Trimming the Hedges

It is my firm belief that major hedge funds will collapse, bringing about a Savings and Loan/long term capital management (LTCM)/Enron-style collapse in the financial markets. This is a raw-materials blog for making sense of the mess after it happens. Update: With the U.S. government debating on a $700 million bailout for the economy, this crisis has surpassed my wildest expectations, so my new prediction is that the U.S. will default on its loans for the first time in history. [09/24/2008]

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YRG
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Sunday, November 18, 2007

Simple, but not easy

A billionaires' guide to investing.
Hedge funds normally charge fees of 1.5 to 2 per cent of the asset value plus 20 per cent of the return. Their own fees make it hard for them to deliver the goods.

Mr Oldfield quotes the decline of the first hedge fund, A. W. Jones. In December 1968 it had $200 million under management: in September, 1970, that had fallen to $31 million. Later George Soros was to rebuild the reputation of hedge funds but there remain questions about whether they can find the exceptional talent they need and whether clients will pay their fees.
Posted by YRG at 11:48 PM

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