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Who on Earth keeps giving this guy money?!?!

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October 27, 2009 – Comments (3)

Back in February I wrote the following:

Stupid people making stupid investments is how we got into this mess to begin with.  How on Earth is John Meriweather of Long Term Capital Management fame (or infamy I suppose) able to launch yet another fund?!?!  I believe that he's had at least one other fund melt down since the LTCM debacle.  This isn't a straight Madoff scam, but clearly whatever Meriweather has been doing is not working.  Stop giving him money people.  Good grief.

Meriwether’s JWM Partners winds down flagship fund 

Can't earn fees because your terrible hedge fund is so far under water?  No problem.  Don't bother trying to get your investors' money back through working hard to correct your errors, nope just close the doors and open a new fund with a clean slate.  Mutual finds do that sort of thing all the time...Do Mutual Funds Cheat on Returns?

If you throw enough crap at the wall, eventually some will stick for a while. 

Three months after closing his second hedge fund, Meriwether is now attempting to open a third.

Meriwether setting up new hedge fund

Go away John.  Clearly there's something wrong with the way you run your funds.  Do the world a favor and just go relax on a beach somewhere and count your pilfered millions rather than going for the hat-trick of investment black holes.

Deej

3 Comments – Post Your Own

#1) On October 27, 2009 at 4:10 PM, QualityPicks (49.86) wrote:

That is nothing. Ben Bernanke, Geithner are making much much bigger bets :) Hopefully they come out of them unscathed, but I doubt it.

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#2) On October 27, 2009 at 4:41 PM, chk999 (99.98) wrote:

I'm sure there is a precise mathematical term for this, but it looks like his strategy has good average returns, but really big drawdowns every once in a while. So the fund goes along quite well until you hit one of the big drawdowns and then it goes out of business. My guess is that fund #3 will do the same thing in the next decade or so. This is sort of a reverse Kelly strategy where you are all but guaranteed to go bust eventually.

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#3) On October 27, 2009 at 10:28 PM, Harold71 (22.81) wrote:

Somehow I was hoping this guy was the subject of the post...

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