The Weirdest Ways Hedge Funds Make Money

Wikimedia CommonsA hedge fund once impounded this Argentine naval vessel because the country owed the fund billions - nothing to see there.

Back in 1949 when the first hedge fund, A.W. Jones, was formed it was just about going long some stocks, and short other stocks.

In the last sixty-plus years, though, that strategy has become just one of a seemingly inexhaustible number of strategies funds use to turn their cash into more cash. Those strategies range from buying water rights in Australia to tracking Taiwanese semi-conductor sales as a leading indicator of how the tech market will do.

In hedge fund land, this is all just part of the game. And the game gets weird.

There's an interesting conversation going on on Quora about the strangest strategies hedge funds use to make money. If you're unfamiliar with the space, and want to go down the rabbit hole, you should definitely check it out.

For those within the industry it's just a gentle reminder that using satellite photos to get a sense of how goods are flowing in and out of businesses - normal.

Investing in countries whose debt will default so you can collect later -and maybe impounding that country's naval vessel in the meantime - like billionaire Paul Singer's Elliot Management has done - normal.

Hiring psychologists and linguists to analyze a Central Banker's speeches - normal.\

After a significant stay in hedge fund land, nothing shocks anymore.

Click here for the full Quora conversation>