Robin Hood Hedge Fund

Making money at the stock market is not about being “right”, about having the “right” opinion, but about the art of knowing the common sentiment, the public opinion, and of anticipating, and even manipulating its movements. This is what Robin Hood does. — Michel Bauwens

Hedge funds are parasites. A game for the filthy rich, who can afford to lose a few millions, and take big risks. They do not create wealth. They are global casinos that suck in money like vacuum cleaners.

It is not workers, or capital, or factories, that accumulate this wealth. It is clever algorithms that are working at high speed on super-fast computers.

Imagine that you knew the European Central Bank was going to invest a trillion euros. You get in a fraction of a second before they do. You benefit from that advance knowledge when the price shoots up.

You are riding the wave.

Investors swarm, they are sheep, they all move the same way, in the same direction. Those who get in first, make the money.

There is no intelligence involved. It is the herd mentality. It causes violent swings and volatility in the market. Major corporations can see billions wiped off their stock market valuation within minutes.

A global casino, a few winners, the rest are loses, the house (Wall Street, City of London) always comes out on top as that is the way the casino works.

You may not wish to participate, but if you have money in the bank, a pension fund, then you are a player.

That is what Robin Hood Coop are doing, they are playing the market, riding the wave, staying ahead of the pack, but using an algorithm to see where the pack is heading.

They are monitoring the data of what the biggest investors are doing, then they get in first.

It is a hedge fund whose average annual return of just over 40% makes it one of the top 4 or 5 best performing hedge funds in the world.

There is no ethics in their investment, which is questionable, and they accept that.

But let us not pretend investment is not political. Boycotting Israel is political. Divesting from fossil fuels is political. Not benefiting from the slave trade was political.

Anyone can invest, 30 euros to be a member, 30 euros to invest, any multiple of 30 euros on top, no upper limit.

Robin Hood Hedge Fund is a cooperative, one member one vote, no matter how big your investment.

There are no hedge fund management fees. It is an algorithm that is deciding where to invest.

Members can spit their profit, with a cut going to irrigate the commons.

Projects are designated, and no not to buy a yacht, and three members are randomly selected. They decide what projects will be funded.

Typical of the type of projects nominated:TechStart (public funding), The Trew Era Cafe (Russell BrandRevolution), Hackney Mosaic Project (KickStarter), The Real Junk Food Project Brighton (crowdfunder). Three social enterprises, and a community arts project. One had public funding, one funded by Russell Brand using proceeds from Revolution, and the other two relying upon crowdfunding.  All could have been nominated to obtain no strings attached funding from the Robin Hood Hedge Fund,

Robin Hood Hedge Fund could be seen as crowdfunding the open commons through the investment return of their members.

Even if as a  member you decide on a 50:50 split, that is still a 20% return on investment based upon past track record (which of course is no indicator of future performance).

Let us invest €1, which they give to the Parasite, who goes ‘out’ into the market, and sometime later comes back with €1.40, the members now have €0.40 they would have otherwise not had – and to be sure, they’ve neither laboured for, nor sacrificed any time or energy for it: so why not turn around and give some of that surplus away?

If you choose to keep more than 50% of the profit, there is a one off fee.

Note: Parasite is the name of the algorithm.

You have not worked to earn this money, but that is the point, that is how hedge funds operate. This is simply playing the hedge funds at their own game.

Basically this is pissing on Wall Street and distributing the proceeds to help the collaborative commons grow.

Corporate raiders in reverse.

But is it a giant Ponzi scheme?

But should Robin Hood Hedge Fund not invest directly in the Open Commons?

Akseli Virtanen, chairman of the board :

Robin Hood is an attempt of reactivating the body of general intellect. Not in the old political way of the last century, but in a strange way. In an insolvent way. In a monstrous or paradoxical way (but are you not taking part in the same system?!). In a disgusting way (what are the ethics of this?!). In a rebel way, maybe, but in any case in a way that is not reducible to present frameworks of knowledge and predictability (this is politics? art? is this research? or business?).

Robin Hood sounds like a ponzi scheme, a fake, or it could be a private group of aggressive entrepreneurs ready to take advantage of anybody. To become a member demands certainly something we don’t have, like belief in the possible, or imagination. This could all be a hoax or an “art project”. Robin Hood makes us uneasy, it breaks the “natural” and “easy” flow of independent action and ready environments. It is something unallowable and unimaginable, almost impossible… a monster… with its specters of mistrusts, weaknesses, confusions, fears, impossibilities, non-commitments and insolvencies… something which is closer to poetics than exchange of information and rational communication.

