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By now you may have received better answers than mine
but here goes:
Hedge funds are un-regulated pools of investor money that can
take large risks by shorting stocks, buying derivatives of any
complexity using sophisticated trading strategies. Such
hedge funds have entry levels from $1 million to multiple millions
because they don't want many investors and wealthy investors
are able to accept the volatility of these funds. They usually
take 20% of the gross return as a fee, for starters.
FYI, the LTCM Hedge fund in the news reportedly earned 46 %
and 47 % in 1996, 1997 before going belly up last month.
Stan R.
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> From: Guy Tann <grtann@xxxxxxxxxxx>
> To: Metastock <metastock@xxxxxxxxxxxxx>
> Subject: Hedge Funds - Help!
> Date: Friday, September 25, 1998 8:42 PM
>
> To All:
>
> Since I'm just an ignorant futures trader, I need help from all of you
> experts to understand what in fact a hedge fund is, how it works, why a
> bunch of banks had to take that one over the other day, why the market
would
> think this is good or bad, and why our banks have a potential trillion $
> exposure to other hedge fund losses (based upon the talking heads)????
>
> Is this just another thing I have to worry about? It's not enough I
worry
> about what those idiots are doing in Washington, the problems in Asia,
> Russia, Central & S. America and Mexico. Now I have to worry about hedge
> funds, bailing them out and the exposure to our banking system.
>
> Thanks
>
> Guy
>
>
>
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