#12 Hating Hedge Funds

We agree that there's not a lot to love about hedge funds. The guys with the slicked‑back hair, big watches, and Mercedes‑Benzes -- we don't share much in common with them, and we could do without them clogging up the line at the Ocean Cafe salad bar when they discuss the merits of buying box seats to the Dodgers. (Well, BG drives a Benz, but that's a story for another post, on another blog that pokes fun at him, not GGL.) But GGL is more horrified by them than most, mostly because, well, they make MONEY. And lots of it! It's enough to make him litigious. Another recreated and slightly abbreviated conversation that actually happened:

GGL (calling from somewhere outside the office): AS, do you know how hedge funds work?

AS: Um, sort of. They take people's money, they invest in various things, and they charge money for managing your money and sometimes they take a percentage of the profits.

GGL: Interesting . . . . I'm thinking about a lawsuit. Anyway, more later --

(The next day)

GGL: So I've been thinking: it seems pretty ridiculous that a hedge fund could take your money, make a ton of money off of it, and not give you a fair share of the profits it's making by using YOUR money.

AS: Well, you know, that is how most financial institutions work -- they take your money and they make money off of it.

GGL: Well, but this is different!