Fwd: FW: FW: Beauty of Math!

 

Beauty of Math!

Please read and enjoy these fascinating calculations!

1 x 8 + 1 = 9
12 x 8 + 2 = 98
123 x 8 + 3 = 987
1234 x 8 + 4 = 9876
12345 x 8 + 5 = 98765
123456 x 8 + 6 = 987654
1234567 x 8 + 7 = 9876543
12345678 x 8 + 8 = 98765432
123456789 x 8 + 9 = 987654321

1 x 9 + 2 = 11
12 x 9 + 3 = 111
123 x 9 + 4 = 1111
1234 x 9 + 5 = 11111
12345 x 9 + 6 = 111111
123456 x 9 + 7 = 1111111
1234567 x 9 + 8 = 11111111
12345678 x 9 + 9 = 111111111
123456789 x 9 +10 = 1111111111

9 x 9 + 7 = 88
98 x 9 + 6 = 888
987 x 9 + 5 = 8888
9876 x 9 + 4 = 88888
98765 x 9 + 3 = 888888
987654 x 9 + 2 = 8888888
9876543 x 9 + 1 = 88888888
98765432 x 9 + 0 = 888888888
 
And finally, take a look at this symmetry:

1 x 1 = 1
11 x 11 = 121
111 x 111 = 12321
1111 x 1111 = 1234321
11111 x 11111 = 123454321
111111 x 111111 = 12345654321
1111111 x 1111111 = 1234567654321
11111111 x 11111111=123456787654321
111111111x111111111=12345678987654321

 
Brilliant, isn't it?

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Constant Value Investing With Virtual Shares

It is possible to boost the performance of Constant Value Investing by using virtual shares to magnify the buys and sells.

This technique makes my system more complex and risky.

I'm presenting it, because I want you to have a lot of options, so that you can develop your own individual system to suit your needs and tastes.

Personally, I think regular constant value is good enough - so, I don't use virtual shares.

I don't even mention virtual shares in my book, Stock Trading Riches, which is available on Amazon.com.

I purposely left it out, because I wanted to "KISS" my book - keep it small and simple. I wanted my readers to learn the exact system I use. I have made double digit annual returns for years without using virtual shares.

With that note / warning, here is how it works:

Let's use the example of a stock that starts at $10/share. It goes to $6, then $12, and then back to $10.

First, let's pretend that we had $4,000 and decided to invest $2,000 in the stock, and follow the normal rules of constant value investing (We maintain $2000 in the stock, no matter the price).

We would initially buy 200 shares at $10 and have $2000 in our cash pool. Then, at $6, we would buy 133 more shares. We would sell 167 shares at $12. Finally, we would buy 34 shares when the stock went back to $10. At this point, we would have 200 shares and $2,866 in cash, for a total of $4,866. We made 21.65%.

Now, we will see what would happen if we used virtual shares. Again, we start with $4,000 and initially invest $2,000. So, we have 200 shares at $10 with $2,000 in cash.

But, we will define a virtual constant value of $6,000. At $10/share, this "gives" us 600 virtual shares. So, now we actually have 200 shares, but 600 virtual shares.

When the stock goes to $6, we divide 6000 by 6, and get 1,000 virtual shares. Since we "had" 600 virtual shares and now have 1,000, it means we had to "buy" 400 virtual shares. So, we now buy 400 actual shares. so we now have 200 + 400 = 600 actual shares. Compare this to when we used the normal constant value investing, where we bought 133 more shares.

Because we only have $2,000 in cash, and 400*6 = $2400, we actually have to add $400 to our account. So, now we have invested a total of $4400 instead of $4,000.

At $12/share, we divide 6000 by 12 and get 500 virtual shares. Since we had 1000 virtual shares, it means we now have to sell 500 shares. So, we go from 600 shares down to 100 shares. Recall that, under regular constant value, we had sold 167 shares, and had 166 shares left.

Finally, at $10/share, we divide 6000 by 10 and get 600 virtual shares. Since we had 500 virtual shares, it means we have to buy 100 more shares. So, we go from 100 shares back to 200.

We end up with 200 shares and $5,000 in cash, for a total of $7,000. Our total investment is $4400 instead of $4,000. We made 7000/4400 = 59%.
So, to summarize:

Under regular constant value, we went from 200 shares to 333 to 166 to 200.

Under virtual shares, we went from 200 shares to 600 to 100 to 200.

