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> which usually still makes a modest profit But for Winner to be beating the market, Sucker has to be underperforming the market, since hedge funds, on average
by SamBam 7y ago
> which usually still makes a modest profit
But for Winner to be beating the market, Sucker has to be underperforming the market, since hedge funds, on average, match or underperform the market (see Buffet's famous ten-year bet: hedge funds massively underperformed index funds).
If the managers of Sucker have figured out a way to outperform the market for 20 years, even while secretly giving away some of its earnings, then that would already be an incredibly impressive success story, even without the cheating.
- s1artibartfast 7y agoI think performance relative to the market is irrelevant to the strategy. making a profit /= beating the market. People invest in hedge funds all the time that under-perform the market. In this case, the sucker fund just sucks a little more than usual. while the sucker fund under-performs the market, the firm also looks like hot shit because the winner fund is the most profitable fund on earth.
- SamBam 7y ago> People invest in hedge funds all the time that under-perform the market. This is perfectly true. I guess it was aptly named the "Sucker" fund in our discussion.