Hedge funds?

John_G_Jones

maxie014 wrote: »

Can anyone explain to me the basics of how these work and what they do?
I read a bit in todays paper about them,from what i could gather they borrow shares off people,and bet against them losing value? Or is that too simplistic.

dividendhero wrote: »

Thing is that the likes of Reich Mogg control the levers of power and are able to profit from it

No, they really don’t, there’s nothing among can do that will influence the returns on his funds, and I’d say that there’s little chance that he’d even bother trying. It’s not his own money, his company gains fees, and all they need to do is to track their targets to retain customers.

There is no conspiracy of the rich to keep you down, there is no cabal controlling the stock markets.

Brown_Bear

John_G_Jones wrote: »

No,

There is no conspiracy of the rich to keep you down, there is no cabal controlling the stock markets.

Politicians have advance warning of things they are planning (eg declaring war, introducing new taxes etc etc).
Obviously they can predict the effect this event will have on the markets and gain accordingly.

Malthusian

Brown_Bear wrote: »

Politicians have advance warning of things they are planning (eg declaring war, introducing new taxes etc etc).
Obviously they can predict the effect this event will have on the markets and gain accordingly.

Politicians have plenty of ways they can make money without being moronic enough to commit insider trading fraud.

Tony Blair has a £100 million+ fortune. Why would you risk confiscation of your assets, a lengthy prison sentence and a destroyed reputation (no cushy jobs in international think tanks, lobbying groups or public speaking) to make a few bucks in insider trading, when a senior politician can generate a multi-multi-million pound fortune without any risk of comeback?

If you declare war on a country then arms companies are going to jump in value by a few percent. So to make a measly $1 million you're going to have to invest tens of millions in those companies before you declare war, then cash it all out after the war is priced in. You can try and conceal that all you want, but some dude's offshore trust investing tens of millions in Boeing just before war is declared and then cashing it all out immediately afterwards is going to get noticed no matter what you do.

And if you already had tens of millions to invest you wouldn't be running this risk anyway. So for your average Prime Minister or anyone senior enough to influence the UK Government to declare war, we're actually talking about investing a few hundred thousand at most to win a few thousand. And it's not like you can declare war every week.

It's picking up pennies in front of a steamroller.

Brown_Bear wrote: »

Even if you correctly guess the shares will fall in value - the govt may just decide to ban short selling at that time. So you guess right - but still lose.

If I've borrowed a bunch of shares and immediately sold them, no government is going to retrospectively demand I hand the sale proceeds back.

dividendhero

Brown_Bear wrote: »

Politicians have advance warning of things they are planning (eg declaring war, introducing new taxes etc etc).
Obviously they can predict the effect this event will have on the markets and gain accordingly.

I have no doubt whatsoever that Trumpski is acting at the behest of money men, he'll be either giving them advance information or more likely basing decisions and announcements at their behest

Malthusian

dividendhero wrote: »

I have no doubt whatsoever that Trumpski is acting at the behest of money men, he'll be either giving them advance information or more likely basing decisions and announcements at their behest

Why?

He's already a billionaire thanks to his inheritance from Daddy. What influence do the money men have over him?

dividendhero

Malthusian wrote: »

Why?

He's already a billionaire thanks to his inheritance from Daddy. What influence do the money men have over him?

Quite clear that he's a grasper, for example he's been dipping his fingers into the Trump Foundation - in fact it appears this "charity" exists largely for his benefit, or at least it did before it was shut down

Brown_Bear

Malthusian wrote: »

Politicians have plenty of ways they can make money without being moronic enough to commit insider trading fraud.

Tony Blair has a £100 million+ fortune. Why would you risk confiscation of your assets, a lengthy prison sentence and a destroyed reputation (no cushy jobs in international think tanks, lobbying groups or public speaking) to make a few bucks in insider trading, when a senior politician can generate a multi-multi-million pound fortune without any risk of comeback?

