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February 3, 2009
 

Lessons of 2008

SHORTING.

Period. That's the best lesson I learnt in 2008. I'm an investor, not a trader. However, last year - I learnt one single important lesson: Be Your Own Hedge Fund (BYOHF). Being or working similar to how a hedge fund operates, means you will go both long and short, depending on the circumstances. Value investors I agree are good, however, last year was bad for them. Not everyone has enough money like Warren Buffet to survive it.

If you were smart, here were/are a few short plays you could've considered. (Hindsight is always cool!)

  • UltraShort Dow 30 ProShares (DXD), which moves at the rate of twice the inverse of the Dow Jones Industrial Average index
  • UltraShort S&P 500 ProShares (SDS), which moves at the rate of twice the inverse of the S&P 500 index
  • UltraShort Oil & Gas ProShares (DUG), which moves at the rate of twice the inverse of the Dow Jones U.S. Oil & Gas index
  • UltraShort QQQ ProShares (QID), which move at the rate of twice the inverse of the NASDAQ-100 index.

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February 1, 2009
 

Differences Between Venture Capital, Private Equity And Hedge Funds

Let me say this upfront, we're all part of the same pool i.e. swimming pool. Just like we have different styles of swimming, we have different forms of 'alternative' investing. Venture Capital is more like the Backstroke, comfortable, not as fast as the others (long incubation times) and sometimes clueless (they look up at the sky ;o) Private Equity is like the Breaststroke (Frog/Butterfly), sure, supported, slow but steady on known facts (history of company) and Hedge Fund is like the Freestyle, make money somehow or the other, use whatever it takes, absolute returns, faster (trading, vs investing).

Jokes apart…

Since there are no legal or commonly accepted definitions, here are the Ultimate Differences between Venture Capital, Private Equity and Hedge Funds (ok, they're generalizations!):

PEVCHF Differences

Ok, this is not a perfect table of comparisons, mainly because we've seen each one step on the other's shoes. The lines between venture capital and private equity (and hedge funds) investments have been blurred by increased competition in the capital markets, which has forced each type of firm to expand their respective horizons in order to continue capturing new opportunities. But this is normal – at the end of the day, it's CAPITALISM!

P.S. If you'd like to add your thoughts on improving this comparison matrix, please send an email.

From the page Differences between Venture Capital, Private Equity and Hedge Funds - JPMARTIN

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