If they invest it they put it in hedge funds rather than in companies that actually produce something.
The competition within and between them will compete away those above normal profits rather than it being the class of hedge funds themselves which no longer offer the desired super-profits.
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For some, it may have to do with getting exposure to gold as an inflation hedge using a gold ETF rather than holding physical gold.
Rather than compete with his peers for trendy new art, hedge-fund manager Michael Steinhardt and his wife, Judy, are building several collections around comparatively obscure niches like ancient Peruvian feather ponchos, Cycladic stone figures and 15th-century rugs.
This means that rather than risking your money on one particular technology, you can hedge your bets on the performance of the entire index, making you less vulnerable to sudden shifts in the market.
Such banks might be looking to sell assets rather than refinance them, which spells opportunities for private equity players and hedge funds hunting for distressed assets.
To hedge my bets I got a Masters in Applied Mathematics rather than a Masters in Taxation.
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It will also create a natural currency hedge, with more of its costs incurred in dollars rather than euros. (Aircraft, like oil, are largely priced in dollars.) Given the uncertainty surrounding the euro, such hedging is doubly wise.
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If you are going to hedge you are better off betting against the weakest part of the market rather than betting against the whole market.
The push to standardise over-the-counter derivatives contracts, for instance, could, if taken too far, leave investors trying to hedge specific risks with blunt instruments, making the system less safe, rather than more.
Attempts to generalise are complicated further by the fact that hedge funds are actually a collection of different investment strategies (see article) rather than a coherent asset class.
But even some fans of gold say the yellow metal serves as a potential hedge, or protection, for a portfolio against inflation and troubles in the world, rather than an outright bet.
Traders would love to turn the risks faced by suppliers, transmitters and retailers of electricity into financial products, so that they could hedge the hazards of weather, fuel supply and wind, and settle up in cash rather than in actual electricity.
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Sarkozy, a man constitutionally uncomfortable unless the spotlight is shining on him, has even threatened to walk out of the G-20 proceedings rather than sign up to anything he doesn't consider tough enough on reining back tax havens, policing hedge funds and restricting the bonus culture.
Along with activist hedge funds, many institutional investors have idolised short-term profits and share-price increases rather than engaging recalcitrant managers in discussions about corporate governance or executive pay.
And instead of being able to break the company apart, the hedge fund caused government officials to have to put quite a bit of resources into the overall company rather than just dealing with some of the root causes of the downfall.
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