In The News

Why hedge funds are a bad idea

> What is upsetting the hedge funds is that if between 10% and 15% of VW shares were on loan to be shorted and only just over 5% were available in the market, it is likely that many of the funds that shorted VW had borrowed the shares from Porsche.

> It meant that because Porsche had not declared the proportion of VW shares it controlled, traders may have been indirectly and inadvertently borrowing shares from Porsche, selling them to Porsche, buying them back from Porsche and then returning them to Porsche.

And there it all is, in a nutshell. If ever you’ve wondered why hedge funds have a reputation for being a bit edgy, then here’s the explanation. Money is strange stuff.

Here’s the original article.