I have no problem at all in understanding the problem that people are enumerating with "secretive" hedge fund activity. The issues are clear and have been well canvassed. (The extent of the issue is unclear - where are the facts and figures to back up the allegations. I still have an open mind about that. Just what effect has this had on the share market? I also have an open mind about that.)
My main problem is that people are complaining that their investments are going down in value - but haven't done anything about it while it has been obvious for a long time that this was happening.
Whose fault is it that they are losing money? Their answer clearly is: Not Mine. Its someone else's. Its those dastardly hedge funds who are secretly shorting shares and getting them from my superannuation fund.
People have to be responsible for their investments. And if they are starting to lose - for whatever reason - they must take some action to protect themselves.
Faith Curtis one of the original Turtle Traders (and one of the most successful) deals with the psychology of this type of thing in his book "Way of the Turtle". He watched during the dot.com bust while friends of his who had great paper wealth continued to see their large fortunes become small fortunes and then turn to dust. Whose fault was it?
Sure - obviously there were important contextual issues - but given that context - the individual should have taken action. They didn't and and became the poorer for it.
Whom should they blame?
People in the recent mezzanine scandals are like someone who continually walks out into traffic without looking. Then when an inattentive, drunk, or reckless driver finally hits them, whine that there should have been a policeman (like ASIC) right there at that very spot to control the traffic.
You could say that my reasoning is a case of "Blame the Victim".
However, I still believe that people must take responsibility for their financial well-being. If they are financially well-educated they are in a position to act in their own self-interest. That means being invested in a bull-market and cutting investments in a bear market. Most large superannuation funds now provide people with options. Most people don't take up those options. They opt to do nothing. In which case, unfortunately, some of them finish up like Faith Curtis's friends.
I apologise for not answering your question of some time ago.
I have tried where-ever possible to give quite extended answers to most of the questions/responses I have received. In fact, I've now spent hours on this particular activity.
Frankly, I've been quite surprised at the extent of the reaction to my meagre contribution to the debate.
So, if I missed one of yours, it was not my intention to be rude - just an oversight.
I shall go back and see if I can find the question you put.
I wish you wealth and happiness.
Cheers Red
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