Monday, January 10, 2011

Monday Morning Ramblings

The Reform series will continue tomorrow. I need to pummel hedge funds today.

Are the Rich stupid? Or gullible? Or foolishly greedy? That's the logical conclusion one could make from the annual returns of their favorite club topic, viz. hedge funds. They love to put money into hedge funds; they've poured billions - trillions - into thousands of hedge funds. The economy of southeast Connecticut must depend on hedge funds, as must many exclusive districts in London or Switzerland. A hedge fund manager gets fat fees, often 2% of assets and 20% of profits. They risk nothing other than some pittance of their own money. They get to gamble with clients money and rake off those fees.

What do clients - investors - get? Oh, they can talk about their hedge fund investments with their pals over cocktails before those black tie galas or at the exclusive clubs, or vacationing at Palm Beach or exclusive resorts. What kind of person would invest for that mere psychological benefit? Any rational person would say no one. They would want superior returns at lower risk.

The numbers for 2010 are now out. The average hedge fund gained 10.4% in 2010 according to Hedge Fund Research, which returns agree with those of Hennessee Group LLC, an advisor to investors. [Source: WSJ over the weekend]. Krypto Fund had a 14.1% return with very low risk as almost 1/2 of its investments are in passive fixed income investments. The equity components of Krypto Fund are invested mostly in low fee index funds. Krypto Fund crushed the performance of all those hedge funds by 3.7%, a huge margin. What fees were paid ? Dog biscuits. Active trading ? Nope, almost no trading - mostly simple asset allocation trades when a sector became out of balance.

All that superior performance with a public, easily copied strategy and no fees. Thus, what else can we conclude but that the rich are either stupid or greedily gullible or foolish or have psychologically weak minds, or any or all of the foregoing?

What else could one expect - there are thousands of hedge funds, just like there are thousands of mutual funds and now thousands of ETFs and thousands of managed account gimmicks at the big Street firms. All that vig created by the Street to rake off all the cream. The money managers and the Street get the beef and the customers get the gristle and fat. Those layers of fees guarantee poor performance on average.

Don't do it. Manage your own money with a simple, low fee, conservative strategy as Krypto Fund does. Sleep easy. Don't worry. Be happy. :)

Word of the Day

"Apocopation" - noun [$10] from "apocopate" - verb [$10]
Apocopate means the omission of a letter or letters at the end of a word as a morphological development [e. g. in the derivation of curio ].
Sentence: The title of the humorous Mozart opera, "Così fan tutte" contains the apocopation 'fan' from 'fanno' meaning 'they do'. In that title, 'tutte' is feminine plural for 'all" hence the literal translation is So do all (women).

20 comments:

Bud said...

here we go again..................the anti-gun frenzy


give me a F'ng break

Bud said...

Bman how many attempts will it take you to hit a beer can from 100 yards? 200 yards ??

Bud said...

Bman will you be viewing the bcs game tonight ?? do you even know who's playing ?

Bud said...

Bman do you own any oil futures ?? oil stocks ??

Bunkerman said...

with a good rifle, one (1) try for both distances.

Bunkerman said...

I don't know who's playing. Isn't it rather later in Jan. for a bowl game. Those should be in Jan. 1.

Greed.

Bunkerman said...

btw, at 100 yds, I could do it with iron sights; at 200 yds I'd need a scope.

Bud said...

1 try...............gimme a break


i need verification..........i need your scorecard attested..........or an affidavit from one of your 2nd amendment event participants verifying such marksmanship

Bunkerman said...

a beer can at 100 yds is about two minutes of arc. A good rifleman shooting good ammo in a goo drifle prone with sling can hit that easily.

At 200 yards, it's 1 minute of arc; that's why a scope is needed. If the can was mounted on the center of a standard NRA 200 yd bullseye target, I might hit it with iron sights.

Bunkerman said...

The BCS championship between Oregon and Auburn ...

Hmmm. Frosty's home state ? Amazing.

they must import players ... I doubt if enough young Oregonians are off pot enough to play football.

Bud said...

worldwide food riots Bman...............sugar in algeria......rice in bangladesh........wheat in thailand


are you still stubbornly insisting there is no food inflation in the US ??? do you own any mules Bman ?

Bunkerman said...

I made a huge pot of beef stew this weekend ... turnips, parnips, onions cabbage. Cheap food IF one prepares & cooks it yourself

Bunkerman said...

tasted great, too ! Put in 3 lbs of sirloin tips (@6.99/lb.) & some red wine.

MMMMM. Got many days worth of meals cheap.

Spin-em said...

PAPAYA PANDEMONIUM AT PUBLIX!!! RUN FOR THE HILLS!!!

Spin-em said...

Bunk ..why is home page stuck in 2010??

Bunkerman said...

Bunk ..why is home page stuck in 2010??

???

The dates on the blog itself & these comments all look like 2011 to me.

Spin-em said...

mine is stuck on DEC 31,2010...and I have to click on 2011 to get the days post

Bunkerman said...

Are you sure you're going to the right place?

http://viewfromthebunker.blogspot.com/

I just logged out and went there as a outsider & it was OK - had today's date & year correct.

Spin-em said...

lool Bunk...I post everyday..I think I know..lol...Im not Patick..or Jupiter family...one n dun..lol..no problem...I'll reset in favorite places...

Spin-em said...

dont think I forgot you Ohioweenians either..lol