Investing in Funds: Buyer Beware

This email came in from a friend on my Facebook.

Michael, I’m very upset as I just lost $30K (wipe out) as the main/sole investor in a new currency hedge fund … do I have recourse? Is there a place to go somewhere and complain? Thanks for intelligence if any …

I felt it would be useful to post this for everyone. Brutal honesty? Everyone gets what they … [read my mind].

11 thoughts on “Investing in Funds: Buyer Beware

  1. If he had made $30k, what would he have done then? “Is there a place to go somewhere and complain?” You’ve got to be kidding me.

  2. Wait– he said he was the main/sole investor in the fund… what did he do..shoot himself in the foot??

  3. There are a lot of people out there who are willing to have you put your money in an account (stock/futures/forex whatever) and have them trade it under a power of attorney. This is legal. Some of them know what they’re doing and some don’t. It sounds like your correspondent found one who knew more about dressing the deal up with words like “hedge fund” than he knew about trading.

  4. He is a good guy. But at the end of the day…we all get what we want. I say that in my best Zen…

  5. Did he predict that dollar get stronger and invested in highly leverage forex “hedge fund”?

  6. Tim,

    See P. 58 of Michael’s TF book (2009)…Ed Seykota says, “Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money.” I have it photocopied and pinned to my cork board.

    This guy’s got a great story he can tell everybody. Heck, he might even get sympathy and a free beer out of it. But if he didn’t want to lose, he wouldn’t have made the investment to begin with.

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