MarketWatch – “Remember the late 1990s, when all those twenty-five-year-olds were starting dot-coms and getting rich?” asks Dave Barry in his newest book, “Money Secrets.” That’s like “the boom going on with hedge funds now. Everybody is starting them. This is the hot thing to do in the investment world.”
Yes, and it’s not funny. We all know hedge funds have doubled since 2000, to $1.1 trillion. Hedge funds are popular because the market’s a loser. We lost $8 trillion during the 2000-2002 bear market and we’re still below the 2000 peak.
That’s bad. But when a humorist like Barry offers investors advice on starting hedge fund you’d better worry about the future: “There’s a McDonald’s employee somewhere saying: ‘I’m tired of asking four-year-olds, which toy they want with their Happy Meal! I’m going to start a hedge fund’ … You don’t want to be the last person in your car pool to start a hedge fund.”
Yikes, it’s really that bad? Yes. But Barry’s strategy needs tweaking: Hedge funds aren’t for beginners. You got to pay your dues, earn your stripes, get a track record. Most hedge managers get experience as mutual fund managers first. So here’s how to set up your own mutual fund; how you can get the credentials to become a hedge fund manager. This strategy is inspired by humorists like Barry, Jay Leno, Billy Crystal and Jon Stewart — fun people who get us to laugh at the dangerous truths hidden in our financial world. So we invented a checklist of seven rules that you’d receive from an imaginary “Fund Managers Benevolent Protective Union” (FMBPU). Secret steps you need to start a fund of your very own. (Actually, this is exactly how funds do in fact work today).
