business model, page-2

finch2 hi

your quote of "don't invest in it unless you understand what they do" is a good emotion to commence from. i don't exactly know what a hedge fund does, i'm sure their website will tell you or wikipedia (as to what hedge funds generically do). the word 'hedge' says to me that they are like bookies, companies that sell commodities or have foreign exchange dealings buy hedging contracts from the hedge fund.

one thing i have heard about hedge funds is there is likely to be big consolidation of their ranks globally, you should have a read of what is out on the web about this. i daresay being one or few (perhaps only) local hedge funds may not be enough to save them from an industry-wide downsizing and merger activity. the driver for this consolidation apparently is a big dropoff in profitability (again, as i don't know what the hell a hedge fund actually does i do not know why there could be such a dropoff, just something i read somewhere along the way).