Mr. Steinhardt founded Steinhardt Fine Berkowitz in 1967 when he was 26 years old. In the next three decades his fund, later renamed Steinhardt Partners, boasted average annual returns of nearly 25%...
Now, hedge funds that make [4%] over T-bill rates are doing great. It's crazy. That's why the field of money management is today the most highly compensated field in the world times three. There's no close second. There's no close third. And I think the expectations inherent in that sort of compensation are absurdly unrealistic.
...I do think there are a lot of inexperienced mangers running hedge funds today. There are a lot of people who do not have a history of superior performance over a long period. While certainly a long period of successful performance is no guarantee for the future, it gives a reasonable amount of comfort. But the fact that you've got a lot of young people running hedge funds whom I wouldn't be comfortable with, that makes one a little bit wary.
Compare to Charlie Munger, another billionaire and Warren Buffet's longtime partner:
I regard the amount of brainpower going into money management as a national scandal.
We have armies of people with advanced degrees in physics and math in various hedge funds and private-equity funds trying to outsmart the market. A lot of you older people in the room can remember when none of these people existed.
and Carl Fox (Martin Sheen, playing Charlie Sheen's father in Oliver Stone's Wall Street):
Carl Fox: Stop going for the easy buck and start producing something with your life. Create, instead of living off the buying and selling of others.
