On 1-2% - it's the steadiness that is the issue. Madoff didn't outperform all other hedge funds on overall performance, it's that he never lost money. I'm ter

On 1-2% - it's the steadiness that is the issue. Madoff didn't outperform all other hedge funds on overall performance, it's that he never lost money. I'm terms of gearing - if that is the source of returns, why invest in it to begin with when you can lever up on your own without a middleman? Leverage has costs too. If the story is psychological bias, there are many better examples.