Time magazine reports on how most hedge funds may be running a Ponzi Scheme, albeit a legal one at that.
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At the heart of the difference is the distinction between realized and unrealized gains. Gains are realized when assets are liquidated to cash. For instance, if you buy a stock for $100 and it is currently trading at $200, you have made $100 in unrealized gains. If you sell it at $200, you have made $100 in realized gains. Most hedge funds do not regularly liquidate their entire portfolio, so they report unrealized gains to their investors and to the public.
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May be I should switch careers and become a money manager.
Read the complete article at Hedge Fund Ponzi Scheme
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