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Clankeye Pioneer100© Member
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HARTFORD, Conn. — A Connecticut hedge fund trying to survive after admitting to investors it had lost billions of dollars in the flagging natural-gas market, has shifted its energy portfolio to a third party. That is the lead off in a story in the Seattle Times today. IMO one of the main differences in "your father's stockmarket" and the one we are all operating in right now are Hedge funds. Privately run equity pools that are basically under-regulated, under-watched, and control--last guestimate I saw--some Trillions of dollars in assets. They can move quickly in and out of positions. They generally have no long term stake in the equities (with the exception of some that actually enter into positions of ownership--such as Lazard and Sears). They have managers who are incredibley over-compensated, and have a tremendous pressure on them to produce. Have you ever watched a Hedge fund dump its position in a company, and practically destroy a share price? I have had the privilege, and it was ugly. It used to be you had pension funds which controled large blocks of money in the market--now some of the pension funds (because of the incredible pressure on them to produce) are investing in... Hedge funds! Volitilty thy name is Hedge fund. This all bodes ill to me.
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saintguru Guest
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I hate them. With all the financial institutions that Spitzer went after hevpassed on the WORST offender of security laws, disclosure laws, and trading rules...as well as disclosure of principles and affiliates. They are unregulated in regards to reporting positions, unscrupulous market manipulators who don't follow NYSE or NASDAQ rukes, and can short without the downtick rule. They hover under a cloak of secrecy that NO other financial based firm can, and lo and behold most of them are based offshore.
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CarlWohlforth Original500© Member 
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Are we talking about Amaranth Advisors? Look, hedge funds have been around for a long time. They are for "Mad" money. When you have a few extra mill to throw around looking for spectacular returns but are willing to lose it all, you might look at a Hedge fund. Personally I incur enough risk on my own so I've never been interested in them, except to see what kind of gambles they are taking. So Amaranth had this 32 year old commodities trader in Calgary who made a fortune for them. He earned many dozens of millions for himself and Billions for the fund in the past. He bet natural gas would go up and, lo and behold, there were hurricanes that devastated gas production in the Gulf of Mexico. Fast forward to this year. He tried the same bet again. Wrong! Gas prices went down dramatically. No hurricane damage (yet, but it is too late for him). So that one trader lost 6 billion bucks for Amaranth. That is SIX BILLION, yes B not m. Amaranth had 9 Billion value and now have about 3. The good news is the majority of investors really can handle a little touch of loss. Unlike the catastrophic loss incurred by Long Term Capital Management back in '98 these guys don't need bailing out by the Gov't.
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24HourNut Administrator  Body pillows rock!
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 The best human beings start good new topics and vote on the better posts. |
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