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    The FormulaHamilton Nolan
    11/05/15 10:03am
    • Ever wonder why fund managers can’t beat the S&P 500? ‘Cause they’re sheep — and the sheep get slaughtered. I been in the business since ‘69. Most of these high paid MBA types, they don’t add up to dog shit. Gimme guys who are poor, smart and hungry. And no feelings. You win some, you lose some, but you keep on fighting . . . and if you need a friend, get a dog.
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      butcherbakertoiletrymakerThe Formula
      11/05/15 10:06am

      Explain to me, seriously, why the so-called “smart” people keep throwing their money at these expensive scams.

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      The Formulabutcherbakertoiletrymaker
      11/05/15 10:09am

      The richest one percent of this country owns half our country’s wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons – and what I do, stock and real estate speculation. It’s bullshit. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now, you’re not naive enough to think we’re living in a democracy, are you, buddy? It’s the free market. And you’re a part of it. You’ve got that killer instinct. Stick around, pal, I’ve still got a lot to teach you.

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    ManchuCandidateHamilton Nolan
    11/05/15 10:03am

    A dart board, a subscription to CNBC and a stock picking monkey is all I need to lose money for a hedge fund. I request an annual salary of $450K (hey bananas for Mojo the Monkey aren’t cheap—he only likes organic bananas from Whole Foods.)

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      Hip Brooklyn StereotypeManchuCandidate
      11/05/15 10:07am

      Psshh, I’ll do you one better:

      Folks, I will lose your money entirely free of charge! I’m that confident in my portfolio management skills!

      Also, who crudely spray painted that set of balls on Mr. Monopoly?

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      Deadly the EternalHip Brooklyn Stereotype
      11/05/15 10:24am

      That’s probably also Aflac’s business model. :P

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    ARP2Hamilton Nolan
    11/05/15 10:21am

    I think you need to finish the thought HamNo.

    The theory underlying our economic, tax, and benefits systems is that rich people should keep more of their money because they earned it by being smarter, working harder, or creating more value for their firm.

    What we find is that yes, those certainly do help, but there are a lot of people that rich because they’re lucky, broke the law (or had the laws change), or were just plain as*holes. If you were to show the sources of wealth and economic inequality, that Teabagger, living in a trailer in KY, might not be so keen on a flat tax.

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      toothpetardARP2
      11/05/15 10:33am

      their money

      I like to tell NOT WITH MY MONEY baby boomers about the ‘federal reserve note’ written on ‘their money’.

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      grykeARP2
      11/05/15 10:57am

      but there are a lot of people that rich because they’re lucky

      All rich people are rich because of chance. For example, those smart people who ‘deserve’ to be rich are only smart because of a genetic lottery.

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    toothpetardHamilton Nolan
    11/05/15 10:08am

    A million bucks a year to lose money

    Yes but can any of us lose money with the talent required of these people? It’s one thing to lose 40k spending it on rent, quite another to piss away 120 million on exactly nothing.

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      Witch Hoggletoothpetard
      11/05/15 10:13am

      Challenge accepted.

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      Mr. Frebustoothpetard
      11/05/15 10:25am

      But when you piss away 120 million, but still have 500 million left at the end of the year and your money loss is purely on paper, it’s not a big deal.

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    SoapBoxcarWillieHamilton Nolan
    11/05/15 11:51am

    The problem isn’t so much the hedge fund industry writ-large, but the pension funds and other institutional investors, the private wealth managers and the funds of funds. They’re the enablers that make all of this nonsense possible.

    Hedge funds can be a great investment for sophisticated wealthy individuals and families, worth paying the 2 and 20 fees, as long as you find a fund manager that has the right priorities and objectives-the best managers tend to focus solely on their returns, while the worst tend to focus on where their fund stands on the list of largest funds by assets. They’re bad for most other investors, especially those for whom liquidity and short term performance are the highest priorities—and typically that’s who invests through the “enablers” listed above (and pay additional fees for the privilege of being allowed to do so).

    However, I’m still surprised that we haven’t seen market forces change the fee structure over time. Even if a great manager is managing $20 billion and making you a 25% return after fees, do the partners of that fund really need to earn $1.4 billion? And shouldn’t investors really only be paying for the alpha (excess return) rather than paying for the return they would have gotten for free if invested in a low-cost index fund?

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      stryxSoapBoxcarWillie
      11/05/15 12:15pm

      Yves Smith at Naked Capitalism has been on this for a while now. Today, for example:

      The Maryland Policy Institute published a study that updated and reconfirmed the findings of an analysis performed two year earlier, that public pension funds that invest in high fee strategies like private equity give up billions in performance as a result.

      Her posts tagged private equity are thoroughly depressing

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      SoapBoxcarWilliestryx
      11/06/15 11:37am

      The NYC pension system is mentioned in one of her articles—that’s why I actually supported Eliot Spitzer for City Comptroller. Sure, he cheated on his wife and pursued a prosecutorial agenda that while headline-grabbing (it also gave him the nickname “the sheriff of wall street”) may not have had much of a lasting effect other than getting him elected governor. But he’s a bulldog and you know he would be a lot more a effective at dealing with the pension fund mismanagement than Scott Stringer is.

      The private equity industry is arguably even worse than the hedge fund industry.

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    Dr. Artemis JonesHamilton Nolan
    11/05/15 10:18am

    For those who are thinking “wtf kind of wily compensation scheme allows them to do this?!?: the vast majority of hedge fund managers are paid on the “two and twenty” scheme, which means 2% of net assets and 20% of profits.

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      Armando stillettoDr. Artemis Jones
      11/05/15 11:02am

      “2 and 20” so no matter how badly your investments crater under their guidance, they still siphon 2% off the amount you gave to them.

      I am content to have beaten them consistently over the last decade and a half doing no more than investing in a diverse group low cost index funds.

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    Witch HoggleHamilton Nolan
    11/05/15 10:12am

    I’d like to be a hedgehog manager.

    GIF
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      KaidogWitch Hoggle
      11/05/15 10:31am

      Doesn’t pay much, but the cuteness rewards are high.

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    zeropointzeroHamilton Nolan
    11/05/15 10:26am

    Pffft ... save your money on these so-called experts and invest w/ the zeropointzero fund, specializing in underperforming stocks ready for a bounce-back - I’ll even give you my November special picks for free: I like Amalgamated Typewriter Repair, The Damascus-Aleppo Real Estate Investment Trust, Eastern Airlines, and the Browns getting 10.5 at Cincinnati tonight.

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      OMG!PONIES!Hamilton Nolan
      11/05/15 11:25am

      And how much of that do they spend on porn? NONE OF IT!

      Because those conniving motherfuckers are smart enough to know that no one pays money for porn.

      Unlike that dumbass Illinois cop. I mean really! That’s fucked up. Steal tax dollars meant for disadvantaged youth and spending it on porn that can be gotten for free.

      Say what you will about hedge fund managers, they don’t waste money paying for porn. Sure, they’ll buy hookers and blow but porn? Naw man.

      The corrupt cops of America should take a lesson from hedge fund managers. Steal smart, steal big, and don’t waste your money on shit that’s free.

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        Snake LipssynkHamilton Nolan
        11/05/15 10:34am

        It’s too bad it doesn’t end with gross over-compensation: hedge funders also like to coerce and corrupt their way to land grabs in Africa and any poor country easily cornered by transnational wealth.

        http://www.aljazeera.com/indepth/opinio…

        http://www.mintpressnews.com/MyMPN/attack-l…


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