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How to Hitch Your Wagon to the Hedge-Fund Stars: Mark Gilbert


Date: Friday, April 27, 2007
Author: Mark Gilbert, Bloomberg

April 26 (Bloomberg) -- Now that social arbiter Tom Wolfe has anointed hedge-fund stars the new Masters of the Universe, how can you finagle your underachieving self a seat on the gravy train before it hits the buffers?

That 25th anniversary college-reunion invitation will be sent to your low-rent abode any year now. Do you want to roll up to the gathering in a Ferrari or a Ford? I thought so.

There's still time to employ a few strategies to inch a little higher up the greasy financial pole and hustle your way onto the bandwagon.

What Hedge-Fund Guy does best, apart from pocketing humongous fees for being so wonderful and hanging on to a mouthwatering slab of any profit just for being in a bull market, is conspicuous consumption. He's all about the limited-edition this and the personalized that and the first-on-the-block other.

Speculating that the rich will get richer while the rest of us get sub-inflation increments is a great way to snag your claws in the big spender's coattails. Moreover, betting on a surge in global wealth has been a lucrative strategy in recent years.

Merrill Lynch & Co. will sell you a certificate tied to the ML LifeStyle Index, which the marketing literature says will provide ``global exposure to the strong growth potential of luxury and lifestyle companies. Its growth is driven by the sustained increase in living standards around the world.''

No Motorcycles for Milquetoasts

The index -- which is basically tied to how much Hedge-Fund Guy is spending on Christian Dior SA suits, Bulgari SpA jewelry and Harley-Davidson Inc. Softail motorcycles -- has more than doubled in the past five years. The milquetoasts with their Standard & Poor's 500 Index tracker funds have made less than 37 percent in the same period, while even the racier Nasdaq Composite Index has gained just 50 percent.

When Hedge-Fund Guy kicks back at the end of a long day picking up pennies in front of the steamroller, he doesn't make his a Bud. It isn't Miller Time in his crib. Instead, he winds his Rabbit corkscrew into a bottle of Chateauneuf du Bourgeois or Cote de Bling, though he'd probably punch you if you called him an oenophile.

The value of fine wines has climbed 50 percent in the past year, and more than 90 percent in the past two years, according to an index of wines compiled by the London International Vintners Exchange. So grab yourself a couple of cases of Petrus and lock them away from your short-term taste buds.

Passion for Paintings

Hedge-Fund Guy is also a keen art collector, so long as it features what his mother would call proper drawing (nothing by Mark Rothko, for example). Modern art has more than quadrupled in value in the past 20 years, with more than 80 percent of the price gains coming in the past three years, according to an index compiled by Art Market Research in London.

By contrast, European 19th century art has gained less than 30 percent since 2004. So try to work out what Hedge-Fund Guy will want to hang on his walls in the next few years, and get down to the auction rooms. My bet is that surrealism is poised to surge; it is loud, obvious and flashy, with just a hint of vulgarity -- a bit like you-know-who.

As lucrative as those follow-the-in-crowd strategies might prove to be, they share a serious, possibly insurmountable, drawback: You need a stack of the folding stuff to get started. And if you are blessed with sufficient financial insouciance to be punting your pension on designer handbags, posh booze and paintings of cubist women, you probably already run a hedge fund.

Faking It

So you need to get a little more creative. Just because you took the turn most traveled at the career crossroads, the primrose path to getting by instead of the rocky road to riches, doesn't mean you can't fake it.

Start your day by lathering up with a bar of Shower Shock caffeinated soap, available in packs of 10 for just $37.99 from a company called Think Geek. Practice the thousand-yard stare of a 24/7 financial warrior in your bathroom mirror, and perfect the bear-fisted handshake that says ``my underwear cost more than your suit and my haircut cost more than your watch, loser.''

Once you have slipped into your Italian chinos and donned a pastel-colored button-down shirt with a tiny embroidered polo player on the left breast, it's time to select some footwear. Just $96 gets you a pair of Kenneth Cole ``Hedge Fund'' loafers from Amazon.com Inc. When you have uploaded your new, embellished profile on http://www.wealthymen.com and started dating Angeleyes1 or AmandAmok or Write2Luv, she will know by your insole that you're the real deal.

Hey, it beats actually being Hedge-Fund Guy, who spends most of his evenings bored out of his brain at charity auctions outbidding other hedge-fund guys for vacations he never has the time to take and dinners that his personal trainer won't let him enjoy.

And it sure beats getting sneered at by Wolfe for being one of ``those people.''

(Mark Gilbert is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Mark Gilbert in London at magilbert@bloomberg.net