Understanding Hedge Fund Investing & Management
I found a great tutorial on hedge funds by a senior editor at Marketplace.org. The best aspect of this video is the speaker uses a white board, and by doing so, he makes a complex concept very easy to follow. It covers:
- What does the Term Hedge Fund Really Mean?
- Starting a Hedge Fund from Scratch
- Hedge Funds have
- Rules for Accredited Investors
- Hedge Fund Manager Invests Own Capital First to Get it Started
- Sets a High Minimum for Investors
- Easily Collects a Large Amount of Capital from
- Locks Investors in, Defining Redemption Rules and Management Fees
- Investing in Various Types of Investments and Strategies
- Gets a Loan, Leveraging the Amount Invested within the Hedge Fund
- Overview of the Key Characteristics of Hedge Funds
- Hedge Funds are in the News because of Infrequent Redemptions and High Leverage
- Hedge Funds Can Always Change the Rules for Investors and Lock Up Money if it is Reasonable
- Panic from Volatile Markets Forces Hedge Funds to Sell Assets at the Wrong Time and Lose Profits
Hedge Funds in reality is just investment funds. Hedge Funds do Not Have Constraints (as oppose to Neutral Funds) but they Only Can Accept Money from Accredited Investors with 5M+ who are “Smart Enough” to Take Risk
Hedge Fund’s Goal is to Provide Steady High Yields, “Don’t Rock the Boat” for their Investors.
Bad Hedge Fund Managers don’t Understand the “Black Swan Theory”, Just Because it Hasn’t Happened in the Market Doesn’t Mean it Won’t. All You Need is One Bad Month to Erase Years of High Yields if You are Overconfident, and Underestimating the Likely-hood of Rare Events (“Black Swan Theory”)
Top 25 Hedge Fund Managers Made $892 Million on Average in 2007. Though some of these facts about hedge fund managers are quite unbelievable, as you will see, the video below confirms this recently popular topic.
[credit to: InsideTrade LLC & Youtube]




