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We’re supposed to take seriously Ellen Pao’s gender discrimination lawsuit against a Silicon Valley venture capital firm as a landmark struggle in American social evolution (here’s Claire Cain Miller’s latest thumbsucker on The Meaning of It All in the NYT: “The Kleiner Perkins Lawsuit, and Rethinking the Confidence-Driven Workplace”) even though Ms. Pao’s gay black broke and perhaps prison-bound husband Buddy Fletcher has been in the newspapers for decades for suing for discrimination. I first read about Buddy Fletcher suing Kidder Peabody in the Wall Street Journal in the early Nineties.
Pao’s lawsuit dodged a bullet when the judge ruled that nobody could mention to the jury how broke ex-hedgie Buddy is, at least on paper, because all that pension money firefighters gave him to manage seems to have vanished.
Ellen Pao avoids public airing of family finances
Elizabeth Weise, USATODAY 7:01 p.m. EDT March 12, 2015SAN FRANCISCO — The judge in Ellen Pao’s $16 million gender discrimination lawsuit against venture capital firm Kleiner Perkins has ruled that her financial situation isn’t relevant to the case and that bringing it into court would “create an unseemly sideshow.”
Kleiner’s lawyer, Lynne Hermle, had tried to get Judge Harold Kahn to overturn his pretrial ruling and allow Pao’s financial difficulties to be discussed in court.
That would presumably have included the financial troubles of Pao’s husband, Alphonse “Buddy” Fletcher Jr.
A hedge fund run by Fletcher has filed for bankruptcy, and he has been accused of fraud. According to Kleiner’s brief, tax liens on the sale of the couple’s condominium in San Francisco have been served on Pao’s Kleiner partnership interests.
However, Kahn quashed the idea in a ruling posted to the San Francisco Superior Court website Thursday.
Kahn said that Pao’s motivations weren’t relevant and that any relevance was outweighed by “the substantial danger of undue prejudice to Ms. Pao and confusion of issues, as well as undue consumption of time.”
In addition, Kahn said that the information about Pao and her husband’s financial situation was “protected by Ms. Pao’s and Mr. Fletcher’s rights of privacy.”
He cited a Tennessee ruling that found that anyone who “stands to gain financially has a motive to sue, whether or not they are in financial distress.”
That takes one potentially explosive issue off the table: whether Pao is suing the venture capital firm for gender discrimination to make a point — or to raise cash.
On the stand, Pao has said she wants $16 million from the Silicon Valley firm because it would take an eight-figure number to “hit their radar” and cause the firm to make changes in how women are treated.
Kleiner tried to make the argument before trial started that she’s doing it because her family needs the money.
In other words, she’s allowed to mislead under oath the jury about her motivations, and the defense isn’t allowed to point out that she isn’t an independently wealthy humanitarian suing out of a disinterested concern for the female sex (or gender or whatever you are supposed to call it these days).
Social movements get to choose their champions and the character of the champions reflect on the movement. Feminism/SJWism/anti-straight white maleism has chosen Ellen Pao.
So, the soap opera details of her personal character are relevant. Here’s a defense court filing. And here’s an entertaining Reddit post by somebody or other that’s definitely not a court filing, so take it for whatever it’s worth.
—–
Interestingly, I can’t find online a picture of the married couple together that doesn’t appear to have been Photoshopped out of pictures taken separately, even though Buddy Fletcher is a high profile socialite who gets his picture taken frequently at parties and events. (Note, I haven’t looked at social media accounts, just Google and Bing.)
Using Google Image, I can find, for example, a picture of Buddy Fletcher and Hillary Clinton, but I can’t find Buddy Fletcher and his wife Ellen Pao in a picture.
The judge in Ellen Pao’s $16 million gender discrimination lawsuit against venture capital firm Kleiner Perkins has ruled that her financial situation isn’t relevant to the case and that bringing it into court would “create an unseemly sideshow.”
Stated with approval, because if there’s anything the New York Times doesn’t like, it’s an unseemly sideshow that distracts from the narrative.
Funny:
http://blogs.law.harvard.edu/philg/2015/03/11/ellen-pao-case-shows-how-the-moral-landscape-in-the-u-s-has-changed/
Finally, after reading the news coverage of this case I am wondering if I myself might have a case against Kleiner Perkins. This New York Times article is typical: “Ms. Pao, who came to Kleiner with the dream of helping direct such a fund, graduated from Princeton with a degree in electrical engineering. She got a law degree from Harvard and worked for Cravath Swaine & Moore for two years doing international deals. She returned to Harvard for a business degree and worked for a variety of tech companies, including BEA Systems and Tellme Networks. Her geek cred is pretty unassailable.” In other words, a person who got an undergrad engineering degree and then never engineered anything has “geek cred” and, implicitly therefore, is entitled to be selected as a senior partner at Kleiner Perkins. What is the basis of the Philip Greenspun v. Kleiner Perkins lawsuit then? I have an engineering degree and have actually had jobs doing hands-on software engineering and electrical engineering. So the Greenspun geek cred should be at least as strong as Pao’s. Like Pao I have been inside the Menlo Park offices of Kleiner Perkins (not to have sex with a married employee, but to talk about some of their portfolio companies’ projects and to attempt to hector them into finding a team and building a startup around my “Mobile Phone as Home Computer” idea). As happened to Pao, the Kleiner Perkins partners with whom I spoke failed to recognize my potential to join them as a senior partner. Instead of issuing me $16 million in paychecks they escorted me to the front door and into my rental car.
But hey, you know she's on the side of the angels because she had a Dream. Only good guys like Ellen Pao, MLK, and illegal immigrant kids get to have Dreams...
Seriously, the worst thing about Megaphone propaganda is not that it's malign in nature, but that it's shoddy in quality. If I'm going to be oppressed and manipulated by the NYTs of this world, they can at least take some pride in their work and make it less formulaic and smarmy.
I seem to have missed the ‘personal motives are immaterial’ rule of evidence. Also, one can’t help but wonder how often Tennessee opinions are cited by San Fransisco jurists in gender discrimination cases. Wow!
Just for fun, try to find a picture of Maggie Gallagher, defender of “traditional” marriage, with her husband. Good luck. Gallagher’s understanding of “traditional” marriage is a lot different than the view held by many of the cultural conservatives she takes for a ride. She never appears in public with him, there are no pictures of them together, and she refuses to use her married name, which is Maggie Gallagher Srivastav. If a feminist in an interracial marriage is a “traditional” marriage, then gay marriage wasn’t much of a loss.
For Buddy Fletcher there is no percentage in being seen in public with his horse faced spouse. Confidence tricksters prefer to photobomb celebrities so they appear to be well connected. They can then leverage this illusion to rip people off.
why would think he’s gay?
When she loses, the Reddit employees will do the memorial Kung Pao Chicken dance for their soon to be former CEO.
How many more stories about grifters and long con players will surface around the country, or if offshore, say Russia, face down in a local waterway?
No wonder businesses have to be even more careful these days. Pao is making it harder for all other employees and applicants.
The pension funds gave their money to a BLACK GUY???
No! The union bosses and their upper crust pension fund managers gave the workers' union dues -- those that didn't go for padding the salaries of union bosses and their friends and relatives and for political "contributions" to persons, parties and causes which the majority of workers loathe -- to a vibrantly diverse mutual fund to enhance their image.
A Brotha who is married to a Chinese chick. Most Brothas don’t go bonkers over Chinese women because they like women who have either big asses, big breasts, or both. And most Chinese women are seriously lacking in the butt and chest department.
Someone else has problems with NYT fantasies :
http://blogs.scientificamerican.com/cross-check/2015/03/13/n-y-times-hype-of-feel-good-gene-makes-me-feel-bad/
Um, because he used to self identify as gay.
“his horse faced spouse”–ouch, but she certainly has a manly face for an Asian woman.
She is an excellent, horse-like lady.
