Todor Mitev
Temujin Fund
140 Broadway, 38th Floor
New York, NY 10005
212-299-5446
tdm@thales.com, or
tdm@temujin.com

He may know ECD fan personally. He might even see him daily.
—
(cached version from Google)
http://74.125.47.132/search?q=cache:XDRol2XxsvcJ:www.edn.com/blog/980000298/post/1620047762.html+ecd.fan+todor+mitev&cd=2&hl=en&ct=clnk&gl=us&client=firefox-a

Thank you for the links about the history of hedge funds!

A little girl tried selling me lottery tickets that were on sale. Last year, they were $1 each, but now they were 5 for a dollar. I smiled, because your odds are exactly the same. If everyone has five times as many tickets, your $1 purchase buys you exactly the same amount of chances.

That’s where we are today. A dollar represents your share of the economy. which is currently $13.13 trillion. If they doubled the number of dollars outstanding, then shared them out pro rata, your share of the economy would be EXACTLY the same even though each dollar was worth half as much. You’d have twice as many of them.

We could be saved from 1929 by understanding this.

Let’s say, for instance, that they increased the supply of dollars by 20%, which would make every dollar 1/1.2 = 83% as much as it used to be. It wouldn’t matter as long as those new dollars were distributed pro rata. Every one would be exactly as wealthy as they were before this happened.

Unemployment causes people to be less wealthy. If only half the people were working, then the GDP would only be $6.565 trillion and all of our dollars would be worth half as much.

So, here’s what a lot of people have trouble wrapping their head around. If you print money and it keeps the economy from shrinking by keeping everyone employed and in their home and the money is distributed pro rata, then everyone has the same percentage of the national wealth and the national wealth doesn’t shrink and we all got something for free.

I’m a bit left leaning and would consider myself a Democrat, but here’s where tax cuts make sense. Obama could offer massive tax cuts (no capital gains, huge cuts in the brackets, etc.) which would allow people to keep their homes and employ other people and as long as he then monetized that debt, rather than borrow it from the privately owned Federal Reserve and other bankster families, it would cost us nothing and make us all wealthier in 2010.

Let the car companies go bankrupt. Let Wallstreet go bankrupt. Write checks to mainstreet and save the economy.

…things that make you go, huh….

I know for a fact that this went to the commissioners at the SEC in 2006.

“Little Known Stock Fraud Could Weaken U.S. Economy”

http://www.projectcensored.org/top-stories/articles/18-little-known-stock-fraud-could-weaken-us-economy/

“As short-selling is a sale of stocks not owned, but loaned, it is an example of buying on margin-a category of practices whose abuses stand out clearly in many people’s minds as a significant factor in the Stock Market Crash of 1929 which ushered in the Great Depression”

I’m glad they are going after Stevie Cohen, but they should go after Knight Deephaven and UBS, the other two besides Madoff the begged for the grandfather clause

http://tinyurl.com/8udj6k

The second-biggest investor in hedge funds will demand that some of the largest names in the industry, including Cerberus, Citadel, DE Shaw and SAC Capital, appoint independent administrators or face it pulling its money.

Switzerland’s Union Bancaire Privée, in an internal memo, instructed managers of the $56bn it has allocated to hedge funds to put in immediate redemptions for any fund that does not have independent administrators and custodians, following its heavy losses from the alleged fraud by Bernard Madoff.

…
Webmaster’s Commentary:

This may force some new Ponzis into the light!

(from http://www.whatreallyhappened.com)

and this:

http://www.law.harvard.edu/programs/olin_center/corporate_governance/papers/Brudney2008_Horsfield-Bradbury.pdf

http://www.investopedia.com/articles/mutualfund/05/HedgeFundHist.asp

A Brief History Of The Hedge Fund
by Jim McWhinney (Contact Author | Biography)
Story Tools

Famed hedge fund manager Mario Gabelli wrote in 2002: “Today, if asked to define a hedge fund, I suspect most folks would characterize it as a highly speculative vehicle for unwitting fat cats and careless financial institutions to lose their shirts.” This characterization stems from the hedge fund’s recent history, which began with the headline-making collapse of Long Term Capital Management in 1998 and continued with the sensational meltdown of the Tiger Funds in March of 2000, followed by the reorganization of the once high-flying Quantum Fund in April of 2000. These high-profile incidents overshadow more than half a century of hedge fund history that began when Alfred Winslow Jones launched the first hedge fund in 1949.

