Posts Tagged ‘Robin Hood Coop’

Robin Hood Hedge Fund

April 5, 2015

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?