Successful Hedge Funds, Really?

​Article: click here

Excerpt:  "...most hedge funds have sharply underperformed their investors' expectations... Unlike most of their peers, Citadel and Millennium... have a backlog of investors who want to invest with them... [having] averaged 19.1% and 14% annually, respectively..."

Gordon:  Keeping in mind that you need about $250K for a hedge fund to return your phone call, the universe of hedge funds has significantly under performed over the past decade, with just a few funds producing consistent profits. 

Yet these are supposed to be "the smartest people in the room," armed with artificial intelligence and high speed neural networks

As for top funds Citadel and Millennium averaging 19.1% and 14% annually, that works out to 1.2% - 1.6% per month.

Not particularly impressive. And this is the best the world has to offer?

Add to this the fact that the true rate of purchasing power destruction is currently running close to 6%. This amount of "inflation" must first be overcome before there is any real, net ROI.

Now when we subtract 6% from the returns above, we get 13.1% and 8% respectively. Dividing these net returns by 12 gives us .7% and 1.1% net monthly.

Our happy little team of WSU traders can outperform these kinds of returns drunk and blindfolded (not recommended for optimum performance ;-).