The author is right: this is a problem with hedge funds, mutual funds, and really any sort of financial investment. I don't think there's any real way to solve

The author is right: this is a problem with hedge funds, mutual funds, and really any sort of financial investment. I don't think there's any real way to solve it though. The author picks an unrealistically simplistic investment strategy for which his point is clear. But in reality, you can't determine the risk and reward for more complicated strategies, and requiring hedge funds to register and report their results would do nothing to separate the scammers from the serious managers.