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Are hedge funds capable of manipulating the market? (part 02)

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@ramsesuchiha
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Greetings friends, we continue with our analysis of hedge funds, the practices they use and the strategies they use, remember that these people have so much money that they not only invest in the market, they practically decide where the market goes since their investments are millionaires.

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We already understand that investment funds resort to information traffic, excessive leverage and pyramid schemes, so most of them work under the 2 and 20 system, for example, if an investment fund achieves 100 million dollars, it already earns 2 million By management, that is divided with the partners and brokers who help to raise the capital, charging that money regardless of whether the fund generates a profit or not, as for the 20 of the 2 and 20 it refers to that they own 20% of the fund earnings although most include a good faith clause in the contract, stating that they will only charge 20% if the fund reaches 5 profitability points.

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Hedge funds can do whatever they want as long as they reveal part of the strategy they are going to use in advance, many times they tell their investors that they cannot reveal the strategy because it is their business secret, apart from hedge funds They are not under the magnifying glass of the law like mutual funds, they usually escape from the super intendancy because to enter they require high entry fees of up to 100,000 dollars in some cases, they handle the money to people with incomes greater than 200 thousand dollars annually. Thus they convince their investors that they cannot be transparent in order not to reveal any trade secrets.

I do not want to make this publication any longer so we will continue it in a third part, I wish you a happy weekend.