Forum Archive Index - May 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi ryanrite,


>
>
> From:"Rockbottom" <rockbottom@ihug.co.nz> wrote:
> 
>> There is an interesting article in today's 'Independent' 
>>relating to hedge funds short-selling. I quote in part:-
>> 
>>
>> " Betting that Telecom's share price would follow 
>>global trends down the  gurgler, United States-based hedge
>> funds short-sold 65 million Telecom shares.
>> 
>> Too bad, how sad.
>>
>
> 
>That would be why they have been knocking telcom
> 
> 


Yes, but do you know what the really sad thing is?  Those hedge fund 
managers will have got their money from ordinary Mum and Dad 
investors under the guise of a capital guaranteed bond, probably from 
a reputable bank.  

The bank will have locked up just enough capital to give their 
punters, err customers, a guarantee of getting their capital 
back, made up from fixed interest payments over the next 10 years or 
so.  

The rest will have been flicked on to the hedge fgund managers 
to play with.  The customers will get back their capital after 10 
years or so and possibly nothing else.  The hedge fund managers 
have blown the rest torpedeoing any hinted at high bond return..  

Ten years is an awful lot of investment opportunity cost foregone.

SNOOPY


 
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