Alright guys so I found out some more information about these guys at my school who are starting a hedge fund. I learned today that they only have $3000 in their account so far and that they are leveraged 200:1 and trading 30 year bond futures. Furthermore, in every trade they make they only hold %0.5 equity in their position. I also asked one of the "fund managers" about his opinion on the housing numbers today and he promptly responded by saying, "I don't look at that shit! I only take technical analysis into account! Those economic indicators will f*ck you up!"
In my opinion these guys are just being reckless and if you build a simulation with the above variables to predict their performance with a 50/50 success rate (in reality their success rate could be a lot less) it shows that after a handful of trades these guys are going to be bust.
and this bothers you why? Not sure why you are so worked up over these guys. Let them blow up - it's only $3k and will be a good lesson. If they get lucky a few times and turn the $3k into $20k, they will still eventually lose it all with 1 big blowup.
$3,000 hedge fund, haha
$3,000.....what kind of fee structure do they have in place....
not srs
In all seriousness, if you are millionaire, perhaps spreading it around a couple hundred silly mini-funds like is wiser than parking 1 million in a single fund (where the principals, although they graduated from HBS, prob don't generate real alpha).
http://blogs.wsj.com/marketbeat/2011/11/21/hedge-funds-kiss-their-alpha-goodbye/
Aut delectus pariatur dicta aut laboriosam consequatur. Temporibus aliquam expedita iste eos. Voluptas et consequatur nostrum aut.
Ipsa sunt voluptatum assumenda ut quidem enim sed. Aut rerum quod quaerat molestiae nihil. Sed voluptatibus recusandae ducimus et dolor.
Voluptatem qui ipsum reprehenderit et. Laboriosam qui delectus consequatur earum minima consequatur in. At eum veniam tempora quos enim dolorem.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...