What is Digg?137 Comments
- selmer, on 04/17/2008, -1/+16I've known some hedge fund guys...tense, wound-up balls of stress, always worried about next year, or this year, or how they did last year, or what to buy or short, or which one of their holdings was going to blow up, or who to blame for the last blowup, or blah blah blah...makes me wonder if having all that money really is a good thing. I think it starts to own you.
- inactive, on 04/17/2008, -0/+14i can't even imagine making $100 million in a year without cackling evilly. how do these guys keep straight faces?!
- TomK88, on 04/17/2008, -0/+11I don't agree with limiting hedge funds to people with a certain net worth but there is some merit to it. Hedge funs are different than mutual funds because they can basically invest however they want and don't have very stringent regulations. If you throw a bunch of uninformed investors into the mix, disaster could ensue.
- TomK88, on 04/17/2008, -1/+12No, hedge funds are not mainly short-sellers. They use a huge variety of investment strategies, one of which is short-selling.
Short-selling is beneficial to the market. It helps prevent excessive bull runs and injects a dose of reality in the market. Companies are constantly trying to cover up their negatives to prevent their share price from falling. Short investors look for faults and expose them which causes companies to be valued more accurately. - dusingaz, on 04/17/2008, -8/+18They take on a lot of risk with a lot of peoples money, they should be rewarded for success. A bunch of jealous people on Digg.
- MrHappy123, on 04/17/2008, -0/+9Trading has been around for Centuries. Jesse Livermore supposedly made 100million in the Wall Street crash of 1929 in just one day alone. Remember, that was in the 1929. And Trading is essential. I mainly think the mass public are naive idiots and they cannot be trusted with money.
- inactive, on 04/17/2008, -4/+13Buried for saying you can only get rich if you are rich.
There are millions of Americans who have gotten wealthy through hard work and smarts.
Quit bitching and stop hoping for something to change for you, take action. - Prosequi, on 04/17/2008, -0/+9"Authorities" - I think you've read the wrong article. These are hedge fund managers - far from "authorities", Mr. Simons is a math nerd for god's sake.
- Indrius, on 04/17/2008, -1/+10You have no idea about hedge funds. They are trading futures and stocks, they do not buy companies or invest in them.
- holmesfour, on 04/17/2008, -7/+15I see no issue with this, they're not doing anything special or illegal. People entrust them with their money and want them to get them more money, and the good ones do, and the bad ones should be jumping out of windows.
- ColonelJessup, on 04/17/2008, -0/+7You are referring to Private Equity Firms.
- AlwaysAwake, on 04/17/2008, -14/+21"It's not illegal, but it's ugly" The so-called American dream is now the exclusive province of the rich and powerful. Wake up people !! View the BBC 4 part documentary series "The Century of the Self" (free Google/YouTube Videos) to learn how we have volunteered to be fleeced by these people. Once you see it, and face the truth, you cannot claim victim status anymore. The Authorities are emptying our pockets, bank accounts, and the Treasury. When will you say ENOUGH !!
- dddavid, on 04/17/2008, -3/+9These guys are not doing anything unethical. The people who put money in their hedge funds agree to pay them a fee, for example 2% of their money deposited each year, plus 20% of the profit made. It seems like a really bad deal for the investors, until you realize that ONE of Mr. Paulson's (the man who made $3.7billion last year) funds returned 590% last year. If I had the good fortune to have been in THAT fund, I would have been happy to pay the fee. If I had invested $1million in THAT fund, I would have paid Mr. Paulson $1,380,000, but I would have earned $4,520,000 on my investment. Of course the only problem is you have to find THAT fund (before it has those gains, not after). If people don't want to pay these fees, then they don't invest with him. It is that simple, and is called capitalism. It is a good thing.
- TomK88, on 04/17/2008, -0/+6Of course the market isn't perfect, or else it would be 100% predictable. If you think stock price has no bearing on actual value however, you have no idea what you are talking about.
- TomK88, on 04/17/2008, -2/+8It's a zero sum game fueled by greed and more importantly fear. That said, there's nothing inherently wrong with it other than the fact that there is a sucker born everyday who falls prey to Wall Street.