Robin Hood is basically a proof of concept. Can we raid Wall Street and get away with it?

In for a punt?

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18 Responses to “Robin Hood Hedge Fund”

  1. keithpp Says:

    On joining, directed to a page, where small print nigh invisible.

    Antiquated method of payment, bank transfer (very expensive if not in eurozone).

  2. keithpp Says:

    Edit membership information.

    Tiny grey text on white background. Nigh invisible.

    Profile picture uploaded by mistake. No means to delete.

  3. keithpp Says:

    Payment made in euros.

    Currency and transactions costs and losses as playing on Wall Street in dollars.

    Why not pay in dollars?

    Or play in City of London and pay in pounds, or Germany in euros.

    If outside eurozone, transaction losses to join the game, transaction losses to play in Wall Street, transaction losses to convert back to euros, transactions losses to convert outside of eurozone.

  4. mcassi Says:

    Reblogged this on mcassi.

  5. Daniel Hassan Says:

    Hi Keith,

    Thanks for taking the time to write this up. As far as I can see on a first reading there are no inaccuracies in the write up.

    RE your comments. I (and the rest of the members I have spoken with) agree with all of your comments regarding the user experience. We’re actually rebuilding the front and back end of the site (development volunteers are less than 3 people), so that the site is not such a pain to use.

    Here are a few of the improvements which will be implemented by May:

    – We’ll be accepting payments by credit card, debit card and bitcoin from any region.
    – Better profile management – ability to change picture, password etc more easily.
    -Easier communications management – you’ll be able to determine what types of messages you can receive from us

    Paradoxically we have been running the co-operative on a shoestring budget – all of the running, webwork is voluntary.

    RE transactions losses

    You are completely spot on. This is an area for development also. This project started as a proof of concept and has not been set up in the most financially stream lined way – and yet members funds have still earned them more and projects more than had they been in a hughstreet bank. Plenty of room for improvement though!

    We are developing some tools in the background that will also help with this…

    Thanks again for engaging in the project!

  6. keithpp Says:

    Thanks Daniel for very detailed and honest reply.

    I suggest rather than bitcoin, accept StartJoin and FairCoin, as both share your commitment to the commons and fund art and community projects.

    True, the gains being made, outweigh any currency transaction losses, but it goes against the grain to give any money to bankers.

    I suggest open a dollar account in US. People outside euro zone can pay into, it can be used for playing the game on Wall Street, proceeds go into the dollar account, and then pay out from account to people who paid in with dollars.

    Should you ever play the game in the City of London, then opening a pound sterling account in UK would be appropriate.

    I was going to ask someone to use a euro zone account, and pay them in euros. I assume we will incur no charges our end, even though across countries, and neither will you your end, as simply an interbank transfer as I do when paying a bill (though it does not go across countries).

    Actually better than using a card on line, which will incur a currency loss on transaction (at bad exchange rate), and they charge a fee. And incur a charge your end too.

    Once set up, it may be worth having a page to click on setting out these various bank charges depending upon method used. People can then see the cut banks are taking.

    I would exclude bank transfer outside of euro zone as it would be high and generally unknown.

    I note what you say about proof of concept, which would explain the ragged nature of interfaces and the lack of credit and debit card and the antiquated payment methods in an on-line world.

    It is incredible, when you think of it, a 300 million euro hedge fund, run by volunteers.

  7. guyjames23 Says:

    Why not allow members to divert a percentage of the return on their investment back to the coop so you don’t have to rely on volunteers? Like a tick box “divert 1% of any profit accruing to my account to the cooperative’s running costs”. Most people would do it, I’m sure.

    And yes to accepting Faircoin – you can cash in using http://www.getfaircoin.net and cash out using http://www.fairtoearth.com – no transaction fees.

  8. keithpp Says:

    I would agree with Guy James, although I would do it slightly differently, levy a small fee to cover the running costs, or nominate as one of the projects.

    The only reason I did not suggest earlier, as I had thought of this, is that maybe it is preferably working as volunteers, as Robin Hood Hedge Fund itself becomes an open coop operating in the global commons, as as well as the funds it diverts to irrigate the commons, it itself is a project within the global commons operating on a sharing, collaborative basis.

