Questions for Hedge Fund Managers

Q: What's the deal with incorporating in the Cayman Islands? Why do some hedge funds do it and others don't?

A:

Q: Is it better to go work for a big company (eg Bear Sterns, like Kyle Bass did, or Salomon Brothers, like Bloomberg), since you can end up making them more money?

A:

Q: How can I get a job that will allow me to telecommute?

A: Initial guess: Network and offer to work for free until you prove yourself. I have a feeling this will severely limit how much money you can earn, though.

Q: What does it mean to buy a quarter of a hedge fund for $1 million?

A:

Q: Why did the stock market drop when S&P dropped the US's credit rating?

A: My guess at the moment: Owning equities is profitable when the businesses you own are going to grow and the stock price will go up. If you don't think the company is going to grow, though, you may get a better return by owning bonds. When S&P reduced the US's rating it may have been a wake-up call to institutional investors that there wasn't going to be a lot of growth in the near future, so they may have decided to pull out of equities and go into bonds instead. Institutional investors command a ton of money and having just a few of them make a decision like this can make the S&P 500 index or Dow Jones Index go down.

Q: How much needs to be sold in order to move the S&P 500 up or down? Can a single institutional investor be responsible for a daily move in one direction or the other?

What’s Eating Steve Cohen?
http://www.vanityfair.com/business/feat ... hen-201007

[Stevie Cohen is] a man whose $12 billion hedge fund was at one time said to trade as much as 3 percent of all the stock moved on the New York Stock Exchange.

Q: Have you (the hedge fund manager) ever sold or bought on good economic news? (In other words, if I'm trying to figure out who exactly is responsible for these big moves in the S&P 500 when some macro info is released)

Q: How often do hedge funds use temps?

Q: What would happen in the financial markets if it suddenly became widespread knowledge that an asteroid was going to destroy the planet in 6 months? I want a month-by-month breakdown.

Q: Where is the line drawn between illegal insider trading and legal scuttlebutt?

Q: What would happen if everyone stopped buying / sold all their individual stocks and instead put their money into total-market market-cap-weighted index funds? List the different inefficiencies that would develop that could be exploited if one and only one institution decided to leave the index fund and buy individual stocks.