Thesis on “the factors of success and failure of hedge funds”
hello all, currently I am doing my thesis on “the factors of success and failure of hedge funds” and I wanted to know if any of you has an answer or an opinion on this subject. For those who are willing to take 15 minutes of their time I have a questionnaire to submit. In return I will send the results of my study.
(1) too much leverage and not understanding what happens to a levered posn in a black swan event which occurs much more frequently than most people realize
(2) arrogance and hubris and thinking you are infallible
(3) having huge exposure to highly illiquid positions with wide bid ask spreads so in a crisis when one of these positions actually trades due to a liquidation elsewhere at a low price this causes the PM to have to remark his/her book with huge paper losses causing a forced liquidation
(4) accounting fraud/insider trading
These are foundation building blocks. Adding the oversights in Paulson’s recent due diligence of Chinese timber would also provide very useful information. There is an important twist to this 540M loss, the complicit role of Governments in not auditing company information. As Fellows Co., Paulson and others have learned dealing in China without Hong Kong coverage requires moving the risk bar much higher.
I will try to help. Meanwhile, I have been invited to serve as Session Chairman for
Private Equity and Venture Capital International Business Summit in Asia 2011 in India
and I have served as Co-Chairman for Corporate Governance Summit in Asia 2010 in
Hong Kong where I was born in 1958 and is a Senior Fellow for Hong Kong Institute
of Directors (Corporate Governance Foundation Ambassador) and have just been
invited Guest, along with my daughter, Cassandra, for Asian Financial Forum 2011 in

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