Friday, November 21, 2008

Study shows upwards of 80% of hedge fund employees never actually knew what the word “hedge” meant

Chicago, IL—A recent study conducted by the Gallop Group showed that of 5,000 hedge fund employees surveyed during 2006-2007, 83% of respondents were unable to correctly define the word “hedge.”

“It’s just like, you know, part of the title” said one trader confidently. “Another way of saying ‘badass’ fund or ‘rockstar’ fund.” “My Range Rover is hedge,” he insisted, as if to corroborate. Other responses were equally absurd, ranging from “a Greek word” to “some Jewish dude’s last name.”

When told that hedging involved systematically eliminating risk, most subjects just stared ahead blankly. Others checked the time. Several respondents were able to eventually grasp the concept, but they found it quite novel. “Ohhh…you mean that…” said the portfolio manager of a $500M fund, as if a light bulb had gone off inside his head. He then added: “Yeah, we didn’t do that shit at all.”

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