The Fruits of Civilization (52-1-2) Hedge Funds<


Those with money can capitalize on opportunities to leverage further returns with little effort, while ordinary working men and women must rely solely upon their labors. That the average American is invested in the stock market is a myth. 84% of all stocks owned by Americans belong to the wealthiest 10%. In 2016, most households had less than $5,000 in stock holdings. Half of American households don’t have a cent invested in stocks.

 Hedge Funds

In the 21st century, the adventurously wealthy have parked some of their money in hedge funds, which are exclusive investment vehicles not available to commoners. Hedge funds use sophisticated computer models and trading stratagems to maximize returns.

Hedge funds held a measly $539 billion in 2001. In 2015 they played with $2.9 trillion.

In 2015, hedge funds’ average return to investors was less than 1%. The best performances, by only a handful of funds, were in the neighborhood of 10%.

JP Morgan Chase, America’s biggest bank, paid its chief executive, Jamie Dimon, $27 million in 2015. That same year, hedge fund manager Kenneth Griffin was compensated $1.7 billion. On average, the 25 best-paid hedge fund managers in 2015 each took home over $500 million in wages. 2015 was a tough year for funders of hedge funds, but a very good year for those at the helm, who could practically set their own payout.

The capital markets are controlled by a bunch of right-out-of business school young guys who haven’t really seen that much. You have a real lack of wisdom. ~ Kenneth Griffin