http://www.nakedcapitalism.com/2008/09/hedge-funds-continuing-to-take-it-on.html Sun, 22 Nov 2009 06:06:33 -0500 http://wordpress.org/?v=2.8.4 hourly 1 http://www.nakedcapitalism.com/2008/09/hedge-funds-continuing-to-take-it-on.html#comment-13983 Peripheral Visionary Tue, 02 Sep 2008 21:15:00 +0000 http://www.nakedcapitalism.com/2008/09/hedge-funds-continuing-to-take-it-on-the-chin/#comment-13983 One fundamental problem is that, with the market sideways and investors sitting tight or even pulling out, the hedge funds are now reduced to betting against each other. The market can be a positive-sum game with new money entering either from investors or from dividends, or from private buyouts, but with none of that happening, it is now a zero-sum game, and for every winner there will be a loser. All the arguments for the outsized fees are starting to look ring hollow now that returns are either converging or, worse, simply becoming random. One fundamental problem is that, with the market sideways and investors sitting tight or even pulling out, the hedge funds are now reduced to betting against each other. The market can be a positive-sum game with new money entering either from investors or from dividends, or from private buyouts, but with none of that happening, it is now a zero-sum game, and for every winner there will be a loser. All the arguments for the outsized fees are starting to look ring hollow now that returns are either converging or, worse, simply becoming random.

]]> http://www.nakedcapitalism.com/2008/09/hedge-funds-continuing-to-take-it-on.html#comment-13952 Mickslam Tue, 02 Sep 2008 14:44:00 +0000 http://www.nakedcapitalism.com/2008/09/hedge-funds-continuing-to-take-it-on-the-chin/#comment-13952 Look at the size of Paulsons fund. $35B!! Look at the size of Paulsons fund. $35B!!

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