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getrichdietrying (83.13)

Why are the rich so stupid?



May 10, 2013 – Comments (3) | RELATED TICKERS: HLF , DELL.DL , JCP

You can not help but be interested in the news makers of hedge fund gurus of the likes of Bill Ackman and Carl Icahn who hedge using other rich peoples money in their funds.  Now these two are a little different than the many other hedge funds out there who consistently loose to the market versus the S&P.  With an industry that has the rich investing in them to the tune of $2.5 trillion and loosing, why are the rich so stupid?

Now it's only the rich due to IRS guidelines which require you to have net worth of $1,000,000 million and yearly income of over $200,00.  That along with most of these self styled "Hedge Fund Guru's" only taking your money from you with their own minimum investment requirements which is most often not less than one million dollars (I asked One to check), sometimes even up to $25 million, makes for sure you are rich and stupid to boot. Hedge funds generally charge a 2% levy per year and IF they are profitable they take 20% of that profit for themselves!

Are Hedge Funds that good that they like are earning phenomenal returns, the rich are rich because they are smart right? I don't get it please explain.





I am long JCP.

3 Comments – Post Your Own

#1) On May 10, 2013 at 10:01 PM, L0RDZ (91.88) wrote:

Hey there are a  ton  of  banks  and  mutual  funds  that  rip  off  the  poor and  middle class  with similiar  if  not  worse fees,  levies,  and  transaction costs.

Before  I  entered  the  market  in  2008  I  had   a  laughable  presentation  of  a  banker around oct 2007   who  was  willing  to  blow  my  life savings  by  offering  to  charge  me a  2%  yearly  management  fee  on  top of  transactions  costs  ~   the  lady  presented me  with  a  bad  choice  of  spreading  it  equally  among  10  horrible  funds  that  charged  upfront  fees  and  the  likes  which  had  I  been  stupid enough  to  agree  to  would have  dwindled  away  my life savings  as  the market  back  than  was  at  its  all time  highs  and  those  funds  were  like  for  suckers  who  didn't  know  better.



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#2) On May 11, 2013 at 4:49 PM, XMFConnor (96.75) wrote:

This is a pretty naive view of the industry.. are investors who have done extremely well in funds like Baupost, Maverick, etc. stupid too?

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#3) On May 12, 2013 at 7:00 PM, getrichdietrying (83.13) wrote:

I am trying to learn more XMF.  The articles I found regarding Hedge funds were pretty much stating what the tile of this blog is, which I posted to get the readers attention.  I would love to know why so many are negative regarding hedge funds versus where/what are the positives.  If you were rich would you invest in these funds? A fool trying to learn and understand is all I am.

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