May 6, 2022 • 3M

Can We Give it a Rest with the Financial Porn?

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The financial media sucks when it comes to reporting about funds, their returns, and founder narratives. Welcome to the world of financial porn.

Today’s WSJ posted this article:

The 26-Year-Old Dropout Lapping the Hedge-Fund Field

This is not a criticism of Ms. Shang or Mr. Haigh.

I am sure they are bright, articulate, persuasive, etc. But the use of “LAPPING” the hedge fund field is a tad bit hyperbolic.

How the hell would we know if she was “LAPPING” the field when the whole hedge fund industry is difficult to track, follow, understand, and even get a relative proxy regarding their returns (and risk exposure).

According to the WSJ article her “gross annual returns” are around 25%. What? Around? What are the net returns?

A former head fund manager who is on the fund’s advisory board states that “she’s an interesting kind of smart” and […] reads a lot and is able to seize on very difficult issues and boil them down to a few simple questions.” What the hell does this even mean or matter? The article also points out she visits her sister and mother and also volunteers with the Girl Scouts.

Financial Porn

It’s this kind of financial porn that sets sirens off in my head.

Oh, and not to mention the fund uses “proprietary artificial intelligence” and an “algorithm” to find “deals faster.” OOOOO…it sounds so secret and sexy.

These types of articles remind of this:

I hope the fund works out for Ms. Shang and Mr. Haigh…seriously.

It truly sucks when clients lose money.

And I hope Ms. Shang doesn’t use a fake voice.

You can read the Wall Street Journal article here.

Hedge Fund Returns

Oh, and by the way, Axios reports that “some hedge funds are sure to beat the index in any given year. But average hedge fund returns continued to lag — in a big way, according to data provided by eVestment.”