You can, of course, vary the virtual constant value to make it as risky as you want. For example, if we used a virtual constant of 4000 instead of 6000, it would reduce the risk. If we used 12000, it would greatly magnify the movements.

P.S. You can read more information about my book (including testimonials) here.

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Lessons in Passive Income Building

There are 2 short, inexpensive books that will provide you with solid systems for making money on the internet and stock trading. These 2 skills can allow you to build two good, passive income streams to supplement your salary.

The internet business book is "The Rich Jerk". Read my review of it here.

The stock market book is "Stock Trading Riches". It is available from Amazon.com.

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The Old Man, the Boy, and the Donkey

I read the story below in Michael Port's Book Yourself Solid. That book is about how self-employed service professionals can build their business.

The lesson from this story applies to both business and life in general:


An old man, a boy, and a donkey were going to town. The boy rode on the donkey and the old man walked beside him. As they went along they passed some people who remarked it was a shame the old man was walking and the boy was riding. The man and boy thought maybe the critics were right, so they changed positions.

Later, they passed some people who remarked, "Whate a shame! He makes that little boy walk." They then decided that they would both walk.

Soon they passed some more people who thought they were stupid to walk when they had a decent donkey to ride. So they both rode the donkey.

Now they passed some people who shamed them by saying how awful to put such a load on a poor donkey. The boy and man said they were probably right, so they decided to carry the donkey. As they crossed the bridge, they lost their grip on the animal, and he fell into the river and drown.

The moral of the story? If you try to please everyone, you might as well kiss your ass goodbye.

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Forbes' Quotations on Bureaucrats

Bureaucracy, the rule of no one, has become the modern form of despotism.

- Mary McCarthy


Bureaucracy is not an obstacle to democracy but an inevitable complement to it.

 - Joseph Schumpeter


It seems to me that there must be an ecological limit to the number of paper pushers the earth can sustain, and that human civilization will collapse when the number of, say, tax lawyers exceeds the world's population of farmers, weavers, fisherpersons, and pediatric nurses.

 - Barbara Ehrenreich


The only thing that saves us from the bureaucracy is inefficiency.  An efficient bureaucracy is the greatest threat to liberty.

- Eugene McCarthy


Poor fellow, he suffers from files.

 - Aneurin Bevan


Bureaucrats: they are dead at 30 and buried at 60.

- Frank Lloyd Wright


Man is the only animal that laughs and has a state legislature.

- Samuel Butler


Bureaucratic time, which is slower than geologic time but more expensive than time spent with Madame Claude's girls in Paris.

- P.J. O'Rourke


Guidelines for bureaucrats:

1. When in charge, ponder.

2. When in trouble, delegate.

3. When in doubt, mumble.

- James Boren


We can lick gravity, but sometimes the paperwork is overwhelming. 

- Wernher Von Braun


Hell hath no fury like a bureaucrat scorned.

 - Milton Friedman


I do not rule Russia.  10,000 clerks do.

- Nicholas I


On Soviet bureaucrats: They don't ask much of you.  They only want you to hate the things you love and to love the things you hate.

- Boris Pasternak


If you're going to sin, sin against God, not the bureaucracy.  God will forgive you but the bureaucracy won't.

 - Hyman Rickover


Bureaucrats write memoranda both because they appear busy when they are writing and because the memos, once written, immediately become proof that they were busy.

- Charles Peters


I love being a writer.  What I can't stand is the paperwork.

- Peter De Vries

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Improve Your Business Writing

I just read a really good ebook called "The Easy Way To Be Brilliant At Business Writing - Volume 1", which was written by Suzan St Maur.

The book is designed very well for busy professionals. It consists of self-encapsulated mini lessons, each of which will improve one aspect of your writing.

The lessons are grouped in sections so that you can learn according to your priorities. The sections include: "Key tipz", Basics, Mechanics, Writing for the Web, Writing for PR, Advertising, General Business, and "Minitipz".

So, instead of having to wade through the whole book before you can apply its teachings, you can read a lesson whenever you find time.

You can then immediately incorporate the mini-lesson into your writing and see a tangible improvement. Over time, these incremental improvements add up, and you will really be amazed at how much effortless progress you made.

Here are a few of the book's ideas:

1. Before writing anything "define not what you want to say, but what your message must achieve". Rewrite any part that does not help your message achieve it's goal.

2. Always include the benefits for the target audience. Convert features into benefits by using the "so" tool:

"He has 20 years of experience. "

"So?"

