Buffett vs. the Hedge Funds; Hedge Fund Comic Gets One-Liner From Crowd: Don't Quit Day Job
"Hedge-fund managers may need comic relief. The industry is composed of unregulated investment pools that typically charge 2 percent in fees and reap 20 percent of profits. Hedge funds suffered their worst first-half performance in almost two decades, according to Hedge Fund Research Inc."
Bloomberg, 12 Aug 08
Buffett's Big Bet;
The celebrated investor wagers a tidy sum that even carefully chosen hedge funds won't return more than the market over time.
Carol J. Loomis
"(Fortune Magazine) -- Will a collection of hedge funds, carefully selected by experts, return more to investors over the next 10 years than the S&P 500?
That question is now the subject of a bet between Warren Buffett, the CEO of Berkshire Hathaway, and Protégé Partners LLC, a New York City money management firm that runs funds of hedge funds - in other words, a firm whose existence rests on its ability to put its clients' money into the best hedge funds and keep it out of the underperformers.
Protégé has placed its bet on five funds of hedge funds - specifically, the averaged returns that those vehicles deliver net of all fees, costs, and expenses.
On the other side, Buffett, who has long argued that the fees that such "helpers" as hedge funds and funds of funds command are onerous and to be avoided has bet that the returns from a low-cost S&P 500 index fund sold by Vanguard will beat the results delivered by the five funds that Protégé has selected.
It's between Buffett (not Berkshire) and Protégé (the firm, not its funds). And there's serious money at stake. Each side put up roughly $320,000. The total funds of about $640,000 were used to buy a zero-coupon Treasury bond that will be worth $1 million at the bet's conclusion.
That $1 million will then go to charity. If Protégé wins, it has asked that the money be given to Absolute Return for Kids (ARK), an international philanthropy based in London. If Buffett wins, the intended recipient is Girls Inc. of Omaha, whose board includes his daughter, Susan Buffett."
The rest of the story is
Hedge Funds are a joke. Bloomberg has the story of another kid turned Hedge Fund Manager and part time comedian.
Hedge Fund Comic Gets One-Liner From Crowd: Don't Quit Day Job
Aug. 12 (Bloomberg) -- Hedge-fund manager
Ben Shoval, wearing a green Thomas Pink shirt and a $1,600 Giorgio Armani suit, grabbed the microphone last week at New York's Broadway Comedy Club to riff on his day job.
``A hedge fund is like a mutual fund on steroids,'' said Shoval, who manages $260 million for his family's firm,
Ambit Funding. ``It's like the Barry Bonds of investments. Barry goes to Mexico for his juice. We go to the Cayman Islands.''
``Only in New York is it cool to be gay, but you have to stay in the closet if you're a redneck,'' he said.
31-year-old hedge-fund manager started his stand-up career in January, taking as many as a dozen private and group lessons a month that have cost about $3,500, he says. By humbling himself before small groups at open-mike shows, Shoval said, he hopes he'll learn to perform at industry conferences and serve as a master of ceremonies for charity events.
Watch this guy here:
Ben Shoval - June 14, 2008 - Part One
Ben Shoval - June 14, 2008 - Part Two
The hedge fund industry and F.I.R.E. economy is very leveraged and very opaque. I do not believe there has ever been a time in history, where the nominal economy, so surpassed the real economy. It has made Soros, so nervous he wrote a book about it and testified before Congress about the end of the credit expansion.
Soros points out that there are now more than $62 trillion in devalued financial products — an amount equal to more than half the entire household wealth of the U.S. and several times the size of the national debt." (Ref: Street Talk; Soros: Congress Needs to Learn to Regulate July 23, 2008)
Do you really believe this 31 year old
Ben Shoval, deserves to make more money then a Surgeon or ______________________.
The stupidity of this industry and its' leverage will not end with out some very severe pain. It boggles the mind….