A Quote by David Ignatius
If you want better behavior from bankers, then make their financial incentives more like those in the hedge-fund world - where managers have 'skin in the game,' and their net worth is tied to their long-term performance.
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I think there are probably too many hedge fund managers in the world, as well as active fund managers. The hedge fund industry is very efficient. We see a lot of hedge funds open and a lot close. It's very binary. You either succeed or fail in the hedge fund world. If you succeed, the amount the managers make it beyond most people's wildest dreams of wealth.
Hedge fund managers charge so much more than mutual fund managers; alpha is even harder to come by. They end up selling a variety of things beyond mere outperformance.
The financial time frame always has been short-term. Projects with long-term paybacks are cut back, because CEOs and financial managers simply want to take their money and run. That is the financial mentality.
If competition for Kaggle's top talent becomes fierce enough among banks, insurance companies, hedge funds - we hope the world's best data scientists will earn more than $50 million per year, just like the world's best hedge fund managers.
I mean, the people who got us into these crises - whether we're talking about the bankers or the hedge fund managers, or we're talking about the IMF - it's become pretty clear that the price to be paid for their illegal financial shenanigans, the burden is being placed on working class people, on the poor, on the elderly, on young people. It's become clear that neoliberal policies aren't just interested in "solving" an economic crisis, these are policies designed to enrich corporations and bankers and the rich at the expense of everybody else.
In America, we have subsidized private jets, big banks and hedge fund managers. Wouldn't it make more sense to subsidize kids?
Hedge-fund managers make too much money relative to their social utility. I wish their rewards were a bit closer to those of, say, schoolteachers.
Mutual fund managers are trapped in this rather deadly vicious circle: the more successful they are, the more money flows into their mutual fund. Then, it is more difficult for them to beat the market averages or even to match their own past performance.
If bankers become overly conservative in response to past lending mistakes - or if examiners force such behavior - it will hurt bankers' own long-term interests and the economy in general.
A hedge fund manager whose clients demand monthly performance reports has different needs than any individual investors with a 20-year time horizon. The needs of that long-term investor differ markedly from someone who is retiring in three years.
Especially from my experience as a quant in a hedge fund - I naively went in there thinking that I would be making the market more efficient and then was like, oh my God, I'm part of this terrible system that is blowing up the world's economy, and I don't want to be a part of that.
I've nothing against Goldman Sachs. But Goldman Sachs isn't an investment bank. Goldman Sachs is a hedge fund. It's bigger than any hedge fund. It's more leveraged, to the power of three or five, than any hedge fund.
I believe that the behavior of too many of our corporations investment bankers and fund managers has jeopardized some of the trust that investors have had. It's not the economic engine that we need to focus on, but the need to make sure that our investors receive their fair share of the returns that that great economic system produces.
When a hedge-fund guy gets lucky because the market goes up, and he is going to make $200m, and you know $200 million, and he is going to pay almost no tax. I don't think that is a good thing for the country, and they are all supporting Jeb Bush and Hillary Clinton, all the hedge-fund guys. I don't want their support, because I'm totally self-funding my campaign.
I much more enjoy the company of freedom fighters and justice campaigners than I do the company of hedge fund managers.
The way to make better decisions is to make more of them. Then make sure you learn from each one, including those that don't seem to work out in the short term: they will provide valuable distinctions to make better evaluations and therefore decisions in the future. Realize that decision making, like any skill you focus on improving, gets better the more often you do it.
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