Finance is like one big movie. There are times when all is snug and cozy, and everyone is smiles and giggles. However, the most anticipated and fun parts of any movie are the action sequences. Well, we have good blow ups around here, albeit a trite expensive. In what might be the most expensive fireworks display ever, trader Brian Hunter blew up hedge fund Amaranth. Cost = $6 Billion. Newspapers expand out the number and multiply with the local currency to get a really big scary number, but you can do that yourself e.g. (6,000,000,000*45.53 Rs). Here is the story! Go to news.google.com, and search for "Amaranth" for more juice.
FAQ :
Whats a hedge fund?
Its a firm that trades the financial markets for a profit. Unlike a mutual fund which cannot do whatever it wants with investors money, a hedge fund can take huge risks. Thus, it has a potential to make a lot of money. As has been seen, it can also lose a tonne!
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6 comments:
Interesting..
wats a hedge fund in lay grad student's terms .. ( of course one who has nothing to do with finance ) .. the wiki is simply morose.
They invested it in natural gas? What morons... even *I* could have told them gas prices are going to go though the roof.
Hmmm.. I am a big fan of the Hedge Funds actually... I think Amaranth's is a total screw up... they make more ..much more than they loose! Having said that I wouldn't want to be working for Amaranth at the moment.. and Thank God My name ain't Brian Hunter!
-SP: Yeah They've been in the energy business for a while.. he tried to speculate abd buy futures as they were already down 4 billion this year I think.. but alas his Soros act failed miseabaly!
Aditya Rao
Liked your Power and Presence post awesome..cool
[varones] seriously. Risk management gone bad. Don't these people understand how coin tossing works?
[anon] essentially takes a bunch of money and makes risky bets..hoping they get it right..many of them blow up!..
[prashanth] thats exactly what they bet! and prices reversed!!...ha! cheaper gas now...
[aditya] oh yeah some of my friend's friends work at Amaranth...so it was pretty interesting to speak to them..they are trying to get them into here..
[vc] thanks man..
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