Hedge funds failure rate - Page 3
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Thread: Hedge funds failure rate

  1. #21
    Quote Originally Posted by ;
    quote removing greed also will come with practice. I had to dismiss several tiny accounts to learn the importance of not being greedy. What about confirmation bias ? We can't only make it disappear by studying a book.
    Some may say this is basic: basic does not mean simple to execute. . At least in my own case!

    Some ppl could have more confirmation bias and therefore are less greedy. In any case it is good to edue yourself and exercise with cash you can manage to burn.

  2. #22
    These may not be funds, but fund management companies which call themselves hedge funds.
    They attract great deal of investor capital and call themselves a hedge fund.
    An actual hedge fund may be one that manages retirement fund that is registered with the authorities.
    They are licensed to exchange on behalf of those public institutions, and are controlled.


    However, the direction of those hedge funds are fresh graduates from universities holding a fund degree without a prior trading/investing experience.
    What they are good at is in fundamental and technical analysis, only on concept.
    Of course, they could build wonderful looking models and do intensive analysis on the market with A regular reports.
    And some of those hedge funds have sales people because of their direction. They will say words like they know the market very well. In fact, nobody can forecast the market.

    And they also can't afford to pay huge fee to employ more experienced staffs to work for them, and they want to house themselves in luxurious office buildings just to boost to their clients they are well-to-do. The majority of them are startups with less than $1m.

    Hedge funds need to borrow in order to hedge their transactions. They are in trouble in case the liquidity runs low.
    Bigger funds need larger loans. Where can you find loans that are larger ? Will the bank trust you?

    If they lose, the investors will withdraw their capital, and sue them to bankruptcy. Once a neighborhood of investors withdraw, the rest will probably follow suit as a result of reputation that is negative. The hedge fund is able to trade, when the fund declines in proportion. Drawdown increases on transactions, because of downsizing fund.

    The cash flow of a hedge fund usually encounter negative territory because of expenses needed to pay off the massive office rental and smart looking workers. And not forget about the direction staffs that pay themselves millions to pay for a castle and Lamborghini. There's a variable and fixed cost. Worse should you use computers to exchange the market. Electricity is eaten up by that.

  3. #23
    Quote Originally Posted by ;
    All these might not be hedge funds, but finance management firms which call themselves hedge funds...
    What you mentioned is NOT correct. Funds are NOT pension funds. They have objectives.
    Hedge fund aren't startups by new graduates. Do you think graduates with no prior experience will be able to procure investments/loan to even set up their funds? I doubt that any investor will be dumb to put money into someone. Venture capitalist aside.

    Yes it is quite true that most hedge funds hire marketers and/or salespeople. But that is the nature of the sport. The bigger their AUM, the more comissions they get.
    It's also quite true that negative yields will cause some investors to pull out their funds. That is the challenge for funds. How can you convince investors that yields that are unwanted are just temporary?

    Total, I don't know your arguement nor your justifiion for putting down hedge funds. We can learn a thing or two from them to increase on our trading.
    Don't mean to seem rude but I felt I needed to respond to your comment

  4. #24
    It is comprehension skills. Please read my announcements.
    These statements are unedited, and as is.

    These might not be hedge funds, but fund management firms that call themselves hedge funds.
    An actual hedge fund might be one that manages retirement fund that's registered with the authorities.
    (A pension fund could be managed by a multiple quantity of hedge funds to diversify the risk.)
    The management of these hedge funds are new graduates from universities holding a fund degree with no prior trading/investing experience.

    In the nation that you trade from, we've got quite a few fund management firms, but due to strict regulation, they cannot be measured because of a hedge fund.
    If it's in overseas, there will be many hedge funds around. Little ones can be called a hedge fund. It has to do with all the capital, experience of staffs, therefore fore.
    Just how I know? I worked for a local fund management firm before. It couldn't get itself registered as a hedge fund, and will need to notify of its customers that come.
    It has 2 fund PhDs that are already millionaires. They have their functionality audited by lawyers.
    One of these has joined a bigger fund management firm with different PhDs. This business is based on an existing university professor. They are all experienced. And, the bigger fund management firm cannot be measured as a hedge fund.
    If it's in other countries, I feel it is simpler to be registered as a hedge fund.

  5. #25
    Regarding failure of funds, it may also need to do with their inability to take care of swan occasions.
    Failure rate has to do with the period of time in which the hedge fund is operating.

    Since the last fiscal crisis, the surviving hedge funds have been exploring investment models to deal with black swan occasions.

    Due to that, the overhead has increased, and this may not become performance gain for those consumers.
    Profit will surely drop if they use investment models which manage black swan occasions.

  6. #26
    Quote Originally Posted by ;
    quote Truly, monkeys are more accurate https://www.forbes.com/sites/rickfer.../#5432e04e630a
    Yeah, LOL

  7. #27
    Quote Originally Posted by ;
    Most of these are only monkeys in suits.
    Actually, monkeys are more accurate https://www.forbes.com/sites/rickfer.../#5432e04e630a

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