I think he means that nothing useful is produced by running a hedge fund. You may say "oh but what about the money?". Well, it was not earn (in a usual sense), just taken out of the market, money changed hands, that's it. Nothing was manufactured, produced, researched, invented or serviced in the process. Think about it: if everyone worked in finance industry, who would clean the toilets?
This guy is no different that some mope at a craps table playing a 'secret system". Works till it don't. Moral of the story...don't confuse dumb luck with an edge.
At least this guy has the balls to work, after loosing his net worth...and at least he made money, unlike 99% of.the clowns who post on this site. Failuer is just a blip on the radar of successful people, its what you do next to regain the success. Even if u have to.start from zero. It's the 9.to.5. Crew who will all ways be chained due to.their way of thinking.
The point is that the money would have been spent anyway, by someone else. Usually a product or service must be provided for money. In the case of trading, no one is receiving anything useful from your actions. You either win or lose money (a zero sum game) and that's about it.
gvt is recieving taxes,brokers-commisions,programmers @ brokerage-salaries. SEC,exchanges-fees and so on..
Let's simplify things a bit. Imagine there are only a few market participants: you and 9 others. All of you bring 10 dollars each and make a bet on something. Some of the participants lose money and some of them win. The total sum of money is still $100 and none of you created anything useful. That is zero sum. No matter who won, the money is "earned" by the winner anyway and gets spent on pizza, toilet cleaners, software, etc. I know, it's very simplified and dumbed down, but I'm just trying to make my point. The real life, of course, is much more complicated, but it boils down to this. Just like professional gamblers, you just took away the sucker's money, nothing of substance was produced.
The problem with your logic i that you oversimplified something that can not be. Various markets allow many companies hedge their risks. Hedging the risks allow companies to plan more accurately, which is reflected in $ they charge their clients. The speculators are there providing liquidity and bring down hedging costs, which also benefits the hedgers and it goes on and on....... Your argument shows how little you understand. This is just of of many examples where traders assists in substance production.
I'm completely aware that there are risk hedgers and investors besides the speculators. But before you belittle me, you could provide some facts to support your opinion. For a start, you could provide data on what percentage of total trading volume is made by risk hedgers and by speculators. The substance produced could very well be extremely marginal. Now don't get me wrong. I am not against trading or speculating. I am not one of those Michael Moore-like protesters that have very superficial understanding of how market works. I just view the market as a competitive zero sum game and that's it. I'm done here.