"He won't waste your time and money because he knows what works and what doesn't."

3. Online text is different from off-line text.

4. Write as people speak.

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Some Words to Live By

Work like you don't need the money. Love like you've never been hurt.
Dance like nobody's watching. Live like it's Heaven on Earth.

...

TODAY, WELL LIVED, MAKES YESTERDAY A DREAM OF HAPPINESS, AND TOMORROW A VISION OF HOPE.

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Rich Schefren

Ever since I became interested in making money online, I have been opting in to different newsletters, and seeing all the free resources out there.

Out of all the gurus, I think the two best seem to be Rich Schefren and Michael Port. They both go beyond teachind the standard internet marketing tactics. They actually can help you build a business.

Rich Schefren, especially, is a valuable resource because he actually consults with all kinds of businesses, both online and off, and can help you grow your business.

He doesn't seem interested in selling info products, like eBooks.

Instead, he gives his content away, and just wants to work with seriously motivated small business owners through workshops and seminars.

So, here is a link where you can watch, listen, and read great business and marketing info free with no strings attached.

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Top 10 Surprising Results of Global Warming

Everybody has heard that global warming will cause stuff like rising temperatures, melting ice caps, rising sea levels, etc.

But, LiveScience has a list of the top 10 surprising results of global warming:

10. Increased suffering from allergies.

9. Animals are moving into the hills.

8. Arctic plant life is blooming.

7. 125 lakes in the Arctic have disappeared - probably the permafrost under them melted.

6. The layer of permanently frozen soil below ground is thawing, causing problems to railroad tracks, roads, and structures.

5. Survival of the fittest - As spring starts earlier, animals who can adjust their biological clocks are more likely to thrive and breed. Meaning animal's genes will adjust to earlier springs.

4. Faster satellites - the build up of CO2 warms the lower atmosphere, but cools down the upper atmosphere, thus causing less drag on satellites.

3. The Alps and other mountains are growing - because the glaciers weighing them down are melting.

2. Ancient ruins are eroding faster.

1. More forest fires.

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European Commercial Real Estate Investment

I read in today's Chicago Tribune that Europe (led by Germany) over-took the U.S. in commercial real estate spending last year.

In 2006, commercial real estate spending in Europe increased 44%, to $305 billion.

In the U.S., commercial real estate spending increased 31%, to $283 billion.

German spending increased more than 140% (to $62 billion), and France increased 67% (to $30 billion).

By contrast, The U.K. suffered a 2% decline, to $101 billion.

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U.S. Home Price Increases Still Slowing

I read in today's Chicago Tribune that the average U.S. home rose 1.12% in the fourth quarter of 2006, compared to 3.03% in the fourth quarter of 2005.

For all of 2006, prices increased 5.9%, a big change from the 13.2% increase in 2005.

However, to put it in perspective, home prices in 2006 still increased faster than other goods and services.

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Awk Scripts For Compund Interest

This post from my Math Play blog  shows the power of compound interest.

 

Now, I will give two awk scripts.  The first one (compound) calculates compound interest on a lump sum.  The second one (compound_add) calculates the total return when we deposit regular contributions, as opposed to a lump sum.

 

First script (compound):

 

The run:

 

[514]-> compound

 

Usage: /usr/bin/nawk principle rate time

 

 

[515]-> compound 100 10 4

 

Amount 100.00 compounded at 1.1000 for 4 yields:

 

1: 110.0000

 

2: 121.0000

 

3: 133.1000

 

4: 146.4100

 

The script:

 

#! /usr/bin/nawk -f

 

BEGIN {

 

if (ARGC < 4)

 

{

 

printf ("Usage: %s principle rate time\n",ARGV[0])

 

exit 1

 

}

 

principle=ARGV[1]

 

rate=ARGV[2]/100+1

 

time=ARGV[3]

 

printf ("Amount %.2f compounded at %.4f for %d yields: \n\n",principle,rate,time)

 

for (i=1;i<=time; i++)

 

{

 

principle *= rate

 

printf ("%d: %.4f\n", i, principle)

 

}

 

}

 

 

Now, we will look at the second script (compound_add):

 

The run:

 

[517]-> compound_add

 

Usage: /usr/bin/nawk principle rate time

 

[518]-> compound_add 100 10 4

 

Amount 100.00 added in each time and compounded at 1.1000 for 4 yields:

 

1: 110.00 (invested: 100)

 

2: 231.00 (invested: 200)