In 1994 a secretary won $7 million against a big Chicago law firm because one of their partners put some M&Ms in her blouse pocket ( admitted to ) and asked her which breast was bigger ( denied by defendant). Of course the power relationship was different as was the culture then. It was still credible a big shot attorney might think he could come on to a newly hired secretary though, even then, pouring M&M’s into a female underlings blouse pocket was pushing the envelope.
Its going to be hard for Ellen Pao, given her educational and occupational background, to pretend she was a victim of male oppression and unable to fend for herself. Even rabid feminists have to draw the line someplace and a woman who is in an industry and job position that people more commonly associate with predatory financial tactics that leave thousands unemployed to enrich people like Pao, to play the victim is going to make most people gag.
Buddy certainly scammed pension funds, but all hedge funds scam pensions funds. Buddy just did it the wrong way.
Hedge funds were a good way to invest your money in the 80′s when traditional mutual funds had a lot of restrictions on how they invested money, leaving open opportunities for mostly unregulated hedge funds. Those days are long over. For the past decade, the average hedge fund has badly outperformed simple S&P 500 mutual funds by a large amount, and that is before the hedge fund’s huge 2% of all money plus 20% of all gains fee.
The financial press conspires with Wall Street to cover this all out by focusing on the hedge funds that do outperform the market. In 2014, only 1 in 6 did.
The biggest scam of all are “funds of funds” which are hedge funds that invest in other hedge funds. These have fees of 2% too, on top of the 2% of the funds they invest in, on top again of performance fees. That compares to the 0.07% fee of the Vanguard S&P 500 index fund that is the best investment for the average person.
To put it another way, the average hedge fund charges 28 times what Vanguard (a non-profit) charges, with much worse performance. And that 28 times is just the management fee, in a year the whole market rises 20%, the hedge fund will charge a fee that is 6%, or 85 times higher than Vanguard.
Now to invest in a hedge fund, you need to have $250,000 in liquid assets or a net worth, on top of your primary residence, of $1 million. So nobody in power really cares they are just scams. Wall Street owns 100% of the GOP* and 75% of the democrats, and the remaining liberals don’t care much about rich people getting scammed.
*There was a time when Sen. Grassley and Rep. Paul would vote against Wall Street sometimes, but Paul retired and Grassley no longer deviates from the Wall Street party line.
He’s an out of the closet bisexual.
For the past decade, the average hedge fund has badly outperformed simple S&P 500 mutual funds
There you mean “underperformed”, instead of “outperformed.”
By the way, can you cite any evidence for your assertion?
… simple S&P 500 mutual funds
Do “simple mutual funds” include actively managed funds?
The good news is that both small and large investors have been abandoning hedge and active mutual funds for years now.
Steve, the NYT would be proud of such objectivity.
Does anyone else fear for Ms. Pao’s life should she win a significant settlement?
Here’s a legal argument to be used in Buddy Fletcher’s lawsuit for being fired:
“In addition to your firing me for being black/gay/whatever, you have forced me to sue you, which gives me a reputation for litigiousness and therefore makes me a bad bet for anyone to hire me. So you should pay me even more damages, for ruining my reputation and employment prospects.”
Has any employment-discrimination lawyer actually used this argument?
[…] Source: Steve Sailer […]
Is it me, or do black gays tend to have larger-than-life personalities in general?
Maybe it’s just the synergy of gay/feminine charisma plus black/masculine charisma. Or another possibility is that since the gay lifestyle is less supported among blacks, black gays won’t come out unless their homosexuality is irrepressibly flamboyant.
Whatever the reason, the fact that Fletcher is both black and gay seems to fit in with his over-the-top adventuring.
I wonder if she’s a lesbian and Buddy’s beard. Buddy is apparently gay. Also Steve mentioned how there are no pictures of them together.
Both are predators and grifters and recognize those attributes in one another. Hence the marriage of convenience.
There is no way Pao could function in a marriage with a normal male, whether beta nerd or run of the mill alpha. She's bright, hyper aggressive and sociopathic. Sure, she's a HBD'ers dream girl with that Ivy League pedigree but a total nightmare in other ways. A brainy wimp would be castrated by her and a Alpha wouldn't put up with her crap and give her the boot.
Mr. Sailer: “In other words, she’s allowed to mislead under oath the jury about her motivations”… strongly disagree.
If she was actually a victim of sex discrimination, her motive for bringing the lawsuit, good, bad or indifferent, is not relevant. If my leg is actually broken in a car accident and I sue, does it really matter if I am a greedy bastard looking for a payday, or just a guy with a broken leg?
Maybe she wants money. I do, too.
On a more practical level, allowing the issue of her finances to be heard would involve the court in a separate mini-trial about things that are really extraneous to the case. Just imagine the nightmare that the trial would turn into: how far back would you go in her, or her husband’s life, to turn up evidence of bad motivation?
http://blogs.law.harvard.edu/philg/2015/03/11/ellen-pao-case-shows-how-the-moral-landscape-in-the-u-s-has-changed/
Finally, after reading the news coverage of this case I am wondering if I myself might have a case against Kleiner Perkins. This New York Times article is typical: “Ms. Pao, who came to Kleiner with the dream of helping direct such a fund, graduated from Princeton with a degree in electrical engineering. She got a law degree from Harvard and worked for Cravath Swaine & Moore for two years doing international deals. She returned to Harvard for a business degree and worked for a variety of tech companies, including BEA Systems and Tellme Networks. Her geek cred is pretty unassailable.” In other words, a person who got an undergrad engineering degree and then never engineered anything has “geek cred” and, implicitly therefore, is entitled to be selected as a senior partner at Kleiner Perkins. What is the basis of the Philip Greenspun v. Kleiner Perkins lawsuit then? I have an engineering degree and have actually had jobs doing hands-on software engineering and electrical engineering. So the Greenspun geek cred should be at least as strong as Pao’s. Like Pao I have been inside the Menlo Park offices of Kleiner Perkins (not to have sex with a married employee, but to talk about some of their portfolio companies’ projects and to attempt to hector them into finding a team and building a startup around my “Mobile Phone as Home Computer” idea). As happened to Pao, the Kleiner Perkins partners with whom I spoke failed to recognize my potential to join them as a senior partner. Instead of issuing me $16 million in paychecks they escorted me to the front door and into my rental car.
It’s not so much geek cred as Transnational Ruling Class cred, with some Careerist Asian Grind cred thrown in.
But hey, you know she’s on the side of the angels because she had a Dream. Only good guys like Ellen Pao, MLK, and illegal immigrant kids get to have Dreams…
Seriously, the worst thing about Megaphone propaganda is not that it’s malign in nature, but that it’s shoddy in quality. If I’m going to be oppressed and manipulated by the NYTs of this world, they can at least take some pride in their work and make it less formulaic and smarmy.
She married a Turk. You think that traditional conservatives equate that to gay marriage? Think again.
Three ludicrous alien actors in a post-American grave dance: Kahn, Fletcher, Pao.
A “nation of immigrants” is no nation at all. But it sure makes for some good eatin’!
Kleiner seems like a pretty loony place but that appears to be because they are playing high stakes poker 24/7 - I'm not sure that if it was all WASPs of comparable intelligence instead of the current post-modern mix of super smart S. Asians, E. Asians, Jews and WASPs (in no particular order) that it would be a saner place - some of the infighting might be carried out in a more passive-aggressive WASP style but it would still be there.
Actually Kleiner was never all WASP. Eugene Kleiner himself really WAS an alien - he was a Jew who had fled from Nazi Vienna as a teenager, then co-founded Fairchild Semiconductor as well helping to start Intel and then Kleiner Perkins. I'm sure that you, as a "native" have surely accomplished as much.
I’ve seen such marriages. They really aren’t marriages though.
Both are predators and grifters and recognize those attributes in one another. Hence the marriage of convenience.
There is no way Pao could function in a marriage with a normal male, whether beta nerd or run of the mill alpha. She’s bright, hyper aggressive and sociopathic. Sure, she’s a HBD’ers dream girl with that Ivy League pedigree but a total nightmare in other ways. A brainy wimp would be castrated by her and a Alpha wouldn’t put up with her crap and give her the boot.
