NBC Labels Hedge Fund Investing 'Dangerous'
Billion-dollar returns? Not good enough for NBC. The network attacked rich hedge fund managers for taking high-risks, greed, and for trying to do business with the âupper-middle class.â
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According to NBC âNightly Newsâ anchor Brian Williams, â[a hedge fund] is high-risk and potentially very high reward.â
âThey [hedge funds] have posted strong returns,â said CNBC reporter Carl Quintanilla. âAnd the people who run them buy mansions, art â paying themselves salaries of over a billion dollars in just the past year.â
But is there anything wrong with that? According to Quintanilla, theyâre run by greedy people and too risky for âa new more vulnerable audience.â
âThey are beginning to target the upper middle class â the reasonably wealthy professional rather than the millionaire or the super-rich,â said Columbia University Law Professor John Coffee.
But Coffeeâs expertise isnât investing, itâs in the legal elements of corporate
Apparently hedge fund investing is meant for the crĂ¨me de la crĂ¨me exclusively. To emphasize the point that ordinary rich people shouldnât invest in hedge funds, Quintanilla quoted billionaire and media darling Berkshire Hathaway CEO Warren Buffett who has called hedge funds a âfoolâs game.â
NBC also mentioned successful hedge fund manager, Tim Seymour, and drew comparisons to a fictional villain played by Michael Douglas in the 1987 movie âWall Street.â
âEven Gordon Gekko, the villain from the movie âWall Streetâ is returning in a sequel as, yes, a hedge fund manager,â Quintanilla said.
âNightly Newsâ then played a scene from the movie where Gekko says, âGreed, for a lack of a better word, is good.â Then Quintanilla added, âThat attitude shared by more hedge fund millionaires playing a risky game and for the moment, winning,â as the screen flashed back to
A textbook definition of a hedge fund, according to the Web site Investopedia, is âportfolio of investments that uses advanced investment strategies âŚ with the goal of generating high returns.â Hedge funds also âhedge against risk,â hence the name hedge fund.