- thanakar, on 04/17/2008, -1/+7They are very good guessers it appears.
- rpfinley, on 04/17/2008, -2/+8what you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.
- TomK88, on 04/17/2008, -2/+7That's the nature of Wall Street. There's not much that's more stressful than being responsible for millions of dollars every day.
- inactive, on 04/17/2008, -1/+6his NAME is Mr. Paulson
his NAME is Mr. Paulson
his NAME is Mr. Paulson... - Makisupa, on 04/17/2008, -1/+5They aren't guessing. They don't hire PhDs in Math and Econ from top schools to guess. Have you ever seen the models they create?
- TomK88, on 04/17/2008, -0/+4What are you talking about?
- chuckDontSurf, on 04/17/2008, -0/+3How am I getting fleeced if I'm in low-cost index funds? Your average Joe doesn't need to mess around with hedge funds.
- TomK88, on 04/17/2008, -2/+5Why don't you provide some proof of your outlandish claim?
- mbonnin, on 04/17/2008, -3/+6The only crime here is that people are stupid enough to give up huge management fees to these funds which are basically just guessing as to which was the market will trend and leveraging multiple times. In essence, gambling with their money.
- TomK88, on 04/17/2008, -0/+3Self-fulfilling prophecy...some of these investors have so much capital they can single-handedly raise or lower prices.
- Kmap, on 04/17/2008, -3/+6Damn and I made $850 this week and thought it was good.
- TomK88, on 04/17/2008, -1/+4So what do you propose as the solution?
- gryphon50, on 04/17/2008, -1/+4If you look at the different studies that have been done, it's clear that the average worker has fallen behind in the last thirty years, if you take inflation into account. The only reason household income has gone up at all is because more women work, and even then it hasn't gone up that much. And yet despite all this, up until at least recently the country had become more prosperous during those thirty years...it's as if it is all skimmed off at the top and never trickles down at all.
- chuckDontSurf, on 04/17/2008, -0/+3It's an "amazing investment opportunity" only if you're a very savvy investor, and even then, it's still pretty much like gambling. If you really feel like you're missing out, go to Vegas.
- Ebulating, on 04/17/2008, -1/+4The biggest problem I have with this is the fact that hedge funds are limited to very large investments, so that the average joe with 5 or even 50,000 dollars to invest is laughed at. So these amazing investment opportunity are limited only to the rich.
Also, its hard to read about people making this kind of money when at the same time you read articles like this:http://www.nytimes.com/2008/04/14/us/14drug.html?_ ... - lburgguy, on 04/17/2008, -2/+5It's not that they made a boatload of money, it's that the amount is simply obscene. We are talking about someone making the equivalent of 100,000 average U.S. salaries (back of envelope calculation).
- TomK88, on 04/17/2008, -1/+4Is there any reason for that or are you just spouting garbage?
- jlhoben, on 04/17/2008, -0/+2It's the free market - like pimping, arms dealing and running drugs. Except of course when a bailout is needed or the military industrial complex wants some nice cushy contracts paid out of the people's taxes. The standard is to ignore the double standard.
- TomK88, on 04/17/2008, -0/+2A stock is part-ownership in a company. As a shareholder, you have partial (or complete, if you have enough shares) over a company. As an owner, any profits the company makes, you have partial control over what the company does with these earnings. Generally, the money is first invested into the company in hopes to return an even larger profit later. After that, dividends are paid out to owners. This process is COMPLETELY controlled by the shareholders. How is that not seeing the profits from a company? Every shareholder has a say in what happens to the profits from the company. Either reinvest or pay out to shareholders. What is a better system than that?
Of course a stock is only worth what others are worth paying for it. The same can be said about anything. Is your house worth anything if nobody will pay anything for it? No. And neither is stock.
Nobody has a perfect formula, but there are formulas that work pretty well. How else do you think companies are valued? You can get a decent appraisal and that combined with future prospects is what a stock is worth. It's not a perfect science, but the market tends to value companies pretty accurately.
Sorry to squash your conspiracy theory, but somebody needs to inject a dose of reality into your little theory. - gryphon50, on 04/17/2008, -0/+2But they would say that anyway. Think of all the CEO's making billions, even when their companies are foundering, and yet each year their employees get measly raises and worse benefits.
