Question: do alternative investments belong in your portfolio? Read this op-ed with care because it’s exactly how Your Survival Guy feels about alternative investments. All’s fine and good until you need your money back and you realize they’re not exactly liquid or what you were sold. Hunter Lewis writes in The Wall Street Journal: Venture and buyout funds are hugely popular—and also imperiled by ethical and other problems. I have a long history with such funds. As an adviser to Yale in the 1970s, I recommended that it make its first venture-capital investment. I gave similar advice to … [Read more...]
You Invest, They Win
The founder of the largest hedge fund in the universe, Ray Dalio, tweeted this from Burning Man:
Just back from Burning Man. Reminds me of Woodstock with better art (installations) and less good music. What a great vibe and what amazing creativity!
Photo is with my pal and coworker Jeff Taylor at his great music camp Root Society. If you go next year, 1-5am is best.
Are these the guys you want running your money? You invest, they win. But hey, it’s not about the money. It’s about saving the planet man.
Because if it’s about the money (Dalio has a personal net worth of $19 billion) then this hedge fund lost to a boring Vanguard fund that uses a conventional mix of 60% stocks and 40% bonds.
The article doesn’t come out and name the fund, but perhaps you, as a long-time reader of our websites, know the name: Vanguard Wellington.
You might also know what Vanguard founder, the late, great, Jack Bogle, meant when he said: “The grim irony of investing is that we investors as a group not only don’t get what we pay for, we get precisely what we don’t pay for.”
The captains of the investing universe are living their “best life” at whose expense?
Yours, of course. You invest, they win. Read more below.
You Invest, They Win: The Punishing Economics of Hedge Funds
Recently, The Wall Street Journal's Juliet Chung reported the story of Gabe Plotkin and Melvin Capital Management's massive losses incurred in 2021. Here's one paragraph that drew Your Survival Guy's attention: Melvin charges investors an annual management fee of 2%, and takes a cut of up to 30% of all profits, among the highest incentive fees in the industry. That can be extremely lucrative in profitable years, but the economics tend to be punishing on the way down. Like most hedge funds, Melvin must first make back all of its losses before it can resume taking incentive fees from investors … [Read more...]
Why Mutual Funds and ETFs No Longer Work
UPDATE 1.25.2022: Things are getting choppy in the markets. Now more than ever is the time to focus on building a portfolio of income earning stocks and bonds that will help you weather the storm. If you need help with that, I would love to talk with you. Originally posted September 30, 2021. Look, I know a lot of you own Mutual Funds and ETFs, especially if you’re wrapped up with an advisor where you invest, he wins. Today, there’re maybe a handful of funds I’d put my own money into, and the same probably applies to yours. The problem is, once you set sail, it’s hard to change course. … [Read more...]
DIGITAL GOLD? Bitcoin-Stock Correlation Heightens, Frightening Investors
Your Survival Guy is no fan of cryptos especially with actors like Matt Damon cashing in where you invest, but they win. Now the price of bitcoin has dropped below $40,000 as it becomes increasingly correlated to the performance of tech stocks. The Wall Street Journal's Caitlin Ostroff reports: It is becoming a more common occurrence: When stocks fall, so does bitcoin. Bitcoin, the world’s largest cryptocurrency by market value, fell below $38,000 Friday to its lowest dollar value since August 2021, according to CoinDesk. It later regained some ground and was trading at $38,705.70, down … [Read more...]
COUNTING ON THE COMMIES? Evergrande Bondholders Hope China Will Work with Them
Chinese investors are still being paid for their investments in Evergrande, thanks to the Chinese government. But can foreign bondholders count on the communist government to save them as well? Never underestimate the vengeance a government will take against the investor class where you invest and they win, or at least don’t lose. Foreign bondholders have claims to a number of Evergrande’s offshore assets in the event that the company cannot repay them, including the company’s property management arm and an electric vehicle startup that Evergrande founded in 2018. Some analysts have said … [Read more...]
SPAC Risks Unmasked in Shakeup
Your Survival Guy doesn’t invest in SPACs, which carve out a fortune for the founders, where you invest and they win. SPACs became very popular during the COVID-19 pandemic, but seem to be losing favor fast. Amrith Ramkumar reports in The Wall Street Journal: SPACs, or special-purpose acquisition companies, burst onto the scene in 2020 as the hip way to take Silicon Valley’s hottest startups public. Unlike traditional initial public offerings, SPACs were seen as modern and accessible, allowing any investor to put money into the companies of the future at the same time as professional money … [Read more...]
The Masters of the Universe Align Themselves with CHINA Using YOUR Money?
BlackRock now manages over $10 trillion in assets. Its funds are among the three largest shareholders in more than 80% of the companies in the S&P 500. In speaking about CEO Larry Fink, David Rubenstein, the co-founder of the private-equity firm Carlyle Group Inc. said, “Treasury Secretaries and finance ministers come and go. They work for someone else who can fire them tomorrow and have to build what others want them to. When you are the CEO of the biggest asset manager, you don’t have to do that.” So when you become THAT BIG, doesn’t life get boring? What’s next? Another jet, or a … [Read more...]
You Invest, They Win: ESG Is a Money Grab
When interest rates are nailed to the floor, business must go on. Hence the creation of ESG funds, and a whole new market is created to generate more fees for fund companies. WSJ reports: Few private citizens wield more power in America today than Larry Fink, the chief executive of BlackRock Inc. In pushing companies to embrace climate-friendly policies, that has made him a lightning rod. The firm he runs manages some $10 trillion for pension funds, endowments, governments, companies and individuals, equal to more than 10% of the world’s gross domestic product in 2020. Its funds are among … [Read more...]
Elites Sold China the Future for a Handful of Climate Credits
Your Survival Guy uses a combination of firewood and propane to heat his New Hampshire log cabin. Prices for both are way up, as I told you about firewood here, and as you can see below, propane which has jumped compared to last winter. Energy prices are being pushed up by incessant regulation and restrictions on the energy industry by European and American politicians. Their actions are not lowering overall worldwide emissions, but instead just relocating them, and the jobs and GDP that go with them, to China. Holman W. Jenkins writes in The Wall Street Journal: Hard to believe, but … [Read more...]
WARNING: Invest at Your Own Risk—How to Lose $2 Billion in 10-Years
“How to Lose $2 Billion in 10 Years: Unpaid Bills Pile Up for Former Hedge-Fund Star: Philip Falcone is in a decadelong battle with the many people he owes money. They include ex-employees, a law firm and limo companies,” explains Rachel Louise Ensign in The Wall Street Journal. You see up close how quickly things unravel and shockingly, this guy was trusted to manage investors’ money. Ensign writes: Mr. Falcone became a hedge-fund billionaire betting on the subprime mortgage crisis. Then investors pulled money from his firm, Harbinger Capital Partners LLC, after a stretch of spotty … [Read more...]
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