Warren Buffett: Why hedge funds fail

Fee structure rewards funds that get bigger, not better
http://www.marketwatch.com/story/warren-buffett-why-hedge-funds-fail-2015-10-16

http://ww2.cfo.com/ma/2015/10/blackstone-fined-39m-fee-practices/

 

interesting read

 

That's why I keep saying that hedge funds should be shut down.

 

Buff is way behind the curve as usual--

Most new funds are 0/10-20. The management fee is a dinosaur.

 

Agreed, there's been fee compression, and more on the management than incentive side. Clients are rightly skeptical about returns, but still willing to pay for performance.

 

why? some do really well.

 

Try attending a shareholder meeting and tell them you represent the short interest. On the grand scheme of things ehat purpose do they serve? Pure speculation that actually affects our lives in a negative way.

 

Speculation affects society in a positive way overall.

 

If funds were willing to escrow 5 years of their cut of profitable years to use toward refunding losses during unprofitable years ...they might be able to avoid failing.

The fact no one except investors would consider this feasible is all anyone needs to know about funds. The fact investors don't give any thought to this is all anyone needs to know about investors.

 

But we as traders do the same thing, we speculate! Hedge funds are of course just doing it bigger.