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As many of
you are well aware, I DESPISE “hedge funds” – as much as any
Wall Street scam. And I should know; as I worked as a hedge fund
analyst/trader in 1996-98; a vile experience I have described in multiple
RANTS.
“Hedge
funds” are supposed to be “market-neutral”; that is, as long
as they are short. However, I’d guess 90% are long-only, or nearly
so; constantly falling prey to “OPTIMISM BIAS”,
“career risk fear”; and, of course, fraud.
Typically,
such “2+20” funds take 2% of your funds in annual management
fees, and 20% of all profits; while NOT sharing in the losses and only
allowing withdrawals once or twice per year – often, with significant penalty
fees. In other words, a GIANT SCAM; particularly as 88% underperformed
the S&P 500 in 2012 – when essentially ALL asset prices
increased…
88%
Of Hedge Funds, 65% Of Mutual Funds Underperform Market In 2012
Given the
S&P 500 was up 16.0% in 2012 (including dividends),
the average hedge fund return of 1.2% was not only horrible, but
nearly CRIMINAL…
Bloomberg Global
Aggregate Hedge Fund Index
And just
to rub it in Wall Street’s LYING, CHEATING, INEPT faces,
here’s a comparison of the Bloomberg Global Aggregate Hedge Fund
Index with other assets classes over the past five years…
As you can
see, not only did hedge fund managers get BLOWN AWAY by PHYSICAL silver and
gold; but even the staid Dow and horrifically suppressed HUI as
well. And better yet, even the “ALGO FUNDS” – which
use nothing but computer programs to “beat the market”; have lost
money two years running!
London
Quantitative Hedge Funds Report Second Year of Losses
In other
words, you’d have to be INSANE to put money with so-called
“brilliant” hedge-fund managers…
Paying
2 And 20 For What Again? Hedge Funds Underperform Stocks For Third Year
Running
Heck,
I’ve known hundreds of such “geniuses” over my 20+
year Wall Street career; and TRUST ME, 90% are common “stock
jockeys”; piling into whatever “hot stock” is making
headlines – typically, right at the top…
A
Record 216 Hedge Funds Own Apple: The World’s Biggest Hedge Fund Hotel
Gets Even Bigger
And by the
way, to “Trader X”; you know, the guy
that claims “mega-Hedge Funds” are the culprits behind PAPER PM
shorting – give me a break. These MOMENTUM MORONS can’t
even beat the market with Apple; so why on Earth would they be
shorting assets that have risen for 12 straight years? Let alone, at odd
hours like 8:00 PM EST; or in WATERFALL fashion, ensuring the worst
possible execution?
True, some
such funds – the most dangerous of all, executing extremely short-term
trades – are what Ted Butler calls “raptors”; that is,
trading off the same, blatantly obvious Cartel “signals” I
highlight each day. However, if that were the case, they’d eventually
need to COVER their shorts, causing an occasional sharp increase;
which NEVER seems to happen.
In the big
picture, “hedge funds” are nothing more than a Wall Street SCAM
– in most cases, perpetrated by “Tier 3” and “Tier
4” idiots – to STEAL from unsuspecting investors. Most are
too dumb to invest themselves out of a paper bag; let alone create complex
frauds like COMEX gold and silver naked shorting. Thus, the further from
these leaches you stand, the better off you’ll be!
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