My wife and I both have Ivy League degrees, but that's mainly an issue of proximity. I fell in love with her not just because she was smart and driven, but because she was very loyal, moral, and traditional.
I know the elite universities get a lot of bad rap for producing man-hating feminist careerists, but that demographic may be a small sliver among the females at such institutions. Most of them do not become tech CEOs or politicians; most, indeed, settle down in traditional marriages and do the wife and mom thing. As observers like David Brooks and Charles Murray have pointed out, a lot of elites do the traditional thing while nominally sticking up for the Socially Progressive Lifestyles TM.
If she was actually a victim of sex discrimination, her motive for bringing the lawsuit, good, bad or indifferent, is not relevant. If my leg is actually broken in a car accident and I sue, does it really matter if I am a greedy bastard looking for a payday, or just a guy with a broken leg?
Maybe she wants money. I do, too.
On a more practical level, allowing the issue of her finances to be heard would involve the court in a separate mini-trial about things that are really extraneous to the case. Just imagine the nightmare that the trial would turn into: how far back would you go in her, or her husband's life, to turn up evidence of bad motivation?
I would certainly strongly agree with this argument, EXCEPT… I read an article (maybe the one linked here?) that mentioned Ellen Pao answered a question while on the stand in front of the jury asking why she was suing KPCB. She answered something to the effect that they wouldn’t change otherwise and it was really all for other women, etc., etc. The question came originally from the jury itself and was relayed by the judge. What, can’t the defense impeach this testimony by citing a very plausible alternative to her answer? That seems very unfair.
You know, I generally do not like to fault people for their physical appearance, over which they have no control, but I must admit, Pao is not, er, a looker by any means.
Both are predators and grifters and recognize those attributes in one another. Hence the marriage of convenience.
There is no way Pao could function in a marriage with a normal male, whether beta nerd or run of the mill alpha. She's bright, hyper aggressive and sociopathic. Sure, she's a HBD'ers dream girl with that Ivy League pedigree but a total nightmare in other ways. A brainy wimp would be castrated by her and a Alpha wouldn't put up with her crap and give her the boot.
Is an Ivy League degree enough to be “a HBD’ers dream girl”?
My wife and I both have Ivy League degrees, but that’s mainly an issue of proximity. I fell in love with her not just because she was smart and driven, but because she was very loyal, moral, and traditional.
I know the elite universities get a lot of bad rap for producing man-hating feminist careerists, but that demographic may be a small sliver among the females at such institutions. Most of them do not become tech CEOs or politicians; most, indeed, settle down in traditional marriages and do the wife and mom thing. As observers like David Brooks and Charles Murray have pointed out, a lot of elites do the traditional thing while nominally sticking up for the Socially Progressive Lifestyles TM.
You need a university education for that?
Pao herself was pregnant at some point (allegedly) but suffered a miscarriage which she blamed for not setting up a crucial meeting for which she was criticized in a performance review. It would not surprise me if the pregnancy was imaginary but I'm a cynic.
Good point. Like Mike, I can see why the judge wouldn’t want a separate trial on what is the collateral issue of the state of the plaintiff’s finances. But once she asserts that her motives are purely (or even mostly) altruistic, I think that the defense should be able to impeach her testimony by presenting evidence on the state of her finances. It’s been so long since I studied the rules of evidence that I don’t know whether that evidence could be introduced only through the cross-examination of the plaintiff, or whether the defense could call it’s own witnesses.
Since she’s ugly as homemade sin and “married” to a gay guy…
Maybe this whole thing is about proving 5o someone that she’s not a virgin?
After a Tiger Mother upbringing and a successful academic career, Chinese kids usually migrate to one of two poles. Either they develop characteristics of extreme diligence and humility which last a lifetime, or they demonstrate a monstrous sense of entitlement and a total lack of empathy. The first kind become worker bees who build successful careers and businesses like Jack Ma. The second kind are unprepared for the workplace, which ranks people based on a combination of talent and team playing skills. At a venture capital firm I imagine a facility for blue sky thinking and a willingness to share credit for big ideas are the necessary ingredients for success. Apparently Pao had neither and a total lack of self awareness to boot. Objectively, she is extremely homely, falling somewhere between a two and a three on the looks scale, yet she seemed to think she could sleep her way to the top. Apparently she never caught on to the fact that uber geeks will sleep with pretty much anything female, no matter how horribly misshapen.
She’s a total brainy psycho bitch. And maybe for that reason I find her extremely sexually attractive. If she tried to seduce me she would be a thousand times more difficult to resist than Kate Upton.
If she ever gets pregnant it will be with a turkey baster.
The rest was simply a jab at the HBD'ers and their obsession with IQ over all other attributes.
The very idea of a $16 million “gender discrimination lawsuit,” is preposterous, on its face. I suppose, if they’d beaten her to death with a ballpeen hammer, they might owe her estate a sum in that approximate range.
“‘his horse faced spouse’–ouch, but she certainly has a manly face for an Asian woman.”
She is an excellent, horse-like lady.
My wife and I both have Ivy League degrees, but that's mainly an issue of proximity. I fell in love with her not just because she was smart and driven, but because she was very loyal, moral, and traditional.
I know the elite universities get a lot of bad rap for producing man-hating feminist careerists, but that demographic may be a small sliver among the females at such institutions. Most of them do not become tech CEOs or politicians; most, indeed, settle down in traditional marriages and do the wife and mom thing. As observers like David Brooks and Charles Murray have pointed out, a lot of elites do the traditional thing while nominally sticking up for the Socially Progressive Lifestyles TM.
Most of them do not become tech CEOs or politicians; most, indeed, settle down in traditional marriages and do the wife and mom thing.
You need a university education for that?
“The pension funds gave their money to a BLACK GUY???”
No! The union bosses and their upper crust pension fund managers gave the workers’ union dues — those that didn’t go for padding the salaries of union bosses and their friends and relatives and for political “contributions” to persons, parties and causes which the majority of workers loathe — to a vibrantly diverse mutual fund to enhance their image.
Mr. Area and Mr. Heretic:
That’s what I get for opining about a case without seeing the record.
if plaintiff’s counsel was actually foolish enough not to object to the question about her motives/or the judge allowed the question over objection, then the judge put himself in a bad situation: arguably, her testimony would be impeachable, at least by prior inconsistent statements of the witness (a fishing expedition into her finances would still not be proper , I think).
I assume (remember what Felix Unger said on that subject) that there were no prior inconsistent statements.
Judge may have realized the potential problem at that point, and decided to cut his losses .
In his position, I would probably do the same.
Its going to be hard for Ellen Pao, given her educational and occupational background, to pretend she was a victim of male oppression and unable to fend for herself. Even rabid feminists have to draw the line someplace and a woman who is in an industry and job position that people more commonly associate with predatory financial tactics that leave thousands unemployed to enrich people like Pao, to play the victim is going to make most people gag.
You forgot to mention that it’s the same plaintiff lawyer in both cases. But as you say, the culture has changed since ’95. The fact that all the defense lawyers are women may be the loudest comment.
Originally she was willing to settle for $10M, which is what they gave her ex-boyfriend Apu when they fired him for showing up at the hotel door of another woman partner in his bathrobe, but now she’s gotta pay those lawyer’s 1/3 of it and she has to (according to her) get enough money for it to be painful to Kleiner so that they will never again treat another woman as poorly as they treated her.
Probably (and she will have the experts to prove it) $16M is the difference between her future expected earnings as CEO of reddit vs the amount she would have made in the future if they had made her a senior partner as they surely would have if (according to her) she had been a man.
I really don’t understand why this has not been settled as such things usually are. Kleiner could have given her a few million, which is pocket change for them and probably less than they are spending on legal fees, and avoided having their dirty laundry aired in public. The only thing I can think of is that nothing short of $10M was sufficient to get Buddy out of his legal mess so she refused all reasonable settlement offers.
The whole place sounds like a cross between a high school and the court of a Byzantine emperor. You couldn’t pay me enough money to get within 500 yards of that place.
