41–50 of 130 posts
It's nice to see that hedge funds are still around. I thought all the bros had switched to tech.
I've tried for the last several years to go the other direction: tech -> finance. I've sent thousands of applications to hundreds of trading and finance companies, and gotten zero bites in the last two years. I am currently just assuming that there aren't as many finance jobs as there are jobs at big tech.
Surely there isn't a shortage of competition? Does everyone just want in on the big names?
The top hedge funds that can realistically promise [0] excellent returns are basically all capacity constrained AFAICT Either that or they've switched business model to mostly making money on the management fee. It's easier to grow the assets than the returns. [0] If you can get money into one of the top multi-managers, in peacetime you are basically looking at somewhere between a nice and very good return every year…
A certain famous Italian gentleman had the same realization.
Earlier quoted context omitted.
I have invested in hedge funds as an individual. Your proposals would be great for me; less competition. I’m sceptical of the public benefits, though there is absolutely a political bloc who will like the optics of banning public investments in HFs and PE. > private equity, which is a high fee structure built to hide losses over long term periods Empirically false. The problem with PE is the same as HFs: fees and dis…
by all means, keep letting those charlatans take your money. Are you denying that private equity avoids reporting standards that are mandated for public companies?
So do startups and small businesses. I’ve made money in both (as well as hedge funds).
Good investments aren’t measured by consultant spam. I’d be furious if my managers burned my money on e.g. commissioning boiler plate risk factors.
As someone who has worked in the industry: hedge funds are certainly parasites on our society, who make money not from wealthy clients (as is widely thought) but by managing government money through the social security system, union pension funds, college endowments, and sovereign wealth funds. They are a tool to redistribute billions of dollars of ordinary people's money into the pockets of an 'in-group' that then u…
1. Crazy graph format lol 2. I thought management fees were supposed to pay for comp? 3. Buying SPY wins again? 4. I don't really care about rich people getting ripped off, but I wonder if any of my money leaks into these funds
I think you need to consider time horizons when analyzing these funds. You can buy SPY and it will win. Unless there is a market crash when you hit retirement age, in which case you are screwed until the market recovers. If you don't mind the risk, go 2x levered and you will do even better. [0] Many institutions and HNW and UHNW individuals prioritize consistency over absolute growth. They would rather make 6-8% a ye…
Earlier quoted context omitted.
I think you need to consider time horizons when analyzing these funds. You can buy SPY and it will win. Unless there is a market crash when you hit retirement age, in which case you are screwed until the market recovers. If you don't mind the risk, go 2x levered and you will do even better. [0] Many institutions and HNW and UHNW individuals prioritize consistency over absolute growth. They would rather make 6-8% a ye…
2x leaves at the mercy of margin calls, which inconveniently come at the moment where you least want to sell (right after a huge crash). Getting margin called after a 50% crashes leaves you with $0, as an example. A 50% market crash would be brutal even without leverage, but at least no one would force you to sell.
It's nice to see that hedge funds are still around. I thought all the bros had switched to tech.
I've tried for the last several years to go the other direction: tech -> finance. I've sent thousands of applications to hundreds of trading and finance companies, and gotten zero bites in the last two years. I am currently just assuming that there aren't as many finance jobs as there are jobs at big tech.
As someone who has worked in the industry: hedge funds are certainly parasites on our society, who make money not from wealthy clients (as is widely thought) but by managing government money through the social security system, union pension funds, college endowments, and sovereign wealth funds. They are a tool to redistribute billions of dollars of ordinary people's money into the pockets of an 'in-group' that then u…
Why are you singling out hedge funds? The blame lies equally with all active fund management, as well as the investment managers (e.g. pension funds) who decide to allocate to them instead of to a passive tracker.
Except active management works for any metric other than long-term yield maximisation. (Most institutions have short-term needs, whether for liquidity or optics.)
Earlier quoted context omitted.
by all means, keep letting those charlatans take your money. Are you denying that private equity avoids reporting standards that are mandated for public companies?
> private equity avoids reporting standards that are mandated for public companies? So do startups and small businesses. I’ve made money in both (as well as hedge funds). Good investments aren’t measured by consultant spam. I’d be furious if my managers burned my money on e.g. commissioning boiler plate risk factors.
Earlier quoted context omitted.
> Why don't you target that anger and contempt to the organizations willfully giving money to these organizations? This happens from time to time. Most recently, in pensions withdrawing from private equity. It’s historically come to bite when these managers hit a bout of volatility. Put simply, portfolio theory is incredibly robust. The question isn’t why hedge funds, but why does it keep paying so well?
Why can hedge funds negotiate such high fees despite lackluster performance? You answered it in the prior sentence: portfolio theory is incredibly robust. They (claim) to provide diversified return. The idea is that although they may not provide a net return comparable to low cost equity ETFs, they provide diversified return. And portfolio theory tells us lower yielding assets can actually increase your portfolio's r…
As you point out, what counts as performance varies. Magnitude of net returns is important. But by analogy, you could get massive net returns betting on the Powerball.