Comments on: Stigma of redemption gates fading fast http://allaboutalpha.com/blog/2008/11/03/stigma-of-redemption-gates-fading-fast/ Hedge funds, portable alpha, 130/30 and alpha-centric investing Wed, 10 Mar 2010 21:44:24 +0000 http://wordpress.org/?v=abc hourly 1 By: Mentor Capital, Inc. (MNTR) http://allaboutalpha.com/blog/2008/11/03/stigma-of-redemption-gates-fading-fast/comment-page-1/#comment-144752 Mentor Capital, Inc. (MNTR) Wed, 03 Dec 2008 22:17:06 +0000 http://allaboutalpha.com/blog/?p=3645#comment-144752 Mentor Capital, Inc. has a $145 Million program to assist hedge fund principals in managing their gated redemptions without having to liquidate positions. Mentor Capital, Inc. has a $145 Million program to assist hedge fund principals in managing their gated redemptions without having to liquidate positions.

]]> By: advisor http://allaboutalpha.com/blog/2008/11/03/stigma-of-redemption-gates-fading-fast/comment-page-1/#comment-141965 advisor Thu, 13 Nov 2008 17:43:25 +0000 http://allaboutalpha.com/blog/?p=3645#comment-141965 Perhaps liquidity expectation is the problem here. The equity, commodity and bond markets are so fixated on being able to sell and buy at a moments notice that we forget what investing was supposed to be about. Real estate and true business ownership was supposed to be a long term hold, not a week-to-week or month-to-month speculation. I used to joke that the stock market should be open for one day per month. Then only the real investors would participate and the stock-jockey's could ply their trade in Vegas instead of impacting the rest of us so badly. Oh, and leveraging might have something to do with it... Perhaps we should also go back to the old taxation regime where your investment only gets capital gains treatment if held for at least one year, otherwise its all income... Perhaps liquidity expectation is the problem here. The equity, commodity and bond markets are so fixated on being able to sell and buy at a moments notice that we forget what investing was supposed to be about. Real estate and true business ownership was supposed to be a long term hold, not a week-to-week or month-to-month speculation.

I used to joke that the stock market should be open for one day per month. Then only the real investors would participate and the stock-jockey’s could ply their trade in Vegas instead of impacting the rest of us so badly.

Oh, and leveraging might have something to do with it…

Perhaps we should also go back to the old taxation regime where your investment only gets capital gains treatment if held for at least one year, otherwise its all income…

]]> By: Jvi http://allaboutalpha.com/blog/2008/11/03/stigma-of-redemption-gates-fading-fast/comment-page-1/#comment-141921 Jvi Thu, 13 Nov 2008 05:36:08 +0000 http://allaboutalpha.com/blog/?p=3645#comment-141921 Well, if hedge funds don't shut the gates, their liquidation could possibly drive prices down enough to trip circuit breakers, causing the entire market to shut down for a while. As for why anyone would want to put their money in with a fund that closes the gates, well, because the fund (until this year) has made them lots of money, probably. Well, if hedge funds don’t shut the gates, their liquidation could possibly drive prices down enough to trip circuit breakers, causing the entire market to shut down for a while. As for why anyone would want to put their money in with a fund that closes the gates, well, because the fund (until this year) has made them lots of money, probably.

]]> By: Alpha Male http://allaboutalpha.com/blog/2008/11/03/stigma-of-redemption-gates-fading-fast/comment-page-1/#comment-141866 Alpha Male Wed, 12 Nov 2008 14:43:28 +0000 http://allaboutalpha.com/blog/?p=3645#comment-141866 I understand your anger with some banks, "me". But banks have always locked in your investment via CDs and other term deposits. They do this so they can turn around and lend the money out to homeowners, businesses and consumers. Hedge funds essentially use a hybrid of a term deposit and demand deposit. By dynamically switching from demand to term, the fund essentially prevents a run on the bank. We actually think it should be illegal to offer investors a level of liquidity (e.g. 100% liquidity for everyone, no matter the circumstance) that is incongruent with the liquidity of the underlying assets. I understand your anger with some banks, “me”. But banks have always locked in your investment via CDs and other term deposits. They do this so they can turn around and lend the money out to homeowners, businesses and consumers. Hedge funds essentially use a hybrid of a term deposit and demand deposit. By dynamically switching from demand to term, the fund essentially prevents a run on the bank. We actually think it should be illegal to offer investors a level of liquidity (e.g. 100% liquidity for everyone, no matter the circumstance) that is incongruent with the liquidity of the underlying assets.

]]> By: me http://allaboutalpha.com/blog/2008/11/03/stigma-of-redemption-gates-fading-fast/comment-page-1/#comment-141838 me Wed, 12 Nov 2008 05:56:11 +0000 http://allaboutalpha.com/blog/?p=3645#comment-141838 Why would anyone join a hedge fund when so many limitations are placed on your money. Freezing the gates should be illegal. What's next...banks preventing you from making withdrawals - oh wait...they do that as well during crisis. Why would anyone join a hedge fund when so many limitations are placed on your money. Freezing the gates should be illegal. What’s next…banks preventing you from making withdrawals – oh wait…they do that as well during crisis.

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