My wife and I both have Ivy League degrees, but that's mainly an issue of proximity. I fell in love with her not just because she was smart and driven, but because she was very loyal, moral, and traditional.
I know the elite universities get a lot of bad rap for producing man-hating feminist careerists, but that demographic may be a small sliver among the females at such institutions. Most of them do not become tech CEOs or politicians; most, indeed, settle down in traditional marriages and do the wife and mom thing. As observers like David Brooks and Charles Murray have pointed out, a lot of elites do the traditional thing while nominally sticking up for the Socially Progressive Lifestyles TM.
Do you have the stats on that? How long ago did you graduate? I don’t get the feeling that most Ivy League women are still going for their MRS degrees anymore but want real careers. They may marry and have a kid or even 2 but still have a career.
Pao herself was pregnant at some point (allegedly) but suffered a miscarriage which she blamed for not setting up a crucial meeting for which she was criticized in a performance review. It would not surprise me if the pregnancy was imaginary but I’m a cynic.
The rise female professional is real. Please do not misunderstand me. But the feminist man-hating rhetoric notwithstanding most Ivy League women get married to men and cut back their careers or still do wife-ing and mothering while managing their careers. Once the children arrive, that trend accelerates dramatically. Many of my wife's peers either cut back or left the workforce once they began to have children, to the occasional horrors of their own mothers.
A "nation of immigrants" is no nation at all. But it sure makes for some good eatin'!
What is ludicrous about Kahn? He seems to be managing his courtroom OK. None of them are “aliens” except by your ridiculous standards. As a descendant of slaves, Buddy’s ancestors have probably been here at least as long as yours. Even Pao was born here. Even in the days when the corridors of finance and the law were lily white, there were crooks like Buddy, gold diggers like Pao, etc.
Kleiner seems like a pretty loony place but that appears to be because they are playing high stakes poker 24/7 – I’m not sure that if it was all WASPs of comparable intelligence instead of the current post-modern mix of super smart S. Asians, E. Asians, Jews and WASPs (in no particular order) that it would be a saner place – some of the infighting might be carried out in a more passive-aggressive WASP style but it would still be there.
Actually Kleiner was never all WASP. Eugene Kleiner himself really WAS an alien – he was a Jew who had fled from Nazi Vienna as a teenager, then co-founded Fairchild Semiconductor as well helping to start Intel and then Kleiner Perkins. I’m sure that you, as a “native” have surely accomplished as much.
The _Palo Alto Daily Post_ has been covering this story very nicely. I know you all have Google and there’s no need to search the archives of any particular newspaper, but I thought people would like to know that newspaper boxes throughout Venture Capital Central have been sporting front pages with juicy Ellen Pao news. A couple days ago the news was that she kept a written sh*t list that detailed her resentments, colleague by colleague. Today the story (top of front page) is about tough personal questions the jury submitted to her.
Its going to be hard for Ellen Pao, given her educational and occupational background, to pretend she was a victim of male oppression and unable to fend for herself. Even rabid feminists have to draw the line someplace and a woman who is in an industry and job position that people more commonly associate with predatory financial tactics that leave thousands unemployed to enrich people like Pao, to play the victim is going to make most people gag.
Even though it was a Chicago firm (Baker & McKenzie) the trial was in S.F. Only a SF jury would consider a sexist joke to be worth $7M. The judge cut it in half but it was still ludicrous. This whole idea of “sending a message” thru punitive damages needs to be eliminated from our civil legal system. Punishment should be the realm of the state thru criminal law only or at most punitive damages should be some very small premium over actual damages.
Obviously if you are suing someone, one of your motives is to get money from them, whether you need the money BADLY or just a little. And the defendant is defending the suit because he has a motive to hang on to his money. This is not really a proper subject to be put in front of the jury and the judge originally and correctly ruled it out of order as irrelevant and prejudicial. In our system of justice, we try to keep the jury focused on stuff that is germane and not let one side sway them with stuff that makes the other side look bad but has very little to do with the case. EXCEPT, in this case, Pao opened the door by saying that she was suing for humanitarian reasons, to help all those other women in the future, blah, blah. At that point, Kleiner should have been allowed to refute her testimony by bringing up other possible motives. Kleiner’s lawyer did ask Pao how many women she had mentored at Kleiner – can you guess the answer?
She’s hideous, but Yoko Ono isn’t much better and she bagged John Lennon.
Maggie Gallagher isn’t engaged in a $16 million lawsuit claiming sex discrimination, and isn’t regular fixture of the New York social scene, so yeah, other than that, just like Ellen Pao–she doesn’t use her married name.
Hedge funds were a good way to invest your money in the 80's when traditional mutual funds had a lot of restrictions on how they invested money, leaving open opportunities for mostly unregulated hedge funds. Those days are long over. For the past decade, the average hedge fund has badly outperformed simple S&P 500 mutual funds by a large amount, and that is before the hedge fund's huge 2% of all money plus 20% of all gains fee.
The financial press conspires with Wall Street to cover this all out by focusing on the hedge funds that do outperform the market. In 2014, only 1 in 6 did.
The biggest scam of all are "funds of funds" which are hedge funds that invest in other hedge funds. These have fees of 2% too, on top of the 2% of the funds they invest in, on top again of performance fees. That compares to the 0.07% fee of the Vanguard S&P 500 index fund that is the best investment for the average person.
To put it another way, the average hedge fund charges 28 times what Vanguard (a non-profit) charges, with much worse performance. And that 28 times is just the management fee, in a year the whole market rises 20%, the hedge fund will charge a fee that is 6%, or 85 times higher than Vanguard.
Now to invest in a hedge fund, you need to have $250,000 in liquid assets or a net worth, on top of your primary residence, of $1 million. So nobody in power really cares they are just scams. Wall Street owns 100% of the GOP* and 75% of the democrats, and the remaining liberals don't care much about rich people getting scammed.
*There was a time when Sen. Grassley and Rep. Paul would vote against Wall Street sometimes, but Paul retired and Grassley no longer deviates from the Wall Street party line.
Vanguard is not a non-profit. That alone makes all of your claims questionable.
But you would be sorry when you came to the next day in a a hotel bathtub filled with ice cubes, only to realize that one of your kidneys had been removed.
Nope she’s ugly and nasty as a pissed off rattler, no man with even a bit of self-respect would be remotely attracted to such a foul beast. Heck the only reason she even survived in Silicon Valley as long as she did is that the nerds there go bonkers over females no matter how ugly or mean they are.
If she ever gets pregnant it will be with a turkey baster.
The rest was simply a jab at the HBD’ers and their obsession with IQ over all other attributes.
There you mean "underperformed", instead of "outperformed."
By the way, can you cite any evidence for your assertion?
... simple S&P 500 mutual funds
Do "simple mutual funds" include actively managed funds?
Yes, I mean 80% or more of hedge funds underperformed S&P index funds.
Active mutual funds as a class are inferior to index funds but better than hedge funds.
The good news is that both small and large investors have been abandoning hedge and active mutual funds for years now.
Sounds like someone works for big finance. From wikipedia:
In other words, they don’t make any profit. When they expect to take in more money than they need, they just reduce their fees so they break even. Technically that is mutual ownership, but few people know that means.
Here is a good article from the Economist showing how hedge funds badly underperformed the market:
http://www.economist.com/news/finance-and-economics/21568741-hedge-funds-have-had-another-lousy-year-cap-disappointing-decade-going
Here’s an even better one that notes these charts actually understate just how bad hedge funds are because of bias issues in hedge fund index construction:
http://www.ritholtz.com/blog/2013/06/bad-chart-hedge-funds-long-term-gains/
Mr. Int’l Jew:
“A couple days ago the news was that she kept a written sh*t list that detailed her resentments, colleague by colleague”…this is routine in harassment (race, sex) cases.
Because very few employers these days are dumb enough to come out and state their prejudice openly, the plaintiff will sometimes present a kind of “death of a thousand cuts” case, in which every slight, every arguably sexist (racist etc.) remark and occurrence over a period of months or years will be put in evidence. To accomplish this, many plaintiffs will keep a running diary of these incidents so they can remember them.
