Days of Easy Money Over for Fund Managers: Alice Schroeder

[dcollon]

http://www.bloomberg.com/news/print/2012-01-19/days-of-easy-money-over-for-fund-managers-commentary-by-alice-schroeder.html

[Guest ValueCarl]

This woman along with her wisdom is like fine wine, it just keeps getting better as she ages.

 

<Druckenmiller and others who followed his example are already rich. This is not true (in the Wall Street sense of “rich”) for a lot of others who work in the industry, or would like to. Despite deteriorating fundamentals, a near- record number of hedge funds and exchange-traded funds started up last year.

 

That certainly did not occur because clients faced a dearth of choices. It was driven more by the insouciant attitude of “Apres moi, le deluge,” or “After me, the flood.” (Louis XV or his mistress, Madame de Pompadour, supposedly used the phrase to convey that a coming flood, which turned out to be the French Revolution, would be too late to drown them -- justifying the French royalties’ excess and debauchery.)>

 

The way she then reverses at the conclusion, while providing the more talented managers inside the flock a window of opportunity according to a slight change in the order of the French words earlier, is pure literary genius. 

 

<Of course, a really good manager will always be able to earn an honest and lucrative living. They just aren’t nearly as numerous as the pretenders. This is why, facing the future, some of the brightest asset managers welcome the thought that the untalented are getting flushed out. For them, the story is, “Apres le deluge, moi.” > 

[Parsad]

Good article!  Cheers!