This discourse explores and illuminates a fundamental problem, the Achilles' heel, which dominates the hedgefund industry: namely, that hedgefunds no are not positioned to accomplish what they were designed to do: namely, hedge against catastrophic loss in the financial markets. Contemporary fund strategies where built upon random-walk, efficient market theories which are now well-known to be false, thus our present dilemma. This discourse tables the Evolutionary Stable Strategy, for prospective hedgefund investors which, essentially, follows the dominant strategy outlined by Smith in 1776. Our discourse also highlights the dimly recognized difference between internal and external financial shocks, as well as several key points regarding economic methodology.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
14487.
Find related papers by JEL classification: F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General Z10 - Other Special Topics - - Cultural Economics - - - General H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
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