Are they trying to set the employer up, based on advice of their counsel? Sometimes, I am sure.
As Maggie might say, better Turk than “Greek“!
At your Economist link it sez:
…The S&P 500 has now outperformed its hedge-fund rival for ten straight years, with the exception of 2008 when both fell sharply. A simple-minded investment portfolio—60% of it in shares and the rest in sovereign bonds—has delivered returns of more than 90% over the past decade, compared with a meagre 17% after fees for hedge funds (see chart).
Compare to:
… The future is notoriously difficult to predict, but the past is far less so. Using the only asset-weighted benchmark calculated on a forward looking basis1, hedge funds looks awfully good on any long-term, ten-year rolling return basis relative to the market and net of fees.
http://blogs.cfainstitute.org/investor/2013/01/14/hedge-funds-the-most-expensive-bargain-in-town/
Here’s my agenda in regard to hedge funds: I don’t own any, never have, but I do a good bit of reading about investments and financial markets. The literature is all over the place as to how much hedge funds actually make or lose. Hedge funds may possibly be like big banks or like da gooberment– the inside story may not be the same as what they tell journalists.
I suspect that mass market publications such as the Economist like to poo-pooh hedge funds in order to make mass market, small time investors such as me feel good. As for fatass Barry Ritholz, he’s a financial advisor with non-hedge fund investment products of his own to sell.
Real hedge funds are for the really rich. Mass market Joe Sixpacks like me don’t own any stake in real hedge funds, because the required minimum investment is on the order of $500K and up.
“Real hedge funds” — There are mutual funds that purport to be like hedge funds, but they are not.
The “On the stand” bit is what’s weirdest about this. It’d be one thing if Pao was all “I’ve been wronged and I want money” and the judge would let KPCB bring up her finances. But she brought up her motivations, and KPCB wasn’t allowed to impeach her credibility. Dunno if this gives KPCB a feasable appeal though.
I’m met Yoko (once.. .long story) and she is truly hideous looking (and tiny and smart). She rarely smiles. Pao is a beauty queen next to Yoko (even accounting for the age difference).
Here's my agenda in regard to hedge funds: I don't own any, never have, but I do a good bit of reading about investments and financial markets. The literature is all over the place as to how much hedge funds actually make or lose. Hedge funds may possibly be like big banks or like da gooberment-- the inside story may not be the same as what they tell journalists.I suspect that mass market publications such as the Economist like to poo-pooh hedge funds in order to make mass market, small time investors such as me feel good. As for fatass Barry Ritholz, he's a financial advisor with non-hedge fund investment products of his own to sell.Real hedge funds are for the really rich. Mass market Joe Sixpacks like me don't own any stake in real hedge funds, because the required minimum investment is on the order of $500K and up."Real hedge funds" -- There are mutual funds that purport to be like hedge funds, but they are not.
That’s one of my points. Hedge funds rip off rich people, but nobody cares when rich people get victimized this way. For every widow or not very smart heir worth $50 million (think McCain’s wife and daughter), there are a dozen or more smooth-talking sharks looking to put them into a rip-off financial investment. But nobody pays good-looking, well-dressed armies of salesmen to pitch rich people on low-fee index funds.
For every article like the one I linked to, there are about 100 profiling the hot new hedge fund and the colorful background and exploits of its manager.
No, not really. The hedge fund industry and those who service it, like Credit Suisse, puts out BS, everyone else who studies the issue calls them on it, but has a lot less money to do so.
To take the guy who wrote the pro-hedge article you linked to, here he is discussing his bet that a basket of hedge funds would out perform the market:
http://blogs.cfainstitute.org/investor/2015/02/12/betting-with-buffett-seven-lean-years-later/
This is a guy who has a strong professional interest in promoting hedge funds. It is his job. As he describes it:
With some unexpected honesty, he admits that since he made his bet, his hedge fund bucket has returned 19.6% (with fees over 7 years of 24.4%), and Warren Buffet’s alternative, Vanguard Admiral Shares S&P 500, have returned 63.5%. This is the single lowest fee investment you can make in a fund, 0.05% per year.
It does not look like an apple-to-apples comparison.
For example, no one can really invest in the S&P 500 directly. That's why it makes sense to use a proxy like Vanguards Admiral Shares S&P 500. That investment is accessible to everyone. What accessible investment represents the "composite return of the five hedge fund of funds"? I can't think of any.
Why not simply compare the index to the top performing hedge funds, like Renaissance Technologies, that still allow for open enrollment?
I used to get a good chuckle out of people who bucked the wisdom of the Efficient Market Hypothesis and lost, but now I am not so sure. It's the same feeling I get when someone is eating a cake while telling me how awful it tastes. If it tastes so bad, then why are you eating it.
If these hedge funds perform so badly, and if average shlub investments like Vanguard really are superior performers to sophisticated Wall Street, then why do they exist? Is it really plausible to believe rich people are all getting conned?
There's lots of things that I was told were not supposed to work in the financial world, like technical analysis, yet sophisticated quants augmenting technical analysis with math and statistics seem to be doing very well.
I agree with just about everything you wrote except that hedge funds rip off "rich people." Although the most successful hedge fund managers (i.e. those who collect the 2 and 20) are very rich indeed, investors in hedge funds are more likely to be institutional investors such as pension funds and university endowments than they are to be super rich individuals. Carl Icahn manages hedge funds but I doubt he invests in too many he doesn't control directly unless he is given preferential terms.
My suspicion is that firms like Vanguard are not adversarial to the hedge fund universe. I’d say they are symbiotic. The work that Vanguard does is what makes much of Wall Street possible.
What Vanguard does is pool together fresh injections of funds into capital markets on a consistent, periodic basis. Thanks to the efficient market hypothesis, the average investor is essentially engaging in a perpetual dollar-cost averaging strategy through their various IRA and 401(k) programs. This creates both volatility and liquidity in financial markets, both essential features for crafting profitable trading strategies.
Rather than Vanguard and the efficient market hypothesis informing investors of a superior form of investing, they’ve instead conditioned investors to accept losses that previous generations would never have accepted. For example, a 2008 loss of 30% or more is treated by investors as some random event, guaranteeing that positions are rarely liquidated and urging more investors to just keep investing. Something like that would’ve been unheard of in 1950.
I don’t know. This seems to only damn Protege Partners in picking “Fund of Funds” to invest in.
It does not look like an apple-to-apples comparison.
For example, no one can really invest in the S&P 500 directly. That’s why it makes sense to use a proxy like Vanguards Admiral Shares S&P 500. That investment is accessible to everyone. What accessible investment represents the “composite return of the five hedge fund of funds”? I can’t think of any.
Why not simply compare the index to the top performing hedge funds, like Renaissance Technologies, that still allow for open enrollment?
I used to get a good chuckle out of people who bucked the wisdom of the Efficient Market Hypothesis and lost, but now I am not so sure. It’s the same feeling I get when someone is eating a cake while telling me how awful it tastes. If it tastes so bad, then why are you eating it.
If these hedge funds perform so badly, and if average shlub investments like Vanguard really are superior performers to sophisticated Wall Street, then why do they exist? Is it really plausible to believe rich people are all getting conned?
There’s lots of things that I was told were not supposed to work in the financial world, like technical analysis, yet sophisticated quants augmenting technical analysis with math and statistics seem to be doing very well.
My second link shows that even looking at some of the better funds that have outperformed the market does not tell the whole story.
John Paulson is a very instructive example. His short of the housing market was absolutely brilliant on a number of levels. First, he was right about the bubble. While it may have seen obvious, very few people took any action to sell at peak prices, and banks were lending at attractive rates to buy overvalued property to buy properties for twice the price three years prior. Part of it is the forced lending to NAMs aspect that Steve has often blogged about, but only a part. Commercial real estate also was a crazy bubble, with investment funds of very rich people lending money at low rates to buy office towers all over the place.
