Slipping back into my regular routine is sometimes a challenge after a few days of traveling. The first day back in the markets — especially following a week like we had to end July and begin August — can be a bit of an adjustment.

A few days away allows the accumulation of jaded skepticism to wane a bit. Hence, the surprise that registered this morning when I read a Wall Street Journal article on “How Individual Investors Can Invest Like a Hedge Fund.” The article goes on to look at three possible ways that an ordinary investor can deploy their capital “like a hedge fund without hefty expenses.”

What it failed to explain is why ordinary investors would or should want to do this.

Continues here


Category: Hedge Funds, Investing, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

2 Responses to “Welcome to the Muppet Economy”

  1. rd says:

    My suspicion is that these funds are targeted at doctors and lawyers who typically make $300k+ per year. The 0.1% have their own teams of financial advisors and can get sub-par performance directly from the hedge funds themselves. Meanwhile, the vast majority of the salaried unwashed masses are putting their meager savings into 401ks that are getting more and more regulated with lower and lower fees.

    So the sweet spot for the honey trap is that self-employed highly-compensated set of professionals that are much smarter than the unwashed masses and therefore have the right and privilege to participate in special funds that most people can’t or won’t access. They like technical terms (even if they mean nothing) and can throw gobs of money at preferred products. Since they are really, really smart, they don’t fall for the dumb sales pitches that the 90% always fall for, so they are assured of getting much better performing products than the average slob stuck with just getting mediocre average returns from cheap places like Vanguard that don’t provide much in the way of personal service.

    • Frwip says:

      Good description of the underlying psychology of the plausible marks : they are successful and worthy ; hence they deserve superior outcomes not offered to the commoners. It was also Madoff’s mode of operation, practiced in a rawer, more personal form on even bigger marks.

      Yet another turn of the crank, another iteration on good ol’ affinity fraud.