When you invest in a hedge fund, you are giving money to a fund manager to speculate for you. The fund can speculate in any type of assets - shares, currencies, commodities. They can borrow money, i.e. leverage, to speculate in bigger stakes. The fund manager can make a lot of profit, but can also make a humongous loss. The hedge fund charge high fees, usually 3% or more of the invested assets, and can also take a large part of the profit, e.g. 20% of the gains. But, when the hedge fund loses big on the bets, they do not compensate the investors for the losses. Hedge funds managers can be multi-millionaires.
It can be reckless for trustees of trust funds or corporate funds to invest their money in hedge funds. But many of them do. This is why hedge funds are so successful. Here is a story of a hedge fund that performed badly this year.
It can be reckless for trustees of trust funds or corporate funds to invest their money in hedge funds. But many of them do. This is why hedge funds are so successful. Here is a story of a hedge fund that performed badly this year.
It looks like timing is everything. Even when you invest with a hedge fund manager!
ReplyDeleteIf you invest with Paulson up till 24 months ago, you'd have made plenty of money.
But if you invest with him over the last 24 months, you'd lose plenty.
I'm just a small insignificant person who wants to sleep well at night, dun have notions "to be the richest man in the cemetery", quote from the former partner of Steve Jobs, who left Steve after seeing him work like a zombie with little sleep and rest.
ReplyDeleteOr dun want to follow Oei Hong Leong, who got bitten only once in some derivative investments in Citibank, and ever since has faded away, quiet as a mouse.
Simply, why should we allow our money to make a billionaire for the hedge fund manager.
MAS is amused as a bystander when they see consumers/investor kenna mauled.
ReplyDeleteThere is a price to pay for working like a zombie. We exchange health for wealth and by the time health is wreck, we try to exchange it back with wealth but it does not work that way. The wealth we amass when we are healthy serves only to make the pharmacies and doctors wealthy but they did not give you back your health and there is nothing you can do about it. Dead man tells no tales.
ReplyDeleteMAS is not amused, the officials are laughing at investors for being so blind and stupid. In fact they look down at us, making use of us as digits to make Singapore the Financial centre of the world.
ReplyDeleteMAS is making sacrificial lambs out of Singaporeans, to paste gold on their faces.
Make a trip to the Marina Bay Sands'
offices, you would see hordes of Ang Mos with their lap tops busily gambling on the world's financial markets, these people are hedge fund managers. The scenario would send shivers down your spine.
If you think MAS and the financial mess is bad, wait until our government scholars build our first nuclear plant in Singapore.
ReplyDeleteCan't manage a limping terrorist.
Can't manage train vandals.
Can't manage a once-very-50 year flood for 2 consecutive years in a row.
Can't manage an oil refinery fire
Still think they can manage a nuclear power plant.
After;
USA failed (3 mile Island nuclear disaster)
Russia failed (Chernobyl disaster)
Japan failed (Fukushima disaster)
Germany abandons nuclear power.
Our little red dot must be better than USA, Russia, Japan and Germany combined.
And when the cock-up happens, where do the experts come from?
Overseas.
As in our flood control expert panel.