Summary of Ezra Zask's All about Hedge Funds

By IRB Media

Please note: This is a companion version & not the original book.

Book Preview: #1 In 2006, we saw the popping of the real estate bubble, the collapse of the private debt bubble, the fall of the stock market bubble, the decline of consumer spending, and the widespread pain that all of this would soon cause to the broader multibubble economy.

#2 Economic bubbles, by their very nature, eventually burst. After they burst, they never are able to reinflate completely and regain their former glory.

#3 The multibubble economy is unlike any other we have seen, and unlike a typical down market cycle, it can’t be bounced back from.

#4 The economy will not get better soon. You must prepare and protect yourself now, while you still can, and find opportunities to profit during the dramatically changing times ahead.

• Language: English
• Publisher: IRB Media
• Release date: Feb 15, 2022
• ISBN: 9781669347583

IRB Media

With IRB books, you can get the key takeaways and analysis of a book in 15 minutes. We read every chapter, identify the key takeaways and analyze them for your convenience.

Book preview

Insights on Ezra Zask's All about Hedge Funds

Contents

Insights from Chapter 1

Insights from Chapter 2

Insights from Chapter 3

Insights from Chapter 4

Insights from Chapter 5

Insights from Chapter 6

Insights from Chapter 7

Insights from Chapter 1

#1

There is no universally accepted definition of a hedge fund, nor is there a legal definition. However, most hedge funds share the following characteristics: they are pooled assets from multiple investors, they are offered to a restricted group of investors that meet regulatory criteria as qualified investors, and they are largely exempt from the Securities and Exchange Commission regulation governing investment companies.

#2

Hedge funds are a type of investment fund that pool investors’ money and invest it in financial instruments in an effort to make a positive return. Unlike mutual funds, which are required to register with the SEC, hedge funds are not.

#3

Mutual funds are open to all investors and have no minimum investment, which makes them much more accessible than hedge funds. They also have a wider investor base of both individuals and institutions.

#4

A hedge fund is a passive investment pool into which the partners place their money. It is established as a limited partnership or corporation, which issues units or shares to limited partners. A hedge fund has no employees or physical presence.

#5

Mutual funds are sponsored by an organization such as Fidelity or Vanguard. Shares in mutual funds are typically offered to the general public on the basis of a prospectus by brokers, investment advisers, financial planners, banks, or insurance companies.

#6

The Securities Act of 1933 and the Investment Adviser Act of 1940 govern the investment management industry. These laws limit the ability of hedge funds to market to small investors.

#7

Mutual funds must redeem investor requests within seven days, but in practice, this is done within a day or two. Hedge funds, on the other hand, may only be redeemed on a periodic basis.

#8

Hedge funds are a type of investment fund that are closely tied to the derivatives market. They are primarily used for speculative purposes. They are a frequent feature of hedge funds involved in the fixed-income markets, which are heavy users of both futures and swaps.

#9

In the hedge fund industry, all managers are active in the sense that their objective is to deliver a positive return to investors under all economic and market conditions. They are not constrained to beat the SP 500, which has had declines of 40 percent or more.

#10

There are three types of investment: speculation, trading, and investment. Trading is simply the sale or purchase of any security. Investment is taking a calculated risk where the outcome can be rationally analyzed. Investment and gambling are often confused, but they are completely different.

#11

The four main laws governing the investment industry are the Securities Act of 1933, the Securities and Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940.

#12

The Investment Company Act of 1940 requires that an investment company must disclose its financial condition and investment policies to investors on a regular basis. However, hedge funds qualify for exclusion from the definition of investment company under the act’s 3(c)(1) and 3(c)(7) provisions.