It must be great to be a hedge fund manager. You can lever up at rock-bottom rates thanks to ZIRP and reinvent yourself in a brand new guise no matter how many times you’ve crashed.
Despite these and more systemic problems, new hedge funds launched at breakneck pace in 2010. Accredited investors with more money than smarts show a never-ending willingness to entrust poor-performing money managers with even more money. People who should know better are too credulous for words. Specialists in behavioral finance need to research this phenomenon. I suspect Bayes’ Theorem comes into play. Go look that one up.