If the tailor who whipped up the emperor's new clothes were around today, there's a good chance he'd be a hedge fund manager. In what other job could an ambitious person with average abilities make so much money and produce so little?
According to Investment News it's not that the fund managers are overtly out to trick anyone, and many are quite talented, says Simon Lack, a former hedge fund executive at JPMorgan Chase & Co. and author of the just-published “Hedge Fund Mirage” (John Wiley & Sons, 2012). But Mr. Lack's research finds that investors would have done twice as well with boring Treasuries over the past decade than being in the high-status, hard-to-research investments they find so captivating.
In fact, Mr. Lack, who now runs SL Advisors in Westfield, N.J., says the reason for hedge fund managers' exalted, albeit unwarranted, status in the investment pantheon lies more with investors — swooning high-net-worth individuals as well as supposedly sophisticated pension funds and other “smart-money” institutions — than with the managers….
Read more at http://www.investmentnews.com/article/20111229/FREE/111229913
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