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!
PROTECT YOURSELF, and do it NOW!
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