Tuesday, May 15, 2007

An Investor Relations Fable

Many years ago a young man from a rich and prosperous family was charged with safeguarding the jewels of the family. He thought long and hard about the best way to preserve the jewels and finally came up with what he thought was a clever solution. He went out and packaged the jewels in a beautiful box. Then he dug a hole in the ground and put the box with the jewels in it and covered it up. On top of the spot where the jewels were, the industrious young man planted a flowering bush. Whenever he was asked about the jewels he described how beautiful they were and how well packaged they were in their box without actually taking the jewels out to show anyone.

Over the years the man, through all types of weather and storms, watered and fertilized the bush, being sure to use plenty of organic manure. The bush grew tall and wide until it was a hedge stretching from one end of the family property to the other. People came from all around to view it and sit in its shade.

Finally, one day many years later, the man came back to retrieve the jewels in order to pay off family debts. In the course of trying to dig out the jewels the man found that the roots of the hedge had grown tightly around the jewel box. While yanking and cutting at the roots, the hedge fell over on the man and crushed him to death.

Moral: The care, feeding and removal of hedge funds is a risky business.

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