Hedge Funds Back to Taking Dumb Money in Overvalued Market

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.

Never mind the massive fines flying for traders who sank their commodity funds.

Never mind the continuing parade of money managers indicted for running Ponzi schemes.

Never mind the hedge fund managers who continue to trade even after they’re convicted of money laundering.

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.

About Anthony Alfidi 128 Articles

Affiliation: Alfidi Capital LLC

Anthony Alfidi is the Founder and CEO of Alfidi Capital. His firm publishes free investment research with honesty and humor.

Mr. Alfidi holds a Bachelor's degree in human resource management from the University of Notre Dame (cum laude) and an MBA in finance from the University of San Francisco. He is a life member of Beta Gamma Sigma, the academic honor society for business majors. He has been a private investor since the 1990s.

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