Labyrinth at Schonbrunn Garden, Vienna; Credit: Andrea Schaufler and Wikimedia Commons
Origin of long-short hedge funds
“Hedge funds” were pioneered some 70 years ago by Australian financier Alfred Winslow Jones. His idea was to combine a “long” position (i.e., one that profits if the securities go up in price), typically a set of growth stocks, with a “short” position (i.e., one that profits if the securities go down in price) on the other part of the portfolio. Jones argued that this “long-short” strategy is more stable that either of the two parts by themselves — if the overall market
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