Comments on: The best way to handle risk: hedge funds

By: nameless42

nameless42 — Thu, 08 Jul 2010 19:59:44 +0000

Okay, so the reason this hedge fund did so well was because they handled their own money and were not too-big-to-fail.

So… we should put _them_ in charge of vast amounts of everyone else’s money. Excellent point. I do not feel like I just wasted my time reading this article.

By: zobodog

zobodog — Wed, 07 Jul 2010 22:02:11 +0000

You take the example of one hedge fund that thinks differently, and based on that example argue that we should let all hedge funds run free. Everything that you say is great about RenTech is untrue for most hedge funds, which are generally run by Wall Street traders rather than cryptographers and manage capital provided by others rather than their own money. Long Term Capital, Amaranth, Goldman Alpha…the list of hedge funds that clearly cannot manage risk is long.

By: MRALI

MRALI — Wed, 07 Jul 2010 20:43:06 +0000

Are you an idiot? Did you forget about Long Term Capital Management? They too invested their own wealth. In fact, just months before they went bust, they forced some investors out and closed their door to new investors to limit the amount of capital they had to manage. Most other hedge fund managers put in substantial sums of their own money into their fund too so that investors know they have “skin in the game.” Should I remind you what happened to LTCM (or the 2 Bear funds that collapsed at the beginning of the recession)?

Hedge funds have no limit on leverage and their counterparites often are unaware as to how leveraged the fund is.

This article ignores these fundamental points. How much is Ken Griffin paying you to write this?

By: anoncommenter

anoncommenter — Wed, 07 Jul 2010 04:45:14 +0000

“But Simons doesn’t follow crowds; he is a nonconformist and contrarian… He seldom drives without exceeding the speed limit.”

Lol. Better hagiographers please.