 

3: 364.10 (invested: 300)

 

4: 510.51 (invested: 400)

 

The script:

 

#! /usr/bin/nawk -f

 

BEGIN {

 

if (ARGC < 4)

 

{

 

printf ("Usage: %s principle rate time\n",ARGV[0])

 

exit 1

 

}

 

principle=ARGV[1]

 

rate=ARGV[2]/100+1

 

time=ARGV[3]

 

printf ("Amount %.2f added in each time and compounded at %.4f for %d yields: \n\n",principle,rate,time)

 

for (i=1;i<=time; i++)

 

{

 

total = (principle + total)*rate

 

invest += principle

 

printf ("%d: %.2f (invested: %d)\n", i, total, invest)

 

}

 

}

 

Notice that the two scripts are almost identical.  The main difference is in the calculation, which is done as the script loops thru the time intervals.

 

In "compound", we simply keep multiplying principle by 1 + rate/100, to accumulate the value.

 

In "compound_add", we have to create a new "total" variable, so we can preserve the original principle value, so we can keep adding it in.  In this case, we take the accumulation, add in a new principle, and apply 1 + rate/100 to the whole thing.

 

In the first example, we add in $100, and let it grow at 10% per period for 4 periods.

 

In the second example, we contribute $100 in each period, for a total of $400 invested. All contributions grow at 10%/period for however many periods that they are in the account.

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Google Calculator

The minimalist Google search box is deceptively simple, but very powerful.

It is designed so well, that its easy to use search box allows you to do a lot of stuff.

For example, besides searching, the google search box is the interface to a powerful calculator and converter:

Instead of typing in a search string, you can type in calculations / conversions and get the answers:

Examples:

5*3+2

32 F in C (converts temp from F to Celcius)

10 USD in INR (convert $10 into Rupees)

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Motorola Settles Bias Suit

Motorola settled as discrimination suit from its former highest-ranking female executive.

The settlement came three days before the CEO, Ed Zander was going to testify.

She says that she was let go because they "sexually sterotyped" her. She felt that, to climb the ladder, she had to "act like a man", but then she was told that she was too cold and should act like a woman.

According to Motorola, she was let go because subordinates compalained to human resources that she was abusive, intimidating, and never around.

What it really looks like is that she was mentored by Mike Zafirovski, who was the former COO, and had wanted the CEO position (which instead went to Zander).

Zafirovski had promoted her to head of procurement. When he was forced out, she was later asked to leave. So, I think it was a simple purge, because she was loyal to the old guy.

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Newspaper Affiliated Websites

These days, newspapers are considered endangered because of the internet.

But, in Arizona, there is a website that is thriving, due to its affiliations with newspapers in Central Arizona.

The site is called AzCentral.com, and it offers information on entertainment, travel, hotels, and even Free Online Dating Services for Arizona.

The information is interlaced with articles from the Arizona Republic, USA Today, and the Gennett news service. So, for example, the dating site has well-written articles about things to do in Arizona, like Karaoke and Spa Nights.

Both the newspapers and the site benfit from the synergy. The Arizona Republic gets to promote its brand and articles with the online crowd, and gets to tap into the growing internet ad market.

Meanwhile, the AzCentral website benefits from offline promotion by the newspaper. For this reason, its viewed by 24% of the residents of Central Arizona.

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For Olympic Bid, Chicago Needs "Skin in the Game"

Chicago and Los Angeles are competing to be the U.S. nominee to host the 2016 Summer Olympic games.

The U.S. Olympic officials have recently completed tours of both cities, and are supposed to announce the winner in April.

Chicago was hoping to fund the Olympics entirely from private donations, just like Millenium Park.

They may still be able to do it, but the U.S. Olympic committee said that Chicagoans must have "skin in the game" and guarantee the costs.

But, it looks like they won't have to guarantee the construction costs of the temporary stadium, which is expected to be $366 million. Which is good, because the price will probably go up. London is building a temporary stadium for 2012, and they have had significant cost overruns.

Instead, tax payers will just have to guarantee the costs to operate the games, in case ticket and concession stands do't cover all of it.

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Selling Real Estate on YouTube

I just read in the Chicago Tribune that real estate agents are turning to YouTube as a marketing tool to lure home buyers to their listings.

Right now, the major video sites, like YouTube don't have separate categories for real estate. So, the only way to find the real estate videos would be to search for words like "real estate" and "Chicago".