Paulson was not only right, but his timing was exactly right. We had bubble prices in 2004, but over the next 2 years values went up another 50% and those who shorted in 2004 got killed.
He also figured out some complex ways to short the worst of the worst lending: exotic subprime residential mortgage securities, and do so in bulk.
So he made himself several billion dollars, and a huge amount for his early investors too, all while the rest of the market was crashing.
This amazing performance attracted a ton of new money to his fund. With that money, he made an aggressive bet on a quick recovery from the recession. That didn't happen, so he lost a lot of the new investors' money. Then he changed his mind, and missed out on the actual recovery a few years later. Then he became the biggest goldbug in America, and was both personally and through his fund the largest individual owner of gold on Earth. Gold had been going up, and a lot of rich people are infected with goldbuggery. Then gold took a dive and he lost even more money from new investors.
All in all, his fund went down more than 60% in a bull market. And critically, his fund went down when it was huge. It was much smaller when he made his brilliant real estate investments. So he lost a lot more investor money than he ever made, but he still became a multibillionaire in the process, and an index of his long-term performance would show his fund in the positive since very early investors still had some profit left over from the early gains, even after the later big losses.
I find this hilarious yet exactly what one would expect.
Ms Elizabeth Weise the USA Today reporter is of course a Jewish feminist SJW activist who lives in San Francisco.
http://glenparkassociation.org/author/elizabethweise/page/2/
Ms Weise also wrote a book on Mandarin immersion for kids
http://www.amazon.com/A-Parents-Guide-Mandarin-Immersion/dp/0990365905
I guess that is so to keep her kids safely away from the NAM diversity riff raff she otherwise wants you to know that she so enthusiastically champions.
Steve has written about how SWPLs love their Mandarin immersion elementary schools.
What’s good for Jews????
Now you wonder why the USA Today is so slanted and hides obviously dispositive information to the feminist SJW agenda.
My son did not attend a Chinese immersion school but he did study Mandarin as his foreign language. As far as I could tell, his classmates were mostly from SWPL type families but there was no clear political slant. I recall that one of his classmates was from a large and wealthy Catholic family - it would shock me if they had the slightest leftist tendency. It's true that the class was low on NAMs except for one typically over-confident black kid who was in over his head and switched to Spanish. That the teacher was the kind of 4' 10" Chinese lady who is able to make grown men cry probably did not help - her teaching method was to REDUCE self-esteem.
It does not look like an apple-to-apples comparison.
For example, no one can really invest in the S&P 500 directly. That's why it makes sense to use a proxy like Vanguards Admiral Shares S&P 500. That investment is accessible to everyone. What accessible investment represents the "composite return of the five hedge fund of funds"? I can't think of any.
Why not simply compare the index to the top performing hedge funds, like Renaissance Technologies, that still allow for open enrollment?
I used to get a good chuckle out of people who bucked the wisdom of the Efficient Market Hypothesis and lost, but now I am not so sure. It's the same feeling I get when someone is eating a cake while telling me how awful it tastes. If it tastes so bad, then why are you eating it.
If these hedge funds perform so badly, and if average shlub investments like Vanguard really are superior performers to sophisticated Wall Street, then why do they exist? Is it really plausible to believe rich people are all getting conned?
There's lots of things that I was told were not supposed to work in the financial world, like technical analysis, yet sophisticated quants augmenting technical analysis with math and statistics seem to be doing very well.
I always believed in the Efficient Market Hypothesis, but then I’m a half-broke intellectual. Rich guys don’t seem to believe in it.
Exactly. This is my point.
Consider this little tidbit about index investing that I've observed about the S&P 500 funds just by perusing Vanguard's website: The indexes are capitalization weighted. This means that they are weighted by the size of the firm. In fact, the top ten holdings of the Admiral Shares Fund account for 17.7% of the value of the portfolio, nearly a fifth of the value. The number one holding is Apple and the number six holding is...Berkshire Hathaway. Hmmm...is this why Buffet recommends Vanguard Admiral shares?
https://personal.vanguard.com/us/FundsAllHoldings?FundId=0540&FundIntExt=INT&tableName=Equity&tableIndex=0&sort=marketValue&sortOrder=desc
More importantly, index investing is touted as a a "broad market" investment because you are diversifying your portfolio. But how diverse is a portfolio where ten stocks account for nearly 20% of the movement of said portfolio?
Capitalization weighting is common in the investing world. It seems to benefit exchanges and the largest firms. Furthermore, capitalization weighting seriously hides the performance of smaller firms. This is probably where you get the famous "small cap" effect.
Some like stock picking as a hobby too. I do too. Most of my money is in low-fee index funds, but tossing some extra cash into individual stocks is pretty harmless, so long as you stick to larger and stable companies. It gives you some of the thrill of gambling without the house's take.
Another way to enjoy the hobby is to decide which low-fee funds to invest. Right now with the strong dollar, Europe funds are "on sale" so you might get Vanguard's low-fee Europe ETF, which is VGK.
The money to be made in the Market is over spotting *temporary* inefficiencies ahead of everyone else. And even in this day of ultra high speed, super high powered, computer-driven arbitrage, there is A LOT of temporary inefficiencies because the securities-buying public is highly sensitive to short-term changes and events. To put mildly, mass psychology is frequently unstable.
As with much in life, it's all (or mostly) about timing.
Speaking of hedge funds, I find it interesting that the second richest hedge fund guy (after Soros), and the richest guy in Connecticut, is Ray Dalio. Dalio, who is Italian-American and the son of a jazz musician, grew up in Queens and went to college at Long Island University before HBS.
For which political party do Kleiner and Perkins vote and donate campaign money?
If it’s for the Democratic Party, then I don’t feel sorry for them.
Ms Elizabeth Weise the USA Today reporter is of course a Jewish feminist SJW activist who lives in San Francisco.
http://glenparkassociation.org/author/elizabethweise/page/2/
Ms Weise also wrote a book on Mandarin immersion for kids
www.amazon.com/A-Parents-Guide-Mandarin-Immersion/dp/0990365905
I guess that is so to keep her kids safely away from the NAM diversity riff raff she otherwise wants you to know that she so enthusiastically champions.
Steve has written about how SWPLs love their Mandarin immersion elementary schools.
What's good for Jews????
Now you wonder why the USA Today is so slanted and hides obviously dispositive information to the feminist SJW agenda.
Maybe Ms. Weise really is a Jewish feminist SJW activist (it would not surprise me) but I don’t see any evidence of that in the links that you gave, unless somehow living in SF and sending your kids to a Chinese immersion school is proof. If she is an “activist” she is not a very active activist because there doesn’t seem to be any paper trail of social justice type activities. Her usual news beat is food safety.
My son did not attend a Chinese immersion school but he did study Mandarin as his foreign language. As far as I could tell, his classmates were mostly from SWPL type families but there was no clear political slant. I recall that one of his classmates was from a large and wealthy Catholic family – it would shock me if they had the slightest leftist tendency. It’s true that the class was low on NAMs except for one typically over-confident black kid who was in over his head and switched to Spanish. That the teacher was the kind of 4′ 10″ Chinese lady who is able to make grown men cry probably did not help – her teaching method was to REDUCE self-esteem.
The SJW label does imply a certain unhinged unprofessional persona. So perhaps I should have described Weise as a typical DWL(disingenuous white liberal) or SWPL.
Ms Wiese lives in a fashionable neighborhood of San Francisco right next to the Castro where because of the large gay, single hipster and homeless populations, blacks, Hispanics and other non Asian minorities(middle eastern??) make up 20-25% of the population but perhaps 30-40% of the school age population.
So what does Ms Wiese promote for her fellow SWPLs? Ah yes the Mandarin immersion public school double bank shot on how to keep your precious kid in a public school and also from getting the crap beaten out of him by NAM classmates. He may never use Mandarin as an adult but at least he does no grow up hating his lefty parents and their anti whitey agenda and being horror of horrors an Un-PC adult .
So much for embracing diversity.... Diversity for you goyim rubes but not for us jews.