- sassip, on 04/17/2008, -2/+4"It's a zero sum game" The "My wealth doesn't cause your poverty" argument worked... in the beginning. When Exxon-Mobile rapes the pension-plan of the company workers and then the CEO retires with a golden parachute of several hundred-million, I think this argument breaks down...
- ronar, on 04/17/2008, -1/+3One doesn't become a billionaire by being lucky. In order to attract clients a hedge-fund manager needs to have a good track record, meaning many years of relatively high and stable profits. By gambling a trader can get lucky one or two years, but that will be it. Usually a good track record of at least 5 years is necessary to attract larger money. I have worked for a hedge-fund that also operates a fund-of-hedge-funds, I can tell you that it is a damn tough business to be successful in, you have to be genuinely good (but as always there are also exceptions to the rule).
- andy314159pi, on 04/17/2008, -0/+2You are only taking on risk if you are liable for losses!!!!!!!!!!!!!!!!!! These guys aren't liable for their losses!! I can't stress that enough. They do these transactions under the auspices of a limited liability corporation and if they are losing on a large transaction they'll just declare that corporation bankrupt. USE YOUR HEAD.
- Myztry, on 04/17/2008, -0/+2People who gamble on horses study form guides. People who gamble with cards study body language and combination odds. The returns are winnings based on educated guesses. A random guess can achieve the same - just the odds are lower. Illegal practices such as insider trader greater increase the odds - but that's another story.
Having people willing/able to pay higher prices causes prices to rise, thus creating inflation which devalues the monetary unit. That is a natural economic factor. But when there is obscene winnings, especially in a form where nothing is provided back to the economy (such as goods), it has the effect of throwing the economy out of 'balance'. Not just absorb-able fluctuations but drastic spikes. - inactive, on 04/17/2008, -0/+2Some of these guys are playing with pension funds, no?
Several posts here talk about "people give them money" when actually its organizations.
Not as educated as I could be but my gut reaction is that speculation _on speculation_ is expecting something for nothing... and eventually there will be a high price to pay. - rickyjones10, on 05/15/2008, -0/+1Check http://www.paydayloansnocreditcheck.co.uk/ for your payday loans query.
- GRANDPAMUNSTER, on 06/11/2009, -0/+1CEO pay always seems to keep rising though.
- TomK88, on 04/17/2008, -0/+1Your average can't. You need to have a certain net worth to invest in them.
- rune420, on 04/19/2008, -0/+1He's right. A lot of the hedge fund managers don't come from particularly wealthy backgrounds, they just saw what needed to be done and did it.
- mbonnin, on 04/17/2008, -1/+2Yes, I have seen the Long Term Capital Management fiasco.
- Stochio, on 04/17/2008, -0/+1Under distributive justice, it's actually a "good" thing that those restaurants are able to charge higher prices. It distributes wealth / lowers the Gini coefficient. Wonder: wouldn't you be happy if you were surrounded by rich people and you knew exactly what they wanted and were able to provide it?
- Stochio, on 04/17/2008, -0/+1Yes, but keep in mind that the price will rise only if that expectation exceeds the market expectation. Those shifts that you're talking about are already captured in the price if the market holds the same belief.
- Stochio, on 04/17/2008, -0/+1If P then Q. Observe Q, deduce P. Fallacy! Rainy days make me sad. I am sad so it must be raining. Fallacy! If good worker then profits. Observe profits so reward good worker. Fallacy! You need to consider leverage, risk, luck, etc....
- ronar, on 04/17/2008, -0/+1Many hedge-funds do thousands of trades every year, some even tens of thousands. To come out ahead in the end needs more than luck. The analysts they employ don't just sit on their butts the whole day and surf Digg, they look for trading opportunities like mispriced stocks/commodities or arbitrage possibilities. That work involves a lot of calculating and analysing. Many hedge-funds employ Maths and Physics PhDs to create complex models to find imperfections in the financial markets. This has absolutely nothing to do with coin-flipping.
- codesuidae, on 04/19/2008, -0/+1"there is a finite amount of money in a country"
You really have no idea how the banking system works do you?
Try 'Debt as Money' on google video. -
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