But, the article said that a lot of brokers think 2007 is the year that real estate videos take off.

They think that sites like YouTube will start featuring channels dedicated to real estate, and there may even be new sites that only show real estate video clips.

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5 Tips to Simplify Writing for Better Results

I saw an article from an internet advertising copy writer.

He said that a lot of websites lose sales because they either sound too stiff and formal, or readers feel that the writing is over their heads, with a lot of buzz words they don't understand.

From my experience in programming, this can be applied to technical and business writing as well.

In fact, I think that this is a general problem with written communications.

His advice?

1. Keep It Simple!

2. Copy should read like conversation; it should flow
naturally and be easy to listen to (or read).

3. Avoid jargon.

4. Use strong, punchy words. Write simply and clearly.

5. Read Strunk & White's Elements of Style - and follow its
advice.

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Orlando Real Estate History

I found a Winter Park Real Estate company that serves as a buyer's agent in Orlando.

They seem to really know real estate in the nine county Central Florida area, and they wrote soem really interesting stuff on the economic and real estate history of the region.

It turns out that, in the 1800's, Central Florida was cattle ranching country. It was more like Dodge City than a Southern town. It had cowboys, Indians, gunfights, etc.

Then, the railroad was built in 1880, connecting Central Florida with the East Coast. This one change ended up revamping the whole regional economy. Businessmen realized that they could grow oranges in the mild climate, and then ship them by train to New York City.

Then, a lot of Central Florida got built up during the land speculation craze of the roaring 1920's.

Now, of course, Central Florida has boomed with the housing market, and it continues to grow because of the large tourist industry.

The article I read said that the amount of annual visitors to Central Florida is greater than the population of California!

Anyway, this buyer's agency seems to be doing well, because they also cater to real estate investors, and say that they are experienced in creative real estate deals.

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Importance of News to Local Stations

Here in Chicago, the ABC, NBC, and CBS affiliates have their local news cast at 10 pm, after prime time (this would be 11 pm on the coasts).

The Fox affiliate, along with Tribune-owned WGN, have their news casts one hour early, and show syndicated reruns (like Fraiser or Sex in the City) at 10 pm.

Now, the Fox affiliate wants to have a 10 pm news cast.

It seems that offering a serious news broadcast during the critical times of day (morning, after work, and after prime time) is now considered a must by local stations.

The feeling is that, since TV show content is now more available over the internet and other distribution models, local news is the one factor that can keep viewers tuned in to them.

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Walgreens Bias Suit

The Equal Employment Opportunity Commission (EEOC) recently filed a Federal lawsuit against Walgreens (the drug store company) alleging bias against African-American managers and pharmacists.

The charges say that Walgreen's supposedly engaged in a form of segregation, because it assigned black managers and pharmacists to inner-city stores, rather than letting them run stores in predominantly white neighborhoods.

What I thought was interesting is that the EEOC mostly deals with one-on-one complaints of discrimination, but they have a mandate to investigate at least one systematic bias case every year.

They are under pressure to speed up their investigation time, because they normally take 5 to 10 years to investigate systematic cases, and critics feel that is too long a period to help victims.

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The Business of Making Lifestyle Coaches

A growing business these days is that of life coaching. It was recently spotlighted in an article by the Chicago Tribune.

Life coaches help guide people through change, in order to improve their lives.
Life coaching is not therapy - they are not trying to help people with emotional issues.

Instead, life coaches are like sports coaches. They believe their clients have the skills and knowledge - they just need help in reaching their potential.

I'm sure that, like any service business, a lot of life coaches will build a successful business with a happy client list.

But, on the internet, I've seen that lifestyle coaches seem to be a dime a dozen. Also, I see a lot of ads for life coach certification programs.

So, I'm thinking that these life coach trainers are the ones who are really making money.

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4 Red Flags For Home Repair Fraud

The Illinois attorney general's Consumer Protection Division listed construction and home repair improvement fraud as the third most common consumer complaint, after identity theft and credit-related issues.

When you are hiring someone to do home improvement, watch out for these 4 red flags:

1. Cash Upfront. You should never have to pay in cash, and you should not have to pay the whole amount upfront, regardless of payment method.

2. Snap Decisions. Con artists and fradulant companies try to make you decide right away to hire them, by offering "specials" only good for that day.

3. No-name Companies. Be wary of any business that sends its employees door-to-door. Be really skeptical if the employee's vehicle has no company name, no phone number, and/or out of state license plates.