“I always believed in the Efficient Market Hypothesis, but then I’m a half-broke intellectual. Rich guys don’t seem to believe in it.”
Exactly. This is my point.
Consider this little tidbit about index investing that I’ve observed about the S&P 500 funds just by perusing Vanguard’s website: The indexes are capitalization weighted. This means that they are weighted by the size of the firm. In fact, the top ten holdings of the Admiral Shares Fund account for 17.7% of the value of the portfolio, nearly a fifth of the value. The number one holding is Apple and the number six holding is…Berkshire Hathaway. Hmmm…is this why Buffet recommends Vanguard Admiral shares?
https://personal.vanguard.com/us/FundsAllHoldings?FundId=0540&FundIntExt=INT&tableName=Equity&tableIndex=0&sort=marketValue&sortOrder=desc
More importantly, index investing is touted as a a “broad market” investment because you are diversifying your portfolio. But how diverse is a portfolio where ten stocks account for nearly 20% of the movement of said portfolio?
Capitalization weighting is common in the investing world. It seems to benefit exchanges and the largest firms. Furthermore, capitalization weighting seriously hides the performance of smaller firms. This is probably where you get the famous “small cap” effect.
My son did not attend a Chinese immersion school but he did study Mandarin as his foreign language. As far as I could tell, his classmates were mostly from SWPL type families but there was no clear political slant. I recall that one of his classmates was from a large and wealthy Catholic family - it would shock me if they had the slightest leftist tendency. It's true that the class was low on NAMs except for one typically over-confident black kid who was in over his head and switched to Spanish. That the teacher was the kind of 4' 10" Chinese lady who is able to make grown men cry probably did not help - her teaching method was to REDUCE self-esteem.
When a reporter hides pertinent information from her audience in order to further an agenda premised on the goals of advancing feminism or equality, I would say that crosses the line towards activism over journalism.
The SJW label does imply a certain unhinged unprofessional persona. So perhaps I should have described Weise as a typical DWL(disingenuous white liberal) or SWPL.
Ms Wiese lives in a fashionable neighborhood of San Francisco right next to the Castro where because of the large gay, single hipster and homeless populations, blacks, Hispanics and other non Asian minorities(middle eastern??) make up 20-25% of the population but perhaps 30-40% of the school age population.
So what does Ms Wiese promote for her fellow SWPLs? Ah yes the Mandarin immersion public school double bank shot on how to keep your precious kid in a public school and also from getting the crap beaten out of him by NAM classmates. He may never use Mandarin as an adult but at least he does no grow up hating his lefty parents and their anti whitey agenda and being horror of horrors an Un-PC adult .
So much for embracing diversity…. Diversity for you goyim rubes but not for us jews.
It does not look like an apple-to-apples comparison.
For example, no one can really invest in the S&P 500 directly. That's why it makes sense to use a proxy like Vanguards Admiral Shares S&P 500. That investment is accessible to everyone. What accessible investment represents the "composite return of the five hedge fund of funds"? I can't think of any.
Why not simply compare the index to the top performing hedge funds, like Renaissance Technologies, that still allow for open enrollment?
I used to get a good chuckle out of people who bucked the wisdom of the Efficient Market Hypothesis and lost, but now I am not so sure. It's the same feeling I get when someone is eating a cake while telling me how awful it tastes. If it tastes so bad, then why are you eating it.
If these hedge funds perform so badly, and if average shlub investments like Vanguard really are superior performers to sophisticated Wall Street, then why do they exist? Is it really plausible to believe rich people are all getting conned?
There's lots of things that I was told were not supposed to work in the financial world, like technical analysis, yet sophisticated quants augmenting technical analysis with math and statistics seem to be doing very well.
You can’t know in advance which hedge funds will do well, which is why you have to compare the average. You might as well compare one hedge fund that’s done really well to one stock that’s done really well.
My second link shows that even looking at some of the better funds that have outperformed the market does not tell the whole story.
John Paulson is a very instructive example. His short of the housing market was absolutely brilliant on a number of levels. First, he was right about the bubble. While it may have seen obvious, very few people took any action to sell at peak prices, and banks were lending at attractive rates to buy overvalued property to buy properties for twice the price three years prior. Part of it is the forced lending to NAMs aspect that Steve has often blogged about, but only a part. Commercial real estate also was a crazy bubble, with investment funds of very rich people lending money at low rates to buy office towers all over the place.
Paulson was not only right, but his timing was exactly right. We had bubble prices in 2004, but over the next 2 years values went up another 50% and those who shorted in 2004 got killed.
He also figured out some complex ways to short the worst of the worst lending: exotic subprime residential mortgage securities, and do so in bulk.
So he made himself several billion dollars, and a huge amount for his early investors too, all while the rest of the market was crashing.
This amazing performance attracted a ton of new money to his fund. With that money, he made an aggressive bet on a quick recovery from the recession. That didn’t happen, so he lost a lot of the new investors’ money. Then he changed his mind, and missed out on the actual recovery a few years later. Then he became the biggest goldbug in America, and was both personally and through his fund the largest individual owner of gold on Earth. Gold had been going up, and a lot of rich people are infected with goldbuggery. Then gold took a dive and he lost even more money from new investors.
All in all, his fund went down more than 60% in a bull market. And critically, his fund went down when it was huge. It was much smaller when he made his brilliant real estate investments. So he lost a lot more investor money than he ever made, but he still became a multibillionaire in the process, and an index of his long-term performance would show his fund in the positive since very early investors still had some profit left over from the early gains, even after the later big losses.
"You can’t know in advance which hedge funds will do well, which is why you have to compare the average. You might as well compare one hedge fund that’s done really well to one stock that’s done really well."
Then why not compare the performance of all of the "investable" indexes that exist in the market to the "fund of funds" hedge fund itself? Selecting the S&P 500 index as your baseline is as arbitrary as selecting the top performing funds to compare.
See, the conceit is believing that the S&P 500 is really a broad market index, when it really is not.
"The Big Short" by Michael Lewis has a lot of good detail on Burry.
Leon Cooperman said he made his money in the Inefficient parts of the market. I thought that the EMH was oversold, like putting 10 pounds of whatever in a 5 pound bag. That isn’t an endorsement to buy commodities now.
Lot,
I agree with just about everything you wrote except that hedge funds rip off “rich people.” Although the most successful hedge fund managers (i.e. those who collect the 2 and 20) are very rich indeed, investors in hedge funds are more likely to be institutional investors such as pension funds and university endowments than they are to be super rich individuals. Carl Icahn manages hedge funds but I doubt he invests in too many he doesn’t control directly unless he is given preferential terms.
That means asset prices incorporate all public information. Rich guys tend to have non-public information.
Some like stock picking as a hobby too. I do too. Most of my money is in low-fee index funds, but tossing some extra cash into individual stocks is pretty harmless, so long as you stick to larger and stable companies. It gives you some of the thrill of gambling without the house’s take.
Another way to enjoy the hobby is to decide which low-fee funds to invest. Right now with the strong dollar, Europe funds are “on sale” so you might get Vanguard’s low-fee Europe ETF, which is VGK.
Correcting the Critics of Nicholas Wade & MAOA
My second link shows that even looking at some of the better funds that have outperformed the market does not tell the whole story.
John Paulson is a very instructive example. His short of the housing market was absolutely brilliant on a number of levels. First, he was right about the bubble. While it may have seen obvious, very few people took any action to sell at peak prices, and banks were lending at attractive rates to buy overvalued property to buy properties for twice the price three years prior. Part of it is the forced lending to NAMs aspect that Steve has often blogged about, but only a part. Commercial real estate also was a crazy bubble, with investment funds of very rich people lending money at low rates to buy office towers all over the place.
Paulson was not only right, but his timing was exactly right. We had bubble prices in 2004, but over the next 2 years values went up another 50% and those who shorted in 2004 got killed.
He also figured out some complex ways to short the worst of the worst lending: exotic subprime residential mortgage securities, and do so in bulk.