If you declare war on a country then arms companies are going to jump in value by a few percent. So to make a measly $1 million you're going to have to invest tens of millions in those companies before you declare war, then cash it all out after the war is priced in. You can try and conceal that all you want, but some dude's offshore trust investing tens of millions in Boeing just before war is declared and then cashing it all out immediately afterwards is going to get noticed no matter what you do.

And if you already had tens of millions to invest you wouldn't be running this risk anyway. So for your average Prime Minister or anyone senior enough to influence the UK Government to declare war, we're actually talking about investing a few hundred thousand at most to win a few thousand. And it's not like you can declare war every week.

It's picking up pennies in front of a steamroller.

.

I expect the lobby jobs etc and the insider information are all linked up. Favours to be repaid. Evidence to remain hidden etc. Not just about simple stock market bets. The cushy jobs also provide a legitimate cover for earnings.

If he hasn't got insider information - then why would anyone pay that much money to hear his opinion?

Brown_Bear

Malthusian wrote: »

Why?

He's already a billionaire thanks to his inheritance from Daddy. What influence do the money men have over him?

Could be anything.
Evidence of criminal activity etc.

We don't know how astute or intelligent Trump is - probably average.
Like you say, he inherited his money so no one knows.

Brown_Bear

Malthusian wrote: »

Politicians have plenty of ways they can make money without being moronic enough to commit insider trading fraud.

Tony Blair has a £100 million+ fortune. Why would you risk confiscation of your assets, a lengthy prison sentence and a destroyed reputation (no cushy jobs in international think tanks, lobbying groups or public speaking) to make a few bucks in insider trading, when a senior politician can generate a multi-multi-million pound fortune without any risk of comeback?

If you declare war on a country then arms companies are going to jump in value by a few percent. So to make a measly $1 million you're going to have to invest tens of millions in those companies before you declare war, then cash it all out after the war is priced in. You can try and conceal that all you want, but some dude's offshore trust investing tens of millions in Boeing just before war is declared and then cashing it all out immediately afterwards is going to get noticed no matter what you do.

And if you already had tens of millions to invest you wouldn't be running this risk anyway. So for your average Prime Minister or anyone senior enough to influence the UK Government to declare war, we're actually talking about investing a few hundred thousand at most to win a few thousand. And it's not like you can declare war every week.

It's picking up pennies in front of a steamroller.

.

The stock market bets could also be leveraged with debt. Low risk if you're making the future.

I think you also over-estimate the intelligence of many politicians. Some are quite bright - but others are just very thick skinned and good at avoiding direct answers.

Look at how many get caught out doing stupid things like 'dogging' in bushes or lying about speeding offenses etc.

Thatcher, for example, didn't even understand why the NI/RoI border didn't run in a straight line.

Malthusian

Brown_Bear wrote: »

The stock market bets could also be leveraged with debt.

So now not only do I have to invest tens of millions in arms companies without anyone noticing, and then sell it after the price jumps without anyone noticing, I also have to borrow tens of millions without anyone noticing. And also I have to pay those tens of millions back afterwards, which means it's still picking up pennies in front of a steamroller.

"Hi, I'm Tony Blair and I'd like to borrow tens of millions of pounds." "Well Mr Blair, you might be Prime Minister and we might be the kind of international criminal organisation that would be willing to lend tens of millions of pounds to a politician in secret, but you have no security and we still have to look to our interests. How are you going to pay us back?" "Oh that'll be easy, I'm going to invest it all in Boeing and then declare war, so it's 100% secure." "What a marvellous idea." "So can I have the money?" "Sorry, no, I'm afraid all our tens of millions of pounds are about to be tied up in Boeing shares."

Low risk if you're making the future.

Stratrospherically high risk for minimal reward.

I think you also over-estimate the intelligence of many politicians.

You can't both be thick enough to attempt this and clever enough to succeed.

An insider trading scheme involving an 8- or 9-figure investment in the stockmarket borrowed from unspecified criminal sources is not on the same level as a speeding offence.