    I also agree with Guy, FairCoin or StartCoin is preferable to using BitCoin, indeed I would go further, do not accept BitCoin as it is now being driven by speculators, whereas FairCoin is operating in the global commons.

    If BitCoin cryto-currency 1.0, then FairCoin and StartCoin cryto-currency 2.0.

    Is FairCoin, like StartCoin linked to StartJoin, linked to crowdfunding?

    Network projects, mutual support, reclaim the commons.

  9. keithpp Says:

    Talking to Santander, there would be a fixed fee of £30 for transferring money from a UK account in pounds sterling to a bank account in euros in Finland.

    For large sums, cheaper to do a bank transfer than use credit or debit cards.

    Within euro zone, there would still be a charge if transferring money within euro zone from one bank account to another, if across transnational borders. The fee because money is transferred via Central Banks, not direct bank to bank, as would be the case within a country via bank giro system.

    For credit cards, one reason why we are being ripped off on currency transactions, apart from it goes with the territory that banks rip us off, is that Visa and Mastercard are American controlled and the transactions are in dollars, therefore what appears to be a simple transactions pound sterling to euros or vice a versa, goes via dollars.

  10. keithpp Says:

    Yes, I thought FairCoin was linked to crowdfunding, but when I looked on FairCoin and FairCoop, I could not find anything.

    I had seen incubators, and then passed it by. If this is crowdfunding then needs to be made explicit that it is crowdfunding, otherwise most people will not give a second glance.

    I had meant to ask Michel Bauwens, but had not got around to it.

    I must revisit FairCoin. When I last looked I had reservations. There was no means to buy other than through BitCoin, and I was less than impressed with the lax approach to security. It was recommended that the crypo-wallet was kept encrypted and offline (or at least backed up). I would expect as default, wallet kept encrypted and access through a pass phrase. If security this lax, it made me question the security of the crypto-currency itself.

    StartCoin I have grave recommendations on registration and log in through facebook. This should be an absolute no, no.

  11. keithpp Says:

    On the Lam with Bank Robber Enric Duran
    http://www.vice.com/read/be-the-bank-you-want-to-see-in-the-world-0000626-v22n4

  12. keithpp Says:

    FairCoop are donating 100,000 FairCoins to coops that accept FairCoins.

    One more reason for Robin Hood Coop to accept FairCoins.

    https://fair.coop/faircoop-donates-100-000-faircoins/

  13. keithpp Says:

    FairCoop – FairCoin – Fair Society
    https://keithpp.wordpress.com/2015/04/12/faircoop-faircoin-fair-society/

  14. Daniel Hassan Says:

    Hi Keith and Guy,

    Thanks again for this interesting exchange.

    It is interesting that you have quotes from both Brett and Enric – they are both in fact RHC members (Finnish regulations requires that our membership list be public information – so I am not giving too much away there). In fact Enric was the first member of the organisation who joined with a crypto-currency – FairCoin.

    It is on the cards that we accept a range of crypto – these things just take time.

    Ok – onto correcting some inaccuracies which I have seen:

    At the moment we have < 1 million euros under management – not 300 million as commented. If we did have 300 million – we would be kicking some serious proverbial ass.

    RE: paying ourselves – well… we are at a juncture in the road. As the co-op grows the cost on time and responsibility increases. At the last member meeting (all the conversations of which are available to members as the meeting was held using open-source collaborative application called Loomio), this was discussed.

    At some point the people working to make this all happen will need to be paid – this would likely come out of the membership fee – but this requires continuous growth to ensure that is covered.

    Your idea of setting up accounts in multiple zones is a good one – we are open to this. Setting it up takes time 🙂

    Your idea of having a info page about all the costs of various payment options is also a good one. I will likely build a form into the new site which allows a crowd sourcing of this info with a community function for verification of accuracy.

    In a nutshell – am automating many of the processes behind the scenes – which should free up some of our time to look at things like this.

    Let me know if there is anything here I haven't covered!

  15. guyjames23 Says:

    That all sounds great Daniel. Looking forward to seeing the changes and hope the RHC does reach 300 million soon!

  16. bruce scott Says:

    I feel warm inside having the opportunity to join Robin Hood as an investor.

  17. keithpp Says:

    Look forward to your comments as an investor.

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