Wildcats of Finance
Fast Track to Wealth
is the Slick Path to Ruin
for Hedge Funds and their Kind
Wildcat groups such as hedge funds have played a growing role in causing or hiking blowups in the capital markets as well as the banking system. A showcase was the crisis of 2008, which ended up crippling the financial complex along with the real economy. The bombshell obliterated trillions of dollars from each of the major stock markets of the world, destroyed millions of jobs in sizable countries, and nixed trillions of dollars through lost output in the global marketplace. This guidebook exposes the reality behind the illusion of profits in the hedge fund game. In plain language, the primer explains knotty issues like the following.
Why do the hedge funds destroy wealth?
How can the operators enrich themselves by delivering worse results to their customers?
Why does the true performance of the wildcats remain hidden from view of the investing public?
How do the custodians slash returns and hoist risk for their clients as well as the financial community and the entire society?
Why will the crash of 2008 and the global recession in its wake show up repeatedly, and cause greater devastation, unless proper safeguards are put in place beforehand?
How can public officials protect the stability of the markets?
How could the economic liability of hedge funds be turned into a social asset?
How can shrewd investors grow rather than wreck their capital?
The main audience for the book consists of active investors and earnest policymakers. Other types of readers include concerned professionals in the financial community as well as thoughtful observers in all walks of life.
Given the carnage to the real economy caused by reckless schemes in the financial sector, the message of this guidebook is in fact relevant to every member of the society at large.
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Wildcats of Finance
Lowdown on Hedge Funds and Suchlike
for Investors and Policymakers
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Specs for the Book
Size: 6 x 9 inches (15.24 x 22.86 cm)
Length: 209 pages, incl. front matter
Format: Adobe PDF
Price: Ebook, $9.95 ; Paperback, $14.95
Publisher: MintKit Press and Partners
“Like a swarm of icebergs, the bulk of hedge funds lurks out of plain sight. It’s the hidden mass that inflicts most of the damage to investors and other stakeholders.”
Over the past few decades, hedge funds have played a growing role in prompting or aggravating blowups in the capital markets as well as the banking system. A prime example was the crisis of 2008, which ended up whacking the financial system and the real economy.
The debacle led to widespread calls amongst the general public for the government to step in and rein in the ringleaders. The targets in the crosshairs ranged from boutique funds standing on their own to coddled groups nestled within commercial banks.
Amid the furor, elected officials scampered around for ways to prevent such flaps in the future. Sadly, though, the politicos merely managed to thrash out a ragtag bag of makeshift decrees. The shackles passed into law merely throttled the financial markets while doing little or nothing to wipe out the menace. In line with custom, the lawmakers took the facile approach by fiddling with the symptoms rather than wiping out the disease.
In this way, the mass of regulations churned out has merely gummed up the financial markets without clearing away the deep-rooted problems. The crux of the ailment lies in the lopsided pattern of reward and penalty in the realm of hedge funds as well as the corporate environment at large. Meanwhile, the mace of doom wielded by the wildcats is a weapon of mass mayhem: the hulking leverage in the form of financial derivatives in capital markets as well as massive loans from commercial banks.
The operators of levered funds pass on the ruinous cost of failure to investors, shareholders and other external parties. For this reason, the bettors have little or nothing to lose by taking on excessive risks that end up bashing the entire system of finance, banking and production.
This guidebook sheds light on a murky domain where illusion and misconception run rampant. The vital topics covered in the compact volume include the following.
How the true performance of hedge funds remains hidden from view of the investing public.
Why the operators of managed funds go out on a limb to pursue extremely risky bets.
How the statistics of the marketplace reveal only the tip of the iceberg, the bulk of which remains under water.
Why the interests of the operators are at odds with those of the investors.
How the managers of pooled accounts can enrich themselves by delivering worse results to their customers.
Why wildcat groups within traditional firms are as dangerous as boutique funds.
How hedge funds in the aggregate destroy wealth for their customers, and thus underperform inert cash under the mattress.
How the reality belies the mirage of performance even amongst the fabled legends of hedge funds, due to a bunch of factors ranging from bogus labeling and selective amnesia to foul play and sudden death.
How robotic agents bushwhack investors and aggravate volatility while skimming billions of dollars a year from each of the major markets of the world.
Why the destruction of wealth occurs at the microlevel of the individual investor as well as the macrolevel of the financial markets and the real economy.
Why robotic agents – also known as algorithmic traders or simply as algos – are often confused with hedge funds.
How the algos siphon off billions of dollars a year from ordinary investors in each of the major markets round the globe.
How the scalpers slash the payoff and hoist the risk for investors in a chronic and crippling fashion, while hedge funds do likewise in an acute and cataclysmic way; in other words, hack by a zillion cuts as opposed to death in one fell stroke.
Why the pat responses of policymakers simply paper over the symptoms rather than cure the ailments.
How the economic liability of hedge funds can be turned into a social asset.
Why the horrific crash of 2008 and the Great Recession in its wake will show up repeatedly, and cause greater devastation, unless proper safeguards are set up in advance.
How savvy investors can take steps to nurture rather than ruin their nest eggs.
In short, this book gives the skinny on the biggest threats to the financial system as well as the real economy. To this end, a crucial task is to unmask the true cause of the malady without pulling any punches. In this light, the specters in the marketplace run the gamut from motive forces to hidden impacts.
Another feature of the primer is a cogent set of measures designed to uproot the ailment at the source rather than putter around the periphery. Unlike the band-aids drummed up in the past by harried lawmakers, the purpose of the remedies is to cure the disease rather than mask the symptoms.
The prime audience for the book consists of active investors and earnest policymakers. Other types of readers include concerned professionals in the financial community as well as thoughtful observers in all walks of life.
Given the carnage to the real economy wrought by ill-formed schemes in the financial arena, the message of the book is also relevant to every consumer, worker and participant in the global society.
Selection of Pointed Quotes
“In the current environment, a robust and prolific venture in the financial forum does not need or want any capital from outsiders.”
“As any financier on the ball will tell you, there is too much money chasing too few opportunities in the marketplace.”
“Based on in-depth studies, hedge funds as a group make their money not from investing but off investors. To make matters worse, the overall trove of capital shrivels up as the punters pursue a heedless campaign of dicey bets and ghastly flops.”
“In the final analysis, the swarm of hedge funds is a destroyer of wealth rather than the creator of riches imagined by the general public. The spree of havoc beats up the larger population of investors, creditors and other stakeholders.”
“The worldly investor has to reach beyond the illusion of performance and take in the reality of adversity.”
“Myriads of punters would increase their earnings by a hefty amount if they could just sit tight and stop fiddling with their assets. In that case, the ease of boosting profits without any effort to speak of happens to be a free lunch that begs to be snatched up.”
The book is carried by major bookstores as well as distributors. Depending on the vendor, the offering may take the form of a soft cover and/or digital book.
As an example, the paperback version is available at Amazon. Further information can be obtained by clicking on the image below.
Meanwhile the software version is proferred by leading vendors of electronic books. An example of the latter is the distributor known as Smashwords.
The ebook is offered in a variety of formats ranging from EPUB and MOBI to PDF and HTML.
About the Author
Steven Kim is a pathfinder in business innovation and investment strategy. He is the founder of MintKit Institute, a think tank on investing for growth in a global marketplace. The research program runs the gamut from market dynamics and financial forecasting to portfolio management and global strategy. The author has counseled and trained self-starters of diverse backgrounds, ranging from budding entrepreneurs and senior executives to international investors and public officials.
Note. The short link for this Web page is: a.mintkit.com/wildc