3 ms·

Any advice to reform things? As individuals or as a collective?

by namuol 2y ago

mjfl 2y ago
(1) widespread education and awareness of this phenomenon, (2) put in restrictions on large institutions i.e. the government, unions, universities so that they only invest in funds with 'low-fee' structures and hire professional risk management at the institution-level that hedge risks using more standard methods like mixing bonds and equities and cash. Ban large institutions from investing in private equity, which is a high fee structure built to hide losses over long term periods.
- JumpCrisscross 2y ago
  I have invested in hedge funds as an individual. Your proposals would be great for me; less competition. I’m sceptical of the public benefits, though there is absolutely a political bloc who will like the optics of banning public investments in HFs and PE. > private equity, which is a high fee structure built to hide losses over long term periods Empirically false. The problem with PE is the same as HFs: fees and dispersion of outcomes.
  - mjfl 2y ago
    by all means, keep letting those charlatans take your money. Are you denying that private equity avoids reporting standards that are mandated for public companies?
    - JumpCrisscross 2y ago
      > private equity avoids reporting standards that are mandated for public companies? So do startups and small businesses. I’ve made money in both (as well as hedge funds). Good investments aren’t measured by consultant spam. I’d be furious if my managers burned my money on e.g. commissioning boiler plate risk factors.
      - mjfl 2y ago
        private equities and startups/small businesses are fundamentally different in terms of the 'skin in the game' that startup founders and small business owners have in their business. They've typically invested themselves significant parts of their lives into their businesses. The same cannot be said of private equity funds, and you should know better.
        JumpCrisscross 2y ago
        > terms of the 'skin in the game' that startup founders I’ve done a startup. My skin in the game was significant, but I was less dependent on the outcome of the startup than I was keeping my job earlier in my career. In any case, fraudsters also have lots of skin in the game. This argument is irrelevant to the irrelevance of public reporting requirements, or the empirical track record of private equity for LPs.
psytrancefan 2y ago
How about mind your own business? The main problem to me is everyone wants to tell everyone else what to do "for the good of society" but over my lifetime this has been a slow acting cultural poison. Less than 20 years ago it cost me $7 a trade for one side and that was the cheap revolutionary price for the retail investor. Today it cost me ZERO. That is because of hedge funds. I doubt this will last forever because someone will come along and "fix" what is not broken "for the good of society".

Any advice to reform things? As individuals or as a collective?

by namuol 2y ago

Any advice to reform things? As individuals or as a collective?

mjfl 2y ago

(1) widespread education and awareness of this phenomenon, (2) put in restrictions on large institutions i.e. the government, unions, universities so that they only invest in funds with 'low-fee' structures and hire professional risk management at the institution-level that hedge risks using more standard methods like mixing bonds and equities and cash. Ban large institutions from investing in private equity, which is a high fee structure built to hide losses over long term periods.

JumpCrisscross 2y ago
I have invested in hedge funds as an individual. Your proposals would be great for me; less competition. I’m sceptical of the public benefits, though there is absolutely a political bloc who will like the optics of banning public investments in HFs and PE. > private equity, which is a high fee structure built to hide losses over long term periods Empirically false. The problem with PE is the same as HFs: fees and dispersion of outcomes.
- mjfl 2y ago
  by all means, keep letting those charlatans take your money. Are you denying that private equity avoids reporting standards that are mandated for public companies?
  - JumpCrisscross 2y ago
    > private equity avoids reporting standards that are mandated for public companies? So do startups and small businesses. I’ve made money in both (as well as hedge funds). Good investments aren’t measured by consultant spam. I’d be furious if my managers burned my money on e.g. commissioning boiler plate risk factors.
    - mjfl 2y ago
      private equities and startups/small businesses are fundamentally different in terms of the 'skin in the game' that startup founders and small business owners have in their business. They've typically invested themselves significant parts of their lives into their businesses. The same cannot be said of private equity funds, and you should know better.
      - JumpCrisscross 2y ago
        > terms of the 'skin in the game' that startup founders I’ve done a startup. My skin in the game was significant, but I was less dependent on the outcome of the startup than I was keeping my job earlier in my career. In any case, fraudsters also have lots of skin in the game. This argument is irrelevant to the irrelevance of public reporting requirements, or the empirical track record of private equity for LPs.

psytrancefan 2y ago

How about mind your own business? The main problem to me is everyone wants to tell everyone else what to do "for the good of society" but over my lifetime this has been a slow acting cultural poison. Less than 20 years ago it cost me $7 a trade for one side and that was the cheap revolutionary price for the retail investor. Today it cost me ZERO. That is because of hedge funds. I doubt this will last forever because someone will come along and "fix" what is not broken "for the good of society".