The Father of the Hedge Fund
Alfred Jones was born in Melbourne, Australia in 1901 to American parents. He moved to the United States as a young child, graduated from Harvard in 1923 and became a U.S. diplomat in the early 1930s, working in Berlin, Germany. He earned a PhD in sociology from Columbia University and joined the editorial staff at Fortune magazine in the early 1940s.

It was while writing an article about current investment trends for Fortune in 1948 that Jones was inspired to try his hand at managing money. He raised $100,000 (including $40,000 out of his own pocket) and set forth to try to minimize the risk in holding long-term stock positions by short selling other stocks. This investing innovation is now referred to as the classic long/short equities model. Jones also employed leverage in an effort to enhance returns.

In 1952, Jones altered the structure of his investment vehicle, converting it from a general partnership to a limited partnership and adding a 20% incentive fee as compensation for the managing partner. As the first money manager to combine short selling, the use of leverage, shared risk through a partnership with other investors and a compensation system based on investment performance, Jones earned his place in investing history as the father of the hedge fund.

The Rise of the Industry
When a 1966 article in Fortune magazine highlighted an obscure investment that outperformed every mutual fund on the market by double-digit figures over the past year and by high double-digits over the last five years, the hedge fund industry was born. By 1968, there were some 140 hedge funds in operation.

In an effort to maximize returns, many funds turned away from Jones’ strategy, which focused on stock picking coupled with hedging, and chose instead to engage in riskier strategies based on long-term leverage. These tactics led to heavy losses in 1969-70, followed by a number of hedge fund closures during the bear market of 1973-74.

The industry was relatively quiet for more than two decades, until a 1986 article in Institutional Investor touted the double-digit performance of Julian Robertson’s Tiger Fund. With a high-flying hedge fund once again capturing the public’s attention with its stellar performance, investors flocked to an industry that now offered thousands of funds and an ever-increasing array of exotic strategies, including currency trading and derivatives such as futures and options.

High-profile money managers deserted the traditional mutual fund industry in droves in the early 1990s, seeking fame and fortune as hedge fund managers. Unfortunately, history repeated itself in the late 1990s and into the early 2000s as a number of high-profile hedge funds, including Robertson’s, failed in spectacular fashion.

The Hedge Fund Today
With media attention still focused on the recent failure of some hedge funds, there has been an increasing move towards their regulation. In 2004, the Securities and Exchange Commission adopted changes that require hedge fund managers and sponsors to register as investment advisors under the Investment Advisor’s Act of 1940. This greatly increases the number of requirements placed on hedge funds, including keeping up-to-date performance records, hiring a compliance officer and creating a code of ethics. All hedge funds that fall under the new SEC rules must be registered by Feb 1, 2006. This is seen as an important move in protecting investors. (For more information, see the SEC website.)

Despite troubles in the last few years, the hedge fund industry continues to thrive. The development of the “fund of funds”, which is simplistically defined as a mutual fund that invests in multiple hedge funds, provided greater diversification for investors’ portfolios and reduced the minimum investment requirement to as low as $25,000. The introduction of the fund of funds not only took some of the risk out of hedge fund investing, but also made the product more accessible to the average investor.

Conclusion
Hedge funds have evolved significantly since 1949. Modern hedge funds offer a variety of strategies, including many that do not involve traditional hedging techniques. The industry has also rapidly grown, with recent estimations pegging its size at $1 trillion – quite the leap from the $100,000 used to start the first fund half a century ago.

With a fascinating past that has twice seen media-fostered publicity push the industry to stratospheric highs and vilify it when it fell from grace, it seems highly probable that the cycle will repeat itself at some point in the future. While it is easy to get sucked in by the hype or repelled by the negative press, it’s always advisable to take a step back and conduct some due diligence, just as you would prior to making any investment. Take the time to learn more about hedge funds – for example, you may want to start by reading our Introduction to Hedge Funds – Part 1 and Part 2.

Before you put your hard-earned money at risk, you have to make sure you are choosing the right investment for the right reason. Don’t blindly chase performance, and remember that past performance is not an indicator of future performance.

I am beginning my generic letter to Congress (which I will post here) and would like understand the history of how hedge funds were made UNREGULATED by Congress.

Like Gary Webb, a few years ago, who shot himself in the head, twice. Suicide, ya, sure.

He was rumored to be investigating the role of Wallstreet and drugs. He’s the one who revealed the CIA’s role in bringing drugs in for Iran Contra.