4. No Contracts or License. Avoid doing business with companies that refuse to provide a written contract or an address / phone number where they can be reached.
Be wary if they say that they are licensed, but won't provide a copy of the license.

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Gross-Receipts Tax

My state of Illinois is thinking about instituting a 1% gross-receipts tax on businesses to pay for education.

I had never heard of this tax before, so its always interesting to find out about new things. It turns out that some states, such as Arizona, Ohio, and Texas, already have one.

Unlike a sales tax, a gross-receipts tax is paid by the company, rather than the consumer (though, of course, the tax will probably get passed on). The tax is levied on a company's total gross revenue, regardless of source.

One of the effects of this tax is to create a pyramid effect that increases the effective tax rate. For example, let us say that an engineering firm takes in $100,000 for a project. At 1%, they now pay $1,000 in tax.

Then, they pass $20,000 to a survey firm that assisted them on the project. The survey firm now pays $200 tax. $1,200 (or 1.2%) of the $100,000 has now been paid as tax.

The proponents of this tax say that economists agree that, all things being equal, its better to have a lower tax rate with a broad base, rather than a higher tax rate on a narrow base (even though they bring in the same amount of money).

Opponents say the tax hurts competitiveness, encourages vertical integration, and imposes different effective tax rates, depending on industry.

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Sheldon Adelson

Macau, a tiny peninsula and 2 islands off of China, was controlled by the Portuguese, but handed back to China in 1999.  It is 1/6 the size of Washington, DC. and is the only place in China that allows casinos.

 

Sheldon Adelson, the casino billionaire who controls Las Vegas Sands Corp., figured that Macau would take off, and so he opened up the Sands Macau Casino in 2004.

 

His bet paid off.  Macau may unseat Las Vegas as the gambling capital of the world.  Adelson spent $265 million on the casino, and he recouped his investment in one year.  Adelson is now the third richest American on the Forbes 400 list.

 

Adelson's Las Vegas rival, Steve Wynn (number 107 on the Forbes 400), is now opening up his own casino in Macao.

 

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How to Succeed

I just read Tim Sander's foreword to Michael Port's Book Yourself Solid. That book is about how self-employed service professionals can build their business, and get clients, and also experience self-growth, and joy.

In the foreword, Sanders (who wrote the book The Likeability Factor), says that Port's advice can be summed up as:

1. Make yourself emotionally attractive.
2. Live on the right side of the Law of Reciprocity

I think that these two rules will not only help you in your career, but in life itself.

"Make yourself emotionally attractive" is about making sure that your clients (and all people) who come in contact with you have a good, emotionally uplifting experience. It is not enough to just be technically skilled at your job. He says that the emotional brain is two dozen times more powerful than the logical brain.

This means, for example, that if you are a better car mechanic than Fred down the street, but Fred does a better job of making customers feel happy, satisfied, and taken-care-of, then customers will go to him.

"The Law of reciprocity" is that people reflect back the energy, value, and generosity you give to them. If you treat them right, and give them a lot of value, then they will stay your customer, they will support you, recommend you, etc.

If you use them, or give them a very basic level of customer service, then they will not be loyal to you.

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Complicator's Gloves

If you want to see how complexity creeps into things, then this article is must reading.

The writer is showing how "Complicators" (software engineers who don't try to make their software simple) can over-complicate other things also.

It ends with a sensible engineer putting them in their place.

But, this doesn't just apply to software: it applies to the whole gamut of life: work, science, business, relationships, etc.

We tend to let complexity creep in, and need someone sensible to slap us.

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Bayou Group Hedge Fund

I read in Forbes that a hedge fund called Bayou Group went into Chapter 11 bankruptcy, after allegedly hiding losses with phony profit statements.

Now a reciever for the fund is suing investors who got out of the fund early.

There is a precedent for forcing innocent investors to return their profits. The issue is called "fradulent conveyance", which goes back to an English case from 1601 where a man gave his sheep to a relative to avoid creditors.

But, in this case, the reciever not only wants the investors to return their profits, but also their principle.

All the money would be divided equally among all the investors. This would mean that the investors who got out early with a profit would now have a loss.

To claim the principal, the receiver has to turn to a different part of the law. In this case, they are trying to use a section of bankruptcy law that can force unwitting participants to give back all the money if they should have known something is wrong, because of red flags.

If the case goes against investors, it will be one more risk you would have to consider if you want to invest in a hedge fund.

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