So he made himself several billion dollars, and a huge amount for his early investors too, all while the rest of the market was crashing.
This amazing performance attracted a ton of new money to his fund. With that money, he made an aggressive bet on a quick recovery from the recession. That didn't happen, so he lost a lot of the new investors' money. Then he changed his mind, and missed out on the actual recovery a few years later. Then he became the biggest goldbug in America, and was both personally and through his fund the largest individual owner of gold on Earth. Gold had been going up, and a lot of rich people are infected with goldbuggery. Then gold took a dive and he lost even more money from new investors.
All in all, his fund went down more than 60% in a bull market. And critically, his fund went down when it was huge. It was much smaller when he made his brilliant real estate investments. So he lost a lot more investor money than he ever made, but he still became a multibillionaire in the process, and an index of his long-term performance would show his fund in the positive since very early investors still had some profit left over from the early gains, even after the later big losses.
See one of my responses to Sailer above on this topic, where I talk about the composition of the S&P 500.
“You can’t know in advance which hedge funds will do well, which is why you have to compare the average. You might as well compare one hedge fund that’s done really well to one stock that’s done really well.”
Then why not compare the performance of all of the “investable” indexes that exist in the market to the “fund of funds” hedge fund itself? Selecting the S&P 500 index as your baseline is as arbitrary as selecting the top performing funds to compare.
See, the conceit is believing that the S&P 500 is really a broad market index, when it really is not.
Some like stock picking as a hobby too. I do too. Most of my money is in low-fee index funds, but tossing some extra cash into individual stocks is pretty harmless, so long as you stick to larger and stable companies. It gives you some of the thrill of gambling without the house's take.
Another way to enjoy the hobby is to decide which low-fee funds to invest. Right now with the strong dollar, Europe funds are "on sale" so you might get Vanguard's low-fee Europe ETF, which is VGK.
That can only be non-public information that has to eventually become public.
My second link shows that even looking at some of the better funds that have outperformed the market does not tell the whole story.
John Paulson is a very instructive example. His short of the housing market was absolutely brilliant on a number of levels. First, he was right about the bubble. While it may have seen obvious, very few people took any action to sell at peak prices, and banks were lending at attractive rates to buy overvalued property to buy properties for twice the price three years prior. Part of it is the forced lending to NAMs aspect that Steve has often blogged about, but only a part. Commercial real estate also was a crazy bubble, with investment funds of very rich people lending money at low rates to buy office towers all over the place.
Paulson was not only right, but his timing was exactly right. We had bubble prices in 2004, but over the next 2 years values went up another 50% and those who shorted in 2004 got killed.
He also figured out some complex ways to short the worst of the worst lending: exotic subprime residential mortgage securities, and do so in bulk.
So he made himself several billion dollars, and a huge amount for his early investors too, all while the rest of the market was crashing.
This amazing performance attracted a ton of new money to his fund. With that money, he made an aggressive bet on a quick recovery from the recession. That didn't happen, so he lost a lot of the new investors' money. Then he changed his mind, and missed out on the actual recovery a few years later. Then he became the biggest goldbug in America, and was both personally and through his fund the largest individual owner of gold on Earth. Gold had been going up, and a lot of rich people are infected with goldbuggery. Then gold took a dive and he lost even more money from new investors.
All in all, his fund went down more than 60% in a bull market. And critically, his fund went down when it was huge. It was much smaller when he made his brilliant real estate investments. So he lost a lot more investor money than he ever made, but he still became a multibillionaire in the process, and an index of his long-term performance would show his fund in the positive since very early investors still had some profit left over from the early gains, even after the later big losses.
Paulson is widely regarded as a talentless hack. He in almost all likelihood lifted the housing short idea (both the thesis and, more importantly, the shorting instrument/mechanics) from asperger hedgefund manager Michael Burry. Hedge funds’ nominally confidential letters to investors are leaked and circulated within the industry as a matter of course…
“The Big Short” by Michael Lewis has a lot of good detail on Burry.
The SJW label does imply a certain unhinged unprofessional persona. So perhaps I should have described Weise as a typical DWL(disingenuous white liberal) or SWPL.
Ms Wiese lives in a fashionable neighborhood of San Francisco right next to the Castro where because of the large gay, single hipster and homeless populations, blacks, Hispanics and other non Asian minorities(middle eastern??) make up 20-25% of the population but perhaps 30-40% of the school age population.
So what does Ms Wiese promote for her fellow SWPLs? Ah yes the Mandarin immersion public school double bank shot on how to keep your precious kid in a public school and also from getting the crap beaten out of him by NAM classmates. He may never use Mandarin as an adult but at least he does no grow up hating his lefty parents and their anti whitey agenda and being horror of horrors an Un-PC adult .
So much for embracing diversity.... Diversity for you goyim rubes but not for us jews.
What pertinent information did Wiese hide? Does she have to make full disclosure that she is a hypocrite at the top of each of her columns? Wear a yellow star?
You can always use your Mandarin to order in a Chinese restaurant, if nothing else. Many Chinatown restaurants have a whole other menu in Mandarin where all the good stuff is (depending on your view of whether frogs, pig intestines, etc. are really good stuff). Plus you will get treated better if you chat with the waiters in Mandarin.
Buddy is gay or bi so he is not a typical brotha. I’m guessing that mates who are big in the T&A dept. are not really his thing. A woman whose physique is not unlike that of a prepubescent boy might not be unappealing to him and carries less of a risk of a long prison sentence.
I find little difference in the body types between WF elites and non-FOB AF elites.
My son did not attend a Chinese immersion school but he did study Mandarin as his foreign language. As far as I could tell, his classmates were mostly from SWPL type families but there was no clear political slant. I recall that one of his classmates was from a large and wealthy Catholic family - it would shock me if they had the slightest leftist tendency. It's true that the class was low on NAMs except for one typically over-confident black kid who was in over his head and switched to Spanish. That the teacher was the kind of 4' 10" Chinese lady who is able to make grown men cry probably did not help - her teaching method was to REDUCE self-esteem.
Jack, you need to ask yourself who the most visible “large and wealthy Catholic family” in America has been for the past 60 years, and maybe rethink that whole leftist tendency thing.
But I concur that Elizabeth Weise has no SJW paper trail.
The Market IS efficient over long term, but that long-term efficiency does not equate to perfection, nor does it guarantee speed.
The money to be made in the Market is over spotting *temporary* inefficiencies ahead of everyone else. And even in this day of ultra high speed, super high powered, computer-driven arbitrage, there is A LOT of temporary inefficiencies because the securities-buying public is highly sensitive to short-term changes and events. To put mildly, mass psychology is frequently unstable.
As with much in life, it’s all (or mostly) about timing.
The good news is that both small and large investors have been abandoning hedge and active mutual funds for years now.
Hedge funds are designed to enrich the management of the hedge funds, not their investors. They are a voluntary wealth transfer mechanism.
You need a university education for that?
No, you do not need university education for marriage. However, it, especially at the upper tier, is an excellent place to meet marriage partners of similar socio-economic demographic as well as IQ/achievement profile.
Pao herself was pregnant at some point (allegedly) but suffered a miscarriage which she blamed for not setting up a crucial meeting for which she was criticized in a performance review. It would not surprise me if the pregnancy was imaginary but I'm a cynic.
http://www.nytimes.com/2005/09/20/national/20women.html
The rise female professional is real. Please do not misunderstand me. But the feminist man-hating rhetoric notwithstanding most Ivy League women get married to men and cut back their careers or still do wife-ing and mothering while managing their careers. Once the children arrive, that trend accelerates dramatically. Many of my wife’s peers either cut back or left the workforce once they began to have children, to the occasional horrors of their own mothers.
Buddy, now that Ellen’s lost, you are well and truly mostly packin’ Bye-bye, Birdie! ;). Don’t go missin trains, my friend!
At least Buddy won’t be needing that turkey baster anymore now that Ellen has proven herself unworthy. Back to Bo!
Not if they speak 廣東話 or 台山話 as many do in San Francisco.
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