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Originally Posted by DickFuld
Was going to post something similar to your response but you beat me to it gosh darnit. I'll post some sort of alternative response instead.
Clearly 'dogmoon' seems to first incorrectly segregate a hedge fund from a mutual fund or any other type of fund that nearly the entirely world uses to place their wealth towards retirement when sarcastically asking how a hedge fund justifies their existence. Furthermore he states that hedge fund managers seemingly blow up, lose everyone's money, and then build some other fund that people pour money into. Feel free to show us some examples of this (since he is in fact wrong.) Lastly, just because his negative bias refuses to accept/read/believe hedge funds make investments that hit it out of the park doesn't mean they aren't doing it regularly.
Also I don't think he quite understands what "hedge" means when used next to the word fund. I'm sure this bull market has him believing hedge funds are worthless as their returns will historically lag one of this magnitude, but they also perform better when **** hits the fan which is what a hedge is supposed to do.
Actually, most mutual funds, and the people and mindsets involved, are the lowest form of activity in the world. I know investing theory more than 99 percent of people who invest money. I also know the mindset of the "asset gatherers" who add nothing to the world, yet take a percentage of other people's assets, which have been paid for from real world effort and labor.
The lowest of the low are actually the big mutual fund guys, like all-time loser Bill Miller. These so-called value investors are some of the worst investors of all-time. They are almost always fully invested and therefore, will never be able to truly load up at the lows when markets crash. Most, if not all of them, were begging for money during 2008 and 2009. They couldn't buy the bargains, as they had to sell beaten down stocks in order to buy other beaten down stocks. That is why you have heard ZERO stories of any fund or Hedge Fund that was sitting on a ton of cash and then got the money it near the lows.
They will get drubbed soon in this market, too. Chasing yield ALWAYS leads to loss, and there is more chasing for yield right now, by all who invest, then at any time in history.