http://www.financialreference.com/blog/2005/09/28/greenspan-another-warning/ Musings of a Financial Hobbyist Fri, 30 Jul 2010 08:56:55 +0000 http://wordpress.org/?v=1.5.2 http://www.financialreference.com/blog/2005/09/28/greenspan-another-warning/#comment-37 Fri, 30 Sep 2005 00:26:44 +0000 http://www.financialreference.com/blog/2005/09/28/greenspan-another-warning/#comment-37 [...] Hedge funds have a problem. It’s a problem I would love to have — to much money and not enough good investment ideas. We’ll at least I’ld love to have the first problem. The problem is that too many people are looking for yield in a low yield environment. To find yield, people are taking on too much risk — both interest rate risk and default risk. (I.e. people are not getting paid enough to lengthen the duration of their portfolio or to invest in the bonds of riskier companies.) Even Greenspan has commented on this problem. [...] […] Hedge funds have a problem. It’s a problem I would love to have — to much money and not enough good investment ideas. We’ll at least I’ld love to have the first problem. The problem is that too many people are looking for yield in a low yield environment. To find yield, people are taking on too much risk — both interest rate risk and default risk. (I.e. people are not getting paid enough to lengthen the duration of their portfolio or to invest in the bonds of riskier companies.) Even Greenspan has commented on this problem. […]

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