Isildur1 keeps on crushing

OPM=Other People's Money, OPM=Other People's Money

If a bank pays you 1% interest and lends it out on a credit card for 10% the bank makes money even when it is closed.

When an artist makes a new cd, the song is recorded as a finished product once, but other people keep selling the c.d for them and they are getting royalties. That is how you get rich.

Teacher, cop, poker player,etc only make money when they actually work. No one is working for them and no one's money is working for them which is why they only get so much money.

You want to see rich poker players, try Johnny Bax or Green Plastic. They both make videos ONCE and then get payed over and over again by others for access to that material. If Bax is sleeping and someone is watching his videos, Bax makes money. When durrr is sleeping he doesn't make money.

td:

first of all, I don't work at a hedge fund nor am i rich or a wall street guy, nor do i endorse the insane amounts of money that these hedge fund guys make. however, i know a lot about the industry and the economics of working at a hedge fund because i've written extensive papers about some while I was in school.

here is a basic thing about the hedge fund industry that you need to understand. hedge fund managers make between 1.5% to 2% of the fund's size as management fee PER YEAR. This is to cover salaries and overhead and is extremely lucrative. next, they make an ANNUAL PROFIT through something called CARRIED INTEREST. this usually comes out to between 10% and 20% (negotiated with the investors and is dependent upon the quality of the hedge fund and its people) of the total profits that the firm makes per annum. the carried interest is paid out annually and distributed amongst the hedge fund analysts in the firm. you can think of these as similar to the Goldman Sachs bonuses that you've been reading about. the higher your title, the bigger your percentage. some hedge funds are larger than $50 billion.

So here is some quick math. A $1 billion hedge fund can work with as little as 10 employees. For simplicities sake, let's assume that all 10 employees are entitled to an equal percentage of the management fee and carried interest.

annual management fee - 2% x $1 billion = $20 million

annual carried interest assuming the hedge fund makes a 10% return on the $1 billion of invested capital -

Annual profit = 10% x $1 billion = $100 million
Carried interest = $100 million x 20% = $20 million

so you have $20 million of management fee and $20 million of carried interest. assuming that half of the management fee is used to cover overhead you have $10 million to go around as salaries. $30 million total in the pot divided by 10 employees = $3 million per employee.

So you see, it's not very hard and most hedge funds are not ponzi schemes or insider trading operations, although I do agree that there are definitely some shady boiler room type operations out there. And no, you're completely wrong about the Galleon case. Raj only made $20 million or so through insider trading. But through his legit trades he brought in hundreds of millions per year in take home pay, as did his partners who were not charged with insider trading.

if you don't believe me google the following firms and read up on them:

- SAC Capital
- Renaissance Funds
- DE Shaw
- Tiger Management
- Soros Fund Management
- Citadel

$5 million a year in take home pay is nothing to these guys. Put it this way. If you're managing a $30 billion fund and buy nothing but blue chip stocks for your portfolio that return 3% per annum, then you're making $900 million in profits per year. disgusting, eh? i think something needs to be done in our country about all of the excesses of capitalism. it's sickening.

if you want to read a book that is well written, but also an informative piece on the excesses of wall st then read "Too Big to Fail" by Andrew Ross Sorkin. It's much better than the garbage in Rolling Stone, which is frankly nothing but conspiracy theory crap.

Durrrr Donk,

Are you talking about the same hedge fund analysts who were recently arrested for INSIDER trading? If you are making $5 million a year doing that kind of job, it is obvious you are getting information that nobody else is privey to, the FBI caught on and wire tapped those people and now those folks are sitting in jail waiting for their day in court.

Nobody can hit 71 Home Runs without cheating/using steroids

Nobody can make $5million a year in stocks without being involved in a insider trading scheme

Nobody can make millions in poker online without cheating.

Why do you think some pros stopped playing high stakes? They are broke and smart, they rather make money being the house.

its the ghost of stu ungar

It's because Isildur1 is in fact Patrick Swayze's ghost. He plays most of his sessions actually standing behind his opponents, where he can see their hole cards - without them knowing. Genius really.