Re: maybe lets be less moderate....

From: Glyn Holton
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Date: 21 Aug 2007
Time: 09:52:35

Comments

Okay, I would say that slightly differently -- that exploitable market inefficiencies have existed in the past. They are notable for how extraordinarily rare they are compared to the thousands of regulated and non-regulated investment funds out there. The next question is whether there are any hedge funds out there actually exploiting one of these extraordinarily rare market inefficiencies, or are they all just fooling investors (and perhaps themselves). As I pointed out in my blog, hedge fund fees are so excessive that the managers will make a killing irrespective of their actual performance. So what fraction of hedge funds are run by managers who (knowingly or unknowingly) have no ability whatsoever to generate alpha but are just cashing in? My answer would be 100%. No Virginia, there is no Santa Clause.

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