to understand that the genius you reference, is in convincing others to pay you.

        Reply
        <