The Hedge Fund Mirage: The Illusion of Big Money and Why It’s Too Good to Be True

February 6, 2012
Hosted by Jordan Goodman

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Guest Information

 

Episode Description

Our guest today is Simon Lack, Founder of SL Advisors, LLC. We will discuss his latest book Mirage: The Illusion of Big Money and Why It’s Too Good to Be True. “The problem is that the hedge fund industry is overcapitalized,” Lack says. “Hedge funds have made tremendous amounts of money, but it hasn’t made its way back to the clients. In fact, if all of the money that’s ever been invested in hedge funds over the history of the industry had been invested in treasury bills instead, the results would have been twice as good.” Lack exposes the truth about hedge funds: as a result of high fees, complex legal structures, poor disclosure, and return chasing, investors have ended up with meager results. Lacks advises hedge fund investors to invest the way they did in the 1990s: look for smaller funds that are not well followed and utilize obscure and off-the-beaten-track strategies. The vast majority of hedge funds did better when they were smaller, and so did the industry as a whole.

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The Money Answers Show

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Jordan Goodman

Jordan Goodman

Jordan Goodman has a mission: to help everyone do better with money. Since graduating the Columbia University School of Journalism in 1977, he has spent the past 32 years combing the country to find the very best ways to help consumers make and save money and then sharing these gems with the public. As a staff writer/reporter at MONEY Magazine for 18 years, a weekly commentator on NBC News at Sunrise and Public Radio’s Marketplace Morning Report, and through his 12, soon to be 13 highly respected books, and his website www.moneyanswers.com, he has provided useful, common-sense information to the public. Some of his better-known books include Fast Profits in Hard Times, Everyone’s Money Book, the Dictionary of Finance and Investment Terms and Master Your Money Type. Jordan is a rare combination: someone who possesses not only encyclopedic knowledge about every area of personal finance but also a passion for helping his listeners not only to get educated but to take action to help their dreams become realities.

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