Yeah I think a lot of hedge funds are run by idiots. Market making firms however, they are the true stars. There are also some really good hedge funds: RenTec,

Yeah I think a lot of hedge funds are run by idiots. Market making firms however, they are the true stars. There are also some really good hedge funds: RenTec, Millennium, 2 Sigma, etc. A lot of hedge funds are dinosaurs and are slowly going extinct. Even in the last 5 years there has been a big shift: investors really prefer systematic firms and raising money for a discretionary fund gets harder and harder every day. I do not believe insider information is key. If it was, hedge fund risk adjusted returns would probably be less abysmal. It's not that straightforward to evaluate hf performance, but trust me when I say, there a lot of funds out there providing very dubious value to investors.