The Unz Review • An Alternative Media Selection$
A Collection of Interesting, Important, and Controversial Perspectives Largely Excluded from the American Mainstream Media
 BlogviewRon Unz Archive
The Red-and-Black Fund
Email This Page to Someone

 Remember My Information


Bookmark Toggle AllToCAdd to LibraryRemove from Library • B
Show CommentNext New CommentNext New ReplyRead More
ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
These buttons register your public Agreement, Disagreement, Thanks, LOL, or Troll with the selected comment. They are ONLY available to recent, frequent commenters who have saved their Name+Email using the 'Remember My Information' checkbox, and may also ONLY be used three times during any eight hour period.
Ignore Commenter Follow Commenter
Search Text Case Sensitive  Exact Words  Include Comments
List of Bookmarks

Since another multi-billion-dollar hedge fund announced on Friday that it had lost almost all its money and was liquidating, I suppose it’s a little too late for me to start my own Red-and-Black Fund, based on some shrewd investment principles I worked out a few years ago. Therefore, I suppose I’m not losing anything by posting the core “investment strategy.”

You collect lots of money and keep it in the bank, earning maybe 3%. Then, once a year, you fly down to Las Vegas and bet it all on one fair roll of the big Roulette Wheel, having covered all but one or two of the numbers. Unless you’re really unlucky during the first couple of years, this should net you a total return of something 6-9% annually (including your bank interest).

Notice that these returns are very, very stable. Basically, you earn 6% or whatever, each and every year.

Since your returns are so extremely stable, you must have a very safe (secret) investment strategy, and everyone is impressed.

But 6% isn’t high enough, even for a very safe strategy. So you go down to the big money-center banks, and “leverage up” your stable strategy, by borrowing five times your invested capital. Suddenly, your returns are just as stable, but have been now “leveraged up” to an annual 30% or whatever!

Even netting out your hedge-fund fees of 2% of equity plus 20% of profits leaves an outstanding return for all your fudn investors, especially since it’s so remarkably stable, year after year. Best yet, your “investment strategy” is one of the very few that can be scaled up in size without limit or degradation in performance.

So many, many, many more investors give you their money as well.

I’ve sometimes wondered whether the recent growth in hedge-funds had some connection to the recent growth in Las Vegas revenues…

• Category: Economics • Tags: Humor 
Current Commenter

Leave a Reply - Comments on articles more than two weeks old will be judged much more strictly on quality and tone

 Remember My InformationWhy?
 Email Replies to my Comment
Submitted comments have been licensed to The Unz Review and may be republished elsewhere at the sole discretion of the latter
Commenting Disabled While in Translation Mode
Subscribe to This Comment Thread via RSS Subscribe to All Ron Unz Comments via RSS
Personal Classics
What Was John McCain's True Wartime Record in Vietnam?
Our Reigning Political Puppets, Dancing to Invisible Strings
Analyzing the History of a Controversial Movement